[m4nu3l]

I agree with the statement except for the "minimum wage" part - I assume you mean the legal minimum wage. Companies should have no right to exist as much as people should have no right to a government imposed minimum wage.

On a practical level a minimum wage is either not effective (so broadly set to what the market is paying already o just above that) or it will inevitably decrease job offer.

On a philosophical level, adults should be free to choose what to do with their body and mind - as long as it has no negative effect on third parties.

[xyzzy123]

Employers who create full time positions that don't pay enough for people to live on create a social burden that the rest of society has to deal with.

That's the negative externality.

[m4nu3l]

Hum, I see your point, but I disagree for two reasons.

AFAIK most jobs that would pay under what's enough to live on are entry level jobs usually carried out part-time by students. Denying them such job is removing them that source of income - and in case of jobs that require experience denying them a chance to gain that experience. This means you are not reducing any social externality. You are just shifting those externalities to a different set of people.

I'm also wary of "daling with" this kind of social externalities even if it was possible. If we apply your argument to drugs than the conclusions would be that alcohol and any other drug should be made illegal because it has a social cost. But I believe people still have the right to do whatever they want with their body and mind as long as there is no direct externality, and I'd rather live with any indirect externality that is the result of that.

[Alekhine]

> AFAIK most jobs that would pay under what's enough to live on are entry level jobs usually carried out part-time by students.

This is a rosy view of things, but I don't believe its true. Walk into plenty of markets in poorer or even middle class areas and you will find older people doing these jobs out of necessity. I've seen 'entry level job' used very often as a way to exploit people with not much choice.

[m4nu3l]

Statistical evidence is better than anecdotal evidence. https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm Also, so you'd rather have some of those people have no income as long as some luckier ones get more income?

[Ziggy_Zaggy]

Quite the moral dilemma, it seems.

[sershe]

They don't really create this externality, though. A person taking this job apparently cannot get a better paying job. With a higher minimum wage in otherwise free market, no jobs for that person would exist, so the social burden would exist just the same.

The situation is diametrically opposite - minimum wage forces businesses to engage in welfare. Those who have enough margins to engage in welfare might do it; the others may disappear with the jobs, or cut the jobs by reducing service/automating/outsourcing (again leading to the same "social burden" existing).

[moistly]

> people should have no right to a government imposed minimum wage

Yes, turn your country into the likes of Bangladesh. Brillo!

[m4nu3l]

Not sure how to take this. Are you saying that Bangladesh is poor just because they didn't think about raising the minimum wage?

[moistly]

I’m saying that without minimum wage laws, you’ll soon enough see corporations depressing wages to the point where a great many workers will be as desperately impoverished as the Bangladeshi, working 60+ hours a week in dangerous environments for wages that leave them literally starving.

[m4nu3l]

I think that's not going to happen because single corporations have no power in choosing wages. The labor market does. In the labor market the wage will reflect the market value of the job. Almost all current jobs already have market value above minimum wage (only ~2% doesn't). For the ones that don't, it's because well either the job is not valuable/the person is not skilled enough. https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm

[fivea]

> I think that's not going to happen because single corporations have no power in choosing wages. The labor market does.

The labor market is not a magical entity. It's comprised of companies doing the hiring and people doing the working.

If you look at sectors where unskilled work prevails and corporations treat workers as fungible resources then the labour market lies firmly in the supply side, and workers have no alternative other than getting exploited. This means paying the least possible amount, which means less than minimum wage.

Think about it for a second: why do you think so many companies pay minimum wage, and not a single cent more? Is is because the workers' negotiating power magically breaks even at the minimum wage level, or is it because labor laws make it illegal to pay less than that?

[m4nu3l]

Did you miss the evidence I provided? It's less than ~2% of the hourly paid workers. I know how the market works. That's why I also provided evidence that's not the case.

Also the alternative is having some of those people have zero income and no opportunity to develop skills.

[moistly]

> single corporations have no power in choosing wages. The labor market does.

Counterpoint: Bangladesh. The labour market does not choose to work 60hr 7day weeks for $75/mo performing skilled sewing of your clothing because they like it: it is because they are left no choice. Given the opportunity, corporations will just as happily enslave Americans as it does third world citizens. Already does, in fact: slavery is still legal via imprisonment.

Corporations could choose to pay their Bangladeshi labour significantly more, and it would cost you only pennies more for your shirts … but they don’t. They pay as absolutely little as possible. They will inevitably do the same to you.

[m4nu3l]

Every company try to pay as little as possible. The only reason they can pay less in Bangladesh is because the economy there is much less developed. Raise the minimum wage in Bangladesh and companies will move to somewhere else leaving those people with subsistence jobs and no way up for the economy. Leave enough companies free to move there and eventually wages will raise as more companies will have to bid higher for the same labor.

[Mountain_Skies]

Companies can expend resources to push the government to implement policies (or ignore existing policies) that flood the labor market with labor from outside of the existing market. This isn't even theoretical, it's something that's been going on almost since the country was founded and continues to distort the labor market on a colossal scale.

[m4nu3l]

Yes, and I'm in favor of allowing people form other countries to "flood" the labor market. I'm not a protectionist. I think people have a right to work no matter their nationality. (BTW I don't even live in the US).

[6510]

> In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers.

I don't understand. How is the rest paid?

[m4nu3l]

No Idea. Bonuses? I have extrapolated to all workers, but the actual number might be a bit different because of this.

[mbrodersen]

I recommend reading up on the work done by the latest Nobel price winners in Economics. But fair warning: they disagree with your assumptions/conclusions and have found clever ways to verify their assertions using real world data.

[todd8]

Interesting, but I see it differently.

