Quote :

"In general if you are working for minimum wage, you are doing so by choice."

no, sir.

7/20/2006 2:39:31 PM

in general, if you are working, you are doing it by choice

7/20/2006 2:40:05 PM

Of course their is such a thing as exploitation...

But you also need remember that there is such thing as supply and demand.
The demand for uneducated and unskilled workers and the supply of those workers intersect at the going rate for those jobs. Right now, that intersection in the VAST MAJORITY of industries is higher than the federal minimum wage, which is why hardly anyone actually supports a family on minimum wage.

There CAN be exploitation, but paying an uneducated and unskilled worker $6 an hour doesn't count here. If it didn't better his situation, he wouldn't do it. Now, if there were indentured servants or slaves in the picture...then the government needs to step in.

But for now, that's just the price you pay for being uneducated and/or unskilled. Tough reality, but the truth.

7/20/2006 2:41:59 PM

people on here dont take kindly to reality and truth

they prefer exhaustively aarguing ideals and impossible scenarios

7/20/2006 2:43:24 PM

Quote :

"no, sir."

Which legal workers are working for minimum wage because they have no other choice?

7/20/2006 2:44:18 PM

my cousin with downs syndrome

7/20/2006 2:46:40 PM

I just don't get how the minimum wage argument gets people so upset and indignant these days.
The fallacy that the minimum wage helps the poor was destroyed by economics and studies YEARS ago, which is why it and rent controls are the fucking day 1 Econ for retards 101 warm up.

But in today's political climate, we'll have to deal with it forever because people don't give up.

7/20/2006 2:48:14 PM

I suggest you talk to the authorities about the enslavement of your cousin...since they apparantly won't let him not work.

7/20/2006 2:48:48 PM

Then he's not looking hard enough. McDonalds hires more than their fair share of people with downs syndrome and other diabilities, as do many other fast food restraunts. So explain how he has no other choice?

7/20/2006 2:49:22 PM

Quote :

"Which legal workers are working for minimum wage because they have no other choice?"

They chose minimum wage over starvation, but what sort of choice is that? These aren't rational decisions made between two parties of equal mobility and power.

Hence, there's a strong chance of exploitation.

Oh wait! That doesn't exist in a free market economy, lol. My bad.


BTW, don't you guys have a problem with the fact that the $5.15-~8.00/hr being paid to the average retail worker is sustainable only through government subsidies? Shouldn't businesses be forced to pay the entire costs of their labor?




[Edited on July 20, 2006 at 3:02 PM. Reason : lawl]

7/20/2006 2:55:39 PM

they choose minimum wage over starvation?

is that because they chose slacking off instead of education earlier in their lives?

7/20/2006 3:06:53 PM

Quote :

"They chose minimum wage over starvation, but what sort of choice is that?"

Or the job that pays above minimum wage just down the street. You don't have to look to hard to find an unskilled labor job that pays above minimum wage.

Quote :

"These aren't rational decisions made between two parties of equal mobility and power."

Who says that both parties have to have equal mobility and power? And if the choice is starve or work for minimum wage and they choose to work for minimum wage, than I would consider that a rational decision wouldn't you? Survival is not a matter of convenience.

Quote :

"BTW, don't you guys have a problem with the fact that the $5.15-~8.00/hr being paid to the average retail worker is sustainable only through government subsidies? Shouldn't businesses be forced to pay the entire costs of their labor? "

So then eliminate the minimum wage and the subsidies, which should lower the taxes, which will in turn lower the cost of living which will mean businesses will need to pay less to pay a livable wage which in turn means they won't need the subsidies because they don't need to meet a minimum wage which is artificialy inflating prices all around. It might also help if the government didn't take ~20-25% of your pay out of every pay check before any other taxes you might have to pay.

[Edited on July 20, 2006 at 3:13 PM. Reason : dsfal;j]

7/20/2006 3:09:52 PM

So just to make things clear-- is it that there's no such thing as explotation, or is explotiotation acceptable?

Quote :

"So then eliminate the minimum wage and the subsidies, which should lower the taxes, which will in turn lower the cost of living which will mean businesses will need to pay less to pay a livable wage which in turn means they won't need the subsidies because they don't need to meet a minimum wage which is artificialy inflating prices all around. It might also help if the government didn't take ~20-25% of your pay out of every pay check before any other taxes you might have to pay."

So there are no externalities when you pay someone $5-7/hr? They pay for all of it via taxes?



[Edited on July 20, 2006 at 3:18 PM. Reason : .]

