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(CNN)   Massachusetts sets the state minimum wage to $11, suck it red state workers   (money.cnn.com) divider line 279
    More: Cool, Massachusetts, minimum wages, highest state  
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738 clicks; posted to Politics » on 20 Jun 2014 at 2:45 PM (48 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-06-20 03:56:00 PM  

Corvus: Lucky LaRue: When I see a statement like this, my reaction is "of course". Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

Umm you forgot PROFIT in your list. You know consumers pay for that too right? Why do you guys always pretend companies don't also set prices based on profit?

Oh I know why because it sort of shows the flaw in your argument that prices are inflexible and only are a function based on business costs.


Of course consumers pay for profit!  If you don't like the price you are paying for your coffee maker, though, the rationale response isn't to legislate a profit ceiling (or a wage floor).
 
2014-06-20 03:58:14 PM  

Lucky LaRue: Corvus: Lucky LaRue: When I see a statement like this, my reaction is "of course". Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

Umm you forgot PROFIT in your list. You know consumers pay for that too right? Why do you guys always pretend companies don't also set prices based on profit?

Oh I know why because it sort of shows the flaw in your argument that prices are inflexible and only are a function based on business costs.

Of course consumers pay for profit!  If you don't like the price you are paying for your coffee maker, though, the rationale response isn't to legislate a profit ceiling (or a wage floor).


Why not?
 
2014-06-20 03:58:14 PM  

Obama's Reptiloid Master: Debeo Summa Credo: yet seem to think a website called "raisetheminimumwage.org" and a link from Berkeley have credibility.

Dude, there's ACTUAL DATA at both of those links. See, unlike Townhall and Investopedia, I showed my work. I provided you links to the raw data.

Also, it's freakin' Berkeley. One of the most respected academic institutions in the world. And it hasn't been a center of left-wing thought since the 60s. You should really get with the times.

 Debeo Summa Credo: Arguing against that is like arguing against the existence of global warming.

I never argued that all minimum wage increases led to a net benefit. Obviously you could set a minimum wage too high. I said this:

"Which is not to say that there is not a point of diminishing returns. There obviously is."

You're arguing against a strawman position and consistently failing to address the fact that the links I have provided have actual empirical data to back them up.

You're the one with his fingers in his ears saying, "nope, the world isn't warming, the science is wrong," when I'm pointing to charts of temperature readouts that are climbing.

Although I am pleased to see such an eloquent example of the Rovian dictum to accuse your interlocutor of what you yourself are guilty of. Your ideological bias is strong, ergo you must try to point out my ideological bias. Fine. I'll admit it. I'm a big, stinking lizard commie. You got me. But that's why I'm not telling you just to believe me or google random macro terms. I'm telling you there's the data in black and white. Don't believe me, double check it.


There's data in the study that is linked to in the townhall link.

estimated deadweight loss to economy of increases in minimum wage past 1994 at $500m per year.

Not large by any means, but negative.

Our minimum wages aren't oppressive, therefore there aren't huge impacts and exogenous variables swamp the min wage impact in most cases. But they do come with a cost.
 
2014-06-20 03:58:15 PM  

Obama's Reptiloid Master: Bareefer Obonghit: This is why I'm surprised. In conclusion, the correct response to his last post would have been, "Your mom is dead weight."

It's not for DSC's edification. He's a lost cause, and his mom might be a perfectly nice lady whose honor I don't want to impugn.

I just happen to have some data on this one, so I thought I'd share, and in doing so, my libby lib brethren can spread the wealth by using this the next time Drunk Conservative Uncle Jimbo starts yelling at the dinner table.


I'm just watching to see how long he goes while ignoring all the links to actual economists debunking his theories at this point. How many times can people like you and chimp_ninja post proof that he's wrong, from real economists, before he has to address that? I mean, the quotes directly address his point and prove he's wrong.

Also, about his mom, I'm sure she's fine and all but I don't think a common gypsy hooker would mind an impugning.
 
2014-06-20 03:59:17 PM  

keylock71: I agree with, but really the whole purpose of this site is pretty much to waste time, no? : )


No.  I came here for internet fame and by god, I will have it.
 
2014-06-20 04:00:37 PM  

Debeo Summa Credo: estimated deadweight loss to economy


estimated deadweight loss

estimated deadweight loss

At some point, hombre, you actually have to measure it. And when it has been measured, it has been shown not in line with those estimates. I'm sorry. You're wrong.
 
