Should minimum wage be increased?

[paranoid android]

Okay, but what do you suggest be done when businesses respond to such legislation by simply firing employees en masse (i.e., downsizing to keep production costs as low as feasible)? Anytime you drive up the cost of labor, you'll be hurting producers' bottom line in such a way that some collateral damage is inevitable. Don't misunderstand me: I detest the fact that most people must live on so fucking little, but making the situation better by introducing artificial price floors is much easier said than done.

Yes but it has been done. The bottom line is the companies can't function without the workers but they can function without CEO's. I admit i am abit of a syndicalist as it has proven to be a effective way to organize the working class. People and governments have put the boot to the necks of employers before so why not now? Collateral damage will happen and things would get worse before they got better.

I was under the impression that those affected most by minimum wage legislation were unskilled workers, rather than those with specific skill sets (many of whom could indeed look for a job elsewhere*, and find one with greater ease than their unskilled counterparts, other things equal).

*As in, geographically elsewhere, as opposed to 'a competitor in the same area'-elsewhere, obviously.

Yes but there is minimum wage and there is just above minimum wage. Many people where i live get sucked in to that trap and either have to forget the skilled trade altogether or go out to work in some godforsaken hillbilly shit hole out west. A friend of mine did a millwright trade and you would think it would be eaay enough to find a job here for a decent wage. He couldn't find one for anything slightly above minimum wage so now he's working at a building supplies store for minimum wage. What's the sense of going to trade school if you aren't going to make anymore then if you just pumped gas for a living?

 

[BK Bonkey Kong]

Examine how the data itself is actually collected.

I thought that is what I addressed in my post. Hidden unemployment describes unemployment that is not reflected due to the way statistics are collected. That is referring to discouraged workers and underemployed workers. If by "how the data is collected" you mean something different, you're going to have to be a little more clear.

The lack of willingness to discover on one's own is partly why the US is in this mess in the first place.

The thing is though, I actually am researching the topic right in front of you. I actually pulled figures and researched the way that unemployment is calculated as you indicated. I don't think you can use that criticism against me.

 

[Escher's Waterfall]

That is what inflation does. It creates malinvestment and imbalances all across the economy that is experiencing it, and it destroys any chance of real wealth being preserved.

How do you define "real wealth"?

The definition of inflation in economics is the expansion of the monetary supply by specie. In more modern terms for economics, it's the growth of the monetary supply in relation to available population which employs it's use.

I'd argue that definition is incorrect due to both omission and its narrowness of focus. The commonly accepted result of inflation is, with all other things being equal, rising prices for the same goods. That results when ratio of the available money to the economy increases. In short, supply and demand - the supply of money increases relative to the amount of goods available. This can be through the expansion of the amount of money, while the economic output remains stagnant, but it isn't the only scenario. Changes in spending habits can also cause inflation - if the average person goes from spending half of their paycheck in a week, to spending half of their paycheck in two days, the amount of money in the economy will effectively increase.

I am an Economist, and there are great many that have agreed with me in the past, and still do to this day. Austrian school is the oldest and fastest growing school of thought in economics.

Too bad it's wrong. And the flaw isn't just that it's wrong (a lot of economic schools of thoughts are wrong), but it tends to be more wrong.

No one ever said that when factories are able to hire at a lower wage that they do not hire extra people to allow the work load to be better distributed. Happy workers produce better goods at a higher efficiency.

You appear to be admitting that efficiency will go down in your scenario. Which brings me back to my main point - as long as the increase in minimum wage isn't more than the productivity of the person, we should see no changes in unemployment.

I know you can't find it, because you are looking for someone in the mainstream to come out and say it. Do you not understand what career suicide is?

You have to do the math yourself, and keep digging, the information is out there. I had it shown to me once by Tom Woods. That is the direction you might want to start in.

Oh great. A conspiracy theorist.

So not only can't you link us to the numbers, but they are hidden. Really?

Just think of the manipulation this would require. Hiding the unemployment rate would require vast amounts of cover-up. It would be amazing.

How about you show me that you can do some work on your own first, and then I can start showing you some other things on the topic. The last thread of this nature died because none of you were willing to do anything for yourselves. I do not work like that. I refuse to simply pump out information for free without an actual conversation around it. Horses and water.... I value my time a lot, and I do not give it freely.