7/20/2006 3:13:50 PM

Unless you find slavery or intendured servitude, no there is no exploitation. It's not exploiting you to pay you $6 an hour for unskilled labor. If it is, it's because you believe your services to be worth more, in which case you should find yourself a new job because I can find myself a new worker. Just because you think you're worth more than you are doesn't mean I'm exploiting you.

Is it exploitation when you can't sell something at the high price you set for it?

7/20/2006 3:16:52 PM

Quote :

"One less employee to be hired per day for all the places that pay minimum wage."

And what leads you to believe the market for labor is that elastic?

Quote :

"Unless you find slavery or intendured servitude, no there is no exploitation."

Someone needs to look into pre-labor union work conditions.

Quote :

"The fallacy that the minimum wage helps the poor was destroyed by economics and studies YEARS ago, which is why it and rent controls are the fucking day 1 Econ for retards 101 warm up."

Price floors aren't neccesarily a bad thing, and neither are ceilings. Perhaps if you learned a bit more about economics you'd know why the market doesn't work on it's own.

[Edited on July 20, 2006 at 3:28 PM. Reason : ]

7/20/2006 3:23:19 PM

Hahah, so it's impossible that an employer would weild its power in such a way as to hire worker for less than they're worth?

7/20/2006 3:26:12 PM

THERES NO SUCH THING AS MARKET POWER DURRRRR

MONOPSONY IS A COMMUNIST CONSPIRACY

[Edited on July 20, 2006 at 3:30 PM. Reason : ]

7/20/2006 3:29:27 PM

Who determines what a worker is worth? The employer and the employee by finding a price which matches with what both are willing to settle for. Worth is an abstact concept.

Quote :

"And what leads you to believe the market for labor is that elastic?"

Why wouldn't it be? If someone is seaking a job, and goes somewhere where they pay minimum wage, assuming the business currently has 5 employees, with the new minimum wage they would not be able to hire the person seaking the job, where as they would have before the wage hike.

Quote :

"MONOPSONY IS A COMMUNIST CONSPIRACY "

Hardly, but a monopoly is 3 things:

1) Not inherrently bad

2) By definition the entire market

3) Temporary

Quote :

"Someone needs to look into pre-labor union work conditions. "

Your point being?

[Edited on July 20, 2006 at 3:36 PM. Reason : dsfal;j]

7/20/2006 3:30:54 PM

Not monopoly...

monopsony

Quote :

"Who determines what a worker is worth? The employer and the employee by finding a price which matches with what both are willing to settle for. Worth is an abstact concept."

Hahah, have you ever taken a retail job before? The employer has 100% of the power in regards to pay.

Of course you could go down the street, and experience the exact same thing, if you knew that they were paying more, of course...

which you don't,

because they won't give you any information on salary until after the interview process.

BUT IT'S A TOTALLY FREE AND OPEN MARKET FOR THE AVERAGE RETAIL WORKER, YES SIR!

7/20/2006 3:38:41 PM

Quote :

"Who determines what a worker is worth?"

The current market price. This market price can be effected by any number of things such as demand, supply, substitutes, AND floors and ceilings.

Quote :

"Why wouldn't it be?"

Because it is by no means a perfectly competitive market.

Quote :

"If someone is seaking a job, and goes somewhere where they pay minimum wage, assuming the business currently has 5 employees, with the new minimum wage they would not be able to hire the person seaking the job, where as they would have before the wage hike."

This is extremely basic macroecon. If that fifth worker increases marginal revenue more than he increases marginal cost, they'll still hire him. There are a large number of factors involved here, the increase in marginal cost which would only be $1.00 per worker, versus that worker's change in MMP, his contribution to marginal revenue, etc.

Quote :

"Hardly, but a monopoly is 3 things: 1) Not inherrently bad 2) By definition the entire market 3) Temporary"

Who said monopoly? I was talking about MONOPSONY, agian, basic econ, although it's clear you have no idea what you're talking about.

Quote :

"Your point being?"

You have no idea what you're talking about.

7/20/2006 3:45:32 PM

Quote :

"Hahah, so it's impossible that an employer would weild its power in such a way as to hire worker for less than they're worth? "

Without price (in this case, wage)-fixing behavior between multiple firms, or a firm with a large enough market share to influence the others, it is impossible for an employer to pay less than the worker is worth in the long run.

Unless you want to claim that EVERY unskilled/uneducated employer in the entire country are working together to pay these workers less than they are worth, you are simply incorrectly assessing the situation.

Much more likely is that someone flipping burgers is only worth $5.15 an hour. Especially considering that teenagers, old people, the disabled, and non-english speakers are willing to do the job at that rate.