2014-06-20 04:00:44 PM  

Debeo Summa Credo: What should happen in this situation?


Find a strategy that doesn't suck.
 
2014-06-20 04:00:59 PM  

Obama's Reptiloid Master: But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.


And along the way, the government collects social security taxes, Medicare taxes, income taxes, etc. from the higher-paid workers, along with the sales tax from the additional transactions they will make now that they have some money, etc.  And as shown above via multiple sources, employment doesn't go down (and has gone up in some cases).  Fewer people now require government benefits like WIC and food stamps.   So now there are actually funds in the treasury to help the homeless sandwich board guys who are mentally ill and can't hold a steady job without getting help.
 
2014-06-20 04:03:03 PM  

d23: cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.

The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.


They are able to pay below cost of living wages because society takes up the slack.  They would not be albe to staff at their pay rates if society didnt take up the slack.
 
2014-06-20 04:03:05 PM  

chimp_ninja: Obama's Reptiloid Master: But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.

And along the way, the government collects social security taxes, Medicare taxes, income taxes, etc. from the higher-paid workers, along with the sales tax from the additional transactions they will make now that they have some money, etc.  And as shown above via multiple sources, employment doesn't go down (and has gone up in some cases).  Fewer people now require government benefits like WIC and food stamps.   So now there are actually funds in the treasury to help the homeless sandwich board guys who are mentally ill and can't hold a steady job without getting help.


I think it's high time we ran for President and Vice President. A lizard space monster and a martial-arts trained ninja primate? Sign me the fark up.
 
2014-06-20 04:03:11 PM  

Mike_1962: cameroncrazy1984: Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.

Okay, name one. Show us the work.

What really gets me about this argument is that it's no longer a theoretical excercise. Minimum wages exist and have been raised in the past. Not ONE SINGLE INSTANCE has caused an inflationary bump of statistical significance. Not one. Never. It doesn't happen. To argue that it does flies in the face of reality.


It's typically argued by the same people that thought our mission in Iraq was a success, and that cutting taxes to the wealthy will increase the number of available jobs. That's pretty much all you need to know.
 
2014-06-20 04:04:47 PM  

Debeo Summa Credo: estimated deadweight loss to economy of increases in minimum wage past 1994 at $500m per year.


Wait.  So even a far-right publication like Town Hall assesses the annual dead weight from minimum wage increases at $1.59 per American?

Where will we ever find that kind of money?  Oh, wait.  I throw some change in my desk drawer sometimes.  I think I can handle that expense to lift millions of my countrymen out of poverty.
 
2014-06-20 04:05:12 PM  

Obama's Reptiloid Master: Debeo Summa Credo: What should happen in this situation?

Hey guys! Hey guys! He's arguing about macroeconomics by using a single microeconomics transaction!

DSC, here's what you don't get. Yes, you, the deli owner, no longer employ the Sandwich Board guy.

But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.

That's why when people talk about MACROeconomics, we often use data across large scales of people and long stretches of time. Because policy is set at the macro-level, not the micro-level.


No they won't. Why don't you understand this? All businesses who have to raise wages will a) lose profit, b) raise prices, or c) lower production, or some combination of these.

The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages! There's no magical wallet from which extra money comes!!! I bet you believe that Henry Ford raised wages to increase sales, and not to improve his workforce in a rapidly growing industry, don't you?

Who benefits from min wage hikes? Employees who see their wages rise.

Who loses? Some combination of employers (lower profits), consumers (higher prices), and newly unemployed workers (priced out of job, like my poor sandwich board guy).

The combined costs to the latter three generally exceed the benefit to the first group. That's why there is a deadweight loss.
 
2014-06-20 04:05:18 PM  

Obama's Reptiloid Master: chimp_ninja: Obama's Reptiloid Master: But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.

And along the way, the government collects social security taxes, Medicare taxes, income taxes, etc. from the higher-paid workers, along with the sales tax from the additional transactions they will make now that they have some money, etc.  And as shown above via multiple sources, employment doesn't go down (and has gone up in some cases).  Fewer people now require government benefits like WIC and food stamps.   So now there are actually funds in the treasury to help the homeless sandwich board guys who are mentally ill and can't hold a steady job without getting help.