At this point, you're making extraordinary claims which the available statistics refute, both directly and indirectly. You're claiming a vast conspiracy to cover this up. The burden of proof is on you.

Our time is also valuable. I just spent half an hour digging through indirect measures of employment and cannot come up with a plausible source for high unemployment figures that you claim.

 

[kaywholed]

Some people call it reading, others call it magic.



That is what inflation does. It creates malinvestment and imbalances all across the economy that is experiencing it, and it destroys any chance of real wealth being preserved.




The definition of inflation in economics is the expansion of the monetary supply by specie. In more modern terms for economics, it's the growth of the monetary supply in relation to available population which employs it's use.




The answer is yes.



I am an Economist, and there are great many that have agreed with me in the past, and still do to this day. Austrian school is the oldest and fastest growing school of thought in economics.



No one ever said that when factories are able to hire at a lower wage that they do not hire extra people to allow the work load to be better distributed. Happy workers produce better goods at a higher efficiency.



I know you can't find it, because you are looking for someone in the mainstream to come out and say it. Do you not understand what career suicide is?

You have to do the math yourself, and keep digging, the information is out there. I had it shown to me once by Tom Woods. That is the direction you might want to start in.



How about you show me that you can do some work on your own first, and then I can start showing you some other things on the topic. The last thread of this nature died because none of you were willing to do anything for yourselves. I do not work like that. I refuse to simply pump out information for free without an actual conversation around it. Horses and water.... I value my time a lot, and I do not give it freely.



Sure you would, because you've been told that all your life. Look around you, the only companies and corporations growing are those that are being pumped full of free Federal Reserve notes. Credit is debt. Savings is wealth in storage, just waiting to be used in a productive effort.



Where did I say that it did? I already know where this conversation is headed.

I already know this conversation will end with people discounting it and throwing Ad-Hom's my direction. This is the norm for me. If you look above my post it's already started. I do not feel like sharing information among people whom are hostile. I don't believe in simply handing out stuff for free without civility. There is a reason why so many have left this forum, and it has to due with the hostility that is present everywhere. This hostility is anger and resentment. All of your trials and tribulations and difficulties are caused by the monetary policies that are in place now. If a group of people can not be strong enough to stay calm and behave in a civil fashion, those of us that actually have that information and knowledge will not be willing to share it or help you understand it. We will simply leave you to your vices and find sanctuary elsewhere.

The difference between me and the rest of you other than base philosophy is that I refuse to be bullied into giving away what I know and understand for free. I have nothing to prove to anyone here, and me sharing something is merely a gesture of civility towards all of you. If you want answers, you have to behave civilly, otherwise I will share nothing. It's best that you all understand what level our relationship is on, and keep it in mind. I have been a part of this site since it started in one form or another. I remember when it was just a bulletin board back in 1999. I have slowly cut myself away from it thanks to several of the associations I have had with people that populate this site.

I find myself less and less willing to converse with a great number of people over the Internet because of the intolerable hostility encountered everywhere. It seems that pseudo-anonymity makes people behave in ways that they otherwise would not. I do not behave that way, and I expect others to return that civility.

Just look at how hostile Paranoid Android was towards me in the other thread. Where were the Mods? Everyone disappears when I do come around, why? You don't like it when your beliefs are questioned, and most of you tend to get hostile.

do you post on zerohedge?

 

[Escher's Waterfall]

The thing is though, I actually am researching the topic right in front of you. I actually pulled figures and researched the way that unemployment is calculated as you indicated. I don't think you can use that criticism against me.

You can also try digging up the employment-to-population ratio. It doesn't support his claims of high unemployment either. From a high under Clinton, to the low of the Great Depression, there's about a 7% change in unemployment.

Other indirect measures would be amount of people on the public doe. There's about a 9% change in the amount of Americans receiving food stamps between 2000 and 2012.

There may be a way to massage some more indirect measurements of unemployment/underemployment. Size of the workforce, for example. Percentage of American homeowners being foreclosed upon. Etc.

But so far, everything is supporting a high single-digit increase in unemployment during the great recession. Underemployment is harder to measure, and quite frankly, is somewhat subjective. It's also hard to find underemployment rates during the Great Recession, and comparing unemployment + underemployment today with just unemployment during the Great Recession is obviously wrong.