7/20/2006 4:14:14 PM

And by the way, monopsony is when there is only one supplier and many buyers.

There are many suppliers of low-skill jobs and many buyers of low-skill jobs.

There is no monopsony here.

7/20/2006 4:16:26 PM

Quote :

"Kris: That being, the labor market is generally not perfectly elastic. Raising the price of labor will not exactly proportionally lower the demand for labor."

Who said it did? Best data I can find, "a 10 percent increase in the minimum wage is associated with a 0.9 to 1.1 percent decline in retail employment and a 0.8 to 1.2 percent reduction in small business employment."

So, as you say, wages and employment are clearly not perfectly elastic, but neither are they perfectly inelastic. Using this data for every 9 people that you help you have ruined the life of 1 person. Now, I have no qualms with helping those 9 people; but what about that 1 person? With prolonged unemployment comes declining physical and mental health due to stress, declining income potential, loss of skills, etc. As stated in the original post: "Is it right to redistribute from the worse-off poor to the better-off poor?"

Quote :

"Price floors aren't necessarily a bad thing, even though they tend to make libertarians shit themselves."

I don't know about the shitting, but a price floor for milk is one thing: we don't care what happens to the milk that gets bought and thrown away by the government regulators. But what happens to surplus workers generated by the price floor on labor? Are you going to dump them in a ditch just like the milk?

Quote :

"Do employers and laborers make 100% rational decisions, each from an equal footing as far as mobility and economic power are concerned?"

Doesn't matter. Even if you increase the price floor the actors will still be irrational. If all the firms in a labor market are honestly delusional and are overly conserving labor given prevalent productivity rates what is to stop them from doing so after the price floor is hiked? You have not changed the firms, they are still delusional, and will only more-so under-utilize the available labor, producing higher unemployment and poorer working conditions to go along with the higher wages.

If there are in fact irrational market actors you would be better off educating them (or their competitors) to the fact.

Just because McDonald's has more market power than it's employees (a fact I do not concede) it does not follow that the government should intervene. Short of nationalizing the company, McDonald's will always do what is in its best interests which is minimizing labor costs. It can either do so by paying lower wages or by hiring fewer employees.

That said, almost no workers at McDonald's actually get the minimum wage outside states that have raised it. If the market power of employers was as pervasive as you say why have wages risen above the minimums?

7/20/2006 4:21:32 PM

Quote :

"Without price (in this case, wage)-fixing behavior between multiple firms, or a firm with a large enough market share to influence the others, it is impossible for an employer to pay less than the worker is worth in the long run."

That's only possible if the labor market is perfectly competitive, it certainly isn't. There is a good deal of market power invovled.

Quote :

"And by the way, monopsony is when there is only one supplier and many buyers."

It refers to a market in which the few buyers wield signifigant market power of the numerous sellers when refering to the labor market specifically.

7/20/2006 4:22:37 PM

The minimum wage doesn't effect hardly any workers. I had several jobs as a teen, all unskilled, mostly really shitty and I never made minimum wage...always above.

7/20/2006 4:24:33 PM

Kris, maybe you are using it that way...but that's not what the term means. You probably mean something akin to oligopoly or monopolistic competition...so oligopsony or monopsonic competition

Quote :

"It refers to a market in which the few buyers wield signifigant market power of the numerous sellers when refering to the labor market specifically. "

[Edited on July 20, 2006 at 4:26 PM. Reason : .]

[Edited on July 20, 2006 at 4:41 PM. Reason : .]

7/20/2006 4:26:11 PM

Quote :

"Who said it did?"

You were argueing agianst a point someone made which was refering to market elasticity.

Quote :

"Using this data for every 9 people that you help you have ruined the life of 1 person. Now, I have no qualms with helping those 9 people; but what about that 1 person?"

I don't like dealing with made up numbers.

Labor market floors don't neccesarily cause unemployement, namely in the case of monopsony, it simply bids the price up. Minimum wage accounts for a market failure.

Quote :

"ut what happens to surplus workers generated by the price floor on labor? Are you going to dump them in a ditch just like the milk?"

When used effectively they do not create unemployment.

7/20/2006 4:28:16 PM

Quote :

"That's only possible if the labor market is perfectly competitive"

The labor market is very nearly competitive...most economists would see it as functionally competitive, if not perfectly competitive, because perfect competition has very difficult tenets to be practically applicable.

7/20/2006 4:28:21 PM

Quote :

"Minimum wage accounts for a market failure."

