About the minimum wage

I disagree with much of the underlying thinking here.

But I’ve still got to say that it’s a damn good article, a very good piece of writing.

Even though it does refer to an article of mine.

23 thoughts on “About the minimum wage”

  1. I’ve read both academic articles. Both methodologies are considered appropriate and there are criticisms that can be made of both – technically the Berkeley paper uses a slightly less reliable method.

    The interesting point is that in a successful economy wages for relatively low skill jobs should rise – and I suspect that they would have, had it not been for massive immigration. The US, like the UK, should be undergoing a massive labour shortfall, which would result in wages of baristas and waiters rising.

  2. ‘Every time a government debates whether to raise the lowest amount it is legal to pay for an hour of labour . . . ,’ an Angel cries.

    It is a declaration that the government is fascist. Empowered to do whatever it wants to, dependent on politicians convincing enough people that what they are doing is “Good.” A fairly simple task.

    The U.S. Federal Register has nearly 100,000 pages, over 90% of which the government has no actual authority.

  3. Bloke in Tejas in Normandy

    I have to disagree that the article is a good article. Fluently written, true.

    But its point or conclusion is hard indeed to discover. Perhaps it’s just a conversation piece, or elegant filler. It starts off so well, wondering if the classic minimum wage discussion is missing something basic. But it never presents a hypothesis as to what this might be.

    I think that he’s right. The ‘debate’ such as it is is missing something fundamental. IF ‘society’ believes that everyone employed should have revenues sufficient to maintain a basic life, then society has done something very terrible: what about those who are not employed? Surely they, too, deserve to have such revenues?

    This drives one inexorably towards a (probably variable across the nation driven by local costs of living) rather low and unexciting UBI. One just sufficient to live if one is sharing some shelter (as if one were married) and with no allowance for children. Children, like TVs, are a luxury; you need to be employed at above basic rate to afford them.

  4. So Much For Subtlety

    The Berkeley economists had been preparing their own study of Seattle’s minimum wage, which reached very different conclusions. At the city’s request, they accelerated its release, so it would come out before the more negative UW paper.

    Camp-following wh0re seems overly generous. Seattle bought the conclusion they wanted when the people they funded came up with the opposite conclusion.

  5. As an aside, I owe you an apology Tim – you were right, Ken Loach does live in Widcombe and not Lansdown. As a quick search on Companies House reveals. He seems to have something of a passion for the number sixteen. And possibly another Georgian house, this one in London, in the Gospel Oak end of Hampstead Heath

  6. What the bloke in Normandy says – it’s a nice little delve into minimum wage history, but the article has no conclusion or even prediction.

    “Therefore, a minimum wage is accepted as a tweak necessary to correct this flaw [monopsonistic conditions].”

    Might there be other, better tweaks available? Ways to reduce the friction of job-hunting and/or better match employees to employer?

  7. The Meissen Bison

    Seattle’s $15 is the highest minimum wage in the US, and almost double the federal minimum of $7.25.

    Impressive talent for sums.

  8. “Might there be other, better tweaks available?”

    The heavy hand of government should not be doing “tweaks.”

    The better tweak is to do nothing, to get out of it, to mind their own business. Once you accept that government can do tweaks, you are doomed. It will grow til it tweaks everything.

  9. As ken alludes to above, the best way to raise the wages of low skilled workers would be to restrict immigration. But the minimum wage rabble rousers don’t really care about that, do they?

  10. The whole point of a minimum wage is that the workers who keep their jobs and get higher pay might vote for the pols who introduced it. Those who lost their jobs, or especially those who never did find jobs, because of the min wage are unlikely even to realise the cause and will therefore have no particular reason to vote against the politicians.

    It’s all just normal democratic politics i.e. vote-buying.

  11. Gamecock,
    A good “tweak” might be the state building a new motorway to better connect workers to jobs. Granted that’s a bit harder than simply legislating to increase the minimum wage.