I think it's high time we ran for President and Vice President. A lizard space monster and a martial-arts trained ninja primate? Sign me the fark up.


Yeah, and DSC can be the Secretary of Defensive.
 
2014-06-20 04:07:07 PM  

Debeo Summa Credo: in the townhall link.


Seems legit.
 
2014-06-20 04:08:33 PM  

Saiga410: d23: cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.

The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.

They are able to pay below cost of living wages because society takes up the slack.  They would not be albe to staff at their pay rates if society didnt take up the slack.


If we could agree on a "livable wage", I'd be all for a tax on retailers for the difference between what they pay their workers and what the livable wage is.
 
2014-06-20 04:09:06 PM  

Lucky LaRue: Saiga410: d23: cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.

The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.

They are able to pay below cost of living wages because society takes up the slack.  They would not be albe to staff at their pay rates if society didnt take up the slack.

If we could agree on a "livable wage", I'd be all for a tax on retailers for the difference between what they pay their workers and what the livable wage is.


We know what that is. It's called the living wage. It's been studied.
 
2014-06-20 04:10:40 PM  

Lucky LaRue: Saiga410: d23: cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.

The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.

They are able to pay below cost of living wages because society takes up the slack.  They would not be albe to staff at their pay rates if society didnt take up the slack.

If we could agree on a "livable wage", I'd be all for a tax on retailers for the difference between what they pay their workers and what the livable wage is.


Livalbe wage is about as definable as good looking enough at closing time.
 
2014-06-20 04:13:01 PM  

Saiga410: Lucky LaRue: Saiga410: d23: cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.

The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.

They are able to pay below cost of living wages because society takes up the slack.  They would not be albe to staff at their pay rates if society didnt take up the slack.

If we could agree on a "livable wage", I'd be all for a tax on retailers for the difference between what they pay their workers and what the livable wage is.

Livalbe wage is about as definable as good looking enough at closing time.


Yeah, that's for sure.  Maybe the government should just calculate it to the point someone who works 40 hrs a week does not have to rely on government assistance, though there are too many factors even then..

Oh, well, the free market it is, then.
 
2014-06-20 04:14:24 PM  

Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!


Yes it can. Very, very easily. That's why buying in bulk is a thing. Increased cost eats into profit margin. Cost can be passed on to consumers, but only at a rate the market will tolerate. If you increase the number of consumers (which everyone agrees a minimum wage hike will do), you also spread out the cost among the consumers, making it easier to bear the increased price.

If there are 50 people that buy a product at $1.00, we can assume that some of them would drop off if the price were raised to $1.50. So we're down to 40 consumers that will tolerate at $1.50 price. But we've increased the universe of consumers with the minimum wage increase, so now 60 people will buy. 60 times $1.50 is $90.00. When it was at $1.00, and the universe of consumers was smaller, the net income to the seller was $50.00. By increasing the price a small fraction, even though we lost some consumers, we gained others, and now the company is making a significant amount more.

Again, this is not a simple two-way street. If the minimum wage increase is too high, then the seller would have to increase prices too much and it might price out even the newly-made consumers. If the price increase is too low, the seller might not realize any increased profit.

This is why every major company hires economists to study these kinds of market factors and determine at what price a given good or service will sell in a given market. People do this every day. Acting like any minimum wage increase is automatically going to throw the economy out of whack and lead to widespread unemployment and price increases while only marginally affecting consumers' spending ability is as foolish as believing we could set the minimum wage at $1,000,000 and all be millionaires by tomorrow.
 
2014-06-20 04:17:07 PM  

chimp_ninja: Fun fact: Science is completely invisible to our resident Internet Tough Guy Economist.


At this point, it isn't believable that it's an accident that he conveniently never replies to any of the posts above citing evidence from formal economic studies.
 
2014-06-20 04:17:45 PM  
I just don't understand. Even to the casual observer, cutting taxes on the wealthy doesn't make fiscal sense, and doesn't help a demand side economy (which is what we have). 

What good is a large supply, if no one can actually buy it? 

Increasing the minimum wage only makes sense. If more people can buy, then more supplies can be sold. Making those at the bottom and middle of the ladder have a better access to the things they want makes goddamn sense. Everyone wins!