No, minimum wage CAUSES a market failure.

7/20/2006 4:29:07 PM

Quote :

"The minimum wage doesn't effect hardly any workers."

Then why are people so violently agianst it?

Quote :

"Kris, maybe you are using it that way...but that's not what the term means."

Yes it does, when refering to labor.

Quote :

"It also means fewer sellers than buyers"

Clearly that's the situation we're describing here. We have a lot of people selling labor, and a fewer number of companies buying it, thus these companies have market power creating monopsony and imperfect competition.

7/20/2006 4:31:48 PM

Quote :

"Labor market floors don't neccesarily cause unemployement, namely in the case of monopsony, it simply bids the price up. Minimum wage accounts for a market failure."

Not true, even if you replace every employer in the nation with a single profit-maximizing monopoly it follows that at some price unemployment will result.

Like you said before: at some point marginal costs will outrun marginal revenues, rendering the least productive workers unemployable.

Of course, maybe you are just smarter than everyone else. Why don't you go down the local Milk Cooperative and tell them how to set their price floors "effectively" as to eliminate surplus milk production. Once you have done that THEN i might consider letting you manage the price floor for labor.

7/20/2006 4:35:54 PM

Its also incorrect to think or each firm as 1 unit and each worker as 1 unit. Then, of course it look like firms have all the power, but remember that they need more than 1 unit of labor to operate.

In reality, though, there is no monopsony in low-wage job hiring, because there is not only a few firms with all the jobs. There are thousands of firms, all competing for the labor.

7/20/2006 4:36:24 PM

Quote :

"Not true, even if you replace every employer in the nation with a single profit-maximizing monopoly it follows that at some price unemployment will result."

Obviously if you bid the price up too high it's going to cause unemployement, but in the case of a monopsony a price floor can bid the price of labor up to what market price should be.

7/20/2006 4:38:41 PM

Quote :

"Its also incorrect to think or each firm as 1 unit and each worker as 1 unit."

Why? It's the number of entities you have competing agianst one another. Clearly you have less companies competing agianst one another than you do workers. Thus it is an imperfectly competitive market due to the market power of the buyer. This is why minimium wage must bid the price up.

Quote :

"In reality, though, there is no monopsony in low-wage job hiring, because there is not only a few firms with all the jobs. There are thousands of firms, all competing for the labor."

And in reality there are many times more unskilled workers selling labor.

7/20/2006 4:41:56 PM

Even so, you're overlooking that the firms don't wield the kind of power you think they do. At some point you have to realize that being unskilled and uneducated means you can't find a job that pays what you would like. That's what sucks about being unskilled and uneducated.

The labor they can supply simply is not worth more...or, more specifically, it is only worth more if firms hire less of them.

7/20/2006 4:44:53 PM

Quote :

"And in reality there are many times more unskilled workers selling labor."

Kris, true, but there is an element of scale here: there is not much difference between having 100 sellers and 10,000 sellers, it still fits the textbook definition of "many sellers." The ratio does not matter: a ratio of 1 seller and 4 buyers is still a monopoly, a ratio of 3 sellers and 12 buyers is still an oligopoly, and a ratio of 100 sellers and 400 buyers is still a functionally competitive market.

7/20/2006 4:45:59 PM

Kris, if there were so many people selling unskilled labor...we'd have a higher unemployment rate, because there would be more people than jobs.

This is not the case.

7/20/2006 4:47:04 PM

Quote :

"Even so, you're overlooking that the firms don't wield the kind of power you think they do."

Sure they do, simply compare the numbers. Large firms buy unskilled labor from a LARGE numbers of people, while these people only sell their labor to one firm.

Quote :

"The ratio does not matter: a ratio of 1 seller and 4 buyers is still a monopoly, a ratio of 3 sellers and 12 buyers is still an oligopoly, and a ratio of 100 sellers and 400 buyers is still a functionally competitive market."

No. Having more buyers than sellers or vice versa creates market power. This market power creates imperfect competition.

Quote :

"Kris, if there were so many people selling unskilled labor...we'd have a higher unemployment rate, because there would be more people than jobs."

Not true. This smaller number of buyers provide MANY jobs, while the workers only work for one. Thus you have more sellers than buyers which creates the market failure.

7/20/2006 4:53:52 PM

It isn't often that I sit back and allow Kris of all people to do all the hard work for me.

7/20/2006 4:54:44 PM

maybe I should teach econ

I'd call it Capitalism sux0rs 101

7/20/2006 4:59:44 PM

I don't know that I could get behind that, but "Laissez-faire is teh gh3y 101" is a different matter.

