# Raising Minimum Wage - Good or Bad?



## burnedandfrozen (Mar 11, 2004)

The minimum wage in CA has been raised and will be raised in many other states as well. I'm not sure if this is a good thing or not so maybe those of you with backgounds in economics can shed some light on it.

As I see it, minimum wage is a joke. It is well intended no doubt, but it certainly has not kept up with inflation and the measly raises I don't think really do anything for the people making minimum wage. For example ten years ago I worked as a waiter in a middle class chain resturant for a little less then a year. During this time the minimum wage was raised although I cannot remember what the number actually was. I do remember though that it did nothing as far as making it any easier to make the rent. Our patrons by the way were for the most part 5-10% tippers. I also remember that after the wage went up, so did some of the menu prices as well as some of the freebies included in certain higher priced (which makes them not so free I suppose) were dropped. This is what business owners always say when minimum wage is raised. They will have to cut jobs and raise prices. So where does the point come when their prices are too high that people won't do business with them and the service stinks because they laid off people?

Most minimum wage jobs are by nature part time with about 16-20 hours per week. They are high turn over jobs so even the owners don't expect people to stay on the job for too long. I quit the waiter job because I wasn't making enough and found a better paying job. This is really what I think people on minimum wage should do. Increase their education or vocational skills so they can get better paying jobs. Then these jobs they leave will be filled by others like students, recent immigrants, ect that will in turn also vacate these jobs when they have something more to offer in the job market and so fourth.

I think it would be great to eliminate poverty in the US but I don't think this is realistic especially if we have to expect the government to do it. If minimum wage is to be raised in order to help the working poor then raise it to a level that actually helps these people but also strongly urge them to consider additional education and/or job training.


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## Wayfarer (Mar 19, 2006)

*It Depends...*

First, I assume we are talking about an effective minimum wage, meaning the minimum wage is set above what market forces would set it at. If it is below market demand, the whole conversation is moot and it is merely a talking point for the liberals.

So, an effective minimum wage. It basically breaks down to two camps and it really is no surprise as to the breakdown. You have those that find veracity in the models of neo-classical economics and those that do not (and each group has camp followers that merely buy what the brass of "their side" have to say on the issue). It is really that simple to my mind. If you find the modelling of accepted economics valid, in that they tend to reflect reality, you are against an effective minimum wage as you will actually foster higher utility without one. If you want an effective minimum wage based on "principle" in the face of predictive modelling, there is really no need to argue as one has already taken the stance that empirical study does not matter, one is merely running on faith.

Cheers.

P.S. Of course, I am against an effective minimum wage. I am viscerally against a "living wage".


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## Kav (Jun 19, 2005)

Last time I worked minimum wage I made less than my unemployment check, which had been adjusted for my severance package. I quit and with the proceeds instead of more macaroni from K Mart bought a jungle carbine. It's in my apt equivelent to my greatgrandfather's thatch roof. When the last remnants of the middle class, who are in reallity working class get the last pink slips and Walmart, McDonalds, temp agencies and corporations with former congressmen on the BOD say no I figure we can do something besides buy tickets to 'MIZ' view exhibitions of little girls standing on soapboxes to reach their loom spindles and recoil from raising minimum wages as if it's some communist conspiracy. The only diference between our socially amoral capitalism and communism are the letters between the C and M.


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## Wayfarer (Mar 19, 2006)

Kav said:


> ....recoil from raising minimum wages as if it's some communist conspiracy. The only diference between our socially amoral capitalism and communism are the letters between the C and M.


Raising minimum wage is not a communist conspiracy, it is merely bad economics (if one choses to believe in the descriptive and predictive value of the models of neo-classical economics) and actually fosters less social welfare (I use the word "welfare" in the sense that economists use it, not liberals). Again, it just all breaks down to whether or not one can rationally accept the models or not. If not, then there is no reason one should not be lobbying for minimum wage to be set at $100 per hour.

Regards

Edit: Forgot to add, all economic models are amoral btw. A model attempts to describe and predict. Morality comes into play with what one does with that information.


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## Phinn (Apr 18, 2006)

If the government could snap its fingers and wave its magic wand and suddenly make a whole slew of labor more valuable, by mere decree, then why stop at $7.00 per hour? Why not make it $100 an hour? Why not $1,000,000 per hour, and we could _all_ be rich? Why so stingy?

A government-mandated minimum wage only accomplishes one thing -- it makes everyone whose labor is worth less than that amount unemployable.

A statute doesn't make their labor more valuable. It simply means that these people will go from low-income to zero-income. This obviously hits young and unskilled people the hardest. It makes it illegal for them to find work. It's unconscionable and indefensible.

So, who supports a minimum wage? It is actually beneficial to an entirely different group of people -- workers who make _more_ than the minimum wage. As a result of minimum wage legislation, these people are protected from competition from workers who would accept a lower salary to do their jobs. They're happy with it. But their benefit comes at the direct expense of people who are one step lower on the income ladder.


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## Phinn (Apr 18, 2006)

> The only diference between our socially amoral capitalism and communism are the letters between the C and M.


100% dreck.


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## Étienne (Sep 3, 2005)

Phinn said:


> A government-mandated minimum wage only accomplishes one thing -- it makes everyone whose labor is worth less than that amount unemployable.


That's basic neoclassic labour economics. I think that reasoning is what you would find in a Microeconomics 101 class, at least that's the level at which I teach it.

Things are a little more complex than that. The neoclassical model is not the only model in labour economics, by far. Empirical studies also abound. The least you could say is that economical theory and evidence is mixed on the subject.

I am not a labour economist, but I'd be happy to try and get some references if needed.


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## Wayfarer (Mar 19, 2006)

Étienne said:


> That's basic neoclassic labour economics. I think that reasoning is what you would find in a Microeconomics 101 class, at least that's the level at which I teach it.
> 
> Things are a little more complex than that. The neoclassical model is not the only model in labour economics, by far. Empirical studies also abound. The least you could say is that economical theory and evidence is mixed on the subject.
> 
> I am not a labour economist, but I'd be happy to try and get some references if needed.


Etienne:

Could you please share the name of one or two models that find an effective minimum wage increases welfare and also how other economists feel about these models and approximately what you feel the percentage of the population of economists that hold these models superior to the standard ones?


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## odoreater (Feb 27, 2005)

What was life like before there was a minimum wage? Shouldn't that be a pretty good example of what it would be like if we didn't have a minimum wage?


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## 16412 (Apr 1, 2005)

One problem with minimum wage is very small town and big city aren't comparable wages. Land out in nowhere isn't worth much so the rent isn't much. Big city the rent could be 5-6 times that.

It seems to me that when the right taxes are cut there becomes a demand for workers, so the wages go up. Haveing the wrong taxes creates an over supply of the unemployed looking for work.

Jimmy Carter is an excellent example of the wrong taxes. The last two years were terrible.

Reagan, Bush Sr., and even Clinton with the Republicans holding both houses created a surpluse of workers. Bush Sr. had problems with the Democrats and eventually signed into law their tax and a recession came. Most the Democrats have not figured that out yet (including Ted Kennedy). I knew that recession was coming if Bush Sr. sign that tax bill, and 4 months later the US economy was going down. If a tax bill is good or bad it shows in about 4 to 5 months.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> What was life like before there was a minimum wage? Shouldn't that be a pretty good example of what it would be like if we didn't have a minimum wage?


For that to be a valid comparison, all social and economic conditions would have to be the same as well as all laws regarding labour, no?


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## Étienne (Sep 3, 2005)

Wayfarer said:


> Could you please share the name of one or two models that find an effective minimum wage increases welfare


All the keynesian and neokeynesian models have that kind of predictions. I would not call the neoclassical model the "standard one", at least not in labour economics. But most labour economists focus more on empirical studies I think. Again, not my field, but I know there are dozens of them with mixed results at best.


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## Wayfarer (Mar 19, 2006)

Étienne said:


> All the keynesian and neokeynesian models have that kind of predictions. I would not call the neoclassical model the "standard one", at least not in labour economics. But most labour economists focus more on empirical studies I think. Again, not my field, but I know there are dozens of them with mixed results at best.


I appreciate your guidance in this as I am just a layman, I lay no claim to advanced economic degrees. However, why did I think people such as Friedman feel Keynes has basically been disproved?

Also, how many current Ph.D.'s in economics in the Western countries do you feel would support an effective minimum wage (I had asked something to this effect previously)?


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## Kav (Jun 19, 2005)

This discussion would be a little more interesting if we all worked for minimum wage at one time. I've taken part in this end of the spectrum and it isn't fun. I am not catterwalling for a massive welfare state from a sense of self entitlement. Nor do I want to hear Horatio Alger stories of people 'pulling themselves up by their own bootstraps.' That can be a little difficult when your barefoot. In a time when CEOs get golden parachutes in the MILLIONS for rearranging deck chairs while the companies took on water from the bow this very discussion is an obscenity.


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## odoreater (Feb 27, 2005)

Kav said:


> This discussion would be a little more interesting if we all worked for minimum wage at one time. I've taken part in this end of the spectrum and it isn't fun. I am not catterwalling for a massive welfare state from a sense of self entitlement. Nor do I want to hear Horatio Alger stories of people 'pulling themselves up by their own bootstraps.' That can be a little difficult when your barefoot. In a time when CEOs get golden parachutes in the MILLIONS for rearranging deck chairs while the companies took on water from the bow this very discussion is an obscenity.


Hear hear.


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## Lushington (Jul 12, 2006)

Wayfarer said:


> I appreciate your guidance in this as I am just a layman, I lay no claim to advanced economic degrees. However, why did I think people such as Friedman feel Keynes has basically been disproved?
> 
> Also, how many current Ph.D.'s in economics in the Western countries do you feel would support an effective minimum wage (I had asked something to this effect previously)?


I don't know if your question can be answered conclusively; however, here is a link to an open letter from 2004 signed by 562 academic economists calling for an increase in the federal minimum wage.

Presumably most, if not all, of the signatories have Ph.D.s

Why would Milton Friedman believe that he and other neo-classical theorists had refuted Keynes and his followers? So that neo-classicism might become the dominant economic ideology. Robert Nelson's _Economics As Religion: From Samuelson to Chicago And Beyond_ is very good on this. Highly recommended.


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## Chuck Franke (Aug 8, 2003)

Y'know it's funny. I used to think of thinks like salaries from the labor point of view. Presently I have a different view. I have 5 people to pay before any other bill gets paid, then I get paid. 

From my perspective, a hiring decision is not about what's best for mankind, it is a simple calculation.

Can this person do enough work so that either
A. Revenue increases sufficiently to cover their check from net proceeds.
B. Enough of my time, or someone else's time, is freed up to sufficiently increase revenue to pay their check (without killing performance while they train)

When these wage debates go on I rarely hear anyone talk about it from that perspective. Employers want to hire more employees and have them do well and make more. When that happens, it means business is good.

Who do we write in order to get Congress to raise the gross sales of every business by 20%? Now there's an idea and it would raise wages and solve unemployment immediately. I'll draft that letter right away


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## Wayfarer (Mar 19, 2006)

Kav said:


> This discussion would be a little more interesting if we all worked for minimum wage at one time. I've taken part in this end of the spectrum and it isn't fun. I am not catterwalling for a massive welfare state from a sense of self entitlement. Nor do I want to hear Horatio Alger stories of people 'pulling themselves up by their own bootstraps.' That can be a little difficult when your barefoot. In a time when CEOs get golden parachutes in the MILLIONS for rearranging deck chairs while the companies took on water from the bow this very discussion is an obscenity.


Kav, I am not sure what you are asking here. 1) You want to know if we've ever worked for minimum wage but 2) if you've become successful, you do not want to hear about that. So basically, you do not want to hear success stories of from rags to comfortable upper middle class, just those that didn't make it?


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## Wayfarer (Mar 19, 2006)

Chuck Franke said:


> Y'know it's funny. I used to think of thinks like salaries from the labor point of view. Presently I have a different view. I have 5 people to pay before any other bill gets paid, then I get paid.
> 
> From my perspective, a hiring decision is not about what's best for mankind, it is a simple calculation.
> 
> ...


Chuck, as I always say, what you have to remember is liberals love jobs but they hate employers.

I operate under similar issues and my wage costs are climbing far faster than my reimbursement. RNs that would work for $19/hour just five years ago now demand $27 just to consider you. Let me assure you, my revenue ppd (per patient day) has not grown like that over the same time.


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## odoreater (Feb 27, 2005)

Chuck Franke said:


> Who do we write in order to get Congress to raise the gross sales of every business by 20%? Now there's an idea and it would raise wages and solve unemployment immediately. I'll draft that letter right away


They tried that in the USSR. It didn't work.


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## odoreater (Feb 27, 2005)

Wayfarer said:


> Chuck, as I always say, what you have to remember is liberals love jobs but they hate employers.
> 
> I operate under similar issues and my wage costs are climbing far faster than my reimbursement. RNs that would work for $19/hour just five years ago now demand $27 just to consider you. Let me assure you, my revenue ppd (per patient day) has not grown like that over the same time.


Now you're talking about something totally different. That has nothing to do with minimum wages or anything that the government does - that has to do with collective bargaining and the market rate of labor. Are you saying that you don't think the nurses should have the right to manipulate market forces in their favor?

See, this is exactly the fear that leads to things like a minimum wage. Employers want to make as much money as possible while paying the people that produce for them as little as possible. If employers could get away with paying employees enough just to keep them alive and coming to work the next day - they would do it.


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## Kav (Jun 19, 2005)

Both ends of this debate have 'folklore' and statistics, economic models ad nauseum. I am just saying Woody Guthrie's songs are a little more valid than Madonna singing Material Girl. I suppose the ultimate solution is to get elected to the congress Chuck wishes would help. Anytime you can vote yourself a payraise and then re enter the private sector as a lobbyist it sure beats honest work.


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## pendennis (Oct 6, 2005)

Lushington said:


> I don't know if your question can be answered conclusively; however, here is a link to an open letter from 2004 signed by 562 academic economists calling for an increase in the federal minimum wage.
> 
> Presumably most, if not all, of the signatories have Ph.D.s
> 
> Why would Milton Friedman believe that he and other neo-classical theorists had refuted Keynes and his followers? So that neo-classicism might become the dominant economic ideology. Robert Nelson's _Economics As Religion: From Samuelson to Chicago And Beyond_ is very good on this. Highly recommended.


Keynes theories have been generally disproven. Keynesian economics was tried in the 1930's, in an attempt to move the U.S. out of the Great Depression. It was an abyssmal failure. The New Deal policies of the Roosevelt Administration were largely just "feel good" measures. The unemployment rate in the U.S. at the end of 1940 was still in excess of 15%, and it did not improve until the economic ramp-up because of World War II.

Keynes believed that excess capacity in the economy (recessions and depressions) could be remedied by increased government spending. It was with this in mind, that TVA, WPA, NRA, and a whole host of government programs were launched, but yielded very little in the way of real results. There were some real successes such as the Hoover Dam, TVA, and REA, but the U.S. government lacked (and still does), the wherewithal to effectively stimulate the economy, except through tax policies.

Note: Missing are Milton Friedman, Walter Williams, and Thomas Sowell, as well as anyone from the Von Mises Institute


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## Phinn (Apr 18, 2006)

> All the keynesian and neokeynesian models have that kind of predictions [that a minimum wage increases welfare].


Which we can add to the list of why the Keynesians and NeoKeynesians are wrong.

I find it funny (in a sad, pathetic kind of way), when the theory that initially prompted the implementation of a policy (such as the unemployment-causing minimum wage, for example) is undermined and discredited into oblivion, but its supporters keep returning with yet another theory, each more desperate and convoluted than the last, in order to justify keeping the policy, even though the reasons for implementing it in the first place are now recognized as invalid.

It's enough to make you think that perhaps these people are only interested in the keeping the policy around at all costs, and are merely fishing around for a theory, any theory, to provide a rationalization for its continued existence.



> They tried that in the USSR. It didn't work.


Now you're onto something!


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## odoreater (Feb 27, 2005)

So the minimum wage causes unemployment. Suppose there was no minimum wage - does that mean that everyone would have a job, but now, instead of 1000 people making $6 there are 2000 people making $3? That's the assumption right.

