7 ms·

Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr? (Btw, the American healthcare system is about as far away

by navi0 1y ago

Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr? (Btw, the American healthcare system is about as far away from a free market as it gets. Don’t think that example supports your point.)

itsmek 1y ago
Your question can be applied to literally any market intervention with a grey area. If housing code is good policy why not make all houses 10 times as strong? If your question is why is minimum wage a good policy, you could start here for a summary of the arguments and evidence: https://en.wikipedia.org/wiki/Minimum_wage https://en.wikipedia.org/wiki/Minimum_wage
- navi0 1y ago
  It's the same question, really. If we make housing too expensive to build through stricter codes, then housing won't get built and at some point (e.g., last decade in California discussed in the parent article), the homeless population increases and people/businesses decide to relocate because the math doesn't work. I don't think a full look at the history of minimum wages will be kind to their supporters. Minimum wages were created by labor unions for the sole purpose of excluding other workers who are more productive or less expensive than their members[0]. Going back further, labor unions were created during the railroad boom by racist white workers to exclude Chinese laborers who were 2x more productive for the same price. Instead of responding to competition by getting better, American railroad workers formed labor unions and lobbied politicians for relief, culminating in the Chinese Exclusion Act [1] that forcibly expelled 400,000 Chinese immigrants and led to some horrific violence and racism towards Asian people in this country. In all cases, the role of government should not be to mandate wages or prices or anything else that markets are better suited to establish, or there will necessarily be higher unemployment. Governments can help by establishing some health and safety standards and policing abuses, but when it comes to accomplishing the social goals that minimum wages intend to, that's better done through tax policy and income redistribution (e.g., guaranteed minimum income, earned income tax credit, welfare benefits). [0] https://en.wikipedia.org/wiki/Workingmen%27s_Party_of_California https://en.wikipedia.org/wiki/Workingmen%27s_Party_of_Califo... [1] https://en.wikipedia.org/wiki/Chinese_Exclusion_Act https://en.wikipedia.org/wiki/Chinese_Exclusion_Act
  - unethical_ban 1y ago
    You still didn't address the idea that there is a threshold for all intervention. You said "why not make $100hr minimum?" and the answer is "that's too high". It sounds like, were you to acknowledge that thresholds exist somewhere for most things you think the threshold for minimum wage is 0 and that UBI and guaranteed services is a better mechanism. Which is respectable, at least in that you recognize a government role in ensuring humane living conditions for its citizens. Most people who argue against a minimum wage seem to think any government action of any kind to protect or provide for citizens is "theft by taxation".
    - navi0 1y ago
      I don’t think there is a threshold for intervention in setting prices. If a $100/hr minimum wage is too high, then a $20/hr min wage will also be too high for plenty of employers and would-be employees who are now unable to legally transact. Safety standards create similar issues, but most typically require capex that can be amortized or depreciated (unlike labor opex). I’m not opposed to taxes. When designed properly, they’re transparent and avoid excluding economic activity like min wages do.
  - itsmek 1y ago
    Ah sorry I was taking you seriously when you said "real question", I didn't realize it was a rhetorical device. The history of the minimum wage is pretty irrelevant compared to the economic models and empirical studies in that article, I'm not going to engage in such a pointless distraction. If the Nazis invented building codes I would still support them based purely on whether they are a good idea or not. But you seem to be missing my point on housing code: do you support a nonzero housing code? Some is good, too much is bad. Same for minimum wage, many models and analyses show that some minimum wage improves productivity and counterintuitively increases employment in monopsonistic industries up to the point when they (partially) undo the damage the monopsony caused, at which point obviously a further increase in minimum wage causes damage as you say. My point is that your "real question" (which was an argumentative point in disguise) works rhetorically against nearly every intervention, some of which you certainly support (I tried to pick an obviously good intervention and came up with building code), and thus is a weak argument. If you truly support no market interventions I at least respect the internal consistency of your worldview but think you must underestimate how much food poisoning, fire death, servitude, etc it would cause.
handoflixue 1y ago
Humans have certain fundamental maintenance costs. $100/hr vastly exceeds maintenance. However, if you pay below those maintenance costs, then society effectively picks up the tab via other social costs and programs. For instance, if employers don't provide healthcare, then we either pay more for emergency medical treatments and other publicly-subsidized healthcare programs, or we accept being a country with a bunch of people dropping dead at age 40 of entirely preventable problems. This is very different from most other goods, because no one really cares if you break your chair, the chair's parents didn't spend 18 years of their life on it, etc.. If you break a chair, you bear the full costs of replacing it. Also, the full cost of replacing a human is vastly higher than the maintenance wage.