7/20/2006 5:03:54 PM

capitalism sucks for lazy bastards 202L

7/20/2006 5:05:24 PM

Basically you've got three cases with minimum wage.

1:Minimum wage reflects the market price. You win, mission accomplished
2:Minimum wage is lower than market price. Companies may use their market power to bid the market price down to the price floor and the workers get less than market value for their labor, luckly this is restricted to the floor so the impact is somewhat minimalized.
3:Minimum wage is higher than market price. Companies employ less people than the would if it was market price. Sucks, but it's generally not that bad, and will eventually work it's way out as labor becomes more skilled or as the government takes measures to battle unemployment or at worst, inflation eventually takes care of it.

Without it you've got one, case #2, and it's not dampenedby the floor. This will dampen itself a little after time, but chances are this will happen a lot.

7/20/2006 5:07:56 PM

Quote :

"Not true. This smaller number of buyers provide MANY jobs, while the workers only work for one. Thus you have more sellers than buyers which creates the market failure."

So what? I can only buy from one TV dealer at any given time, does that mean Sony has sufficient power to create a "market failure" in televisions?

As for Grumpy, who is arguing "laze-fuck" anyway? If you really want to help the poor then we can talk: targetted subsidies, state charity, EITC, anything that actually helps the poorest among us; instead of redistributing from the worse-off poor to the better-off poor.

7/20/2006 10:42:37 PM

Quote :

"I can only buy from one TV dealer at any given time, does that mean Sony has sufficient power to create a "market failure" in televisions?"

They do have market power, not to the degree of labor, but yes they have market power. Labor is different because everyone needs a job, and only one. It's further limited for unskilled workers. It's pretty much accepted that minimium wage accounts for the labor monopsony market failure. It's not like I'm just making this stuff up.

Quote :

"f you really want to help the poor then we can talk: targetted subsidies, state charity, EITC, anything that actually helps the poorest among us; instead of redistributing from the worse-off poor to the better-off poor."

You don't even understand how this works. Its basic economics, you know, the kind that liberitarians know nothing about. I know you like to think that you have economists on your side here, but economics is an easy major, joe blow could be an econ major. Any good economist knows the basic market failures. Price floors can be ineffectively implemented, but that by no means implies that all are bad.

7/20/2006 11:13:14 PM

remind me again, Kris. Where is the price floor for the company? Are companies guaranteed a basic level of talent and skills when they pay minimum wage? Or are they just guaranteed a body?

I think it ought to work both ways...

7/20/2006 11:15:30 PM

Quote :

"Where is the price floor for the company?"

They don't need one. They have market power. They'll always bid the price down to minimium wage for unskilled labor.

Quote :

"Are companies guaranteed a basic level of talent and skills when they pay minimum wage?"

No. They'll most likely have to pay above minimium wage for skilled labor. But they have market power, they'll always have the upper hand.

Quote :

"I think it ought to work both ways..."

That is so insanely stupid it becomes difficult for me to even explain why at that level.

7/20/2006 11:24:26 PM

Quote :

"They have market power."

market power means nothing with price fixing, Kris. If the labor, itself, isn't worth what they are being forced to pay, then companies are being exploited, plain and simple.

Quote :

"But they have market power, they'll always have the upper hand."

Actually, I just proved that false.

Quote :

"That is so insanely stupid it becomes difficult for me to even explain why at that level."

actually, you can't explain the "stupidity" because it's not stupid. You think corporations are inherently evil and look to fuck them over at every turn. That a corporation should be able to protect itself never enters your mind. Sorry, but with logic like that underpinning your every thought, it's not surprising to me that you fail to see how an unmatched price-floor can actually hurt a company

7/20/2006 11:37:03 PM

Quote :

"If the labor, itself, isn't worth what they are being forced to pay, then companies are being exploited, plain and simple."

That will never happen. You see if P < AVC, companies shut down. Humans however cannot.

Quote :

"Actually, I just proved that false."

No, you're an idiot.

Quote :

"actually, you can't explain the "stupidity" because it's not stupid"

No, it's incoherent jibberish.

I've explained it as clearly as I can. Labor market monopsony is a widely accepted economic concept. Basic market failures are econ101 material, it's not difficult. Minimium wage is economically better for everyone.

[Edited on July 20, 2006 at 11:47 PM. Reason : ]

7/20/2006 11:43:51 PM

Quote :

"They'll always bid the price down to minimium wage for unskilled labor."

Which is why McDonalds pays minimum wage.

7/20/2006 11:54:58 PM