I believe you might be referring to 2021 Nobel Prize winner David Card’s paper A Re-analysis of the Effect of New Jersey Minimum Wage with Representative Payroll Data (with Alan Krueger) written over 20 years ago. See [1]. This paper compared New Jersey with neighboring Pennsylvania that didn’t raise its minimum wage.

Ironically, Joshua Angrist (and a third Economist) shared the 2021 prize with Card, and Angrist had this to say about the research by Card (and Krueger):

“[the] data show a slight decline in the employment from February to November 1992 in Pennsylvania, and little change in New Jersey over the same time period. However, the data also reveals substantial year to year employment variations in other periods. These swings often seem to differ substantially in the two states… So Pennsylvania may not provide a very good measure of counterfactual employment rates in New Jersey in the absence of a minimum wage change.” See [2].

[1] https://davidcard.berkeley.edu/papers/reanal-ff-nj.pdf

[2] Joshua Angrist and Jörn-Steffen Pischke, Mostly Harmless Econometrics, page 293, https://press.princeton.edu/books/paperback/9780691120355/mo...

[mbrodersen]

Yep that’s the problem with Economics. It isn’t a science like physics. And it is easy to find Economists that disagree with each other. The New Jersey experiment needs to be repeated many times in different settings before we can be more confident in its truth value. The same way it is done in sciences. However it is also true that some people will never accept it as being true no matter the evidence. People are a lot less rational than they think they are.

[m4nu3l]

I can believe it to be true but so far no evidence has convinced me of that.

> However it is also true that some people will never accept it as being true.

I suspect it is because of the philosophical point I made, but maybe some people are not able to articulate it? E.g. I could accept my practical point to be invalid but that would not invalidate the second point - I just give freedom of choice value in itself. Hence I can tolerate costs that arise because of that.

[mbrodersen]

Freedom of choice is an interesting thing to think about. Most people will agree that freedom of choice is a good thing. However the devil is in the details. How about giving people the freedom of choice to own nuclear weapons? Most people would probably disagree with that one. How about having the freedom to own slaves? Again people would probably disagree. But why? Isn’t freedom of choice always good? How about free education and free healthcare? I personally think that it gives people more freedom to choose the kind of life they want. But I have heard “pro freedom” people argue against it because they think it will make people lazy. I myself received a MSc in Computer Science from a top university and it cost me nothing. It didn’t make me or anybody else I knew at University lazy. So I don’t think it is true. However some “pro freedom” people still want to take that freedom away from other people. And the same goes for minimum wage. I have lived in a number of countries with a high minimum wage. And the economies were strong and people worked hard. So a lot of the claims about minimum wage sounds false to me. So perhaps it all comes down to personal experience. If you have seen or been part of something that works well then you obviously know that it works well. And people who haven’t will disagree.

[m4nu3l]

I got my MSc in Computer Engineering in a country where university is highly subsidized, so it cost me very little. Now I live, work and pay taxes in another country. People that paid for my education are getting nothing in return.

About freedom of choice, for me the line is whenever your freedom directly impacts the freedom of someone else. You can't have slaves for this reason. But for the same reason you shouldn't have others pay for your education. Of course you have more choices if someone pays for your education. But that's not the point. Society has no say on what type of education you choose to have, so it should pay no cost. As I mention in another comment I only believe negative rights should be a thing - and I think I have strong reasons to believe this.

Nukes are only good for war, hence you probably shouldn't have them. On the other hand private companies or individuals with the right clearance should be able to own and manage nuclear power plants - as they do.

[mbrodersen]

Yep I think it shows the limitations of evidence in complex subjects like Economics. If somebody doesn’t want something to be true, they will simply demand more evidence, claim that the evidence has flaws, claim that the researchers are not rigorous enough and/or somehow corrupt etc. The tobacco industry wrote the book on how to do that.

[lucian1900]

Unlike companies, humans have a right to exist. Working full time should be sufficient for survival, as a bare minimum.

[m4nu3l]

A right to exist for humans, to me, means a right not to have interference from others. But still, higher minimum wage means some people will have no income, and some other will have more income. How's that better?

[lucian1900]

Individualism emphasises negative rights, but positive rights are important too: life, health, air, food, etc.

Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.

Or we could rationally plan economies to meet everyone’s needs. Enough homes can be made and we already produce more food than necessary.

[m4nu3l]

> Individualism emphasises negative rights, but positive rights are important too: life, health, air, food, etc.

Positive rights and negative rights are in oppositions as you can't have positive rights without violating someone else's negative rights. We have a trade-off right now, but I personally only believe in negative rights for a variety of reasons.

> Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.

Economy 101. Increase the price of something and the quantity bought will be less. Companies will hire fewer people at that price.

> Or we could rationally plan economies to meet everyone’s needs.

History has proved over and over that's not possible (and there are theoretical well known reason why that is.

[lucian1900]

The number of workplaces isn’t constant. The simplest solution would be to reduce the working week. Another is to use collective funds to improve infrastructure and provide essential services.

Planned economies do work, both historically and today. They are immune to the business cycle (as the USSR didn’t experience the Great Depression) and can be more efficient even within capitalist economies (witness Amazon, Apple and Walmart). I recommend “The People’s Republic of Walmart” on this topic.

[m4nu3l]

They only work up to the point when they don't. Amazon only plans part of the economy of its workers. It doesn't have to plan for what they eat, where they live and how they spend their money in general.

In a capitalist system companies, trying to maximize profit, will try to expand until it is efficient to do so, but not more or smaller competitors will take over.

The USSR was basically constantly in a Great Depression. According to the US definition of poverty almost all its population was in extreme poverty.

The Great Depression was a Government failure, not a market failure. They didn't print enough money basically.