- biztos 1y ago
  I wonder how the “replacement cost” of a human should be calculated in light of the low birth rates in so many countries. > Also, the full cost of replacing a human is vastly higher than the maintenance wage.
- zeroCalories 1y ago
  It would be more efficient to pay someone market rate, have needed work get done, and subsidize their existence than to try and offload that cost onto employers.
  - atq2119 1y ago
    That effectively becomes a subsidy to those employers though, plus an incentive to drive wages down even more.
    - zeroCalories 1y ago
      The alternative is that certain types of work simply do not get done, as shown by the article. That means if you care about providing for these people you'll now be responsible for shouldering 100% of their cost as they sit around unemployed.
    - 1y ago
watwut 1y ago
How is that a real question? If it is reasonable to make a policy with number X, how come it is not reasonable to make a policy 5X or 0? Because you intentionally picked large unreasonable number and now want to argue it implies much smaller number is reasonable. If maximum speed of 50km/h is reasonable in cities, why not making it 5km/h?
- HPsquared 1y ago
  In the early days, the speed limit was indeed walking pace - often with a person needing to walk in front waving a flag! https://en.wikipedia.org/wiki/Locomotive_Acts#Locomotives_Act_1865_(Red_Flag_Act) https://en.wikipedia.org/wiki/Locomotive_Acts#Locomotives_Ac...
- kaashif 1y ago
  It is still useful to ask the question just so we know the answer. I admit the person asking in this case probably didn't mean it this way... :) On speed limits, when it comes to road deaths, you get people saying "one death is too many" and so on when one of their loved ones die, even when speed limits are set to 20 mph. These people are wrong. Asking why a 1 mph limit is bad can help reveal that we do put a cost measured in lives on convenience, and we do face the risk of death when driving a car, and everyone has a number they think is reasonable. Asking why $100/hr is too high can at least help us decide on a quantitative way to decide on a number rather than just guessing.
- navi0 1y ago
  Another reply already addresses your question about speed limits, which is another great example through which to examine these questions. "Reasonable" is a completely subjective standard and not a good way to run a complex economy with an infinite combination of job seekers and providers. Who gets to decide what is reasonable has big real world implications for millions of people. Get it wrong, and as we see in California here, people lose their jobs and businesses close all because some politician or bureaucrat (or misinformed voter) thinks they know better than workers and employers what the correct price for labor should be.
bawolff 1y ago
> Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr? Because min wage policies have a cost and a benefit. The benefit only happens at relatively low numbers (enough for basic necessities). After that point you dont get more benefits but the costs still increase.
- navi0 1y ago
  Please define basic necessities. Is a three-bedroom house in [pick nicest neighborhood in any metro area] a necessity? How about a one-bedroom apartment in the same neighborhood? An in-law unit (e.g., "granny flat") on a farm just outside town? A room in a six-bedroom co-op house where meals are collectively prepared and shared? Same could be asked about food, clothes, etc. I can buy used clothes for $5 or new ones for $100. "Basic necessities" is woolly term that in practice is full of paternalistic value judgements. Every individual has a variety of resources to draw upon that would make them willing/unwilling to work a job at a given wage. A government-mandated minimum wage means some people who could find employment will not because their output do not exceed the wages the government has declared must be paid. In practice, it also means many people starting out in life or who are less skilled never get the chance to be hired and learn new skills that increase their pay. Minimum wages remove the lowest rungs on the job ladder that often teach skills required to be successful higher up.
6510 1y ago
I think the solution here is to have you work at a fast food restaurant with a salary just low enough not to be able to eat at the end of the day. There really is no substitute for experiencing first hand what it is like to stack 500 burgers on an empty stomach then telling your kid there wont be any dinner today. Imagine some land whale exploding over her 7th burger not approaching perfection closely enough and that it seems you are not taking the issue seriously enough.
- lsaferite 1y ago
  You were doing fine until you jumped to an aspersion.
  - carlosjobim 1y ago
    The audacity that a starving person would insult somebody for their obesity! How dare they?
    - 6510 1y ago
      In contrast, if one earns enough to live a normal life they instantly change into one of the best regular customers. One can make a career out of flipping burgers and have a long term [professional] relationship with them. If they are indeed overweight give them a salad on the house and have them explore the many delicious healthy things on the menu. Delicious because one gets room to think about improvements when not drowning in bills. An eating disorder usually comes with above average knowledge of the culinary realm. Should make an interesting conversation.