But, what if that's not the case? What if there is only a certain number of jobs to go around? What if the numbers of umemployed stay the same, or almost the same, except now, the _same_ people that were making $6 are making $3. Meanwhile, the people that employ these people are happy because now they have $3 more per worker per hour in their own pocket. They can then use that money to buy some more $11,000 suits, $3,000 custom shoes and $1000 baby rattles.


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## Phinn (Apr 18, 2006)

> What if there is only a certain number of jobs to go around? .... [The employers] can then use that money to buy some more $11,000 suits, $3,000 custom shoes and $1000 baby rattles.


Even within the artificial, unrealistic scenario you have outlined, it is clear that whoever is making these suits, shoes and baby rattles will need more employees.

Or perhaps, given the boom in the suit, shoe and rattle sectors, some enterprising person might want to start a business providing these goods, or expand their existing businesses to take advantage. If these goods are overpriced, then there must be, by definition, a profit opportunity for someone to get that some of that market share.

Or, are you saying that people should not be _allowed_, by law, to make and sell goods that you consider to be overpriced? Why are you so hostile to Mr. Kabbaz? His customers seem to be more than willing, eager actually, to give him a lot of money to make very expensive shirts. Who are you to tell them they can't reach a mutually agreeable exchange?

Let's say that you could force this employer to pay $6 for his employees rather than $3.

What it really means is that you have made it that much more likely that his business will be destoyed by foreign competition. His company will be that much more likely to close and his market share taken by a competitor outside the wage-law.

Or, even if you manage to prevent that from happening, you have made it that much more unlikely that the business will be able to expand into some other new line of goods, some other market, etc. You have reduced the ability to accumulate savings, operating capital, and thus the market options, of this entire sector of business.

Finally, whoever does manage to survive in business, despite how difficult you are making it for him by taking money out of his pocket, you are effectively destroying whatever businesses he would have patronized with that money. In your example, it's expensive suits, shoes and rattles. More likely, it is car dealers and repairmen, grocery stores, appliance salesmen, maybe even a building contractor or two. All you have done is declare, in your infinite wisdom, that these people shall get less money than they otherwise would. In other words, when you are adding up all the costs and benefits of your wage law, you have to account for what will _not_ exist as a result of your edict.


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## odoreater (Feb 27, 2005)

I think we should let people sail down the river in whatever way they will; but, I think the river should have those little rubber bumpers at the sides so that if somebody starts to stray into dangerous territory, the little rubber bumpers bump them back towards the middle of the river. That's what we've been doing so far in this country and it seems to be working. Most people are getting by and the people who can afford the expensive suits and shirts are buying them. I don't see what's so wrong with the system that we've been using for the past 60 or so years that we need to get rid of it.

As I always say - let the people decide whether we're getting it right or getting it wrong. It's easy for us to talk when we're not the ones that are making the minimum wage.

Also, why is my scenario any more artificial or unrealistic as the one you propose?


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## Étienne (Sep 3, 2005)

Wayfarer said:


> However, why did I think people such as Friedman feel Keynes has basically been disproved?


I guess if you ask a neoclassical economist, he will surely claim that it is the case. however, in spite of what Phinn says, neokeynesianism is alive and well, and a well-respected theory in macroeconomics at least.

And as far as I know empirical studies do not support the neoclassical claim taht a raise in the minimum wage raises unemployement. At least not unambiguously.

And, by the way, famous quote by Milton Friedman in Time Magazine, December 31, 1965, "We are all Keynesians now."

Of course the complete quote was actually "In one sense, we are all Keynesians now; in another, no one is a Keynesian any longer. We all use the Keynesian language and apparatus, none of us any longer accepts the initial Keynesian conclusions."


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## Wayfarer (Mar 19, 2006)

odoreater said:


> Now you're talking about something totally different. That has nothing to do with minimum wages or anything that the government does - that has to do with collective bargaining and the market rate of labor. Are you saying that you don't think the nurses should have the right to manipulate market forces in their favor?
> 
> See, this is exactly the fear that leads to things like a minimum wage. Employers want to make as much money as possible while paying the people that produce for them as little as possible. If employers could get away with paying employees enough just to keep them alive and coming to work the next day - they would do it.


Odor, please find out what percent of health care dollars spent come from government of one level or another and how they set their payment scales then come talk to me. It does have something to do with something the government does. What I am saying is that it is totally illogical to allow market forces to work on the expense side of a business but have some totally out of touch, up for re-election policy wonk set rates on the revenue side: gentlemen, I give you Medicare, Medicaid, and the VA and now, just for your enjoyment.....Medicare Part D!

Get government out of health care would be your argument to make your point valid. I do not think it should be out of healthcare, but I think the ability to earn revenues must match the need to pay salaries (and ancillary costs, medical supplies always seem to go up far over my rate increases). However, we digress and you are correct in that I wandered off the minimum wage talk. I will keep it on topic.


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## Wayfarer (Mar 19, 2006)

Étienne said:


> I guess if you ask a neoclassical economist, he will surely claim that it is the case. however, in spite of what Phinn says, neokeynesianism is alive and well, and a well-respected theory in macroeconomics at least.


So I was quite correct in my original answer to this thread: either you find the models of neoclassical economics valid or you do not (or you just belong to a camp on one side or another 'cause yer a follower) and that decides your stance on minimum wage. Pretty much end of story. Like I said, I make no pretensions to being an economist, I am just a schmuck, albiet one with about 350 FTEs that runs the P&L function


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## Kav (Jun 19, 2005)

I have no objection to any individual EARNING great wealth. I also realise there is a % of society that will still wind up on Skid Row 5 days after you give them $10,000. What I object to is the increasing concentration of the national wealth in fewer and fewer hands. This is not economic theorum, genetic predisposition or even honest work creating usefull products or ideas. It is the result of GREED.As an example being reported as I type, the e coli outbreak , traced largely to California and an ORGANIC GROWER was warned against by inspectors a year ago. One of the postulated sources are workers RELIEVING themselves in the fields because of pressure to produce more and lost time walking to the porta potties. I may be anti illegal worker, but if I saw a campesino who couldn't even use the lousy banyo his patron would need dental work. I've read myJohn Steinbeck and John Nichols.


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## crazyquik (Jun 8, 2005)

I'm surprised that no one has mentioned inflation.

What is the intention of raising the minimum wage? To increase the buying power of the lowest rung of workers. Assuming thier bosses can afford to keep them there, what will they do with thier 10% greater income? Buy more goods and services, right?

If the cost of labor increases, businesses will increase thier prices in order to keep thier margins whole and thier profitability at par. They will pass on the increased cost of labor to thier consumers (much like the increased cost of gas or raw materials). This is mainly if they employ minimum wage workers of course.

Because of the higher minimum wage, sellers will increase thier prices so they maintain profitability, and therefore the greater buying power of the Minimum Wage Worker is erased. 

How much does this effect the retail of cordovan shoes? Not much, because they are rarely "touched" by minimum wage workers. Thier retail price is based on the availability of horse hides, skilled artisans, expensive retail space, and workers making more than the minimal wage. Goldman Sachs won't change thier prices, because they aren't closely levered to minimum wage workers. Of course, most minimum wage workers aren't customers of cordovan shoes or Sachs.

On the other hand, discount grocery stores and cheap resturants have very thin profit margins and are closely levered to minimum wage employees. If the cost of labor increases, the stores would be unprofitable, so they will raise thier prices across the board. So now, everyone shopping there is negatively impacted by the increased minimum wage (except the Min Wage Worker, who's 10% raise will probably be absorbed by the increased cost of groceries and meals). 

Luckily, most voters don't understand inflation...


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## Étienne (Sep 3, 2005)

Wayfarer said:


> and that decides your stance on minimum wage. Pretty much end of story.


Not really. In this case researches rely mostly on empirical studies. It's just that I don't know the field well enough to tell you what the consensus in these studies is or if there is one. My vague recollection is that there is no consensus.


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## odoreater (Feb 27, 2005)

crazyquik said:


> I'm surprised that no one has mentioned inflation...


See, these types of over-simplistic theories are what cloud this area. How do you know that the discount grocers and cheap restaurants won't start doing better because the people that shop there now have more money to spend, which means that more goods will be purchased and moved off of shelves, and the owners will have higher profits, which will off-set the amount they have to pay the few workers that work there without raising prices.

All these "hypotheticals" about what would happen are pretty useless because the world is a lot more complicated than these hypotheticals presume.


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## crazyquik (Jun 8, 2005)

Profit margins for grocers, esp discount grocers, is among the lowest in retail. 1-2% is the norm. Much like gas stations, they will sometimes take a loss on products just to drive traffic to thier stores. On the other end of the grocery spectrum is Whole Foods, with thier massive 3% net profit margin. I wonder where Aldi is in this, since they make the discount grocers look posh.

Target and Wal-Mart have both said that when they added groceries to thier Superstores, thier margin mixed down because of the downward pull of groceries vs thier normal retail products. 

When already faced with the smallest margins in business, it would be hard for these stores to absord the cost without raising retails significantly, which cancels the effect of more money. They aren't going to wait and see if sales increase, because they are so close to the edge to begin with. They will raise thier prices at the same time as thier costs go up (probably raise it on the most price inelastic goods first though, but I'm not sure what those are, maybe soap and paper goods?). 

Really all moot though, they would just fire some of the minimum wage cashiers and baggers, who cost too much now, and put in self-checkout machines. So the minimum wage bagger became a zero wage non-worker.

I honestly didn't believe it when I heard that grocery baggers and shelf stockers were unionized in parts of the country.


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## odoreater (Feb 27, 2005)

crazyquik said:


> Really all moot though, they would just fire some of the minimum wage cashiers and baggers, who cost too much now, and put in self-checkout machines. So the minimum wage bagger became a zero wage non-worker.
> 
> I honestly didn't believe it when I heard that grocery baggers and shelf stockers were unionized in parts of the country.


I actually prefer the self-checkout machine. It's much more efficient than a real person.


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## hopkins_student (Jun 25, 2004)

odoreater said:


> It's easy for us to talk when we're not the ones that are making the minimum wage.


Exactly! We should discredit the voices of successful people. What do they know, they've only made (mostly) good decisions.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> It's easy for us to talk when we're not the ones that are making the minimum wage.


I have made less than minimum wage on more than one occasion. I can remember picking tomatos from dawn to dusk for two weeks one year and making $50 back in high school. De-tassling corn paid $3.12 /hour Canadian. I had another gig once where I was a valet and not only did we only work for tips, we had to pay the owner of the valet service $1.00 per car, so theoretically, I could lose money on every car parked.


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## Phinn (Apr 18, 2006)

> That's what we've been doing so far in this country and it seems to be working.


How do you know?

This touches on what Wayfarer mentioned earlier -- there is no laboratory for economics. Economies are dynamic, adaptive, massively complex systems. "The economy" is a shorthand term that refers to the hundreds of decisions and behaviors of literally every person on the planet made every single day, and how those interactions affect the decisions and behaviors that follow. The level of complexity in even a single day of economic activity is beyond measure.

In order to know what the true effect of a policy -- like a minimum wage law -- is, you would have to be able to account not only for the way things are today, but also for how things would have turned out if you never implemented it. You have to account for what actually comes to pass, but for what _doesn't_ come to pass because you changed how the system worked.

You have to account not only for what is seen, but for what is unseen.

How do you do that? For all that you or anyone else is able to prove through economic statistics, the world would be a lot better off if these anti-freedom policies of economic control and interference had never been imposed on people.

This error in thinking is repeated by Etienne when he refers to "empirical research" in economics:



> In this case researches rely mostly on empirical studies.


That is part of the problem.

As far as I know, there is no such thing as a time machine that allows us to implement a policy (e.g., a minimum wage or any of the other thousands of other forms of collectivist economic interference in people's daily lives, like price-fixing, production quotas, make-work rules, unionization, etc.), and see how it _alone_ affects things. You can never go back in time, change just that one law, and re-do everything to see how things would have turned out. There are no do-overs in economics. The economic conditions that affect the outcome never repeat. Thus, you can never conduct economic experimentation because there can never be a control group.

What do we have to rely on since there can be no such thing as economic experimentation?

_A priori_ reasoning.


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## odoreater (Feb 27, 2005)

hopkins_student said:


> Exactly! We should discredit the voices of successful people. What do they know, they've only made (mostly) good decisions.


Or were lucky enough to be born in a more advantageous position than some other people. Or were lucky enough not to suffer some of the hardships in life that other people have suffered. Take your pick.

I wonder how many people that advocate getting rid of a minimum wage do so because it would be better for the people that are earning a minimum wage or for society in general and not because it would be better for them personally.


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## crs (Dec 30, 2004)

Wayfarer said:


> I have made less than minimum wage on more than one occasion. I can remember picking tomatos from dawn to dusk for two weeks one year and making $50 back in high school.


I'm a former tomato picker, too. In New Jersey in the early-mid 1970s, the rate was 50 cents per large plastic bucket, and the problem was not so much the pay rate but the farmer "disqualifying" a number of buckets for supposedly containing bad 'maters. It was a scam, but under age 16 in a rural county, employment options were limited. When I turned 16 I became eligible to work in restaurants that didn't serve alcohol. The pay was $1 per hour with the understanding that our tips would more than bring us to minimum wage, which they did and then some. In fact I earned far less per hour later that year when I landed my first newspaper job, covering high school sports part time. Of course in that era a few years after Watergate, journalism schools were bursting at the seams and a 16-year-old felt almost like he had to pay the newspaper for the honor of working there. Minimum wage was nirvana.

When I think of minimum wage now, my memories focus not on us teenagers bending in the fields for hours, only to be ripped off by the farmer. I think of the grown men and women, migrant workers with families to feed, bending in the fields for hours, only to be ripped off by the farmer. Farm labor, to my understanding, is or was exempt from minimum wage. At least if there had been a minimum wage for farm workers rather than pay-by-the-bucket, the worker would have been protected somewhat. The problem with economic theories is that they assume honest behavior when in practice this is often not the case on the low end, and it is these people on the low end who most need government protection.


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## Phinn (Apr 18, 2006)

> under age 16 in a rural county, employment options were limited


Employment options were so limited, at least in part, *because of* the minimum wage.

As you said, young people and the unskilled poor are the most vulnerable, and it is idiotic policies like the minimum wage that makes their lives that much harder.

But in a perverse way, I guess the minimum wage taught me a valuable lesson -- you have to make your own way. As a teenager who was not allowed to earn a wage below the arbitrary minumum (and thus unemployable), I was forced to become entreprenurial -- pool cleaning, lawn mowing, hawking wares at sporting events. (Eventually, government thugs shut that last one down, too.)


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## jbmcb (Sep 7, 2005)

odoreater said:


> See, these types of over-simplistic theories are what cloud this area. How do you know that the discount grocers and cheap restaurants won't start doing better because the people that shop there now have more money to spend, which means that more goods will be purchased and moved off of shelves, and the owners will have higher profits, which will off-set the amount they have to pay the few workers that work there without raising prices.
> 
> All these "hypotheticals" about what would happen are pretty useless because the world is a lot more complicated than these hypotheticals presume.


Here's a non-hypothetical. I know someone who owns a seasonal retail store. She has the need for temporary, cheap, unskilled labor, to move inventory around and clean the place. It's actually a pretty good job, the stock boys/gals can make their way to full-time, well-paying salespeople within a couple years if they are sharp. They are raising the minimum wage in our state. She won't be hiring as many temps as she did last year, and curtailing how many hours she hires temps for. Another minimum wage success story!


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## Étienne (Sep 3, 2005)

Phinn said:


> What do we have to rely on since there can be no such thing as economic experimentation?


Econometrics. I never said it was easy to decide precisely whether an economic policy works or not. But to dismiss beforehand the very possibility of empirical studies in economics is not far from luddism. When you decide beforehand that no empirical study will ever convince you because they are never perfect and that you *know* raising the minimum wage won't work because microeconomics 101 says so, that's a reasoning that strikes me as rather limited.

Tell me, have you ever studied empirical economics and econometrics? Ever read one of the dozens of studies about the effects of the minimum wage? Ever studied an economic model besides the basic neoclassical microeconomic model in Econ 101? Because your discourse certainly makes it seem that you haven't and are awfully sure of yourself with very little reason for that.


