| > They will hire fewer workers.. Why isn't Amazon hiring fewer workers right now? Is the board wasting money on workers that it doesn't need? If Amazon could hit the shipping volumes it needs to hit with 50% of the current workforce, then it would be hiring ~50% of the current workforce -- if that's not the case, then somebody in the company that's making hiring decisions needs to be fired. > Price controls don't work to increase net welfare. A) no one is talking about price controls on final products, they're talking about price increases on one of the inputs. B) on the subject of wages and worker prices, minimum wage increases have been shown on multiple occasions to increase net welfare. We can debate the theory, but we can also just look at reality and say, "we've tried this before, and when handled correctly, it works." > Prices are a collectively generated signal produced from a complex network of interlocking exchanges that are based on a vast array of localized calculations. I would be on board with your argument if the original comment starting this thread didn't boil down to "costs go up, prices go up". You're not talking about a complex signal at that point, you're talking about basic economic principles, and basic economic principles is that in Capitalism, price is what people will pay, not what a product costs to produce. Even your N95 example shows this point. Why did prices go up for N95 masks? Not primarily because of costs of production, primarily because demand changed. The basic principle economic principle is demand, not costs of production. If you want to step away from those basic principles and talk about the complicated realities of what people will invest, and how safe they feel, and the size of the payout influencing investment enthusiasm, and so on -- then fine, that's reasonable, but the complicated reality is also that economic experts have looked at minimum wage increases, weighed up all of the complicated inputs that go into final product prices, and regularly concluded in multiple studies that minimum wages don't consistently increase prices or decrease market investment. > It's entirely possible for price controls to still create losses while the market is not perfectly competitive. Possible, but definitely not guaranteed. > but it's nowhere as simple as "the economy doesn't conform to a simplistic model therefore a price floor is good". Agreed, but "the economy doesn't conform to a simplistic model therefore a price floor is good" is much closer to reality than saying "the economy does conform to simplistic models, therefore a price floor is always bad." You're arguing that the simplistic model isn't applicable, in a thread that was started with you arguing that the simple model was that price and material/wage costs would always move in the same direction. That's just not true, it's both an oversimplification and just bad economic theory. |
We can't prove that it's not hiring fewer workers than it otherwise would have. In the absence of the ability to run a controlled experiment on how a minimum wage affects Amazon behavior, we can only trust in Economics, the same way we trust in what epidemiology tells us about the efficacy of vaccines, and assume that a larger volume of people would be hired without an artificial floor on the price of labor.
>>A) no one is talking about price controls on final products, they're talking about price increases on one of the inputs.
You're talking about a price control on manual services in general, i.e. labor.
>>B) on the subject of wages and worker prices, minimum wage increases have been shown on multiple occasions to increase net welfare.
No they haven't. Studies on minimum wage cannot conclusively show anything, because they are not controlled, and minimum wages are too low to affect a significant number of jobs.
Meta-studies suggest that minimum wage tends to be harmful, just as you'd expect, though these are not definitive for the reasons mentioned.
>>and basic economic principles is that in Capitalism, price is what people will pay, not what a product costs to produce.
Yes I agree with that, but I didn't make the counter-argument, another commenter did.
>>Possible, but definitely not guaranteed.
Nothing is guaranteed in economics, but we should err on the side of basic economics in the absence of certainty and proof.