Folks, this is what you call long term fiscal responsibility. It might take awhile for it to be felt, but in the long term, it will help everyone.

A short term fiscal approach would be trickle down economics. Wherein, the wealthy have more money to maybe spend it on things to help boost the economy. Eventually, the loss of money through taxes cut for them will be felt and budgets will shrink. QOL goes down, but short term gains might go up. How this ever got lauded as being a sound fiscal approach is beyond me.
 
2014-06-20 04:19:04 PM  

Gonz: cman: Mass just ensured their economic recovery cratered their economy.

FTFY. This will be overturned by popular demand within 6 months, because businesses will quit hiring.

Then there will be no demand for goods and services, and then MA will watch their tax revenues dwindle, and then they'll look to states like Mississippi to see how to fix the problem.


[Citation Needed]

Maybe the price of a burger will go up by a dime.
 
2014-06-20 04:20:22 PM  
Damnit, didn't notice the Mississippi comment, showing that that was a troll.  Oh well.
 
2014-06-20 04:22:26 PM  

AnonAmbientLight: How this ever got lauded as being a sound fiscal approach is beyond me.


It relies on the false assumption that wealthy people drive consumer spending while working class people scrimp and save every penny they have.

The opposite is actually true; saving money long-term only makes sense where you have enough of it for interest rates to work in your favor (outside of special accounts like retirement accounts which are high interest but effectively remove the money from the consumer economy). So the rich are very good about saving money and making long-term investments, while the poor and working class have to spend more of their take-home pay just to live.

Wealthy people may buy more in aggregate, but only because they're apt to make a smaller amount of very large purchases (vacation homes, new cars, luxuries like boats, etc.) instead of a large amount of smaller and medium purchases throughout the year.

Consumer spending (and the curse of credit) are driven by the working classes. Increasing their buying power (through, say, the cheap credit we got from the late 90s on, cough cough) or through wage/COLA increases will lead to increased consumer spending, decreased supply, increased demand, and therefore lead to economic growth.

This can be bad (consumer credit crisis that fed into the 2008 recession, for example), or it can be a net benefit as long as some farkwits (read: George Bush and Co.) don't fark it up by effectively allowing wealthy people to remove a large chunk of cash from economic circulation (tax cut to the wealthy).
 
2014-06-20 04:24:31 PM  

Obama's Reptiloid Master: Debeo Summa Credo: estimated deadweight loss to economy

estimated deadweight loss

estimated deadweight loss

At some point, hombre, you actually have to measure it. And when it has been measured, it has been shown not in line with those estimates. I'm sorry. You're wrong.



Cripes.  make me turn on a computer.

http://econ2.econ.iastate.edu/research/webpapers/NDN0020.pdf


And you might say 'but but but that just Iowa in the 1990s!'.  Well, Card and Krueger was just fast food workers in PA and NJ.  You can't overturn widely accepted economic models with such a narrowly focused (and debunked, btw) study.
 
2014-06-20 04:26:29 PM  

Obama's Reptiloid Master: I think it's high time we ran for President and Vice President. A lizard space monster and a martial-arts trained ninja primate? Sign me the fark up.


So if congress and the house breaks down into bickering half get ninja poo stars flung at them and the other half are selectively probed with chainsaws? Count on my vote.
 
2014-06-20 04:28:02 PM  

Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages! There's no magical wallet from which extra money comes!!!


No, actually there is. And it's completely possible. Check it out. I'll simplify numbers, to make the math easy to follow. This is just an example, simply a model, but learn something.

Scenario A- you have a store. You sell one thing- a widget. Each widget costs $2 to produce ($1 in parts, $1 in labor), and you make 50 of them every hour. You employ 5 people, each making $10 an hour. You sell your widgets for $4, and make $2 profit per widget. So, each worker can afford 2.5 widgets per hour of labor, and your factory makes $5 in profit per hour of labor.

Scenario B- Same store, but the government has imposed a $15/ hour minimum wage. Your total labor costs have gone from $50 to $75. You can either decrease profits, or increase prices. You obviously don't want to lose profits, so you now sell your widget for $5. Your standard of living has not decreased, you're still making $2 profit per widget sold, or $100 profit an hour. But, your workers can now afford 3 widgets per hour of work.