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## Phinn (Apr 18, 2006)

> to dismiss beforehand the very possibility of empirical studies in economics is not far from luddism


That's .... ridiculous.

Economic study has some unique features, namely (1) a level of complexity that makes ordinary analysis impossible, (2) the presence of determinative factors in every economic system that never repeat.

As a result, economic conditions cannot be tested with the scientific rigor one might find in other fields. Scientific proof requires a few things, such as the ability to replicate results, and the isolation of causes with the use of controls. None of this is possible in an economic system, for the reasons I mentioned. Causation is especially problematic.

A third element I have not yet mentioned, but still relevant, is the fact that economic activity depends on subjective preferences that cannot be known or predicted with certainty until the actual decision must be made. People may say one thing about what they want or how they would act in certain circumstances, but that differs from their actual behavior under real conditions. Also, subjective preferences change over time. This further undermines the ability to replicate results, or prove the significance of historical data.

The Luddites, as I understand, were hostile to science and technology. I, in contrast, am pointing out the limits of scientific experimentation and the impossibility of employing it in this context.



> Tell me, have you ever studied empirical economics and econometrics?


Yes.



> Ever read one of the dozens of studies about the effects of the minimum wage?


Yes.



> Ever studied an economic model besides the basic neoclassical microeconomic model in Econ 101?


Yes.



> Because your discourse certainly makes it seem that you haven't and are awfully sure of yourself with very little reason for that.


You seem to be terribly concerned with me, rather than the topic at hand. Rather than repeatedly offering nothing but ad hominem arguments and relying on credentialism, you might want to consider saying something substantive.


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## Chuck Franke (Aug 8, 2003)

Still really haven't heard anyone address my issue as an employer and if you really want to see better wages and more jobs I think this one is a key.
As an employer, I have a very precise budget for employees in a given week. Let's say that is $45/hr.
My experience is that one person making $15 and 3 making $10 gets a lot more work done and done accurately than 8 people at minimum wage would do. If 8 people making minimum wage produced more then that is what I would do.

But... the fact remains. A business, especially small businesses which produce a very very large percentage of the lower wage jobs doesn't set wages based on government studies, popular opinion or anything else.

It is a financial decision, period, end of discussion.

An employee who costs $250/week must either save you $250 in another area or generate $250 in profits just to earn thier keep. 

If you want more jobs and more wages then the focus ought to be on developing workers of higher value, not on assigning an artificial value to their work.

If you really want the least skilled worker to make a better wage then put some sort of program in place where a business gets a tax break or other benefits fro bringing in a worker with insufficient skills and training them. I figure each new worker will cost me a $500 loss the first month, minimum, due to the time it takes to train them, the mistakes they will make and the fact that they will not work at a productive pace until the 4th or 5th week.

Increase the value of the workers and you'll see people earning better wages. 

I think Kav's point about the farm labor is more an argument to enforce the laws on using illegal alien labor than a minimum wage argument.


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## crs (Dec 30, 2004)

Phinn said:


> Employment options were so limited, at least in part, *because of* the minimum wage.


No, you are completely wrong. Employment options were limited because of child-labor laws that limited the work open to those under 16 and because of a lack of jobs overall in a rural county -- most adults commuted an hour or more each way to their jobs. I take it that your insights into mimimum wage are completely theoretical, rather than practical.


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## crs (Dec 30, 2004)

Chuck Franke said:


> Still really haven't heard anyone address my issue as an employer and if you really want to see better wages and more jobs I think this one is a key.
> As an employer, I have a very precise budget for employees in a given week. Let's say that is $45/hr.
> My experience is that one person making $15 and 3 making $10 gets a lot more work done and done accurately than 8 people at minimum wage would do. If 8 people making minimum wage produced more then that is what I would do.
> 
> ...


If employers can't afford to pay minimum wage, perhaps they lack the skill to operate a successful business. I don't think we ought to virtually legalize slavery in order to compensate some employers for their lack of business knowhow. If a business can't survive within our laws, maybe it doesn't deserve to be in business -- and when your business fails, it would open a place in the market for a more skilled businessperson. Some here seem to see minimum wage as a kind of welfare for the unskilled workers. I see the lack of minimum wage as a kind of welfare for unskilled employers.


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## Étienne (Sep 3, 2005)

Phinn said:


> As a result, economic conditions cannot be tested with the scientific rigor one might find in other fields.


That's right. And yet, empirical research is possible. Amazing what the human mind is capable of doing, right? You will also find empirical research in psychology or medicine where all your arguments (non replicability, complexity of the phenomena) apply.



> You seem to be terribly concerned with me, rather than the topic at hand. Rather than repeatedly offering nothing but ad hominem arguments and relying on credentialism, you might want to consider saying something substantive.


No ad hominem as far as I am concerned. I am rather amazed when somebody just dismisses one entire research field (empirical studies in economics) with a few well-coined phrases, that's all. That has to be a first for me, but it just proves you never cease to learn.


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## jbmcb (Sep 7, 2005)

Étienne said:


> That's right. And yet, empirical research is possible. Amazing what the human mind is capable of doing, right? You will also find empirical research in psychology or medicine where all your arguments (non replicability, complexity of the phenomena) apply.


Apples and oranges. You can statistically compensate for relatively minor differences between people through sheer volume, you can't statistically compensate for changes between countries, or economies. There aren't enough countries whose economies are signifigantly similar to each other, with similar policies, infrastructure, demographics, etc... to make such analysis statistically signifigant. There is the same problem with temporal studies, the economic dynamics of the USA in 1940 are completely different than in 2000.

That doesn't stop people from trying to quantify economic policy, of course. 
Makes for good grant-writing, at least.


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## Chuck Franke (Aug 8, 2003)

crs said:


> If employers can't afford to pay minimum wage, perhaps they lack the skill to operate a successful business. I don't think we ought to virtually legalize slavery in order to compensate some employers for their lack of business knowhow. If a business can't survive within our laws, maybe it doesn't deserve to be in business -- and when your business fails, it would open a place in the market for a more skilled businessperson. Some here seem to see minimum wage as a kind of welfare for the unskilled workers. I see the lack of minimum wage as a kind of welfare for unskilled employers.


Oh boy, now that's just funny, nothing like a good theory to trump reality with. Priceless! If you artificially raise wages and completely ignore the realities of supply and demand thus causing businesses to fail then it is because the businesses are poorly run.

Real simple - For every dollar a business pays in wages they have to generate another dollar in profits to pay for that labor or else they have to save a dollar somewhere else.

If a company uses a LOT of minimum wage employees - say they have 100 of them. Raising the minimum wage by a dollar means that they either have to:
1. Get $100 per hour more productivity
2. Cut $100 per hour in costs
3. Raise prices by a sufficient amount to pay the cost.

It never ceases to amaze me the way employers are seen by the left as the bad guys. If laws are changed to create an artificial and arbitrary value for labor and it puts a business under then the left will say it was because the business was poorly run and take no responsibility for putting the business under - thus sending all of it's employees to the unemployment roles. Then they blame the government who put those businesses under for a high unemployment rate.

Likewise when the value of labor is inflated to $30/hr by labor unions and the work goes overseas the left villifies the (former) employer for it and refuses to address the fact that the company had no choice but to lower costs or else go out of business - putting everyone out of work.

Honestly, I haven't been able to locate anyone willing to work for minimum wage who can do good work. I've found that half as many people at twice that wage will be more productive in terms of $$/work. If, however, someone came in tomorrow and said that I had to give everyone a 20% raise there is no question - I'd have to cut someone or else sit down with them and ask them if they could produce 20% more. That isn't coldheartedness on the part of business, that's the cold reality of life in the real world.

A business' finances are a complex formula. They break down into two categories - costs and income. You can't arbitrarily chage one value in that formula without changing the entire equation. Add 20% to one value and you have to balance the equation by tweaking between 1 and 1000 other variables or you break the equation. That's reality.

CRS - if your paper finds out tomorrow that ink and paper have gone up 25% in cost, what does that do to the price of your paper, the advertising costs, the travel budget, the photography budget, the labor budget.....

You are right about one thing though - if paper and ink go up by 25% tomorrow and your paper does everything else precisely the same way then that is one way to fold a newspaper. ...and terrible management would be to blame.

I'm not an economist by any means. I do know this - businesses, especially small ones, are desperate to pay $10/hr to anyone who can come in and produce a $20/hr value to the company. I also know that when businesses pay people, they are required to use actual money, not hypothetical money.

I'm trying to pinpoint precisely what it is in the left's collective view of the employer/employee relationship that irks me. It seems to be the assumption that businesses are scheming on ways to get rich while abusing workers. I don't think that is reality. I know there are some businesses that are scummy, most would really like to grow their business, pay their good employees MORE money and hire new employees. Why? SImple - it means that the business is successful.

Those who think you can arbitrarily raise wages without affecting the rest of the equation may well have PhD's in economics but they sure as hell never had the responsibility to meet a payroll.


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## Phinn (Apr 18, 2006)

> I don't think we ought to virtually legalize slavery in order to compensate some employers for their lack of business knowhow.


A job that one takes voluntarily is hardly comparable to slavery. I take it that your insights into slavery are completely theoretical, rather than practical.



> If a business can't survive within our laws, maybe it doesn't deserve to be in business -- and when your business fails, it would open a place in the market for a more skilled businessperson.


Everyone deserves to be in business, provided that one is not engaged in coercion or fraud. It is not your place to dictate what others do, particularly regarding two people who would prefer to be allowed to mutually agree to employment terms without your interference.

In any event, the question here is whether those laws themselves are just and proper. The question is whether the people enforcing these so-called laws deserve to have the power to do so.



> Some here seem to see minimum wage as a kind of welfare for the unskilled workers. I see the lack of minimum wage as a kind of welfare for unskilled employers.


No, if you take the time to actually read what I wrote, you'd see that my objection to the minimum wage is that it causes unemployment and hardship at the lowest end of the income scale.



> Employment options were limited because of child-labor laws that limited the work open to those under 16 and because of a lack of jobs overall in a rural county -- most adults commuted an hour or more each way to their jobs.


So, despite the fact that you were ready, willing and able to work at some age under 16, and some employer might have otherwise been willing to hire you, some government official somewhere was standing at the ready to tell the two of you that you could not agree to such an arrangement.

This situation further demonstrates that these laws that you say we must blindly follow (or allow our businesses to fold, as you suggest) are not so beneficial and wise as you think.



> I take it that your insights into mimimum wage are completely theoretical, rather than practical.


Again, you seem to have missed the part where I mentioned that I was shut out of work by the minimum wage law, and turned instead to independent entreprenurial work (of a manual nature). That seemed pretty practical at the time.


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## Lushington (Jul 12, 2006)

Wayfarer said:


> Etienne:
> 
> Could you please share the name of one or two models that find an effective minimum wage increases welfare and also how other economists feel about these models and approximately what you feel the percentage of the population of economists that hold these models superior to the standard ones?


It appears that there is a more empirically-based answer to your question than the anecdotal response I posted yesterday. A survey published in the Fall 2003 issue of _The Journal of Economic Education _addressed the consensus among academic economists regarding 44 statements of economic orthodoxy and policy. Statement 30 was: "a minimum wage increases unemployment among young and unskilled workers." Of those economists responding, 45.6% agreed with this statement, 27.9% agreed with provisos, and 26.5% disagreed. The reported data was collected in 2000. The authors of the study then reexamined similar data from 1990 and found that the percentages at that time were 62.4%, 19.5%, and 17.5%, respectively (.06% did not respond.) As the authors note, there were two large empirical studies of the effect of increases in the minimum wage conducted during the 1990s, so the rather significant change in professional opinion reported was likely caused by the debate arising out of those studies. One can access the survey article here:

Given the change in professional opinion from 1990 to 2000, it is interesting to speculate what additional change in opinion, if any, has taken place in the six years since the last survey.


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## Phinn (Apr 18, 2006)

> No ad hominem as far as I am concerned.


Fortunately, it's not up to you.



> I am rather amazed when somebody just dismisses one entire research field (empirical studies in economics) with a few well-coined phrases, that's all. That has to be a first for me, but it just proves you never cease to learn.


You should get out more.

In any event, despite two days' worth of opportunities, you still have not offered any substantive comment.


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## crs (Dec 30, 2004)

Chuck Franke said:


> CRS - if your paper finds out tomorrow that ink and paper have gone up 25% in cost, what does that do to the price of your paper, the advertising costs, the travel budget, the photography budget, the labor budget.....
> 
> You are right about one thing though - if paper and ink go up by 25% tomorrow and your paper does everything else precisely the same way then that is one way to fold a newspaper. ...and terrible management would be to blame.


Well, we have, in fact, all dealt recently with a rising cost of newsprint, which is the No. 2 cost after labor on paid-circulation newspapers and the No. 1 cost on free papers.

In fact, not every newspaper deals with that price increase the same way. Some cut bodies, but most understand that the price of newsprint is cyclical. When we cut newshole and reduce newsprint consumption, at some point the suppliers will lower their price.

Too, many newspapers have responded to the death of major advertisers, shrinking circulation and increased newsprint costs by developing fleets of niche products. In other words, expanding the business rather than contracting as a way to compensate. I consider this the best way to deal with it -- if we need more money, go out and find more business. It is better for the company, for management and for the employees.

Yes, I think management is to blame. They can respond to the market passively, or they can be aggressive capitalists. In the newspaper biz, usually those who respond with short-term solutions -- cutbacks -- usually are publically traded companies that are chained to Wall Street and must maintain their stock price at all costs. The smaller companies (or those with two tiers of stock, voting and non-voting) do not have that inherent inflexibility and can respond more aggressively and creatively. So I don't buy that minimum wage hurts smaller employers. It hurts smaller employers who lack the skill and guts to expand rather than contract.


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## Phinn (Apr 18, 2006)

Thank you, Lushington, for the link.



> so the rather significant change in professional opinion reported was likely caused by the debate arising out of those studies


Given the rate at which academics (including academic economists) change their minds about orthodoxy and policy, I would submit that one would need to look at the change in composition of the two surveyed groups before making any assumptions.

As Max Planck is (perhaps apocryphally) quoted as saying, "science progresses one funeral at a time."

There is a similar effect in economics circles.


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## crs (Dec 30, 2004)

Phinn said:


> So, despite the fact that you were ready, willing and able to work at some age under 16, and some employer might have otherwise been willing to hire you, some government official somewhere was standing at the ready to tell the two of you that you could not agree to such an arrangement.


How very 18th Century of you.


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## Wayfarer (Mar 19, 2006)

crs said:


> If employers can't afford to pay minimum wage, perhaps they lack the skill to operate a successful business. I don't think we ought to virtually legalize slavery in order to compensate some employers for their lack of business knowhow. If a business can't survive within our laws, maybe it doesn't deserve to be in business -- and when your business fails, it would open a place in the market for a more skilled businessperson. Some here seem to see minimum wage as a kind of welfare for the unskilled workers. I see the lack of minimum wage as a kind of welfare for unskilled employers.


Sorry, have to disagree with this. The old, "if you can't pay <insert artificially derived amount here, from minimum wage to "living" wage> you do not deserve to be in business. Never heard someone that owns or runs a business say that. Further, just because I am in business does not mean I need to exit the market to "open a place in the market for a more skilled businessperson". Shows me how much you understand of free markets crs, as a more skilled businessperson would simply enter the market if they saw market share and drive me right out of business. We often call this business "Wal-Mart" and it is hated by liberals, so odd you would push that thought.

"Welfare for unskilled employers" Love it. Want to come shadow me for a month?


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## crs (Dec 30, 2004)

Wayfarer said:


> Shows me how much you understand of free markets crs, as a more skilled businessperson would simply enter the market if they saw market share and drive me right out of business.


In my business, here's how it works. A daily newspaper in Palo Alto, Calif., was folded by the Tribune Co. of Chicago in the early 1990s. Supposedly, it could not survive. A new daily was started shortly thereafter and lives today. A daily newspaper was folded in the early 1990s by The New York Times Co. in Gwinnett County outside of Atlanta. A new one came along shortly thereafter and lives today. In neither case would an upstart choose to compete against a huge company, but once the vacuum was created, they came in and thrived.


