NOT THE FRUITS OF MY LABOOOORRRRRRRR!!!!!!

ANYTHING BUT THAAAAATTTTT

7/18/2009 12:47:12 PM

Quote :

"What is unjustified is the other 90% of the money that is forcibly taken to give to rich people."

Please to explain?

7/18/2009 10:26:34 PM

What needs explaining? Only a small fraction of federal spending actually goes to the poor. The rest goes to people that I doubt you would consider poor.

7/19/2009 9:33:28 AM

^Don't be coy. Spell it out. How are the rich getting gov't welfare?

7/19/2009 10:47:58 AM

Quote :

"^Don't be coy. Spell it out. How are the rich getting gov't welfare?"

seriously? have you been conscious the past 8 months?

7/19/2009 10:51:07 AM

Quote :

"MASSIVE FEDERAL BAILOUT"

7/19/2009 11:09:33 AM

I'm still trying to figure out why it takes more workers to cook food at Smithfields than it does at McDs.

7/19/2009 11:16:55 AM

^ McDonald's has a hell of a good engineering department that optimizes everything in the place. Go into to a well run McD's and watch. Automated drink dispensing, everything is in it's place, etc... Runs like a clock. It's a lean operation.

7/19/2009 2:31:54 PM

because McD's doesn't "cook" their food.

7/19/2009 2:43:39 PM

I wish. It's hard to find a good rare burger....

7/19/2009 3:47:10 PM

i was a white castle the other day and they were cooking meat on a flat top

it was hilarious.

7/19/2009 4:02:26 PM

So, no reason to believe Smithfields can't do that either.

Rather than try and rationalize what LoneSnark posted, lets just chalk it up to another single variable ridiculous scenario he made up to try and prove a point.

Like this one for example

Quote :

"but let us assume they spend every penny eating out more and they only eat at their employer. Well, the government took 10% as income tax, so their employer has $90 more revenue, but as with all businesses, most of that new revenue is going to go towards costs: sales taxes to the state, the ingredients to make the food was not free, neither was the energy used to cook the food, it was produced in factories elsewhere that do not pay minimum wage. As such, even in this absurdly optimistic example, of the $100 cost imposed on the employer, he recouped $20."

So, the ingredients now cost more that the minimum wage has raised? Wtf?

7/19/2009 5:01:55 PM

I think you guys have minimum wage confused with a living wage, which causes a constant outward spiral of rising prices on both ends.

The problem with eliminating the minimum wage at this point is that people have come to expect it. They would not be willing to accept anything less. The only people who might would be illegal immigrants, who should be required to make minimum wage anyway (since that would destroy any incentive to hire them). The initial market response might be slow, unless it resulted in raised recruiting and training costs, since some people would be stupid enough to take a stupid wage and then readily quit, since those types of jobs are inherently crappy.

7/19/2009 6:13:33 PM

Quote :

"So, no reason to believe Smithfields can't do that either."

Yes, the owner of smithfield can wake up tomorrow, see the higher wage, decide to buy new equipment, and lay off a portion of his minimum wage workforce. You yourself accepted the fact that the minimum wage destroys jobs when the owners are profit crazy, I was pointing out that the owners could actually be happy sacrificing for their workers and yet the minimum wage would still destroy jobs.

Quote :

"Rather than try and rationalize what LoneSnark posted, lets just chalk it up to another single variable ridiculous scenario he made up to try and prove a point."

I'm sorry, I must have this place confused. I thought it was an internet forum where people waste time by making arguments in relation to irrelevant subjects?

Quote :

"So, the ingredients now cost more that the minimum wage has raised? Wtf?"

Yes, I know, wtf. Not since the 1930s have I heard of anyone seriously arguing that raising wages would improve a companies balance sheet. It did not end well then, and I assure you that it will not end well now.

7/20/2009 12:10:23 AM

well having free labor would be the best bet for most companies.

we already had a war over it.