    Another tweak might be imposing tough penalties on companies whose job offers don’t match the reality. That’s merely enforcement of contract law, something that even the wildest liberals tend to agree falls under government’s remit.

    If workers are reluctant to chase better opportunities, there’s a fair bit that government can do to improve that without overstepping the mark.

  12. “Another tweak might be imposing tough penalties on companies whose job offers don’t match the reality.”

    That’s the marketplace’s job.

    “That’s merely enforcement of contract law, something that even the wildest liberals tend to agree falls under government’s remit.”

    Jeeze. There is no contract. An offer does not constitute a contract.

    “If workers are reluctant to chase better opportunities, there’s a fair bit that government can do to improve that without overstepping the mark.”

    Wut? You gonna make ’em chase better opportunities at gunpoint?

  13. What is an hour worth?

    Kind of depends on what you produce during that hour, and on whether anyone wants to buy it once you have done so, doesn’t it?

    No doubt I am being simplistic. Or something else bad.

  14. Liberals too often believe that people can be sorted into satisfactory slots and then maintained there. Hence, a large increase in minimum wage will not result in all minimum wage earners losing their jobs, and those who don’t lose their jobs will now have been satisfactorily taken care of. Those who do lose their jobs will be taken care of later in another manner, perhaps in a galaxy far, far away.

    It true that business owner with an investment in a fixed locale may well try to stay in business. The McDonalds’ owner often doesn’t close down because his wage costs go up, but a prospective McDonalds’ owner decides that there may be better entrepreneurial opportunities somewhere else and so invests and hires elsewhere. The liberals don’t care about those who might have been hired but aren’t. The first group is sorted, the job losers will be taken care of later as will those who don’t get a job. That’s their belief.

    Eventually, counter actions happen. An Uber might spring up putting pressure on taxi drivers, a group the liberals deemed to have been satisfactorily sorted. Hence the hatred of Uber even though it is largely low wage people doing the driving and making a few bucks. Also, businesses may slowly migrate away, and eventually we have Detroit. This is to howls of “how dare they move away”. The only way to obtain to a truly “progressive” society is to put stringent controls on personal and business mobility. We need only look to Russia or other countries for examples of how well this works.

  15. Bloke in North Dorset

    Another xOrder effect:

    Seattle and a few other States’ minimum wage makes it worthwhile a company developing a hamburger flipping machine. Not only does that mean the loss of jobs in those States but as the price of the machines falls it makes it easier to replace workers in other states,and even other countries, which have lower minimum wages.

  16. @Bloke in Tejas in Normandy, April 13, 2018 at 12:24 pm

    I have to disagree that the article is a good article. Fluently written, true….elegant filler…


  17. Indeed, BiND.

    When I worked in a manufacturing plant, we saved project proposals that didn’t quite make the grade. When there was an increase in the wage rate, we pulled out all the old almost good enough projects and reevaluated them.

    Leftards view the economy as static. Raise minimum wage, and the economy hums along, only with the minimum wage earners getting more.

    Companies and economies are not static. Every action will produce a reaction.

  18. Productivity – if wages go up but the value of work produced does not go up what happens to productivity?
    Are some of the productivity issues the result of government increasing wages by 4.4% for some workers?

  19. “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country,” Franklin Roosevelt.

    An this encapsulates why so many liberals are indifferent to businesses closing down if they find wage costs are too high. Business closures from minimum wage hikes are considered a feature not a bug.

    Presumably those who lose their jobs, not to mention the small business owners who shutter their businesses, will be taken care of later once someone new magically appears to set up a much more profitable business in the building and rehire all the laid off people at higher wages.

  20. All restrictions on prices eventually lead to a black market. The minimum wage leads to a black market in labor. That is under the table payments and illegal immigrants. Simple economics.

  21. Peter C.Baker is obviously paid by the word, so he has written a lot of them, that don’t actually say anything. Or perhaps this is a masterpiece of fence-sitting. Meh.

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