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## Chuck Franke (Aug 8, 2003)

crs said:


> So I don't buy that minimum wage hurts smaller employers. It hurts smaller employers who lack the skill and guts to expand rather than contract.


Oh I dunno, I know a lot of small business owners and they would all like to expand and do so as conditions allow it. You leave out a somewhat important part of the decision to expand though. There are at least 10 things I have in mind personally to expand my business right now and 3 of them will happen in the next year without question. The cheapest one will cost around $50K and as always, each is a calculated risk.

A company with say 20 employees who wants to make a big expansion and demonstrate the guts you mention has to give consideration to the 20 people already depending on the company for their livelihood, don't they? They are not gambling with only thier own livelihood but with 20 other people's. Gambling with someone else's money is a cliche for reckless decisions, gambling with other people's ability to support their family has the opposite effect on any person who is not a sociopath.

My suggestion to you is not that I have the answers and you don't, my suggestion to you is that the answers are extremely complex and multi-faceted and you can't tweak one component artificially without upsetting the balance. The equation isn't artificial.

It would be nice if we could set the minimum wage at $200/hr without increasing the minimum production standard by a like percentage. Unfortunately it is a constraint-based model. Tweak one of the constraints too much and you break the entire model. Now, is raising the minimum wage by a buck going to break the model? I doubt it, but I don't much like the precedent it sets. It's a feel good measure by politicians that plays upon the 'employers are bad, workers are noble' theme and makes the assumption that people don't really think too hard about such things. It sounds nice.

Kinda goes back to my theory. It isn't that conservatives care less than liberals about rights. It's more that conservatives generally see in each right an inherent and inextricable responsibility. I've never seen a liberal fight to increase a worker's responsibilities or an employer's rights. By creating an artificial us versus them mentality which sells well to the larger group you institutionalize a counter-productive relationship between the government, the worker and the employer. That's not best for anyone... except the politician who is betting nobody will think it over too carefully. Business owners think it over carefully. When gasoline doubles in price we anticipate what it will do to our utility costs, corrugated packing materials costs, travel costs, shipping costs, .... In short - you are mindful of the impact of every bad decision you make. What scares the hell out of you is someone else making bad and/or short-sighted decisions without thinking it through in the same real-world, practical terms you do.


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## crs (Dec 30, 2004)

Chuck Franke said:


> Kinda goes back to my theory. It isn't that conservatives care less than liberals about rights. It's more that conservatives generally see in each right an inherent and inextricable responsibility. I've never seen a liberal fight to increase a worker's responsibilities


In my industry recently, a liberal tried to do just that. When Knight Ridder put itself for sale, the Newspaper Guild attempted to buy only the unionized papers with the backing of Yucaipa Companies, a private equity firm headed by a liberal, a friend of Bill Clinton. Obviously, the union and the equity firm believed they could make a go of it despite high labor costs.


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## Wayfarer (Mar 19, 2006)

crs said:


> In my business, here's how it works. A daily newspaper in Palo Alto, Calif., was folded by the Tribune Co. of Chicago in the early 1990s. Supposedly, it could not survive. A new daily was started shortly thereafter and lives today. A daily newspaper was folded in the early 1990s by The New York Times Co. in Gwinnett County outside of Atlanta. A new one came along shortly thereafter and lives today. In neither case would an upstart choose to compete against a huge company, but once the vacuum was created, they came in and thrived.


Well with that huge and diversified data set, your evidence is rock solid!


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## Wayfarer (Mar 19, 2006)

*Wow, good info....*

Lushington, thanks very much for that link.

Etienne, I would say with that info, the ball is firmly in your court at this point. It would seem much of what I have been maintaining concerning one's stance on minimum wage is true as well as some other things I said above. I mean, 73% and 82% of economists agreeing with the neoclassical viewpoint on minimum wage?  Amongst academics, that is virtually an unheard of concensus on a "controversial" topic like this.

Cheers


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## crs (Dec 30, 2004)

Wayfarer said:


> Well with that huge and diversified data set, your evidence is rock solid!


Hey, it's not often that newspapers fold. I use that example because I know a lot about my industry, less about others. In my line of work, it is very expensive to enter a market. In the markets cited, a printing press and facility will run at least $25 million.


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## Wayfarer (Mar 19, 2006)

crs said:


> Chuck said he had NEVER seen it, not rarely seen it. He can't say "never" anymore.


You might well be making a spurious corelation. I'd not declare victory yet.


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## Martinis at 8 (Apr 14, 2006)

Any wage or price control, floor or ceiling, is against the concept of Liberty & Freedom.

Both the American Socialist Party (Republicans) and the American Communist Party (Democrats) subscribe to some form of wage and price controls.

M8


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## odoreater (Feb 27, 2005)

Chuck Franke said:


> Kinda goes back to my theory. It isn't that conservatives care less than liberals about rights. It's more that conservatives generally see in each right an inherent and inextricable responsibility. I've never seen a liberal fight to increase a worker's responsibilities or an employer's rights. By creating an artificial us versus them mentality which sells well to the larger group you institutionalize a counter-productive relationship between the government, the worker and the employer. That's not best for anyone... except the politician who is betting nobody will think it over too carefully. Business owners think it over carefully. When gasoline doubles in price we anticipate what it will do to our utility costs, corrugated packing materials costs, travel costs, shipping costs, .... In short - you are mindful of the impact of every bad decision you make. What scares the hell out of you is someone else making bad and/or short-sighted decisions without thinking it through in the same real-world, practical terms you do.


The image problem that conservatives have is that when they take stands such as "we should get rid of the minimum wage" they do it to line their own pockets and the pockets of their big-business friends and not because they care about the little guy. I think this view is not always unjustified. Then again, everybody has a romantic view of what their side is doing and a cynical view of what the other side is doing.

I'm neither liberal nor conservative - but I do think that many times there is more than one way to skin a cat. That's what bothers me about this whole "liberal and conservative" paradigm - it assumes that there is only one solution to every problem and the correct solution is the solution of whichever camp you happen to belong to. I don't know why we don't believe that there is more than one valid solution to any particular problem.


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## Martinis at 8 (Apr 14, 2006)

odoreater said:


> ... but I do think that many times there is more than one way to skin a cat. That's what bothers me about this whole "liberal and conservative" paradigm - it assumes that there is only one solution to every problem and the correct solution is the solution of whichever camp you happen to belong to. I don't know why we don't believe that there is more than one valid solution to any particular problem.


You are correct. The *Martinis at 8* paradigm is the better alternative to these antiquated systems.

M8


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## Wayfarer (Mar 19, 2006)

odoreater said:


> I'm neither liberal nor conservative - but I do think that many times there is more than one way to skin a cat. That's what bothers me about this whole "liberal and conservative" paradigm - it assumes that there is only one solution to every problem and the correct solution is the solution of whichever camp you happen to belong to. I don't know why we don't believe that there is more than one valid solution to any particular problem.


Part of the problem too is that single isolated positions get assigned "liberal" or "conservative" labels. Abortion, border security, education, etc. should not be a liberal or conservative thing to have proscribed stances on based by political affiliation. I am deemed "liberal" by some as I want free needle exchanges when really, all I want is less blood borne diseases spread through intervenous drug abusers (IVDAs), creating a smaller draw on tax dollars for healthcare and all research shows a needle exchange program will do this. I get called "conservative" by others because I feel no man or woman has an innate right to the fruits of my labour. I think we should have charity and welfare programs, I just feel that someone's need does not give them some god given right to my productivity.

Something else to think about.


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## Phinn (Apr 18, 2006)

Martinis at 8 said:


> Any wage or price control, floor or ceiling, is against the concept of Liberty & Freedom. Both the American Socialist Party (Republicans) and the American Communist Party (Democrats) subscribe to some form of wage and price controls.


Now _that's_ what I'm talking about! I like the cut of your jib, sir.


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## odoreater (Feb 27, 2005)

Wayfarer said:


> Part of the problem too is that single isolated positions get assigned "liberal" or "conservative" labels. Abortion, border security, education, etc. should not be a liberal or conservative thing to have proscribed stances on based by political affiliation. I am deemed "liberal" by some as I want free needle exchanges when really, all I want is less blood borne diseases spread through intervenous drug abusers (IVDAs), creating a smaller draw on tax dollars for healthcare and all research shows a needle exchange program will do this. I get called "conservative" by others because I feel no man or woman has an innate right to the fruits of my labour. I think we should have charity and welfare programs, I just feel that someone's need does not give them some god given right to my productivity.
> 
> Something else to think about.


Whew, finally we found something to agree on. Now that we lost a common target - gmac - we seem to be at each other's throat more often.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> Whew, finally we found something to agree on. Now that we lost a common target - gmac - we seem to be at each other's throat more often.


LOLOL....shows everyone has their uses in life


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## Chuck Franke (Aug 8, 2003)

CRS - ya got me. That makes one instance I know of where a business specifically sought out a labor force with an artificially above market cost.

Was that someone who thought it was the best financial plan for a business or was this someone who had the means to make a decision based on political beliefs?

...and yet, the question of raising the value of the work done goes untouched and ignored.

I'm not sure how many minimum wage jobs are out there (seriously). When I was in High school I had some. I think the minimum was 3.35 when I started at Wal-Mart for $3.65. My girlfriend at the time started at a Kroger store where you are required to join the union in order to work. The union got her $3.85. She was pleased with this until she found out the Union would take $50 from each of her first 4-5 checks I think it was. After that I think it was just $50/month or so. At any rate, I do recall that she was making much less than minimum wage as a result of the union.

I'd like to see a comparison - how many fulltime employees would be helped a $1 increase to the minimum wage and how many employees in similar Union jobs would be better off if unions were unable to require payments from workers until they hit the $10/hr mark.

I'm sure once those concerned about the lowest earning hourly employees find out what the union charges a 16 year old bagger at Kroger they will be outraged and rush to correct that injustice - ya think?

The BS going on over these issues just annoys me. Do politicians really think Wal Mart employees are getting screwed or do they figure that the unions would have a much bigger budget if Wal Mart is forced to capitulate to the unions? LOL, Ok, we'll save Wal Mart for another thread. That ought to be worth at least 8 pages.


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## crs (Dec 30, 2004)

Chuck Franke said:


> CRS - ya got me. That makes one instance I know of where a business specifically sought out a labor force with an artificially above market cost.


I wouldn't say it's artificially above-market cost. They published excellent newspapers in those markets, won Pulitzers, and the lowest profit margin at any of them was 10 percent in St. Paul, half the industry norm but still pretty good by most standards.



Chuck Franke said:


> Was that someone who thought it was the best financial plan for a business or was this someone who had the means to make a decision based on political beliefs?


That I couldn't say for sure. I suspect some of both, but I doubt they'd do it if they couldn't make money. The only major dailies that lose money that I know of are the NY Post and Washington Times, subsidized by owners who want to voice their conservative agenda. The rest of us expect a healthy profit.


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## Étienne (Sep 3, 2005)

Chuck Franke said:


> If a company uses a LOT of minimum wage employees - say they have 100 of them. Raising the minimum wage by a dollar means that they either have to:
> 1. Get $100 per hour more productivity
> 2. Cut $100 per hour in costs
> 3. Raise prices by a sufficient amount to pay the cost.


All this assumes that the demand to said enterprise is constant. In other words, in your crude model, none of the additional revenue to workers is consumed. Doesn't it strike you as a little simplistic?



Phinn said:


> Fortunately, it's not up to you.


The question of whether I made an "ad hominem" attack has a little to do with me.



> In any event, despite two days' worth of opportunities, you still have not offered any substantive comment.


I woud not really know where to start. You just claimed in one paragraph that no empirical studies are possible in economics without any specific criticism of the tools of econometrics, which you claim to know. What can I say... "Eppur si muove"? I don't think there's anything I could say that could possibly be constructive given your stance. Especially given it is not my specialty and it would require some re-reading to explain the arguments that you would never accept.

I feel like, say, a chemist confronted to somebody that explains to him "Biology cannot be rigorous. A living body is just too complex to be able to isolate a controlled experiment." I guess some people would have the courage to have a long and strenuous discussion to defend biology, but many people would just shrug. Right now I am just inclined to shrug.


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## Phinn (Apr 18, 2006)

Étienne said:


> ]I guess some people would have the courage to have a long and strenuous discussion to defend biology, but many people would just shrug. Right now I am just inclined to shrug.


Quelle surprise.


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## Chuck Franke (Aug 8, 2003)

Étienne said:


> All this assumes that the demand to said enterprise is constant. In other words, in your crude model, none of the additional revenue to workers is consumed. Doesn't it strike you as a little simplistic?


I suppose there would be increased revenues to some businesses, it sure wouldn't be an even distribution across all businesses though. Do I understand you correctly that you think the increased cost of wages would be largely offset by increased revenue because the business would also get a 20% increase in patronage by minimum wage earners who would suddenly have more disposable income?

Yikes, my model was crude and imperfect but describes well the immediate impact on a business that uses minimum wage employees. Might they get an offset down the road? I don't know. Presumably some, but how long that takes could range from 6 days to 6 months to never. If we're talking Burger King, I suppose they do a lot of business with minimum wage earners who suddenly would have the extra scratch to order up the large onion rings and a shake instead of small fries and a coke. If you have say... a hotel property with 200 minimum wage employees in everything from laundry to groundskeeping do you want to look the owner of that hotel in they eye and tell him that the $1600/day in extra wages is not a problem because he'll be getting 8-10 extra rooms rented by minimum wage employees who suddenly decide to spend 5 weeks worth of that increase on a $200 hotel room?

My larger point is that you can't artificially set the value of work without causing problems elsewhere in the model - regardless of how crude or complex.


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## odoreater (Feb 27, 2005)

Chuck Franke said:


> If you have say... a hotel property with 200 minimum wage employees in everything from laundry to groundskeeping do you want to look the owner of that hotel in they eye and tell him that the $1600/day in extra wages is not a problem because he'll be getting 8-10 extra rooms rented by minimum wage employees who suddenly decide to spend 5 weeks worth of that increase on a $200 hotel room?


Eventually, it should work that way. If the minimum wage employee can't afford to stay at a hotel he will still do something with the extra money. Maybe he'll buy a television that year that he never would have bought. Now, the guy who is selling all the extra tvs that he would have never sold has enough money to afford to stay at that hotel instead of a cheaper hotel. If it's not the minimum wage employees that are taking the extra rooms it is somebody else up the chain that is renting the room who would not have been able to rent it before.

If the minimum wage employee decides to save the money, now there is more money in savings, which makes it cheaper to borrow money, which makes it easier to invest, which makes investors richer. The now richer investors will stay at the expensive hotel instead of a cheaper one.

Just like Raeganomics theoretically works downwards, this type of economics theoretically works upwards.

Of course, this is all theoretical.


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## Wayfarer (Mar 19, 2006)

*Etienne, no comment?*

Etienne,

I had asked you about the meta-analysis that Lushington was kind enough to find. To review positions, I stated the neoclassical model was the accepted standard and it indicates there is a decrease in welfare (in the economic use of the word) with an effective minimum wage. You stated the following:



Etienne said:


> I would not call the neoclassical model the "standard one"


From the report linked in this thread:



> The authors of the study concluded that a broad consensus exists among economists





Etienne said:


> And as far as I know empirical studies do not support the neoclassical claim taht a raise in the minimum wage raises unemployement


The report finds that in its latest data that actually, 83% or so of economists feel an effective minimum wage is harmful to minimum wage workers, an increase from 74% in a survey a decade earlier. It is conjectured this is due to large scale empirical studies conducted in the interm.



Etienne said:


> My vague recollection is that there is no consensus


See above. Also:



> Specifically, we found evidence of a shift toward more agreement
> with monetarist and new classical or supply-side-based propositions.


I do believe "new classical" is a statement equivalent of "neo-classical", no?

Please correct me where I am wrong.

Regards


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## Phinn (Apr 18, 2006)

> If the minimum wage employee can't afford to stay at a hotel he will still do something with the extra money. Maybe he'll buy a television that year that he never would have bought. Now, the guy who is selling all the extra tvs that he would have never sold has enough money to afford to stay at that hotel instead of a cheaper hotel. If it's not the minimum wage employees that are taking the extra rooms it is somebody else up the chain that is renting the room who would not have been able to rent it before.


