[Ferret7446]

Economics 101 happens. I don't think we need yet another example of the obvious thing happening.

I have no idea why people keep talking about raising pay as if they were in a video game where resources just spawn out of thin air

[VanTheBrand]

You may need to retake economics 101 perhaps if you think raising a wage floor has a single predictable outcome in every scenario, which seems to be what you are implying.

It puts varying pressures on other elements in a dynamic system in different ratios and with second order effects that can’t be fully predicted until you “run the experiment.”

[bko]

You don't know what the definitive predictable identical outcome would be. But you know the effect at the margin.

At the margin, a wage floor will prevent some percent of transactions that would have taken place if a wage floor was not in place. It's not complicated. Some people will benefit, sure, but some commerce just won't take place.

Consider a price floor on selling a used car. Suppose you had a car to sell. Would it make you feel better if there were a law that prevents you from selling your car for less than some amount? Sure maybe without the floor, your car would have sold for less than the floor amount. But would you want a price floor as a seller of a car? How about as a buyer of a car?

Chances are if your car is worth less than the floor, no one will buy your car now. The price floor doesn't magically make your car more valuable, just makes it harder to sell.

[jfengel]

You don't actually know that. It's too simple a model. Real world data on minimum wages do not bear it out.

There are more variables than the graphs you get in the first two weeks of Econ 101. If you make it to the end of the semester, or even to the midterm, you'll know that the simple predictions you got on the first quiz were false.

[mchusma]

I think it does bear that out in general, although it is slightly more complicated. What seems to happen 1. Low-wage workers, as a collective group, experience an increase in earnings (Dube & Zipperer, 2024). 2. Total job losses do take place, but are minor and teens/part-time/new entrants workers lose more often (Belman & Wolfson, 2014; Redmond & McGuinness, 2024). 3. Lost hours & increased prices - businesses primarily absorb the cost by slightly reducing weekly hours worked & increasing prices for consumers (Redmond & McGuinness, 2024)

I would agree that modest minimum wage increases are far from the worst thing the government does, compared to other government interventions.

[stuaxo]

There's commerce not taking place when wages are too low as well.

Wages don't make up all the costs so we can't say that increasing wages increases prices by the same percentage either.

[gruez]

>You may need to retake economics 101 perhaps if you think raising a wage floor has a single predictable outcome in every scenario, which seems to be what you are implying.

>It puts varying pressures on other elements in a dynamic system in different ratios and with second order effects that can’t be fully predicted until you “run the experiment.”

Now replace "raising a wage floor" with "tariffs". Just over a year ago Trump administration cheerleaders were making similar arguments about "dynamic system" and "second order effects" to justify tariffs, predicting that prices might even drop due to [insert handwaving about fx rates].

[VanTheBrand]

Most predictions about the Trump tariffs from Trump and the people railing against them have proven to be hugely incorrect in both directions. If anything this proves my point that these are complex systems that are hard to predict.

[gruez]

>Most predictions about the Trump tariffs from Trump and the people railing against them have proven to be hugely incorrect in both directions

Really? Which ones? For the ones predicting economic calamity, they get a pass because they were didn't take into account TACO, which might be bad if you're grading it as a forecast, but hardly is a mark against them when it comes to economic analysis on the effects of a policy.

[tpxl]

Resources have a way of spawning for CEOs, why not for minimum wage workers?

[watwut]

That is fairly reasonable description of how world works. Well connected CEO can spawn money they way minimum wage workers cant.

And we in fact have tons of Epstein files showing exactly that in play, as a side benefit of those being released.

[akramachamarei]

Do they? It's an interesting question whether resources can be spawned by fiat. I think the only entity capable of doing so is the government, i.e. when it prints money.

[tpxl]

Well companies can issue stock, which is more or less spawning resources, but that's not what I meant. When people with more money than they need want more of it, things get done, including fucking over the customers, the partners and the workers. When wageslaves want more money they get dragged through the media for their greed (as is happening now).

[imglorp]

What?

Uber saw adjusted EBITDA of $2.5 billion, up 35% year-over-year" in 4q25 (per them). Money poured in.

I have no idea why people keep talking about raising pay is a problem. Workers paid more spend more, stimulating growth at all levels. Economics 101.

[gruez]

> Workers paid more spend more, stimulating growth at all levels. Economics 101.

But per the original study, they didn't get paid more?

[philipallstar]

Because then fewer people will use Uber. Customers don't have a whole-economy view. If you raised the price of an Uber to $200 a ride minimum, would that be a good thing? After all, workers paid more spend more, stimulating growth at all levels!

It's a bit like California raising fast food minimum wages causing thousands of jobs to be lost[0].

[0] https://tfppwire.com/new-data-shows-california-lost-staggeri...

[oblio]

Yeah, about that source:

> About

> TFPP Wire helps you stay ahead with breaking news, analysis, and bold <<conservative>> insights on the economy, politics, national security, culture, and more.

It quotes California Globe:

> About Us

> California Globe is an independent, professional news website obsessively chronicling everything political throughout the state of California. We are <<pro-growth and pro-business>>, non-partisan and objective; we report what we see and hear without fear or favor.

"pro-growth and pro-business" (dogwhistle for conservative), I'm sure their reporting is super unbiased, their sources are obviously not incentivized to distort facts.

Oh, wait:

> Explained Altaf Chaus, who owns and operates three Burger King franchise restaurants in San Jose

Ah, yes, the capitalist is complaining.

> By June 2024, <<Stanford University>> found that over 10,000 fast food jobs were already lost.

> The "Stanford University" study behind that 10,000-jobs figure is an article titled "California Loses Nearly 10,000 Fast-Food Jobs After $20 Minimum Wage Signed Last Fall," written by economist Lee Ohanian and published April 24, 2024 by the <<Hoover Institution>>. The Hoover Institution is a think tank located on Stanford's campus and affiliated with the university, which is almost certainly why outlets describe it as a "Stanford University" finding. (Hoover itself notes that opinions on its site don't necessarily reflect the views of the Hoover Institution or Stanford University.)

> <<Here's the catch: the article has been retracted.>> According to the notice now on the page, the author cited data reported by the Wall Street Journal and interpreted those data as being seasonally adjusted; following publication, those data were identified as not being seasonally adjusted, so the article was retracted to avoid misinformation. The seasonal-adjustment issue matters a lot here, because fast-food employment naturally fluctuates with the seasons, so unadjusted month-to-month numbers can show "losses" that are really just normal seasonal patterns.

https://en.wikipedia.org/wiki/Hoover_Institution

> It is widely described as <<conservative>>, although its directors have contested the idea that it is partisan.

You need a more balanced news diet.