7/20/2009 1:14:55 AM

Quote :

"Yes, the owner of smithfield can wake up tomorrow, see the higher wage, decide to buy new equipment, and lay off a portion of his minimum wage workforce."

They need new equipment to cook the exact same food? Your analogy is just retarded in that you can barely compare Smithfields to McDonalds. You do realize all that super efficient method of business that McDs has came at a cost of all the overhead of the people that set the system up, plus all of the equipment you just called for.

The whole point I am making about "single variable" that you constantly fail on is you simply can't look at a business like McDs vs Smithfields and draw the conclusions you do without examining EVERYTHING ELSE. I actually will give you the idea that raising the minimum wage might slow their self financing capability...if you ignore every other aspect of their business. The thing about economics and large policy decisions is...YOU JUST CAN'T DO THAT. Which is why I played devils advocate about the money velocity, wealth effect, and more people coming to eat at Smithfields. It's not a stretch to thing the type of workers that are working minimum wage jobs will "splurge" more often at Smithfields.

It's pretty stupid and arrogant for an econ minor (or are you a double major with ECE?) to come to these boards and post these little cute scenarios you do like you're accomplishing ANYTHING.

Quote :

"I'm sorry, I must have this place confused. I thought it was an internet forum where people waste time by making arguments in relation to irrelevant subjects?"

It's the same thing with you over and over. You waltz in the thread, regurgitate what you learned with your pathetically inadequate economics background, and then challenge everyone else to create a full economic paper (which is essentially what it would take to refute what you spew, even if it would be for the win) as a reply.

Quote :

"Yes, I know, wtf. Not since the 1930s have I heard of anyone seriously arguing that raising wages would improve a companies balance sheet. It did not end well then, and I assure you that it will not end well now."

You have a terrible short term memory as I do believe it was posted on page 1 of just that argument.

7/20/2009 9:19:17 AM

It is called a thought experiment. It is how things in economics are considered. My point is that there is no mechanism with the magnitude to compensate for the hit from the minimum wage, as such jobs will be destroyed. You mentioned the demand boosting effect, so I determined just how big that could possibly be, and it came up to nothing close to the wage hit.

So what is your point? That the real world is too messy to know anything? That there are too many variables to say for sure the minimum wage will destroy jobs, so we should raise it? Even if that is your point, it is absurd: have you never heard of the precautionary principle? I admit, some economic processes are quite complicated, but this is not one of them. All it does is move money around among a few stake holders, with predictable results: less employment.

And this being an internet forum, there is no need to write full papers, just presenting the abstract should always suffice to present mechanisms and give a sense of magnitude.

7/20/2009 9:42:29 AM

Quote :

"My point is that there is no mechanism with the magnitude to compensate for the hit from the minimum wage, as such jobs will be destroyed."

The cool thing is, a nobel laureate has already addressed guys with your train of thought

Quote :

"Nobel laureate Paul Krugman, has argued in favour of the Card and Krueger result, stating that Card and Krueger;[55] ... found no evidence that minimum wage increases in the range that the United States has experiences led to job losses. Their work has been attacked because it seems to contradict Econ 101 and because it was ideologically disturbing to many. Yet it has stood up very well to repeated challenges, and new cases confirming its results keep coming in. "

One thing is certain about economics is that it almost evolves as fast as we can understand it, which is why it is absurd for the majority of us to even discuss the minutiae here in any serious way when it comes to policy. The best we can do almost every single time is site history and say we don't know if we'll follow that path going forward because the system is too complex.

Quote :

"so I determined just how big that could possibly be, and it came up to nothing close to the wage hit. "

You did no such thing. You pointed out the employees of one employer and pulled some numbers out of a hat. This says nothing about all the other employees at other employers. We can all play this game. I could just as easily wave a wand to make a case on my side that more people that tend to eat fast food will upgrade from McDs to Smithfields now that they have more money in their pocket.

7/20/2009 10:09:48 AM

If we're so worried about helping the finances of the working poor, why not eliminate the regressive payroll tax on them.