The hotel owner can also be the one to buy the television. By forcing the hotel owner to pay the employees more money, you haven't created more wealth, or increased the total productivity of the economy. You have merely diverted the direction in which the hotel owner's money flows -- from all of the people to whom he would have voluntarily given it to some other people who now get it as a result of government mandate.



> If the minimum wage employee decides to save the money, now there is more money in savings, which makes it cheaper to borrow money, which makes it easier to invest, which makes investors richer. The now richer investors will stay at the expensive hotel instead of a cheaper one.


Again, the hotel owner can also be the one to save, thus accomplishing the same thing.

It is better over all if this money were not diverted. The market had determined that the hotel employees' labor was worth $X, and now they are being forcibly paid $X + $1600. That's $1,600 worth of inefficiency you have just introduced into the economy. All of the economic activity that _would_ have been done by others to earn that $1,600 will now not be done. But the hotel employees aren't doing $1,600 more in work. They are getting paid more money to do the _same_ work. Therefore, the total productivity of the economy as a whole just dropped $1,600.


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## odoreater (Feb 27, 2005)

Phinn said:


> It is better over all if this money were not diverted. The market had determined that the hotel employees' labor was worth $X, and now they are being forcibly paid $X + $1600. That's $1,600 worth of inefficiency you have just introduced into the economy. All of the economic activity that _would_ have been done by others to earn that $1,600 will now not be done. But the hotel employees aren't doing $1,600 more in work. They are getting paid more money to do the _same_ work. Therefore, the total productivity of the economy as a whole just dropped $1,600.


This would be all well and good if efficiency were the only social goal that we are seeking to advance or achieve. However, our society has decided that while efficiency is an important goal, there are some other goals for which we can ever so slightly push efficiency aside.

Hate to bring this up again, but slavery was very efficient as well, but our society decided that we needed to pass laws prohibiting slavery as efficient as it was. And I know that you'll come back with your argument about two people voluntarily contracting on the open market; however, that argument assumes equal bargaining power - which is almost never the case in reality.

I mean, come on, do we really want to go back to sweatshops, 18 hour days for 14 year old children, no breaks, wages high enough only to make sure the person survives enough to come back to work the next day, poor working conditions, etc. all in the name of efficiency? All these conditions were more efficient, but as a society, we decided to pass laws prohibiting these conditions even if that means lower efficiency (and less money in the pockets of business owners) because they are a social ill.


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## Chuck Franke (Aug 8, 2003)

Phinn said:


> Again, the hotel owner can also be the one to save, thus accomplishing the same thing.


No Phinn, the goal is to ensure that the hotel owner makes no profit. He has made a huge investment and provided hundreds of jobs and has taken all of the risks and is thus an evil bastard and we need the government to come in and make sure he makes no more than minimim wage.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> Hate to bring this up again, but slavery was very efficient as well, but our society decided that we needed to pass laws prohibiting slavery as efficient as it was. And I know that you'll come back with your argument about two people voluntarily contracting on the open market; however, that argument assumes equal bargaining power - which is almost never the case in reality.


Okay, you win the first reference to slavery contest.

Listen, free market, neo-classical economics has nothing to do about slavery, it's like the "Hitler was a vegetarian" thing when talking about vegetarianism.


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## odoreater (Feb 27, 2005)

Wayfarer said:


> Okay, you win the first reference to slavery contest.
> 
> Listen, free market, neo-classical economics has nothing to do about slavery, it's like the "Hitler was a vegetarian" thing when talking about vegetarianism.


All that I was saying is that sometimes efficiency has to take a back seat to other social goals. All of the other things I listed (sweatshops, 18 hour workdays for 14 year old kids, etc.) are more "efficient" as well, but would you seriously argue for getting rid of those laws as well?



Chuck Franke said:


> No Phinn, the goal is to ensure that the hotel owner makes no profit. He has made a huge investment and provided hundreds of jobs and has taken all of the risks and is thus an evil bastard and we need the government to come in and make sure he makes no more than minimim wage.


I wonder how many businesses that pay minimum wage to their employees are owned by people who are earning minimum wage themselves. Somehow, I have a suspicion that the owners of Hilton and Walmart are making a little more than minimum wage.


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## Chuck Franke (Aug 8, 2003)

A minimum wage employee in the US typically has an apartment (small), a TV (not a 60" HDTV Flat screen, probably only 50 channels), a car (Not a new luxury one) and food (not filet mignon) in the refrigerator (not the sub-zero side by side). I'm pretty sure that is not slavery.

Plus, it is highly likely that a minimum wage employee can/should and most likely will earn increases in fairly short order. It is very very very hard to find employees who are willing to work hard for $10/hr let alone 6.

The amount of experience and effort requisite to moving from a minimum wage job to a better paying one is not great. We don't have a caste system here. Nobody is 'stuck' in a minimum wage job for very long unless it is by choice. Our system is designed to give everyone an equal opportunity, not to ensure similar results.


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## odoreater (Feb 27, 2005)

Again, I wasn't saying that minimum wage employees are slaves. I was just giving an extreme example of a situation in which social good trumps efficiency. There are many other examples. One more time - I am not saying that earning minimum wage is equivalent to slavery - far from it.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> I wonder how many businesses that pay minimum wage to their employees are owned by people who are earning minimum wage themselves. Somehow, I have a suspicion that the owners of Hilton and Walmart are making a little more than minimum wage.


Odor, can you not see how foolish that statement is?

Funny too, how it is always business owners, CEOs, etc vs. low wage workers that get compared. Why do we not be original and ask why the guy selling beer at the NBA game does not get a bajillion dollars PLUS endorsements like the star players? I mean, where is the equity there?


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## odoreater (Feb 27, 2005)

Wayfarer said:


> Odor, can you not see how foolish that statement is?
> 
> Funny too, how it is always business owners, CEOs, etc vs. low wage workers that get compared. Why do we not be original and ask why the guy selling beer at the NBA game does not get a bajillion dollars PLUS endorsements like the star players? I mean, where is the equity there?


I was merely responding to a statement suggesting that the goal of a minimum wage law is to "ensure that the hotel owner makes no profit" and to "make sure that he makes no more than minimum wage." Why didn't you point out how foolish that statement was before picking on the foolishness of my statement?


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## odoreater (Feb 27, 2005)

I just made an interesting discovery while doing a little more research on this topic. According to one source, over 60% of the people who earn minimum wage are college and high school students who live in households with an annual income over $50k. That kind of takes a little wind out of the "helping the poor" argument.

How come none of you anti-minimum wage guys mentioned this? It might have subdued some of my arguments somewhat.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> Why didn't you point out how foolish that statement was before picking on the foolishness of my statement?


Sorry, I got the sarcasm in Chucke's but thought you were serious in your proposition.


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## Wayfarer (Mar 19, 2006)

odoreater said:


> How come none of you anti-minimum wage guys mentioned this? It might have subdued some of my arguments somewhat.


What, do your research for you and be an enabler? 

Seriously, the lowest paying job I have on the books pays about $7.50 /hour plus benefits and PTO. The people that fill them on a full time basis are usually developmentally disabled (I am a big believer in work programs for them), first generation immigrants, and losers. By "loser" I mean able bodied, able minded people that have made very bad life choices.


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## Chuck Franke (Aug 8, 2003)

Odor - Good point, I figure most of the minimum wage jobs are of the part-time type as well. 

I don't buy the idea that there are many folks out there making minimum wage in a job that they have held for a long time. People with experience and skills are in very high demand. Anyone taking a minimum wage job today who is willing to wark hard, shows up on time and demonstrates a desire for more is going to advance.

Not kidding - try to hire someone for minimum wage who shows up on time, is willing to learn, can read and speak English, puts in a full day and can pass a drug test. Go out and try to find 10 of them and within a week. I promise you, you will not believe that there is a class of people out there at minimum wage who are underpaid and without opportunities. They either do not exist or else I haven't had any luck locating them. Even at $10/hr to start it is very difficult to find people who are willing and able to put in a full day of work. I kid you not - try it.

Finding a job, at least in this area, is a whole lot easier than finding good job candidates. The two best workers I had prior to a couple months ago were high school and college kids who worked like crazy right up until the day they left to do missionary work... now what kind of priorities are we teaching these kids when they are more concerned with building schools and hospitals than keeping my shipping and inventory current?


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## Chuck Franke (Aug 8, 2003)

Wayfarer said:


> Sorry, I got the sarcasm in Chucke's but thought you were serious in your proposition.


This wounds me. I am never sarcastic


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## jackmccullough (May 10, 2006)

Drug test? In my younger days, maybe, but I can no longer claim to have any expertise in that area.


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## Chuck Franke (Aug 8, 2003)

Wayfarer said:


> Seriously, the lowest paying job I have on the books pays about $7.50 /hour plus benefits and PTO. The people that fill them on a full time basis are usually developmentally disabled (I am a big believer in work programs for them), first generation immigrants, and losers. By "loser" I mean able bodied, able minded people that have made very bad life choices.


I'd concur. I'd love to hear about an example of a person who is willing to show up sober every day, understand and follow directions and work an honest 8 hour day who can't get beyond minimum wage. Not out there, trust me.


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## hopkins_student (Jun 25, 2004)

odoreater said:


> Somehow, I have a suspicion that the owners of Hilton and Walmart are making a little more than minimum wage.


No, but they do not have guaranteed minimum incomes either.


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## hopkins_student (Jun 25, 2004)

odoreater said:


> How come none of you anti-minimum wage guys mentioned this? It might have subdued some of my arguments somewhat.


I thought that was pretty common knowledge.


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## hopkins_student (Jun 25, 2004)

Chuck Franke said:


> I'd concur. I'd love to hear about an example of a person who is willing to show up sober every day, understand and follow directions and work an honest 8 hour day who can't get beyond minimum wage. Not out there, trust me.


No kidding. We've been trying to find someone to work about twenty hours a week, Friday and Saturday, in a very cushy office job where you can pretty much sit around and read whatever you want all day. At ten dollars an hour ($13 to the temp agency) we've gone through all kinds of people, most of whom do not show up on time if they show up at all. But it looks like we've finally found a "winner" with a twenty-one year old who has her second out of wedlock child on the way, who lives with her boyfriend who claims he is not in a relationship with her but she swears she is going to marry in two years. So, I'm not sure if she's actually a "winner", but she appears to be reliable with her work commitments.


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## odoreater (Feb 27, 2005)

hopkins_student said:


> No kidding. We've been trying to find someone to work about twenty hours a week, Friday and Saturday, in a very cushy office job where you can pretty much sit around and read whatever you want all day. At ten dollars an hour ($13 to the temp agency) we've gone through all kinds of people, most of whom do not show up on time if they show up at all. But it looks like we've finally found a "winner" with a twenty-one year old who has her second out of wedlock child on the way, who lives with her boyfriend who claims he is not in a relationship with her but she swears she is going to marry in two years. So, I'm not sure if she's actually a "winner", but she appears to be reliable with her work commitments.


It sounds to me like this is more of a problem with finding part-timers than it is a problem with finding people willing to work for $10 and hour. In my family's business, it's not that hard to find good hard working people willing to work for minimum wage for the full-time positions, but it's nearly impossible to find good hard-working people for the part-time positions at any reasonable wage for the job that they perform. For the part-time positions you get a lot of high-school kids who need money to buy weed and a lot of adults with all kinds of weird life problems.


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## Chuck Franke (Aug 8, 2003)

odoreater said:


> it's not that hard to find good hard working people willing to work for minimum wage for the full-time positions, .


Seriously? Where are you located?
Are we talking about people who can read/write, show up on time, pass a drug test, work with a reasonable degree of accuracy on tasks that are repetitive and boring but uncomplicated?

Not being at all sarcastic, genuinely interested in hearing more because it seems nearly impossible to find such people here but it's a metroplex of 5 million people where English is now the secondary language. Here, the only decent minimum wage folks you can find are High School kids to work part time but full timers are impossible to find at that price. At least a fulltimer you'd be willing to trust to not totally destroy your business.


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## Wayfarer (Mar 19, 2006)

Chuck Franke said:


> Not being at all sarcastic, genuinely interested in hearing more because it seems nearly impossible to find such people here but it's a metroplex of 5 million people* where English is now the secondary language*.


Hey, that's another one of my threads!


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## Chuck Franke (Aug 8, 2003)

Wayfarer said:


> Hey, that's another one of my threads!


Me disculpo, señor Wayfarer


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## jackmccullough (May 10, 2006)

Again with the drug test. What possible concern is it of yours that a potential employee chooses to use different drugs from the ones you use, as long as it doesn't affect their work?

If they're using drugs at work, or showing up at work under the influence of drugs, fine, get rid of them.

If they can't meet the requirements of the job, either for regular and punctual attendance or for quality of work, get rid of them whether it's because of drugs or not.

If they meet all the requirements of the job, including regular and punctual attendance, quality and quantity of work, what do you care what they're doing when they're not at work?


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## globetrotter (Dec 30, 2004)

Chuck Franke said:


> Still really haven't heard anyone address my issue as an employer and if you really want to see better wages and more jobs I think this one is a key.
> As an employer, I have a very precise budget for employees in a given week. Let's say that is $45/hr.
> My experience is that one person making $15 and 3 making $10 gets a lot more work done and done accurately than 8 people at minimum wage would do. If 8 people making minimum wage produced more then that is what I would do.
> 
> ...


chuck, here is my take on it - if I want to provide a pretty good enviroment for workers, pretty good service, etc., I need to pay a certain amount. it amy take time to develop the business, develop customers, etc. if all of my competition can use slave labor, then I don't have a chance. if we all start from a certain position - minimum wage - then at least I am not competing with something that is totally outside of my range.

maybe we should let the free market decide these things, but when you throw on top of that the social issues - the cost to society of extreme poverty, then I believe minimum wage makes sense.


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## Phinn (Apr 18, 2006)

> What possible concern is it of yours that a potential employee chooses to use different drugs from the ones you use, as long as it doesn't affect their work? If they're using drugs at work, or showing up at work under the influence of drugs, fine, get rid of them.


You expect an employer to distinguish between an employee's drug use that adversely affects his work and drug use that doesn't?

That's economically inefficient. The cost of making this ultra-fine distinction is higher than ordinary testing. I suppose one could conduct pupil-dilation and neural response-time tests on every employee several times per day, but a simple occasional non-invasive test is a more efficient use of managerial resources.

Also, employers are liable to third parties for injuries caused by employees' acts that are within the scope and course of their employment. Given the availability of such tests, an employer who did not use them would probably be liable if doing so allowed a chronic drug-using employee to drop a forklift load on someone, or put brake pads on backwards, or drive a delivery truck into a school bus. All of which have happened.

Before you accuse me of working for The Man, I should add that I also believe that no form of drug use should be illegal.


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## Phinn (Apr 18, 2006)

> if we all start from a certain position - minimum wage - then at least I am not competing with something that is totally outside of my range.


This is the protectionist argument.

All forms of protectionism raise prices for consumers, as surely as if you imposed a direct tax on them.



> maybe we should let the free market decide these things, but when you throw on top of that the social issues - the cost to society of extreme poverty, then I believe minimum wage makes sense.


The minimum wage makes poverty worse. It *INCREASES* unemployment among young and unskilled workers. (To the extent such things matter to you, 73.5% of economists agree with this proposition.)


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## odoreater (Feb 27, 2005)

Chuck Franke said:


> Seriously? Where are you located?
> Are we talking about people who can read/write, show up on time, pass a drug test, work with a reasonable degree of accuracy on tasks that are repetitive and boring but uncomplicated?
> 
> Not being at all sarcastic, genuinely interested in hearing more because it seems nearly impossible to find such people here but it's a metroplex of 5 million people where English is now the secondary language. Here, the only decent minimum wage folks you can find are High School kids to work part time but full timers are impossible to find at that price. At least a fulltimer you'd be willing to trust to not totally destroy your business.