 

[dopemaster]

Well yeah. No one can live on minimum wage without sharing a flat and making compromises with their food choices. Its basically like living like a slave on minimum wage. So many people stuck in that boat turn to crime so they don't have to stay in that situation.

Personally I pulled myself out of that cycle through college and sheer determination. But yeah I actually decided to not have a flat and work and keep my money in the bank. After a bit I got pell grants and scholarships and hit up the community college. Medicaid was a big help to as well as food stamps. A lot of people don't have the time, patience, or know-how to get government aid.

I also acquired some skills like gunsmithing, car systems, knowledge of basic electronics/computers, construction, and plumbing. Often times I will fix something for a mate and get a free meal and a nice stack of cash. Another thing I did was buy and sell various things from skateboard parts to guns. As far as my gun work I only will work on a gun in a completely legal way and make sure the person actually owns the gun. Everyone seems to want a full auto but usually unless its made that way its not going to be reliable with the AK clone being the exception.

With one more year of school I could walk into a 60-80k a year with bennies job with my credentials.

 

[P A]

Yes but it has been done. The bottom line is the companies can't function without the workers but they can function without CEO's. I admit i am abit of a syndicalist as it has proven to be a effective way to organize the working class. People and governments have put the boot to the necks of employers before so why not now? Collateral damage will happen and things would get worse before they got better.

While I fully understand and sympathize with the spirit of the foregoing remarks re. the significance of labor vs that of management, I'm not sure how well they square with the reality of our situation. It seems to me that, while corporations don't 'need' their CEOs, CFOs, Senior Executive Vice Presidents, Undersecretaries to Junior Executive Vice Presidents, &c., these quasi-trained apes in suits are still quite a bit harder to come by than the shiftless mass of unskilled (or modestly skilled) laborers desperate for work. Though it may be technically correct to suggest that firms can't function without their workers, but can function in the absence of CEOs, the implications of such a statement are misleading. In reality, the aforementioned scarcity of managers in comparison to the profusion of unskilled laborers creates a toxic environment in which managers' value is grossly inflated while that of workers' is severely depreciated, creating the state of affairs in which we live today. In other words, though workers are undeniably more 'valuable' in an absolute sense than the higher-ups, the sheer abundance of such workers permits their comparatively scarce 'superiors' to treat them as fully disposable widgets to be discarded at a whim's notice.

 

[Bardeaux]

^This array of producers is exactly what makes them indispensable as a whole though. Individually, a manager or an administrator is much more scarce than an individual moderately skilled worker, but considering their relationship to production, the producer class is absolutely crucial. Especially when compared to the figureheads and executives who aren't even a prerequisite for production. The issue is in the structure of enterprise, giving the comparatively irrelevant management staff authority and control over the actual producers.

 

[BK Bonkey Kong]

While I fully understand and sympathize with the spirit of the foregoing remarks re. the significance of labor vs that of management, I'm not sure how well they square with the reality of our situation. It seems to me that, while corporations don't 'need' their CEOs, CFOs, Senior Executive Vice Presidents, Undersecretaries to Junior Executive Vice Presidents, &c., these quasi-trained apes in suits are still quite a bit harder to come by than the shiftless mass of unskilled (or modestly skilled) laborers desperate for work. Though it may be technically correct to suggest that firms can't function without their workers, but can function in the absence of CEOs, the implications of such a statement are misleading. In reality, the aforementioned scarcity of managers in comparison to the profusion of unskilled laborers creates a toxic environment in which managers' value is grossly inflated while that of workers' is severely depreciated, creating the state of affairs in which we live today. In other words, though workers are undeniably more 'valuable' in an absolute sense than the higher-ups, the sheer abundance of such workers permits their comparatively scarce 'superiors' to treat them as fully disposable widgets to be discarded at a whim's notice.

You're seriously underestimating the worth of a good CEO. Compare someone like Steve Jobs' tenure at Apple to Leo Apotheker's at HP and you'll see clearly that CEOs are vital to productive functioning. When you think of corporations as large, bloated, inefficient machines that are only marginally effective, filled with layers of superfluous management, you are absolutely correct. However, to lead a massive clusterfuck such as this and make it competitive takes some skill.