So, with their increased wages, they can do one of two things: keep demand constant, in which case money will accumulate in their bank, or increase demand to the full extent of their buying power. If demand increases, then you will be able to sell 60 widgets an hour, so your profits have gone from $100 to $120.

What if it's in the middle? Then your profits go to $110 an hour, and each worker puts $2 an hour in the bank.
 
2014-06-20 04:30:13 PM  

Geotpf: Gonz: cman: Mass just ensured their economic recovery cratered their economy.

FTFY. This will be overturned by popular demand within 6 months, because businesses will quit hiring.

Then there will be no demand for goods and services, and then MA will watch their tax revenues dwindle, and then they'll look to states like Mississippi to see how to fix the problem.

[Citation Needed]

Maybe the price of a burger will go up by a dime.


If Wal-Mart paid their employees a livable wage you'd end up spending about a penny more on each item you buy. 

The going trend I see is that citizens are being pitted against citizens to try to dodge the important topics in this kind of debate and others. 

Most people generally want their community to succeed, and by extension their city / state / nation. Increasing the minimum wage is a step in that direction. Don't let the fear of "corporate backlash" prevent us from making choices that benefit us all.
 
2014-06-20 04:30:44 PM  
i mean honestly if you think about it

aren't all laws just meaningless feel-good legislation???

QED libs
 
2014-06-20 04:31:46 PM  
hmm yes if I invent a complex enough analogy with enough numbers, I will definitely convince the guy who thinks the poor should be lining the piss gutters of the wealthy that a small increase in minimum wage won't destroy the economy
 
2014-06-20 04:32:28 PM  

Obama's Reptiloid Master: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

Yes it can. Very, very easily. That's why buying in bulk is a thing. Increased cost eats into profit margin. Cost can be passed on to consumers, but only at a rate the market will tolerate. If you increase the number of consumers (which everyone agrees a minimum wage hike will do), you also spread out the cost among the consumers, making it easier to bear the increased price.

If there are 50 people that buy a product at $1.00, we can assume that some of them would drop off if the price were raised to $1.50. So we're down to 40 consumers that will tolerate at $1.50 price. But we've increased the universe of consumers with the minimum wage increase, so now 60 people will buy. 60 times $1.50 is $90.00. When it was at $1.00, and the universe of consumers was smaller, the net income to the seller was $50.00. By increasing the price a small fraction, even though we lost some consumers, we gained others, and now the company is making a significant amount more.

Again, this is not a simple two-way street. If the minimum wage increase is too high, then the seller would have to increase prices too much and it might price out even the newly-made consumers. If the price increase is too low, the seller might not realize any increased profit.

This is why every major company hires economists to study these kinds of market factors and determine at what price a given good or service will sell in a given market. People do this every day. Acting like any minimum wage increase is automatically going to throw the economy out of whack and lead to widespread unemployment and price increases while only marginally affecting consumers' spending ability is as foolish as believing we could set the minimum wage at $1,000,000 and all be millionaires by tomorrow.


Your numbers are just conjured fantasy.  First off, the 40 original customers who still buy are spending .50 more on each widget - that's $20 in cash that has to come from somewhere - likely foregone spending on other stuff, hurting sellers of other stuff.

And I don't what bodily orifice you pull another 20 people being able to buy your product now for $1.50.   Your raise might partially have caused that but part of that is coming from foregoing other purchases, which leads to the same issue as in the previous paragraph.

In the absence of deadweight loss, I'd call it a zero sum game - the gains to the minimum income workers are offset exactly by increased costs to the employer and consumers and workers who have lost their jobs.  But deadweight loss does exist because workers who lose their jobs are no longer contributing to the economy, so on a net basis society loses.
 
2014-06-20 04:38:01 PM  

Debeo Summa Credo: Sure, prices will increase some


You are saying that business owners will respond to a cost increase by decreasing their market share?
 
2014-06-20 04:38:22 PM  

Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: estimated deadweight loss to economy

estimated deadweight loss

estimated deadweight loss

At some point, hombre, you actually have to measure it. And when it has been measured, it has been shown not in line with those estimates. I'm sorry. You're wrong.


Cripes.  make me turn on a computer.

http://econ2.econ.iastate.edu/research/webpapers/NDN0020.pdf


And you might say 'but but but that just Iowa in the 1990s!'.  Well, Card and Krueger was just fast food workers in PA and NJ.  You can't overturn widely accepted economic models with such a narrowly focused (and debunked, btw) study.