I'm located in New Jersey. I'm talking about people who show up on time and who work with a reasonable degree of accuracy on tasks that are repetitive and boring but uncomplicated. My family owns a couple of convenience stores and the worker's job is basically as a cashier. Reading and writing is only really necessary to the extent that they have to place orders and stuff like that, which they learn how to do even if they can't read or write perfectly. They also work with minimal supervision. We don't drug test our employees.

It's interesting actually, because we have the same problems with the high school students we hire for the night shifts, which are part-time shifts. They tend to be pretty irresponsible and usually end up not lasting long. The good thing in our business is that it doesn't take that long to train new employees. A new employee can be more or less brought to speed in one or two days so that they're at the point where they can handle working a normal shift.

Actually, now that I think about it, I think I know what the difference may be and why it's easier for us to find quality employees in this area. However, I'm not at liberty to say.


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## odoreater (Feb 27, 2005)

Phinn said:


> You expect an employer to distinguish between an employee's drug use that adversely affects his work and drug use that doesn't?
> 
> That's economically inefficient. The cost of making this ultra-fine distinction is higher than ordinary testing. I suppose one could conduct pupil-dilation and neural response-time tests on every employee several times per day, but a simple occasional non-invasive test is a more efficient use of managerial resources.


To me it sounded more like he was saying that if the worker is performing satisfactorily on the job then you keep him and if he is not you fire him regardless of whether he smoked a doobie the night before or not.


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## Chuck Franke (Aug 8, 2003)

odoreater said:


> To me it sounded more like he was saying that if the worker is performing satisfactorily on the job then you keep him and if he is not you fire him regardless of whether he smoked a doobie the night before or not.


My employees are around my home office part of the time, around my kid occasionally, around my dog... they get drug and background checks, period. One drug user employee was enough of an emotional and financial trauma for us and though naive and overly trusting we do learn a lesson once it's been seared into our memory with a branding iron.
If you have to choose between a drug addict employee and getting hit by a bus, try the bus.


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## Phinn (Apr 18, 2006)

odoreater said:


> To me it sounded more like he was saying that if the worker is performing satisfactorily on the job then you keep him and if he is not you fire him regardless of whether he smoked a doobie the night before or not.


It's a matter of risk. Employers have generally determined that drug-using employees pose a higher risk (of being unreliable, of requiring additional supervision related to job performance, or of causing some form of harm to others) than non-drug users.

Whether this is true or not is immaterial. It is a requirement of many jobs. I could have a requirement that all of my employees wear leather-soled burgundy shoes because I think it has some correlation with job performance. I could be totally wrong, and still have the right to refuse to hire people in sneakers. Just as I have the right not to buy products made by companies that begin with the letter "R." It could be a totally arbitrary rule on my part, but we all have the right to be arbitrary in our voluntary relationships.


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## Wayfarer (Mar 19, 2006)

jackmccullough said:


> Again with the drug test. What possible concern is it of yours that a potential employee chooses to use different drugs from the ones you use, as long as it doesn't affect their work?
> 
> If they're using drugs at work, or showing up at work under the influence of drugs, fine, get rid of them.
> 
> ...


From a lawyer too. Man.

Many industries, such as mine (healthcare), require through legislation, at both the State and Federal level, that we do drug testing and also criminal background checks on certain employees. Can you see the big, wet, gaping hole of a lawsuit Mr. McCollough would file against me if one of his loved ones were in my care and a drug using staff member caused harm to his loved one?

Further, workman's comp is another issue. This is a very BIG issue if you run a business due to costs and one must proactively meet their fiduciary responsibilities by mitigating risk factors where and when possible. Another no-brainer for reducing incidents on time lost is drug screening. Try having a few big cases and then getting insurance.

This thread really has brought out that many intelligent people just really know nothing about what it is truly like to operate a business.


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## crs (Dec 30, 2004)

Wayfarer said:


> From a lawyer too. Man.
> 
> Many industries, such as mine (healthcare), require through legislation, at both the State and Federal level, that we do drug testing and also criminal background checks on certain employees. Can you see the big, wet, gaping hole of a lawsuit Mr. McCollough would file against me if one of his loved ones were in my care and a drug using staff member caused harm to his loved one?
> 
> ...


Newspaper companies say they must drug-screen because their insurance companies say so. Oddly enough, though, two that hired me delayed, for logistical reasons, the pre-employment physical until I'd been there a week or two. I wonder what they'd have done if I'd failed, especially the one that already had paid to move me and my stuff from California to NYC.


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## Wayfarer (Mar 19, 2006)

crs said:


> Newspaper companies say they must drug-screen because their insurance companies say so. Oddly enough, though, two that hired me delayed, for logistical reasons, the pre-employment physical until I'd been there a week or two. I wonder what they'd have done if I'd failed, especially the one that already had paid to move me and my stuff from California to NYC.


crs, we are very careful to make it quite clear any offer of employment is based upon a successful drug tox screening and criminal background check and that if they should begin employment and something comes back after the start date, they are gone. We also occasionally get items from DPS (department of public safety) that someone has lost their finger print clearance status. They do not tell us why but the employee is suspended and given two weeks to clear up any errors, terminated at the end of two weeks if not cleared up. To my knowledge, no one has ever found DPS to be in error, which is a good thing.


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## odoreater (Feb 27, 2005)

Phinn said:


> Whether this is true or not is immaterial. It is a requirement of many jobs. I could have a requirement that all of my employees wear leather-soled burgundy shoes because I think it has some correlation with job performance. I could be totally wrong, and still have the right to refuse to hire people in sneakers. Just as I have the right not to buy products made by companies that begin with the letter "R." It could be a totally arbitrary rule on my part, but we all have the right to be arbitrary in our voluntary relationships.


Yes, there is no doubt about this. In my family's business, a drug screening is not really necessary, but if someone feels that it is necessary for their business then by all means. For example, if I were in Chuck's position, where my employees are in my home and around my children (not that I have any, but hypothetically), then I would probably want to do a drug screening as well. In fact, I would probably require a full criminal background check.

Of course, there are some qualifications to the statement you just made (there are some circumstances under which you can't use whatever characteristics you want to discriminate - and it's questionable whether these ought to be part of the law as well, but that's way beyond the scope of this thread), but I agree with you on this one. Glad we can find some common ground.


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## Étienne (Sep 3, 2005)

Phinn said:


> Quelle surprise.


Well, you know how it is. I have little patience for lost causes and talking some sense into you on that subject seems to be one. Given that you hadn't even bothered to answer to my arguments on the subject, I don't see why bother. Other people in the thread seem much more open to an interesting discussion.



Wayfarer said:


> I do believe "new classical" is a statement equivalent of "neo-classical", no?


For the purpose of this discussion, it is. Actually, "neoclassical" is what Veblen called the marginalists (end of the 19th century), the name stuck. "New classical" is what the main critics of keynesian economics called themselves from the 70's on, but they are usually and confusingly called "neoclassical" too.

I haven't read the meta-report posted. What I can say is that it depends on the fields. In growth economy, the consensus (if there is one) is indeed a revised version of the neoclassical growth model (Solow), though endogenous growth theory is alive and well. Most macroeconomists I know are some shade of keynesians, though, if you insist on labeling them. In my field (industrial organization) those labels have no meaning actualle. I might be mistaken, but my impression is that labour economists are not overwhelmingly neoclassical.

And again, labels are not really the most important thing here. What matters the most to most economists in the field are empirical studies of the subject. If you jus say that the effect works in one model and not in the other, you really have not said much and most economists are a little more ambitious than that. Of course it seems now that some people have decided beforehand that empirical work is pointless, which actually left moreor less speechless.


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## Chuck Franke (Aug 8, 2003)

Etienne - I want to preface this by saying it is not a poke in the ribs but a serious question.

As an outsider looking in at France's more socialistic economic model I'm curious about how those who are working and producing in the economy feel about the vast costs of entitlements like welfare and unemployment. We were all somewhat dismayed here on the forum not long ago when a young man from Paris explained that he hadn't worked in a couple years but was earning enough from his government stipend to buy luxury clothing items well outside the means of a poor person. Actually he had a nicer collection of cufflinks than I do 

I'll be the first to admit that I don't have your background in econ as my studies were in Engineering but I think there is a fundamental difference in how most Americans view the workplace. While some see any shortcoming in the system as a failure of government, the majority of Americans would likely see those shortcomings as a lack of ambition/effort.

Obviously I am generalizing. At one time the industry I was in collapsed and I was absolutely shocked since I believed I was in a very safe position. I heard a lot of folks complaining about how 'our' jobs had gone overseas but I really didn't buy that idea. After I got done sulking I figured that life wasn't too hard, I was too soft and thus I quit whining and sniveling about it and made my own job. That 'philosophy', if you could call it that, is deeply engrained in the American psyche. Well, it was at one time. It seems to have changed a great deal even in my lifetime. The notion of personal responsibility is deeply ingrained though. There are few things more terrifying to the American male than finding yourself in a position where you are not sure whether you can support your family. Perhaps testicular cancer but it's a close race.

Again - want to be very clear that this is not one of those "Our way is good, your way sucks" sort of childish jabs. I'm sincerely interested in understanding what you were taught and came to believe with regard to the delegation of responsibility for an individual's economic well being between government, the employer and the individual.


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## Phinn (Apr 18, 2006)

Étienne said:


> Given that you hadn't even bothered to answer to my arguments on the subject, I don't see why bother.


These are your statements on the subject thus far:



> Things are a little more complex than that.
> 
> I would not call the neoclassical model the "standard one"
> 
> ...


Which of these statements contains the "arguments on the subject" that you mentioned?

Wage-fixing is more complicated than a single sentence? Well, sure. Care to elaborate? Apparently not.

You keep mentioning the consensus (or lack thereof) among economists. Repeatedly committing the fallacy of the argumentum ad verecundiam is not the same thing as making a genuine argument.

We then got mired in a discussion about methodology.

You still have not made one actual proposition and defended it with reasons. Maybe the word "argument" has a different meaning on your side of the pond, but where I am from, you actually have to take a position, prefereably on the question as it is posed to you, and then support it with logical reasoning and/or facts.

Other than talking about what other people think about the topic, or talking about the methods one should use to talk about the topic, I don't see any substantive comment from you about, you know, the topic.

And this is Day 3 of the discussion. My expectations that a simple, straightforward statement of position, supported by reasons, is forthcoming is vanishingly small. If you care to offer one, in an appropriate level of complexity and length, in keeping with the non-academic nature of this forum, I am sure we would all give it our full attention.


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## Chuck Franke (Aug 8, 2003)

> argumentum ad verecundiam


Jeez, I am way out of my league now - who else thought that was the name for an extinct species of very aggressive mountain goats?

Oh well, at least nobody is resorting to


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## Wayfarer (Mar 19, 2006)

Étienne said:


> For the purpose of this discussion, it is. Actually, "neoclassical" is what Veblen called the marginalists (end of the 19th century), the name stuck. "New classical" is what the main critics of keynesian economics called themselves from the 70's on, but they are usually and confusingly called "neoclassical" too.


Interesting trivia. I think anyone with an even mild passing knowledge of economics knows of the school of thought to which I refer. While a nice blurb on terminology, it really does not seem to impact the lines of discussion so far put forth.


Étienne said:


> I haven't read the meta-report posted.


But you'll refute it anyways?



Étienne said:


> What I can say is that it depends on the fields. In growth economy, the consensus (if there is one) is indeed a revised version of the neoclassical growth model (Solow), though endogenous growth theory is alive and well. Most macroeconomists I know are some shade of keynesians, though, if you insist on labeling them. In my field (industrial organization) those labels have no meaning actualle. I might be mistaken, but my impression is that labour economists are not overwhelmingly neoclassical.
> 
> And again, labels are not really the most important thing here. What matters the most to most economists in the field are empirical studies of the subject. If you jus say that the effect works in one model and not in the other, you really have not said much and most economists are a little more ambitious than that. Of course it seems now that some people have decided beforehand that empirical work is pointless, which actually left moreor less speechless.


So as to my summation, "yes" or "no"?

From the report:



> For the present study, a two-page questionnaire of 44 economic propositions was mailed in September 2000 to a random sample of 1,000 economists taken from the AEA membership roster.


Seems like a pretty solid "n" to me. Of course one could claim bias as after all, it is the "American Economic Association" and I am rather sure it is not rife with socialists.


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## Étienne (Sep 3, 2005)

Chuck Franke said:


> As an outsider looking in at France's more socialistic economic model I'm curious about how those who are working and producing in the economy feel about the vast costs of entitlements like welfare and unemployment. (...) I'm sincerely interested in understanding what you were taught and came to believe with regard to the delegation of responsibility for an individual's economic well being between government, the employer and the individual.


That's a very large question, though a very interesting one, of course.

I am not sure if I can claim to represent "those who are working and producing in the economy". As you know I am a student, although of course, as all grad students do, I also teach to pay my rent. I don't know if that qualifies me. I should also add that my choices on the subject are pretty clear. I have mentioned earlier on our beloved forums that I am a member of a political party (the Socialist Party, a mainstream left-of-center party in France). I think that about sums up my possible biases on the subject.

I think most people in France don't really mind the extent of the social protection. People will often complain about such or such example where you can see the system was taken advantage of. Employers will ***** about the level of social taxes. But the general consensus is that the system is good and that the additional security you get for it offsets the costs and possible decreased economic dynamism (that last part is not unambiguously proved). To sum up: you have difficulties finding liberals in the French political spectrum.

(note that I am using "liberal" in the European sense here ; as I explained earlier, see https://askandyaboutclothes.com/community/showthread.php?t=58699&page=5, when we talk about a liberal we are thinking of economic liberalism, not social liberalism - this usally refers to somebody on the right)



Phinn said:


> Which of these statements contains the "arguments on the subject" that you mentioned?


What I was calling the "subject" in that sentence was not the problem of the effect a minimum wage has on the economy. I freely admitted I lacked the expertise to give a proper idea of the current consensus on that problem, although I offered to ask my labour economics colleagues (nobody asked me to do that).

I was actually refering to your extraordinary claim that empirical studies can yield no results in economics.



Wayfarer said:


> But you'll refute it anyways?


I am not under the impression that I refuted it. As Phinn pointed out quite strongly, I have not discussed the core matter of that thread (raising the minimum wage) at length. That study is about economists that declared they were in favour of raising it (that's how it was summed up earlier in the thread). That's not what I was discussing, which was I did not read it. Was I mistaken about the study?

I was discussing a more general point. Your claim that "the neoclassical model [is] the accepted standard".



> So as to my summation, "yes" or "no"?


Not in all fields of economic research, no. In several. Most researchers would probably not use such wide doctrinal labels to describe themselves anyway.



> Of course one could claim bias as after all, it is the "American Economic Association" and I am rather sure it is not rife with socialists.


It's probably the most respected society in the field with the Econometric Society (a bunch of people who specialize on empirical research of the kind Phinn claims is impossible to do rigorously in economics). They publish the two most respected journals in economics (_American Economic Review_ and _Econometrica_). I cannot say much more about whether they could have a bias.


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## Wayfarer (Mar 19, 2006)

Étienne said:


> I was discussing a more general point. Your claim that "the neoclassical model [is] the accepted standard".


I just re-read the thread. Could not find where I said that. You however did make the assertion:



> I would not call the neoclassical model the "standard one"


What I stated was that a person's position on an effective minimum wage will pretty much be determined by whether or not you find the descriptive and predictive models of neoclassical economics valid. The report indicates 83% of 1000 economists from the AEA find an effective minimum wage does decrease welfare.



Étienne said:


> It's probably the most respected society in the field with the Econometric Society (a bunch of people who specialize on empirical research of the kind Phinn claims is impossible to do rigorously in economics). They publish the two most respected journals in economics (_American Economic Review_ and _Econometrica_). I cannot say much more about whether they could have a bias.


I am aware of that. Yet you will not agree with the findings. Odd.


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## Étienne (Sep 3, 2005)

Wayfarer said:


> I just re-read the thread. Could not find where I said that.


Post #79, on page 4, your reply to Lunshington's post.



> What I stated was that a person's position on an effective minimum wage will pretty much be determined by whether or not you find the descriptive and predictive models of neoclassical economics valid.