Get rid of the min. wage so more people will be hired, and spare them the pain of taxing their first dollar and sending it to some retiree in Florida.

7/20/2009 11:03:17 AM

Quote :

"Get rid of the min. wage so more people will be hired,"

Do you read anything that is posted?

7/20/2009 11:47:36 AM

Quote :

"Their work has been attacked because it seems to contradict Econ 101 and because it was ideologically disturbing to many. Yet it has stood up very well to repeated challenges, and new cases confirming its results keep coming in."

Stood up very well in the sense that it cannot be proven faulty, which isn't saying much: if the data existed to disprove their conclusion then being good researchers they would have used it themselves and drawn an different conclusion. Remember, the assertion is not that their work was faulty, but that the data needed to complete the whole picture did not and still does not exist because the vast majority of employers do not file quarterly reports with the government. It helps if you try to actually understand what is going on, rather than just proclaiming "oh, it all beyond our comprehension! who are we to try and comprehend the Krugman's mysterious ways!"

Now, your assertion does have some ground when we are talking about measured statistics. It is far too complex a system to conclude that statistics will show job losses, since the labor market is so complex the damage done by the minimum wage will get lost in the noise. As such, it is only natural to have studies showing a higher minimum wage correlated in more employment standing along side studies showing a higher minimum wage correlating with less employment. But to suggest that the higher employment in the former was a result of the hike is wrongheaded without a means for it to be true, which you have not presented. Showing a correlation in statistics is not enough, you must propose a model which would allow it to be true. Otherwise you will find yourself arguing that a lack of pirates causes global warming, since the two are correlated. But because there is no reasonable mechanism for fewer pirates to cause the planet to warm, the theory must be rejected. Similarly, since there is no mechanism for a higher minimum wage to create jobs, it similarly must be rejected.

If we accept your assertion that the wage hike drove people to preference the now higher prices at Smithfield, it still results in job losses, as there is no where for the extra money to come from to keep the order intact. If we assume the only business cost is wages and employees spend every cent eating out, then employment will still fall as there is simply not enough money to sustain the system of employment, and it will not be restored until the federal reserve puts more money into their pockets.

7/20/2009 12:14:12 PM

Quote :

"If we accept your assertion that the wage hike drove people to preference the now higher prices at Smithfield"

I simply don't care to engage you on any cordial level when you begin your arguments with these types of assertions. The bottom line is, if professional economists including at least one nobel laureate can't get in agreement about sweeping policy changes such as the minimum wage, then what makes you think the rest of us can do the discuss any value adding?

7/20/2009 2:06:06 PM

If twwers only made posts about topics that they're qualified to discuss, there would'nt be a single topic in the Soap Box.

7/20/2009 3:09:45 PM

Clearly, that is exactly what I said when I compared a nobel laureate to a poster on the wolfweb talking about intensely complex macro economic policy topics.

7/20/2009 4:23:51 PM

Quote :

"The bottom line is, if professional economists including at least one nobel laureate can't get in agreement about sweeping policy changes such as the minimum wage, then what makes you think the rest of us can do the discuss any value adding?"

It is the minority of economists (26.5% of respondents in the following study) that believes minimum wage does not increase unemployment.

http://www.journalofeconed.org/pdfs/fall2003/6fullerfall03.pdf

Quote :

"Clearly, that is exactly what I said when I compared a nobel laureate to a poster on the wolfweb talking about intensely complex macro economic policy topics."

You cannot settle an argument on the grounds that a single nobel laureate favors your position. Besides, one can also produce a list of nobel economists who oppose minimum wage (e.g. Samuelson, Buchanan, Friedman, Tobin, et. al.) Neither list is a good substitute for argument.

[Edited on July 20, 2009 at 7:25 PM. Reason : .]

7/20/2009 7:23:08 PM

Quote :

"It is the minority of economists (26.5% of respondents in the following study) that believes minimum wage does not increase unemployment."

Lets ask that majority how well they predicted the economy going forward in 2003? 04? 05? 06?