The conclusion of the study was a total decrease in the number of firms, offset by increased hiring at a smaller number of firms. A net decrease in total employment (given the magnitude of that particular MW increase). Fine, looking at that statistic, the MW increase led to increased unemployment.

Except...

http://www.law.gonzaga.edu/law-review/2011/09/07/minimum-wage/

That's kind of what the data predicts will happen if the MW increase is too high (as I've maintained all along). Most of the data actually indicates that there are better ways (cough cough universal basic income/negative income tax) to address chronic low wages in society, but those are even less palatable than a price floor for labor to conservatives, so fark us, right?

Utilizing the best data we have, and controlling for local factors which might have influenced the Card/Krueger or Orazem studies, we have...

http://www.irle.berkeley.edu/workingpapers/157-07.pdf

Which, surprising absolutely no one (even you), supports my position.
 
2014-06-20 04:43:01 PM  

AnonAmbientLight: If Wal-Mart paid their employees a livable wage you'd end up spending about a penny more on each item you buy


Which would be higher or lower than the decreased tax load needed for the lower used safety net?  If higher then no.
 
2014-06-20 04:47:18 PM  

Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!


This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?
 
2014-06-20 04:50:47 PM  

Gonz: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages! There's no magical wallet from which extra money comes!!!

No, actually there is. And it's completely possible. Check it out. I'll simplify numbers, to make the math easy to follow. This is just an example, simply a model, but learn something.

Scenario A- you have a store. You sell one thing- a widget. Each widget costs $2 to produce ($1 in parts, $1 in labor), and you make 50 of them every hour. You employ 5 people, each making $10 an hour. You sell your widgets for $4, and make $2 profit per widget. So, each worker can afford 2.5 widgets per hour of labor, and your factory makes $5 in profit per hour of labor.

Scenario B- Same store, but the government has imposed a $15/ hour minimum wage. Your total labor costs have gone from $50 to $75. You can either decrease profits, or increase prices. You obviously don't want to lose profits, so you now sell your widget for $5. Your standard of living has not decreased, you're still making $2 profit per widget sold, or $100 profit an hour. But, your workers can now afford 3 widgets per hour of work.

So, with their increased wages, they can do one of two things: keep demand constant, in which case money will accumulate in their bank, or increase demand to the full extent of their buying power. If demand increases, then you will be able to sell 60 widgets an hour, so your profits have gone from $100 to $120.

What if it's in the middle? Then your profits go to $110 an hour, and each worker puts $2 an hour in the bank.


Your numbers are a bit off (how would a total increase in wages of $25 (5 workers times $5) allow workers to buy 10 more $5 widgets), and you are forgetting about the 37.5 widgets you are originally selling to non-employees.  Your 5 workers can currently afford 2.5 widgets each per hour like you said, or 12.5 in total, meaning you must be selling 37.5 of the original 50 externally.  Your example assumes that quantity demanded externally remains constant despite your 25% increase in prices.  Rather if we assume that outside purchasers have a finite amount of widget money to spend, then an increase in prices would reduce the number of widgets sold externally by 7.5.   ($4 original price* 37.5 widgets originally sold externally = $150 in external money available for widgets / new price of $5 = 30 widgets sold after price hike).

Then assuming your employees continue to use all their newfound income to buying widgets, they will now be able to buy $15*5=$75 total wages per hour/$5 per widget cost = 15 widgets.   Add that to the 30 we are selling externally and we are only selling 45 widgets total.  Total profit of $90, less than the $100 original.

Now, if we assume that some of the original purchases will allocate more total money to our widgets after our price hike, keeping the quantity demanded externally constant at 37.5, then yes we will now sell 52.5 widgets and increase profits.   That is a big assumption, though, and of course would result in those buyers reallocating $37.50 from purchases of other things they were buying previously, with resutling damage to those sellers and the economy.   We're also not addressing the possibility that the increase in minimum wage caused other producers to increase prices, resulting in external purchasers of our widgets not spending even the same dollar amount on our widgets post wage/price hike.
 
2014-06-20 04:53:08 PM  

Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?


Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.
 