I am pretty sure most economists have a little more self-respect than that. They will at least claim that their position is based on more than merely a specific Weltanschauung. For example, that it is based on their knowledge of the empirical results on the subject.



> The report indicates 83% of 1000 economists from the AEA find an effective minimum wage does decrease welfare.


I see. I was apparently not talking about the same report. I thought you were speaking about the report mentioned in post #16 of this thread on page 1.



> I am aware of that. Yet you will not agree with the findings. Odd.


In what way do I not agree with the findings? The report polls professional economists on the subject and finds most of them think increasing the minimum wage decreases welfare. I was not aware there was such a consensus. Last time I checked an empirical survey on that matter, there was still a heated controversy. So what?

By the way, I must say that I would value the survey more if it had been conducted among labour economists and not economists in general. as far as I know, most economists (specialized in other fields) have no more certainty on the subject than me, which is to say they have last studied the topic in detail 15 years ago in grad school and might read an article or two every couple of years out of sheer curiosity. They are probably better informed than the general public, but that's still not the last word, especially on recent findings.


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## Wayfarer (Mar 19, 2006)

Étienne said:


> By the way, I must say that I would value the survey more if it had been conducted among labour economists and not economists in general.


There we go, I knew you could marginalize it.

Cheers


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## Wayfarer (Mar 19, 2006)

Étienne said:


> Post #79, on page 4, your reply to Lunshington's post.


Ahhh, at that point, I will admit, you had pulled a minor Jedi-mindtrick on me. You repeated your refutation so often of a statement I did not make, I felt that page 4, I had made it. In the original assertions, I did not, but you kept answering as if I did. I finally rallied the energy to go search the first few pages.

To be clear, you asserted I said it before I said it.


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## Étienne (Sep 3, 2005)

Wayfarer said:


> There we go, I knew you could marginalize it.


There's a weakness, so of course I point to it, what's your point? it doesn't mean I "don't agree with the findings".



Wayfarer said:


> Ahhh, at that point, I will admit, you had pulled a minor Jedi-mindtrick on me. You repeated your refutation so often of a statement I did not make, I felt that page 4, I had made it. In the original assertions, I did not, but you kept answering as if I did. I finally rallied the energy to go search the first few pages.


I just scanned the thread quickly. As far as I can see I made that "refutation" only once before your post #79. I was not attributing a statement to you. I was answering to a question you asked. Specifically the question in post #13 on page 1. Where's the mind trick? I'm not sure I follow you.


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## burnedandfrozen (Mar 11, 2004)

Man what a thread this turned out to be. Thanks to all of you who posted. As usual, there are two sides and each side make some valid points. In general I favor less government child labor laws and such the exception. Here's a interesting take on the issue: Here in CA and I think now in other western states there is a fast food burger chain called In-N-Out. Perhaps the best tasting fast food burgers hands down. The start their employees at (I think) eight or nine bucks an hour. Every other fast food place pays the minimum. Yet what a difference! I think at In-N-Out they find that increasing profit is better in the long run then trying to cut costs. The food is higher quality, the service better, resturants cleaner, ect then the other fast food places. As a result, In-In-Out resturants are constantly packed. Could it be that the higher wage attracts higher quality people? Perhaps. All I know is that sometimes I'm forced to eat at the Wendy's across the street where I work since I only get 1/2 hour for lunch and no place else is closer. The times I've been in there there as been only one cashier. They never have the other register going even at the lunch hour rush. Once I counted eight people in line and still only one cashier. I walked out. Add to that the numerous times peoples orders get mixed up well, you can imagine what a nightmare that place can be. Would it really kill them to have another person at the other register? I mean the meal I purchase runs over $7.00 that's more then the wage they would have to pay that person for an hour (although I know other costs are factored in as well.) It also costs more then a comparable meal at In-N-Out. Go figure.

I also know that in some areas of the country there's not enough people willing to work for minimum wage so fast food joints there have to raise their wages to attract people which is how the market works or so I thought.


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## Lushington (Jul 12, 2006)

burnedandfrozen said:


> Man what a thread this turned out to be. Thanks to all of you who posted. As usual, there are two sides and each side make some valid points. In general I favor less government child labor laws and such the exception. Here's a interesting take on the issue: Here in CA and I think now in other western states there is a fast food burger chain called In-N-Out. Perhaps the best tasting fast food burgers hands down. The start their employees at (I think) eight or nine bucks an hour. Every other fast food place pays the minimum. Yet what a difference! I think at In-N-Out they find that increasing profit is better in the long run then trying to cut costs. The food is higher quality, the service better, resturants cleaner, ect then the other fast food places. As a result, In-In-Out resturants are constantly packed. Could it be that the higher wage attracts higher quality people? Perhaps. All I know is that sometimes I'm forced to eat at the Wendy's across the street where I work since I only get 1/2 hour for lunch and no place else is closer. The times I've been in there there as been only one cashier. They never have the other register going even at the lunch hour rush. Once I counted eight people in line and still only one cashier. I walked out. Add to that the numerous times peoples orders get mixed up well, you can imagine what a nightmare that place can be. Would it really kill them to have another person at the other register? I mean the meal I purchase runs over $7.00 that's more then the wage they would have to pay that person for an hour (although I know other costs are factored in as well.) It also costs more then a comparable meal at In-N-Out. Go figure.
> 
> I also know that in some areas of the country there's not enough people willing to work for minimum wage so fast food joints there have to raise their wages to attract people which is how the market works or so I thought.


In-N-Out remains a privately-held, family-owned company. Because of its popularity - one might have formerly said, because of its So Cal cult status - In-N-Out has been the object of many acquisition efforts by major players in the fast-food industry, all which have, to date, been resisted by the Snyder family. This has allowed In-N-Out to adhere to its business model without an overriding concern for "shareholder" demands. If - or more likely, when - the company is acquired by one of these players new management will immediately move to "unlock shareholder value" by firing two-thirds of the workforce, slashing wages, raising prices, expanding the menu, introducing franchises to open hundreds of new stores, and dumping many millions of dollars into marketing that formerly went into operating budgets. Your Double Double with cheese and grilled onions will then cost three times as much as it does currently and will taste worse than the bag it comes in. Something of the sort happened to another So Cal cult fast food chain, Rubio's Fish Tacos. Ralph Rubio always maintained that he wanted to follow the In-N-Out business model, and he did for some time. The result was that for about a decade Rubio's prospered as a family-run business offering, in a limited number of locations, a menu of Ensenada-style "street food" that was unlike anything else widely available in the US at the time. It was truly innovative (anyone who has ever chomped down a fish taco in the bar of a Marriott in, say, Charlotte NC can thank Ralph Rubio), tasted great, and developed a devoted following in its target markets. However, Ralph eventually succumbed to the lure of the big bucks, and took the company public. Now, one's local Rubio's - oops, one's local Rubio's Fresh Mexican Grill® - is like every other fast food joint, a Fish Taco Especial tastes like a piece of wet cardboard stuffed with fried bread, and even the shareholders aren't very happy. Market imperatives, man, they can be a motherf . . . I mean, they can be very unpleasant and burdensome.


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## Borat (Sep 23, 2006)

*
Minimum wage is very bad idea!

It slippery slope that only result in such barbary as Walton family having downgrade from 24 karat to 14 karat gold flake in marmalade!

**'Wow wow wee waa!' **
 *


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## Trenditional (Feb 15, 2006)

In-N-Out, definitely a So. Cal. tradition. I do believe the higher pay and the dedication to "training" goes a long way to having better employees representing their company. There could also be other reasons for this. I'm sure someone would find the highering practices of In-N-Out unfair and discriminatory. I will say this though, I can't remember the last time I went into In-N-Out and had any language problems with the person taking my order. As a matter of fact, I honestly can't remember the last time I went into In-N-Out and my order wasn't taken by a very "bubbly" young blond female.

In-N-Out has stayed family owned, which has kept the quality at the highest levels. Also, they have a limited menu which makes mass production very easy. Also, for anyone who has driven past the original In-N-Out (now closed, which I grew up down the street from) there is the In-N-Out Burger School adjacent to it. Their employees are sent to school to learn how to make their burgers. Novel concept, huh?

So, yes I do believe In-N-Out does their business very well and part of this is paying their employees fair wages. 

I do believe an increase in the minimum wage is fair, but I don't think just pay is going to affect the customer service provided by many businesses. You could pay some of these employees double what they are making now and they still would not be professional. 

The Waltons were mentioned and I know many people who will not shop at Wal-Mart because they are not union. I grew up in a union home. I know in their infancy unions were there for the right reasons. Today, unions are their own worst enemy. As far as Sam Walton is concerned, I respect his steadfast stance to not have any of his locations unionized. I've read before, he has threatened to close a store because the employees were attempting to form a union. I don't know if he'd follow through with it, but you'd have to respect him if he did. My feeling is, if you want to work for a union facility go get a job at a place that has a union.


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## Wayfarer (Mar 19, 2006)

Trenditional said:


> I do believe an increase in the minimum wage is fair, but I don't think just pay is going to affect the customer service provided by many businesses. You could pay some of these employees double what they are making now and they still would not be professional.


I am very confused by this paragraph. Please define "fair" in the context of these statements and then explain exactly how it is "fair" to raise the minimum wage yet not expect increased performance in the employees, as you state a doubling of the wage would still not make many employees professional. So why is it "fair" they get more money then without being better employees? Further, why is it "fair" to force an employer to pay more for the same job when it is not a market force causing the need to increase pay?


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## Trenditional (Feb 15, 2006)

First, there are many jobs and professions whose employees make more today than those who did the same job twenty years ago. The costs of employing people rise regardless if the work changes. So, in the sense of offering a "fair" wage for the time spent at work/working, I believe in general a raise in the minimum hourly rate is "fair." As an employer I might no want to be forced to raise the hourly rate of my employees, but when everything else (milk, gas, rent etc) goes up in price, then it should be a given that what I have to pay is going to increase. In the sense of "fairness," if an 18 year old h.s. grad. goes into the work force, they should be able to earn a salary that can provide them the ability to put a roof over their head and food in their stomach. For this person who has not had the opportunity to show their work ethic, they deserve the "fair" opportunity. Now, for the current slacker employees, their performance should have been corrected before any issues of pay raises came about. Unfortunately, some of these are going to be able to slide by and get the raises everyone else receives. I'm sure there are waitresses at Denny's, who do less work and make more money than their predecessors. Is this fair? No.


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## burnedandfrozen (Mar 11, 2004)

I'm reminded of what a friend of mine told me a few years back. He's a computer programer, freelance. He found out one day that city bus drivers make more then he does. I suppose he'd make more if he had a 9to5 but he likes being freelance. Still he was really went off on how he has to be always be updating his skills by learing new languages ect and yet a city bus driver with a GED makes more. I guess the message here is that the world just isn't always fair.


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## Wayfarer (Mar 19, 2006)

burnedandfrozen said:


> I'm reminded of what a friend of mine told me a few years back. He's a computer programer, freelance. He found out one day that city bus drivers make more then he does. I suppose he'd make more if he had a 9to5 but he likes being freelance. Still he was really went off on how he has to be always be updating his skills by learing new languages ect and yet a city bus driver with a GED makes more. I guess the message here is that the world just isn't always fair.


Or that if you have a GED, join a union. I was reading, with the latest Ford layoffs, that the average union autoworker, with benefits, earns $64.00 /hour. The average non-union US autoworker, e.g. Toyota Camry plant, makes $45/hour. While I think $45 per hour (with bennies in) is still an egregious amount for screwing nut "B" onto bolt "A", the nearly 50% more for US union plants shows why Ford is folding up in Detroit, Windsor, and St. Catherines and opening up in Mexico and Asia. While we are here arguing the nuances of minimum wage, the real world is showing us all exactly what artificially inflating *any* wage will do to an industry. We can argue all we want, but reality just gets on with things and hands us all our asses if we're not competitive.


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## Wayfarer (Mar 19, 2006)

Trenditional said:


> First, there are many jobs and professions whose employees make more today than those who did the same job twenty years ago. The costs of employing people rise regardless if the work changes. So, in the sense of offering a "fair" wage for the time spent at work/working, I believe in general a raise in the minimum hourly rate is "fair." As an employer I might no want to be forced to raise the hourly rate of my employees, but when everything else (milk, gas, rent etc) goes up in price, then it should be a given that what I have to pay is going to increase. In the sense of "fairness," if an 18 year old h.s. grad. goes into the work force, they should be able to earn a salary that can provide them the ability to put a roof over their head and food in their stomach. For this person who has not had the opportunity to show their work ethic, they deserve the "fair" opportunity. Now, for the current slacker employees, their performance should have been corrected before any issues of pay raises came about. Unfortunately, some of these are going to be able to slide by and get the raises everyone else receives. I'm sure there are waitresses at Denny's, who do less work and make more money than their predecessors. Is this fair? No.


Sorry, I was going to give you a thoughtful answer but I've had just enough tequila to realize how useless that would be. If things were "fair", no caring and skilled physician would make magnitudes of less money than Cobe Bryant. No police officer would make substantially less than successful drug dealers. Market forces are amoral and "fair" inherently infers there is justice of some sort.


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## gregp (Aug 11, 2005)

Phinn said:


> Which we can add to the list of why the Keynesians and NeoKeynesians are wrong.


Out of curiousity, do you believe that demand side failures occur?


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## Phinn (Apr 18, 2006)

gregp said:


> Out of curiousity, do you believe that demand side failures occur?


No. I do not subscribe to the concept of "market failure" at all.

It cannot fail, because it has no purpose other than to allow willing buyers and sellers to find each other and to compare their abilities to offer better goods, services and prices than others.


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## gregp (Aug 11, 2005)

Phinn said:


> No. I do not subscribe to the concept of "market failure" at all.
> 
> It cannot fail, because it has no purpose other than to allow willing buyers and sellers to find each other and to compare their abilities to offer better goods, services and prices than others.


That's not what economists mean by the term market failure.


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## Chuck Franke (Aug 8, 2003)

I think the discussion is typical of government doing feel good cosmetic things that sound very nice and demonstrate concern in a 30 second soundbite. They are helping the poor... Except, well - they really are NOT doing that. Their putting some ointment on their conscience and giving themselves a pat on the back for demonstrating their concern for those poor people.

How many people do you know of who are willing to get to work on time every day, put in a full day of work and who can be legally hired who are not able to get past the minimum wage? If I am wrong, fine. I don't think they are out there. What if those folks are not being held back by the wage but by other factors that are within thier control?

Perfect example: The Salvation Army gave sub-minimum wage stipends to indigent people - many of them homeless, addicts, mentally ill and others who had fallen through the cracks a small weekly stipend and up to ninety days of food, shelter, and counseling. Basically, they were taking people who COULD NOT get a minimum wage job, cleaning them up and helping them return to society in a dignified manner. They'd take three months to help the person get healthy, learn to go to work every day, learn some job skills and meanwhile get them off the street and into a safe environment where they had a chance to get well. Then they helped them find actual jobs at the end. That's not a bandaid.

Nope, Labor department shut that down and insisted they had to pay minimum wage despite the fact that the program participants were getting benefits substantially greater. That was a big help - they had to cut the program out and find ways to get around it.

If you want to solve the problem of the fulltime, sober, sane, worker who is just dying to work but has no skills then focus on the root problem - focus on helping them get the skills and minimum wage is a non-issue. 

Another example:
Jill's cousin runs a ministry. He's a guy who made his fortunes in the oil business a long time ago and is trying to give something back. He purchased a motel and converted it into a halfway house. He accepts drug offenders who are interested in getting back into society and who want or need a very structured path where they are held accountable and have to comply with strict rules. Now while he's providing food and housing and counseling and a good environment for those folks wouldn't it be nice if he could arrange 'busy work' for them? $1/hr to do made up work that really doesn't NEED doing but allows the participants to get used to getting up, taking a shower, drinking some hot coffee and then working a full day? Nope, that would be exploitation. In fact, he can't take one penny of Federal dollars in his program. Why? Because it is a faith-based program and thus must be privately funded. He funds it, tells the government where to stick it and he gets results.

Guess what his recitivism rate is? Within 24 months of release the folks who go through his program return to substance abuse less than 10% of the time. Compare that to the government's success rate. But hey - they'll get you minimum wage.