 

[BK Bonkey Kong]

^This array of producers is exactly what makes them indispensable as a whole though. Individually, a manager or an administrator is much more scarce than an individual moderately skilled worker, but considering their relationship to production, the producer class is absolutely crucial. Especially when compared to the figureheads and executives who aren't even a prerequisite for production. The issue is in the structure of enterprise, giving the comparatively irrelevant management staff authority and control over the actual producers.

While you're pointing out the inefficiency of management structures in corporations, you haven't proposed any alternative. There is a symbiotic relationship between management and workers. The reasons that management needs the workers you have stated. The reasons that the workers need the management structure are to organize their efforts into something that can be competitive in a global economy. How are workers going to create products that are globally competitive if not for a management structure? Even if they were to organize into co-ops and create internally a structure that balances costs, production, expansion, competition, etc and creates desirable products at competitive prices, the structure that they would have created internally would essentially be a management structure, with management dependent on the workers and vice versa, just as it exists today.

 

[Bardeaux]

I'm not trying to say management is inherently bad or unnecessary. The productive portion of an enterprise is necessary to produce and the management portion is necessary to navigate the logistical aspects of the enterprise. The point being that it's the producers that are driving the enterprise (and the global economy for that matter) while the management steers. Therefore the producers should have collective authority over the management rather than an unaccountable system of managers holding authority over the entire enterprise. We would never (ideally) allow for governments to run in the undemocratic manner large corporations are run. The alternative is a participatory, democratic economy down to the microeconomic level outward.

 

[BK Bonkey Kong]

I just don't see how the same scenario doesn't develop when producers have authority over management. Eventually the new entity established to manage the business is going to function as a management structure. The end result of both scenarios is that there is an ad-hoc organization centered around trying to maximize profits in the competitive economy. The individual workers themselves will still have representatives that function in an office setting and whose jobs are contingent upon maintaining high profits. In calling managers unaccountable, I think you're forgetting that managers are in fact accountable to profit.

PS-- When you say producer, who exactly are you referring to. Is a restaurant worker a producer, or are only literal producers like farmers?

 

[Bardeaux]

I just don't see how the same scenario doesn't develop when producers have authority over management. Eventually the new entity established to manage the business is going to function as a management structure. The end result of both scenarios is that there is an ad-hoc organization centered around trying to maximize profits in the competitive economy.

Indeed, every enterprise needs management. Whether managed directly by the workers themselves or via elected representatives, the enterprise will work to serve the interests of the majority of those involved, rather than supporting the interests of those at the top. For example, the phenomena of cutting down on staff while at the same time experiencing record profits or shipping the business elsewhere wouldn't be a favorable option for anyone.

In the bigger picture, is competition a necessary prerequisite for production?

In order for this to function there would have to be drastic changes not only to the business model, but to the greater economy and the way we allocate goods and services. This is what I mean by democratic participation from the micro level outward . Keeping the same conglomerates and market structures in charge of the economy while changing everything at the enterprise level isn't really changing anything. With a transition to a more cooperative economy based on the real material needs and abilities of its participants, competitive profiteering wouldn't be a democratically viable option.

PS-- When you say producer, who exactly are you referring to. Is a restaurant worker a producer, or are only literal producers like farmers?

I'm referring to the productive workers. The ones actually doing the services or producing the goods for an enterprise.

 

[ebola?]

a toxic environment in which managers' value is grossly inflated while that of workers' is severely depreciated

Well, we need to take a step back and ask, what is the function of the manager in collaborative production? My answer is that it is to make decisions governing the allocation of capital to production to facilitate it. These decisions are always in some sense politicized, as a particular scheme for allocation of capital (at any point in circulation or production, in any form) will differentially benefit and hinder the different class-members involved at various points of production. Since these decisions are inherently political, it seems like they should be conducted democratically in some sense (with some voluntary deference to experts in highly technical but uncontroversial matters) to ensure that they are more fair. This suggests the type of micro-level, 'syndicalist' workplace democracy that Bardeaux describes above.

ebola

 

[BK Bonkey Kong]

Bardeaux, we are definitely in agreement that it would be ideal to have more of a democratic process in terms of management, in order for the labor force to protect their own interests. As you mentioned however, this would take quite a large change to happen to force businesses to work this way. How does this change happen?

In the bigger picture, is competition a necessary prerequisite for production?

I think maybe in a philosophical sense competition isn't necessary, but realistically, competition is going to happen.