Or, we can just forget about asking the economists and look at what 1 study found actually happened in response to the raising of the minimum wage.

Cognitive dissonance must really suck.

7/20/2009 9:21:09 PM

Or we can look at all the other studies that demonstrated the exact opposite.

Or we can be rational thinkers and try to understand the subject at hand. The economics does not get much simpler than price floors. Clearly you do not go in for that, so why are you here? The only conclusion you are willing to assert is pro-minimum wage, yet when we make assertions to the contrary you fall back to "then what makes you think the rest of us can do the discuss any value adding?" So which is it? Is the minimum wage supported by the evidence or do you not feel competent enough to draw any conclusion? If it is the former, then respond to the criticism and stop ducking under the table. If it is the latter then go away, you have nothing to contribute. And stop saying this question is complex, it is not; few subjects in economics are simpler than price fixing.

7/20/2009 10:34:17 PM

Quote :

"The only conclusion you are willing to assert is pro-minimum wage"

No, my conclusion is most of the standard libs and conservatives in here are nothing more than an echo chamber about conventional economic theory despite studies that contradict this rather handily. It's like pulling teeth just to get you guys to admit that your old lines of thinking might be questionable.

Quote :

"So which is it? Is the minimum wage supported by the evidence or do you not feel competent enough to draw any conclusion?"

Oh, Ill readily admit I'm not competent enough and am not pretending to be. You however won't admit it.

Quote :

"And stop saying this question is complex, it is not; few subjects in economics are simpler than price fixing."

JUST HOW FUCKING RETARDED DO YOU GET? NOBEL LAUREATES CAN'T EVEN AGREE ON THIS. IT OBVIOUSLY ISN'T SIMPLE NO MATTER HOW MANY TIMES YOU STATE IT SO THAT YOU CAN ATTEMPT TO TALK ABOUT IT AND THINK YOU'RE INTELLIGENT.

Where is that pseudo-intellect thread that used to be in this section. It's needed now in the worst way.



[Edited on July 20, 2009 at 10:41 PM. Reason : .]

7/20/2009 10:39:21 PM

Quote :

"JUST HOW FUCKING RETARDED DO YOU GET? NOBEL LAUREATES CAN'T EVEN AGREE ON THIS. IT OBVIOUSLY ISN'T SIMPLE NO MATTER HOW MANY TIMES YOU STATE IT SO THAT YOU CAN ATTEMPT TO TALK ABOUT IT AND THINK YOU'RE INTELLIGENT."

You need ask why they cannot agree. It isn't because their data sets don't match. I suspect they also cannot agree on cap&trade, progressive income taxes, the morality of abortion, the usefulness of the death penalty, or immigration. Is it your opinion that these subjects too should be off-limits?

7/20/2009 11:21:57 PM

I think about the best anyone in here outside of an actual economics professor can do is have an idea and at least post links to reviewed work to support their assertions.

When I look around for literature on the minimum wage, the vast bulk of it seems to have been created before 1985. I don't care quite enough to go and tally all the years, I just eyeballed it.

Aside from the Krueger study which is newer than 1985, studies I found recently included commentary about the standard model for wages and challenges to the standard model that could account for the empirical observations Krueger made. The fact that economics still evolves, the fact the economists continue to epically fail in their predicitons, and the fact that there are so many schools of thought about it where major policy is concerned is why I don't care to debate on any rational level with someone like you who is so arrogant, so fucking cavalier, so sure of his knowledge that he'll just concoct any old scenario he thinks makes partial sense and slaps it down in a thread and thinks he is adding real value to the conversation.

You need to take some notes from Hunt. He rarely makes an argument without something fairly respectable backing up his post. You don't have the clout or reputation to just post anything and have us take it at face value...again, where major policy is concerned.

[Edited on July 20, 2009 at 11:35 PM. Reason : .]

