Well, it's certainly nice to finally join a place and be able to discuss views that fall in line with my own.
Either way, my first question/discussion (a little of both) is on the minimum wage. I am 100% opposed to the minimum wage for economic reasons as well as moral (requires governmental force to insitute). That said, I wanted you guys to take a look at these two websites, and what they say:
http://mediamatters.org/items/200701100004 http://www.epi.org/content.cfm/issueguides_minwage
Both of these claim to show that the minimum wage really doesn't hurt individuals and that it's overall good. I'm 99% sure that they're wrong, but I'm afraid that I just can't quite grasp or see it, at this point in time; whether their data is skewed or whether they're merely out and out incorrect.
So, my main question is, do any of you have counter-points to this website? I prefer, if there are, that it not be a quick short answer, such as "well, they're just wrong", or the like, but a well thought out and put forth answer.
Resident Christian Minarchist.
Its interesting, the WSJ article Mediamatters references isnt quit the ringing endorment of their theory:
http://online.wsj.com/public/article/SB116250968954211912-ulbQAzJn_bfqr5q1NjAS2gGurCU_20071102.html?mod=blogs
A few choice nuggets:
"Four years later, though it is impossible to say what would have happened had the minimum not been raised,"
"At Petite Provence eatery in Portland, co-owner Didier Blanc says the minimum wage, while paid only to servers, has had an "aftershock effect," forcing him to raise wages for all employees. While servers earn the minimum, bakers and cooks earn between $9 and $12 an hour. The costs are passed on to customers."
"In a new report, economists David Neumark of the University of California at Irvine and William Wascher of the Federal Reserve Board say a review of more than 90 studies in more than 15 countries since the early 1990s shows nearly two-thirds of the studies find a "consistent" though not always statistically significant negative impact on employment. Fewer than 10 found a consistently positive impact. While there's "no consensus," they say, "the weight of empirical evidence" supports the traditional view."
As someone who lives in Oregon I would say much of the cost has been passed on to the consumer.
Wren: I could look through those sites and find things at fault with them, but instead let me simply say that minimum wage doesn't even keep pace with inflation. One might as well not even have it, since it is so low in comparison.
I could look through those sites and find things at fault with them, but instead let me simply say that minimum wage doesn't even keep pace with inflation. One might as well not even have it, since it is so low in comparison.
Of course, this doesn't mean that I would support a minimum wage that kept up with inflation. I just wanted to point out that a quarter or 50 cent increases in the minumum wage would probably have little to no affect anyway, since inflation/the cost of living increases at a much faster rate. Many of the Austrian critiques in general of empirical and positivist economics apply to these emprical studies dealing with minimum wage.
I typed in minimum wage in the media search and found this stuff:
http://mises.org/multimedia/block/Block_Debate_05-08-2008.mp3
http://mises.org/multimedia/block/Block-Blundell-Debate-2007.wmv
http://mises.org/multimedia/mp3/block/block3.mp3
I could look through those sites and find things at fault with them, but instead let me simply say that minimum wage doesn't even keep pace with inflation. One might as well not even have it, since it is so low in comparison. HiggsBoson also makes a good point, the cost is then just shifted to the consumer. Also, if you look through the media section of this website, you'll find many critiques against these empirical studies from Walter Block and such.
Thank you immensely for your reply, as this is informaiton I may need in a debate, in the future (which is chiefly why I created this topic). If anyone else is to post here, this is the kind of information I'd prefer/require.
Thanks again!
Thanks, yet again; I'll have to check those out tomorrow when my eyes and ears are so weary.
If the additional costs are passed onto the customers, rather than being eliminated by reducing the employees, that would reduce the competitive performance of that firm.
Eduard - Gabriel Munteanu: If the additional costs are passed onto the customers, rather than being eliminated by reducing the employees, that would reduce the competitive performance of that firm.
Obviously you can't eliminate all employees. Firms remain competitive even after passing on the cost because all their competitors have to do the same.
This is why the meme that "companies want low wages to increase their profits" is false. A general reduction in the cost of labor would have no impact on profits.
Hey Fox, nice to see you around the Mises forums.
The minimum wage is nothing but a price floor. If I value your labor at $5 and the minimum wage is $5.15, I won't hire you. The rising costs of labor will give me incentives to hire less people - and thus create unemployment for the least skilled. Empirical explanations that "prove" otherwise are nothing more than giant post hoc fallacies. Saying that employment increased alongside with a minimum wage increase and that therefore minimum wages don't affect employment is ridiculous when you can have a million things going on at the same time creating more jobs - e.g. you're at the height of a boom, or the corporate tax was just lowered, or the payroll tax was just lowered, etc.
This is precisely the lesson of the Austrian school - empiricism in economics is a failure precisely because it fails to account for other factors and oftentimes confuses cause with effect (e.g. the monetarist concentration on the credit crunch - not the preceding credit expansion - as the thing that creates recessions).
Mises Community Natural Rights Discussion Group
JonBostwick: This is why the meme that "companies want low wages to increase their profits" is false. A general reduction in the cost of labor would have no impact on profits.
I can't even begin to see how this could be true. Why would an employer want low wages if not to increase their profits?
The employer want the lower wages possible for the jobs he need to fill. They want maximize the profits.
Multiple employers will try to fill the same jobs paying the same wages or lower, to remain competitive.
But if they are not able to fill the jobs they will pay more to attract workers to the jobs they need filled.
The limits are how much the job filled pay and how much they cost.
If filling the jobs cause a loss, the employers will not hire the workers.
krazy kaju: The minimum wage is nothing but a price floor. If I value your labor at $5 and the minimum wage is $5.15, I won't hire you. The rising costs of labor will give me incentives to hire less people - and thus create unemployment for the least skilled. Empirical explanations that "prove" otherwise are nothing more than giant post hoc fallacies. Saying that employment increased alongside with a minimum wage increase and that therefore minimum wages don't affect employment is ridiculous when you can have a million things going on at the same time creating more jobs - e.g. you're at the height of a boom, or the corporate tax was just lowered, or the payroll tax was just lowered, etc. This is precisely the lesson of the Austrian school - empiricism in economics is a failure precisely because it fails to account for other factors and oftentimes confuses cause with effect (e.g. the monetarist concentration on the credit crunch - not the preceding credit expansion - as the thing that creates recessions).
Or in terms minimum wage true believers can understand: increasing the size of one's pizza slices must, apodictically, decrease the number of slices, no matter how many studies say otherwise.
Diminishing Marginal Utility - IT'S THE LAW!
Greg: JonBostwick: This is why the meme that "companies want low wages to increase their profits" is false. A general reduction in the cost of labor would have no impact on profits. I can't even begin to see how this could be true. Why would an employer want low wages if not to increase their profits?
I believe he meant if there was a generally reduction in the cost of labour competition would bring prices down accordingly.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
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