 

[Bardeaux]

How does this change happen?

It's difficult to tell, that's the reason it hasn't happened yet


There are different camps, espousing both revolutionary and reformist theories.

I think maybe in a philosophical sense competition isn't necessary, but realistically, competition is going to happen.

I think within an economic framework that encourages competition, there will be competition. If the economy was structured in a way where your enterprise shared a mutually supportive relationship not only within your industry, but within the greater economic network, the consensus would be to support other enterprise rather than working to destroy them. In other words, if your survival depended on the survival of neighboring companies, you and your colleagues probably wouldn't choose to destroy them.

 

[BK Bonkey Kong]

Capitalism came into power and took over because its competitive nature created economic outputs that have to date not been superseded by any system. How do you suggest domestic businesses concerned with domestic stability survive against foreign businesses concerned only with profit? It seems to me that changing the focus away from profit creates an environment where the foreign entities will out-evolve the domestic ones.

 

[Bardeaux]

Developing capitalist economies will eventually run into the same problems though. Again, changes of this sort require changes to the entire economy, not just at the micro level or the national level. Capitalism is globalizing the world, most economies are dependent on global markets. The concept that applies to individual enterprises also applies to nation states.

 

[Joeof1]

I'd like one of you to actually define Capitalism outside of Marxian language.

I thought that is what I addressed in my post. Hidden unemployment describes unemployment that is not reflected due to the way statistics are collected. That is referring to discouraged workers and underemployed workers. If by "how the data is collected" you mean something different, you're going to have to be a little more clear.

How much clearer can it get? I already told you to go and look at how they are being calculated back then and compare it to now. It's not that hard to figure out. What you are really saying is that you are entirely too lazy to do it yourself.

The thing is though, I actually am researching the topic right in front of you. I actually pulled figures and researched the way that unemployment is calculated as you indicated. I don't think you can use that criticism against me.

I can, because you missed the detail you have likely not even thought of looking up, even though I have stated it several times already.

How do you define "real wealth"?

Real wealth is tangible goods that improve the standard of living and enhance productivity.

I'd argue that definition is incorrect due to both omission and its narrowness of focus. The commonly accepted result of inflation is, with all other things being equal, rising prices for the same goods. That results when ratio of the available money to the economy increases. In short, supply and demand - the supply of money increases relative to the amount of goods available. This can be through the expansion of the amount of money, while the economic output remains stagnant, but it isn't the only scenario. Changes in spending habits can also cause inflation - if the average person goes from spending half of their paycheck in a week, to spending half of their paycheck in two days, the amount of money in the economy will effectively increase.

Argue all you wish, it doesn't make you correct. Fluctuates in pricing due to moving capital in the markets are not inflation. It's merely what is referred to as the "Wealth Effect". Inflation is something completely different.

Too bad it's wrong. And the flaw isn't just that it's wrong (a lot of economic schools of thoughts are wrong), but it tends to be more wrong.

Except it isn't and I doubt I should take your word on something of this nature when you are struggling to distinguish between the Wealth Effect and Inflation.

You appear to be admitting that efficiency will go down in your scenario. Which brings me back to my main point - as long as the increase in minimum wage isn't more than the productivity of the person, we should see no changes in unemployment.

No, actually, I am saying the work load will decrease and efficiency will stay relatively the same or improve.

Oh great. A conspiracy theorist.

So not only can't you link us to the numbers, but they are hidden. Really?

Just think of the manipulation this would require. Hiding the unemployment rate would require vast amounts of cover-up. It would be amazing.

Yet here you are unable to find it, and I have given you everything needed to find the data.

At this point, you're making extraordinary claims which the available statistics refute, both directly and indirectly. You're claiming a vast conspiracy to cover this up. The burden of proof is on you.

Our time is also valuable. I just spent half an hour digging through indirect measures of employment and cannot come up with a plausible source for high unemployment figures that you claim.

No it isn't. You are just incapable of looking something up. Something so simple as the age range of workers from that era. Something so ridiculously simple that none of you could find it, but I am saying there's a vast conspiracy to cover it up. Yet, you still were not able to find something so simple as that point of data. This points more directly at your sources of information being more than highly flawed and knowledge of history being mediocre.

 

[BK Bonkey Kong]

You're certainly representing the Austrian School well!