7/20/2009 11:34:09 PM

I don't feel like coming here to do research. I do enough of that at work. As such, I presented an argument in the form of a simplified model of reality. If I made a logical error then point out where. If making my model less simplified in some way would reverse the outcome, then say how. But I see no reason why something as easy to comprehend and analyze on a micro-economic basis as a wage price floor needs to resort to a battle of the experts, especially when it is clear that there are experts on both sides of the isle.

7/21/2009 1:06:06 AM

Quote :

"Lets ask that majority how well they predicted the economy going forward in 2003? 04? 05? 06? "

Oddly enough, I doubt you would take this argument from hooksaw vis a vis Global Warming and climate models.

7/21/2009 8:13:25 PM

I have no opinion of Global Warming. A 100 page thread (or whatever it is up to now) where I occasionally click on it and see the exact same arguments and charts over and over again is enough of a reason for me to not mess with it. Seems...religiony.

7/21/2009 8:29:12 PM

Quote :

"Besides, one can also produce a list of nobel economists who oppose minimum wage (e.g. Samuelson, Buchanan, Friedman, Tobin, et. al.)"

Well, for starters, Buchanan's, and probably Friedman's, opposition is just as ideological as empirical. Come on, I watched an interview with Buchanan once where he went as far as to act as if someone had asked him a question in Urdu when he was asked what role "common good" should play in policy making.

In the social sciences, you learn to view study results through lenses of bias. In history, you have your cultural historians, social historians, Whiggish historians, Marxists, etc. Economics is just as susceptible to lenses of bias as history. That's why it's a social science.

Although your typical "look you moron go take Econ. 101...what do you mean humans are irrational?" winner refuses to acknowledge that most of the time.

7/21/2009 8:50:08 PM

^ I agree. Ideology can play a significant role for both liberal and conservative/libertarian economists (and especially so in macroeconometrics where assumptions almost entirely drive the output)

That is why it is especially telling when nearly 75% of economists agree that minimum wage is distortionary despite nearly 75% being democrats.*

*Source: http://www.nytimes.com/2004/11/18/education/18faculty.html?_r=1&pagewanted=print

7/22/2009 8:23:33 AM

Economist, Walter Williams, in his 1983 PBS documentary:

http://www.youtube.com/watch?v=7DS0XXFdyfI

(The above is part II. If interested in parts I & III: http://www.youtube.com/watch?v=P1r-r6iLBEI&feature=related & http://www.youtube.com/watch?v=NUtY80fv56M)

[Edited on July 23, 2009 at 12:49 PM. Reason : .]

7/23/2009 12:43:19 PM

Quote :

"^ McDonald's has a hell of a good engineering department that optimizes everything in the place. Go into to a well run McD's and watch. Automated drink dispensing, everything is in it's place, etc... Runs like a clock. It's a lean operation."

Fail Boat, read Fast Food Nation. It's preachy toward the end, but it's a very interesting read on the mechanics of making fast food so easy that people who can't even read English can do it. And a lot of other shit about the industry.

7/23/2009 1:48:09 PM

Another "real world" example of how minimum wage has adverse effects:

Quote :

"HUNTSVILLE (WATE) -- The federal minimum wage has gone up to $7.25 an hour and in a county that already has Tennessee's highest unemployment rate, a grocery store has to make some changes. Scenic Foods sits just off of Highway 63 in Scott County. It's the kind of store where you can get a little bit of everything, including a down home feel. But owner Bruce Posey isn't exactly happy about the 70 cent minimum wage increase. "It is hard on a small business to absorb this." Starting Monday, the 12 part time employees making minimum wage will have their hours cut. "If we don't cut hours, it could add as much as $400 to $500 per week to the pay roll," Posey explains."

http://www.wate.com/global/story.asp?s=10786522

This is another reason why the effects of minimum wage will not necessarily show up in unemployment statistics as no one in the above example has lost their jobs. Another possible effect, which wasn't in the above story, is a cut in non-cash compensation (e.g. less-generous health-insurance, employee discounts, scholarships, bonuses, paid vacation ect) which also does not show up in unemployment statistics.

[Edited on July 26, 2009 at 8:26 AM. Reason : .]