2014-06-20 04:58:07 PM  

Cubicle Jockey: Debeo Summa Credo: Sure, prices will increase some

You are saying that business owners will respond to a cost increase by decreasing their market share?


No.  costs will increase for all producers, incenting all companies to pass costs along to consumers.  If price resistance occurs, where competitors maintain volume by not cutting prices, it will cut into profits, reducing the number of current or prospective market participants, limiting competition and eventually increasing prices.

Are you saying that all businesses ignore costs in pricing products or deciding which businesses to enter/remain in/exit etc?
 
2014-06-20 04:59:55 PM  

raerae1980: My employer can certainly handle the addition in pay.


Then why does your employer have to be forced to pay more?
 
2014-06-20 05:00:00 PM  

Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.


In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.
 
2014-06-20 05:00:56 PM  

sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?


Because otherwise the taxpayers are. Why should we subsidize employers?
 
2014-06-20 05:02:07 PM  

Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: Sure, prices will increase some

You are saying that business owners will respond to a cost increase by decreasing their market share?

No.  costs will increase for all producers, incenting all companies to pass costs along to consumers.  If price resistance occurs, where competitors maintain volume by not cutting prices, it will cut into profits, reducing the number of current or prospective market participants, limiting competition and eventually increasing prices.

Are you saying that all businesses ignore costs in pricing products or deciding which businesses to enter/remain in/exit etc?


Businesses don't ignore costs, but they don't raise prices to a point that the market won't bear them either.
 
2014-06-20 05:06:05 PM  

cameroncrazy1984: sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?

Because otherwise the taxpayers are. Why should we subsidize employers?


But, if employers can afford to pay their workers more, why don't they do so voluntarily?
 
2014-06-20 05:07:00 PM  

sendtodave: why don't they do so voluntarily?


Really, man?
 
2014-06-20 05:08:05 PM  

sendtodave: cameroncrazy1984: sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?

Because otherwise the taxpayers are. Why should we subsidize employers?

But, if employers can afford to pay their workers more, why don't they do so voluntarily?


Because they want to maximize profits. I figured that was obvious. Greed is good for the employer. Not for the employee.
 
2014-06-20 05:08:44 PM  

cameroncrazy1984: Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.

In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.


Exactly

We can't do this anymore.

Its becoming too damn expensive for the tax payers to make up for what they should be getting in wages

Food stamps in a perfect world would be there to help those who are unable to work. Someone who works should get paid enough to live.
 
2014-06-20 05:12:09 PM  

cameroncrazy1984: Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.

In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.


I'm not so sure.  We've assumed as a society a minimum level of income (lets pretend its $15 per hour) is necessary and subsidize people who fall below that (whether they don't work at all or work at wal-mart at $8 per hour).   Unless you believe that absent that social safety net Walmart would have to pay its workers $15 per hour, then we aren't subsidizing walmart.  Rather we are subsidizing the low income worker, which is the intention.

If you truly believe that the market would force Walmarts wages up to $15 absent govt benefits to their minimum wage workers, then by all mean lets cut those benefits (gradually) and let the market drive wage prices to their natural clearing rate.

I propose this all the time but nobody every takes me up on it.  Why?  Because the truth of the matter is that absent govt benefits to low and no income workers, labor supply to walmart would dramatically INCREASE as people at that level would seek additional employment to make up for the loss of govt benefits.  This increase would lower the wages walmart would need to pay.   So if anything, our social safety net increases the market clearing rate of low wage labor, the exact opposite of what liberals would have you believe.

If we do want to subsidize low income workers, the fairest and most efficient is EITC, food stamps, rent subsidies etc., not farking around with the labor market.
 
2014-06-20 05:12:36 PM  

palelizard: Or feudalism, which is how trickle-down economics work.


img4.wikia.nocookie.net

THAT'S IT!!!!
 
2014-06-20 05:12:43 PM  

cameroncrazy1984: sendtodave: cameroncrazy1984: sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?

Because otherwise the taxpayers are. Why should we subsidize employers?

But, if employers can afford to pay their workers more, why don't they do so voluntarily?

Because they want to maximize profits. I figured that was obvious. Greed is good for the employer. Not for the employee.


But, they're the job creators!  They shouldn't be regulated!  It's their duty to provide for the economic well-being of their employees, not some socialist government's!

... Are you trying to say that the right wing doesn't really care about the economic well-being of the people?
 
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