by navi0 1y ago

itsmek 1y ago

Your question can be applied to literally any market intervention with a grey area. If housing code is good policy why not make all houses 10 times as strong? If your question is why is minimum wage a good policy, you could start here for a summary of the arguments and evidence: https://en.wikipedia.org/wiki/Minimum_wage https://en.wikipedia.org/wiki/Minimum_wage

navi0 1y ago
It's the same question, really. If we make housing too expensive to build through stricter codes, then housing won't get built and at some point (e.g., last decade in California discussed in the parent article), the homeless population increases and people/businesses decide to relocate because the math doesn't work. I don't think a full look at the history of minimum wages will be kind to their supporters. Minimum wages were created by labor unions for the sole purpose of excluding other workers who are more productive or less expensive than their members[0]. Going back further, labor unions were created during the railroad boom by racist white workers to exclude Chinese laborers who were 2x more productive for the same price. Instead of responding to competition by getting better, American railroad workers formed labor unions and lobbied politicians for relief, culminating in the Chinese Exclusion Act [1] that forcibly expelled 400,000 Chinese immigrants and led to some horrific violence and racism towards Asian people in this country. In all cases, the role of government should not be to mandate wages or prices or anything else that markets are better suited to establish, or there will necessarily be higher unemployment. Governments can help by establishing some health and safety standards and policing abuses, but when it comes to accomplishing the social goals that minimum wages intend to, that's better done through tax policy and income redistribution (e.g., guaranteed minimum income, earned income tax credit, welfare benefits). [0] https://en.wikipedia.org/wiki/Workingmen%27s_Party_of_California https://en.wikipedia.org/wiki/Workingmen%27s_Party_of_Califo... [1] https://en.wikipedia.org/wiki/Chinese_Exclusion_Act https://en.wikipedia.org/wiki/Chinese_Exclusion_Act
- unethical_ban 1y ago
  You still didn't address the idea that there is a threshold for all intervention. You said "why not make $100hr minimum?" and the answer is "that's too high". It sounds like, were you to acknowledge that thresholds exist somewhere for most things you think the threshold for minimum wage is 0 and that UBI and guaranteed services is a better mechanism. Which is respectable, at least in that you recognize a government role in ensuring humane living conditions for its citizens. Most people who argue against a minimum wage seem to think any government action of any kind to protect or provide for citizens is "theft by taxation".
  - navi0 1y ago
    I don’t think there is a threshold for intervention in setting prices. If a $100/hr minimum wage is too high, then a $20/hr min wage will also be too high for plenty of employers and would-be employees who are now unable to legally transact. Safety standards create similar issues, but most typically require capex that can be amortized or depreciated (unlike labor opex). I’m not opposed to taxes. When designed properly, they’re transparent and avoid excluding economic activity like min wages do.
- itsmek 1y ago
  Ah sorry I was taking you seriously when you said "real question", I didn't realize it was a rhetorical device. The history of the minimum wage is pretty irrelevant compared to the economic models and empirical studies in that article, I'm not going to engage in such a pointless distraction. If the Nazis invented building codes I would still support them based purely on whether they are a good idea or not. But you seem to be missing my point on housing code: do you support a nonzero housing code? Some is good, too much is bad. Same for minimum wage, many models and analyses show that some minimum wage improves productivity and counterintuitively increases employment in monopsonistic industries up to the point when they (partially) undo the damage the monopsony caused, at which point obviously a further increase in minimum wage causes damage as you say. My point is that your "real question" (which was an argumentative point in disguise) works rhetorically against nearly every intervention, some of which you certainly support (I tried to pick an obviously good intervention and came up with building code), and thus is a weak argument. If you truly support no market interventions I at least respect the internal consistency of your worldview but think you must underestimate how much food poisoning, fire death, servitude, etc it would cause.

handoflixue 1y ago

Humans have certain fundamental maintenance costs. $100/hr vastly exceeds maintenance. However, if you pay below those maintenance costs, then society effectively picks up the tab via other social costs and programs. For instance, if employers don't provide healthcare, then we either pay more for emergency medical treatments and other publicly-subsidized healthcare programs, or we accept being a country with a bunch of people dropping dead at age 40 of entirely preventable problems. This is very different from most other goods, because no one really cares if you break your chair, the chair's parents didn't spend 18 years of their life on it, etc.. If you break a chair, you bear the full costs of replacing it. Also, the full cost of replacing a human is vastly higher than the maintenance wage.