7/26/2009 8:23:11 AM

why is this thread still going?

most understand the impact of minimum wage increases and currently it seems like a poor decision but to completely write it off as a horrible thing is also pretty stupid.

also also most countries without a formal minimum wage are mildly socialist western European countries

7/26/2009 10:02:45 AM

Quote :

"Starting Monday, the 12 part time employees making minimum wage will have their hours cut. "If we don't cut hours, it could add as much as $400 to $500 per week to the pay roll," Posey explains.""

Assuming he's only cutting the hours required to offset the increase in pay, this doomsday scenario you put forth ends up with the workers having to work less for the same amount of money. Sounds like a good deal for them.

7/26/2009 12:06:59 PM

You are assuming the rise in wages fully offsets the decrease in hours. You also are not factoring in the reduction in output.

On a side note - I'm still curious why those who favor minimum wage do so over an EITC.

7/26/2009 1:31:47 PM

I am speaking from the workers' point of view. They don't give a shit about output.

7/26/2009 2:04:45 PM

Quote :

"You also are not factoring in the reduction in output. "

Again, this is more fun single variable analysis from the free marketers on the board. It's just as possible that the boost in pay motivates them, at least for a time, to get as much work done as they did in more hours before.

Quote :

"On a side note - I'm still curious why those who favor minimum wage do so over an EITC."

We aren't familiar with the EITC, we aren't taking economics courses, we don't make minimum wage = not interested in researching it to debate you about it?

7/26/2009 3:13:59 PM

Preface: I'm not an economist. I'm a policy analyst, but I do environmental and energy work, not anything related to labor economics. But it seems like there's been clamoring in this thread for a thought model that could support an increase in employment related to an increase in minimum wage, and since no one else has provided one, I thought I'd give it a stab. Feel free to shoot it down in typical TWW fashion. I'm not coming down on one side or the other of this debate, merely positing a situation that could in some circumstances produce the results that Card and Krueger found for some industries--I make no claims about how this would generalize across the entire low-wage labor market.


Everyone is so keen to discuss the effects of minimum wage on firms' hiring practices, but we seem to sometimes forget that employment is a two-way street--workers have to be willing to work, and this is particularly important to remember when talking about wage floors in a society that also provides welfare support for the poor. A quick search of the intertrons produces the following graph illustrating the real income adjusted for inflation of a full-time (40 hrs/wk) minimum wage worker, as compared to the federally-defined poverty line:



If you accept that the poverty line has some approximate relationship to the reservation income of an average low-wage, unskilled individual through the availability of social welfare programs, then it seems plausible here that a sizable number of individuals might choose welfare over employment at minimum wage. In the same way that you're all arguing the classic micro "platitude" that increasing minimum wage reduces firms' demand for labor, it should also induce more workers to seek employment. If there are industries for which minimum wage is close to the uncapped equilibrium wage, or for which they face difficulty attracting enough workers at the current minimum wage, then it seems feasible that an increased min wage could still cause a net increase in employment. Think of a firm that wants to hire 50 workers at min wage but they can only regularly employ 40 because the work is pretty shit; if the min wage is increased, maybe now they only demand to hire 45 workers, but the higher wage induces 5 more people to be willing to do the work.

All other criticisms about wage floors, efficiency, and social welfare aside, I can imagine this situation could exist. Perhaps this phenomenon, combined with issues like Hunt's article where some firms reduce hours rather than employee numbers, could go some way towards explaining counterintuitive results. Like I said before, I wouldn't expect this to be the case in all industries, but it might help explain why the increased employment result shows up in some studies that just look at one sector like fast food.

I don't have any good idea about labor statistics, but do the benefits from social welfare systems get adjusted for cost of living and inflation more often than the minimum wage does? I'm guessing from the graph above that the federal minimum wage has only been changed about four times in the last 30 years?

7/26/2009 7:02:20 PM

Quote :

"Again, this is more fun single variable analysis"

How so?

7/26/2009 7:41:08 PM