biztos 1y ago
I wonder how the “replacement cost” of a human should be calculated in light of the low birth rates in so many countries. > Also, the full cost of replacing a human is vastly higher than the maintenance wage.
zeroCalories 1y ago
It would be more efficient to pay someone market rate, have needed work get done, and subsidize their existence than to try and offload that cost onto employers.
- atq2119 1y ago
  That effectively becomes a subsidy to those employers though, plus an incentive to drive wages down even more.
  - zeroCalories 1y ago
    The alternative is that certain types of work simply do not get done, as shown by the article. That means if you care about providing for these people you'll now be responsible for shouldering 100% of their cost as they sit around unemployed.
  - 1y ago

watwut 1y ago

How is that a real question? If it is reasonable to make a policy with number X, how come it is not reasonable to make a policy 5X or 0? Because you intentionally picked large unreasonable number and now want to argue it implies much smaller number is reasonable. If maximum speed of 50km/h is reasonable in cities, why not making it 5km/h?

HPsquared 1y ago
In the early days, the speed limit was indeed walking pace - often with a person needing to walk in front waving a flag! https://en.wikipedia.org/wiki/Locomotive_Acts#Locomotives_Act_1865_(Red_Flag_Act) https://en.wikipedia.org/wiki/Locomotive_Acts#Locomotives_Ac...
kaashif 1y ago
It is still useful to ask the question just so we know the answer. I admit the person asking in this case probably didn't mean it this way... :) On speed limits, when it comes to road deaths, you get people saying "one death is too many" and so on when one of their loved ones die, even when speed limits are set to 20 mph. These people are wrong. Asking why a 1 mph limit is bad can help reveal that we do put a cost measured in lives on convenience, and we do face the risk of death when driving a car, and everyone has a number they think is reasonable. Asking why $100/hr is too high can at least help us decide on a quantitative way to decide on a number rather than just guessing.
navi0 1y ago
Another reply already addresses your question about speed limits, which is another great example through which to examine these questions. "Reasonable" is a completely subjective standard and not a good way to run a complex economy with an infinite combination of job seekers and providers. Who gets to decide what is reasonable has big real world implications for millions of people. Get it wrong, and as we see in California here, people lose their jobs and businesses close all because some politician or bureaucrat (or misinformed voter) thinks they know better than workers and employers what the correct price for labor should be.

bawolff 1y ago

> Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr? Because min wage policies have a cost and a benefit. The benefit only happens at relatively low numbers (enough for basic necessities). After that point you dont get more benefits but the costs still increase.

navi0 1y ago
Please define basic necessities. Is a three-bedroom house in [pick nicest neighborhood in any metro area] a necessity? How about a one-bedroom apartment in the same neighborhood? An in-law unit (e.g., "granny flat") on a farm just outside town? A room in a six-bedroom co-op house where meals are collectively prepared and shared? Same could be asked about food, clothes, etc. I can buy used clothes for $5 or new ones for $100. "Basic necessities" is woolly term that in practice is full of paternalistic value judgements. Every individual has a variety of resources to draw upon that would make them willing/unwilling to work a job at a given wage. A government-mandated minimum wage means some people who could find employment will not because their output do not exceed the wages the government has declared must be paid. In practice, it also means many people starting out in life or who are less skilled never get the chance to be hired and learn new skills that increase their pay. Minimum wages remove the lowest rungs on the job ladder that often teach skills required to be successful higher up.

6510 1y ago

I think the solution here is to have you work at a fast food restaurant with a salary just low enough not to be able to eat at the end of the day. There really is no substitute for experiencing first hand what it is like to stack 500 burgers on an empty stomach then telling your kid there wont be any dinner today. Imagine some land whale exploding over her 7th burger not approaching perfection closely enough and that it seems you are not taking the issue seriously enough.

lsaferite 1y ago
You were doing fine until you jumped to an aspersion.
- carlosjobim 1y ago
  The audacity that a starving person would insult somebody for their obesity! How dare they?
  - 6510 1y ago
    In contrast, if one earns enough to live a normal life they instantly change into one of the best regular customers. One can make a career out of flipping burgers and have a long term [professional] relationship with them. If they are indeed overweight give them a salad on the house and have them explore the many delicious healthy things on the menu. Delicious because one gets room to think about improvements when not drowning in bills. An eating disorder usually comes with above average knowledge of the culinary realm. Should make an interesting conversation.