Frustrating. Raise the minimum skill level and the minimum wage level is a non-issue.


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## Phinn (Apr 18, 2006)

> That's not what economists mean by the term market failure.


Of course it is. A demand-side failure is merely one of the many forms of market failure that market interventionists of all stripes have invented and trotted out as a justification for asserting ever-increasing control over people's economic lives.

The idea of demand side failure (and its companion, "aggregate demand") is just another example of the extremely old idea that prices need to be manipulated in order to represent the supposedly true value of goods. Take a look at the Code of Hammurabi, for crying out loud, and see how much of it is devoted to price-fixing.

Manipulating prices through Keynesian inflation and anti-savings policies is a _little_ more sophisticated than Hammurabi's methods, but not much.


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## gregp (Aug 11, 2005)

Phinn said:


> Of course it is. A demand-side failure is merely one of the many forms of market failure that market interventionists of all stripes have invented and trotted out as a justification for asserting ever-increasing control over people's economic lives.
> 
> The idea of demand side failure (and its companion, "aggregate demand") is just another example of the extremely old idea that prices need to be manipulated in order to represent the supposedly true value of goods. Take a look at the Code of Hammurabi, for crying out loud, and see how much of it is devoted to price-fixing.
> 
> Manipulating prices through Keynesian inflation and anti-savings policies is a _little_ more sophisticated than Hammurabi's methods, but not much.


You've got all the cliches down. That's the standard Austrian-ideologue reply on market failure, which attempts to redefine the term and then knock it down. A trained economist would kind of chuckle at that and move on. Market failures deal with whole classes of problems and inefficiencies that are well understood and accepted. I'm pretty sure that even Austrians try to grapple with negative externalities, though they try to reclassify them as political problems. Ditto recessions.

The problem I have with this is that its leads to a really bad way to think about economics. When you let ideology dictate the answer in all cases to all questions you wind up with something akin to a religion, not a science.


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## Wayfarer (Mar 19, 2006)

gregp said:


> You've got all the cliches down. That's the standard Austrian-ideologue reply on market failure, which attempts to redefine the term and then knock it down. A trained economist would kind of chuckle at that and move on. Market failures deal with whole classes of problems and inefficiencies that are well understood and accepted. I'm pretty sure that even Austrians try to grapple with negative externalities, though they try to reclassify them as political problems. Ditto recessions.
> 
> The problem I have with this is that its leads to a really bad way to think about economics. When you let ideology dictate the answer in all cases to all questions you wind up with something akin to a religion, not a science.


Apparently I might not only be uneducated, but also an Austrian ideologue. I was always under the impression it is the realm of economics to describe and predict, you have entered politics and/or ethics when you start prescribing? You mention negative externalities for instance. I was under the apparently mistaken thought economics would be used to describe the situation and model possible outcomes for given solutions but one would use politics and/or ethics to pick among the possible ways to deal with said negative externality. Environmental pollution secondary to industry is a large and relevant one. The choice of solutions would be the realm of politics and ethics, not economics.


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## Phinn (Apr 18, 2006)

> You've got all the cliches down.


Yeah, you got me. I got all that from a conversation I overheard in an elevator. Between "Hot enough for ya?" and "Day late and a dollar short", I heard someone say "The Code of Hammurabi sure has a lot of price-fixing rules in it for a 4000 year-old document."



> A trained economist would kind of chuckle at that and move on.


And what about you, Chuckles? Your smug (yet content-free) attempt at withering condescension did not work. You clearly need to log a few more hours in the faculty lounge to really get practiced at it. Whenever you are finished chuckling and are prepared to deal with specifics, let me know.



> Market failures deal with whole classes of problems and inefficiencies that are well understood and accepted.


Then I am sure you will have no problem succinctly explaining and defending some of them. One will do.



> I'm pretty sure that even Austrians try to grapple with negative externalities, though they try to reclassify them as political problems.


Once again, you'll have to be more specific, but typically, the economic effects of behaviors that you might describe as negative externalities would probably be analyzed by Austrian methods in terms of whether it constitutes a property rights violation. But, until you start speaking in something more than hollow generalities, it's hard to tell.

But your use of the term "reclassify" is interesting. It makes me think that you seem to believe that someone, somewhere has already officially "classified" the meaning of economic phenomena, and that this "classification" is somehow set in stone and thus beyond question. It's an odd, bureaucratic, sheep-like way of thinking about things.



> Ditto recessions.


In the Austrian school, recessions are explained as the consequences of various forms of artificial credit expansion and (in our age of fiat money) manipulation of the money supply. I'll direct you to an online book on the subject. Try this one and this one. Additional sources are here.



> When you let ideology dictate the answer in all cases to all questions you wind up with something akin to a religion, not a science.


You seem to have mastered a few cliches of your own.


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## gregp (Aug 11, 2005)

I think we're agreeing. "Market failure" is not a moral judgement. It's a well understood term referring to inefficiencies in different market structures. In fact, what I object to is an attempt to manipulate the language of economics in the service of ideology.

Btw, Phinn is correct about minimum wage rates as far as I'm concerned. Either way, I'm not an economist, just someone interested in tailoring...


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## gregp (Aug 11, 2005)

> You seem to have mastered a few cliches of your own.


First of all, I don't think I relied on a cliche there. Nor do I think I was being vague before that. Curt? Maybe. Its a web site about clothing.

Anyway, you are very wrong that I'm not familiar with the theory of the business cycle. I've read the Theory of Money and Credit about six times. Ditto Human Action. Ditto Man Economy and State. I have dog eared copies of Menger and Bohm Bawerk, for goodness sake. While I warmly cherish the personal memory of many kind Austrians I've had an opportunity to spend time with and learn from, I think that mainstream micro and macro economics has a lot to offer and shouldn't be rejected out of hand for ideological reasons. Which is the only small contribution I wanted to make on this thread.

Editorial note: an ex post facto edit of the message to which I replied obscures the point of my post. Moderators should really disable this feature.


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## Phinn (Apr 18, 2006)

> I think we're agreeing.


Very glad to hear.



> "Market failure" is not a moral judgement. It's a well understood term referring to inefficiencies in different market structures.


I have found it to be a much misunderstood and/or misused term that is typically used to invent problems where none exist, to invent a bogeyman in order to justify some assertion of control over others.



> what I object to is an attempt to manipulate the language of economics in the service of ideology.


I've never understood the use of the term "ideology" as a perjorative. Even hard-core Communists are not wrong _because they are ideological_. They are wrong because their ideology is, itself, wrong. "Ideological" is usually an ad hominem argument -- a way of avoiding the subject matter.

If you had a problem with my assertions, rather than call them "religious" or "ideological," a more constructive approach might have been to (a) rebut some specific point with reasons, or (b) ask for clarification. It is the nature of discussions of complicated topics to stake out a few basic positions, and then follow them up with specifics when appropriate. That's not ideology. That's clarity.


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## gregp (Aug 11, 2005)

Phinn said:


> Very glad to hear.
> 
> I have found it to be a much misunderstood and/or misused term that is typically used to invent problems where none exist, to invent a bogeyman in order to justify some assertion of control over others.
> 
> ...


OK: that last one was really unclear. I was suggesting I was in general agreement with Wayfarer ;-) I agree with you on the minimum wage, but that's probably about it as far as this thread went.


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## MichaelS (Nov 14, 2005)

I'm not sure if this has been mentioned and I am too lazy to read the entire thread (plus I finally have low blood pressure and I want to keep it there), but wasn't it Henry Ford who paid his workers what was considered much too high by his contemporary industrialists? His rational was that if you pay your workers enough, they will have enough money to buy your products. If no one makes enough to buy a car, the car companies go out of business.

As by constant dollars, our minimum wage is reportedly a lot lower than it was 15-20 years ago, we are not going to buy as much (except for outsourced cheap/shoddy goods at Wal-Mart) and in the long run, what will this do to our economy? If we are all in minimum wage service jobs (with no more manufacturing), who are we all going to serve?

Another proud liberal leaning post by:

MichaelS


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## Phinn (Apr 18, 2006)

And in which we see the obvious, completely predictable results of a forcibly imposed minimum wage, and the results of increasing it: unemployment at the lowest rung, teenagers in this case. 

Congratulations, minimum-wage-supporters. How does it feel to cause economic hardship?


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## crs (Dec 30, 2004)

Phinn said:


> And in which we see the obvious, completely predictable results of a forcibly imposed minimum wage, and the results of increasing it: unemployment at the lowest rung, teenagers in this case.
> 
> Congratulations, minimum-wage-supporters. How does it feel to cause economic hardship?


An experienced editor's job is to spot holes in the story and ask reporters to fill them. The hole I spotted is, if these businesses are reacting to their increased cost by laying off employees instead of, say, raising prices, does this mean that they previously employed more people than the minimum they needed to serve their customers? My experience with this kind of teen-age work was 30 years ago, but as I remember it, we had no more teen-age employees than were absolutely necessary, and a reduction in workforce would have been noticeable to customers. So the restaurant raised its prices instead of laying off employees when costs increased. Consumers are unlikely to balk at paying 10 cents more for a cheeseburger, but likely will notice if they are asked to wait 10 minutes longer for that burger.

I wonder, too, why there are no comments from businesses that have not laid off employees and why there is a comment from a spokesperson for an independent business owners' advocacy group and no comment from minimum-wage advocates. I'm not saying the jist of the story is necessarily wrong, but the absence of comment from people who feel differently makes the reporting appear unbalanced.

I attribute this shoddy work to the laying off of 35 people in the Arizona Republic's newsroom three months ago so Gannett could maintain its absurd 25 percent profit margins. Give people little to no supervision, and this is the result. Since buying this newspaper, Gannett has turned a below-average metropolitan newspaper into a terrible one.


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## Wayfarer (Mar 19, 2006)

crs said:


> An experienced editor's job is to spot holes in the story and ask reporters to fill them. The hole I spotted is, if these businesses are reacting to their increased cost by laying off employees instead of, say, raising prices, does this mean that they previously employed more people than the minimum they needed to serve their customers? My experience with this kind of teen-age work was 30 years ago, but as I remember it, we had no more teen-age employees than were absolutely necessary, and a reduction in workforce would have been noticeable to customers. So the restaurant raised its prices instead of laying off employees when costs increased. Consumers are unlikely to balk at paying 10 cents more for a cheeseburger, but likely will notice if they are asked to wait 10 minutes longer for that burger.


If you only had the slightest knowledge of micro economics, you would know that adage "it all gets passed to the consumer" is false. You would know that as costs go up, companies must actually absorb some (or all) of the increase in costs as consumer's indifference curves are affected. Your attempt at logic shows your total lack of knowledge in this realm and is rather sad, coming from a man that feels he is so important in this society due to his profession. It also shows that you have never had responsibilities in the realm of a P&L sheet, pricing, or forecasting, as these facts would be empirically driven home to you through experience.

I guess we need to revise another old adage: Those that cannot do (or know), report.


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## Lushington (Jul 12, 2006)

Phinn said:


> And in which we see the obvious, completely predictable results of a forcibly imposed minimum wage, and the results of increasing it: unemployment at the lowest rung, teenagers in this case.
> 
> Congratulations, minimum-wage-supporters. How does it feel to cause economic hardship?


Now this is more like it. Leave it to Phurious Phinn to liven things up. In the Phinnish world of neoclassical clockwork, minor increases in the minimum wage inevitably lead to job loss and untold human suffering. In the real world they apparently do not. Ever since Card and Krueger's landmark work in the nineties, "[t]he evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss," to quote former Fed Vice-Chairman, Alan Blinder. This has led to a substantial change in professional opinion on this important issue, as documented in the study that I referenced much earlier in this thread, the link to which now sadly appears to be inoperative. In fact, the "job annihilation" criticism has become so shaky that much recent criticism of the minimum wage has focused on its alleged illusory and inequitable benefits. Of course, one expects to read this kind of anecdotal apocalypse every time some tiny, well-picked bone is thrown to the laboring classes; it's part of the game. The "Employment Policies Institute" ("EPI") quoted in the story is one of Rick Berman's reptile hatcheries that came into existence in 1991 to lobby against the minimum wage on a national level. Berman is a former management-side labor lawyer and restaurant industry executive, and since 1986 he has been a full-time lobbyist, railing against federal policies that benefit labor. In 1989 he penned a notorious article claiming that the proposed ADA would cripple the hospitality industry by allowing it be overrun with "AIDS-infected cooks and server" Yeah, right. The name of Berman's institute mimics that of another EPI, The Economic Policy Institute, which has been around since the mid-80s, and which has lobbied for increases in the minimum wage and other worker benefits. Two recent publications from _this _EPI address both recent changes in the minimum wage, and the current state of empirical research on the issue:

https://www.epi.org/content.cfm/bp178

https://www.epi.org/content.cfm/bp176

The last states some rather interesting conclusions:



> Between the last time the federal minimum wage was increased, in September 1997, and the end of 2005, 17 states and the District of Columbia raised their own minimum wages a grand total of 47 times. By the end of this period, the median minimum wage of these states was $1.40 (more than 25%) higher than the federal value. Examination of several demographic groups for which wages and employment are thought to be sensitive to minimum wages found some positive effect on wages and scant effect on either employment or labor supply. The same can be said for employees working in eating and drinking establishments. . .
> Though consistent with much work on the minimum wage conducted in the last 15 years, the results presented in this analysis are nevertheless surprising when viewed through the prism of a simple, textbook model of supply and demand. In this model, neither hiring nor firing imposes any costs on employers, and either all workers are identical, or employers can easily discern how productive potential employees are. As with all modeling assumptions, none of these assumptions is correct in reality. The results presented here indicate that the modeling assumptions are not merely useful simplifications. Rather, they impede understanding of labor markets, and the design of policy to affect them, both in general and specifically concerning the minimum wage, suffers. "Prism" is a less apt description of the simple textbook model in this context than "funhouse mirror."


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## crs (Dec 30, 2004)

Wayfarer said:


> If you only had the slightest knowledge of micro economics, you would know that adage "it all gets passed to the consumer" is false. You would know that as costs go up, companies must actually absorb some (or all) of the increase in costs as consumer's indifference curves are affected. Your attempt at logic shows your total lack of knowledge in this realm and is rather sad, coming from a man that feels he is so important in this society due to his profession. It also shows that you have never had responsibilities in the realm of a P&L sheet, pricing, or forecasting, as these facts would be empirically driven home to you through experience.
> 
> I guess we need to revise another old adage: Those that cannot do (or know), report.


I think you have some reading-comprehension problems. Were they able to cut staff because they were overstaffed to begin with?

Not every company responds to increased costs by reducing the workforce. Surely you can't be suggesting this is the only solution companies use. That would be, ummm, ridiculous. Even from you.


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## Wayfarer (Mar 19, 2006)

crs said:


> I think you have some reading-comprehension problems. Were they able to cut staff because they were overstaffed to begin with?
> 
> Not every company responds to increased costs by reducing the workforce. Surely you can't be suggesting this is the only solution companies use. That would be, ummm, ridiculous. Even from you.


Possibly it is you with the reading difficulties; in addition to your debate skills. Please let me refresh your somewhat limited registry:



crs said:


> ...if these businesses are reacting to their increased cost by laying off employees instead of, say, raising prices....


You raised the idea of cutting staff due to increased costs or raising prices. You see my dear crs, one does not debate as if answering voices in one's head, one replies to those thoughts put forth by the oposing party. I did not suggest this was the only way but rather dealt with your stated alternate, namely raising prices. I directed you to broaden your intellectual horizons to find out why this solution is not what you think it is. You declined to educate yourself and fell back into your usual pattern of insults vs. rational discussion. Please do not let me slow you down further. Continue your insults.

Cheers


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## crs (Dec 30, 2004)

Wayfarer said:


> Possibly it is you with the reading difficulties; in addition to your debate skills. Please let me refresh your somewhat limited registry:
> 
> You raised the idea of cutting staff due to increased costs or raising prices. You see my dear crs, one does not debate as if answering voices in one's head, one replies to those thoughts put forth by the oposing party. I did not suggest this was the only way but rather dealt with your stated alternate, namely raising prices. I directed you to broaden your intellectual horizons to find out why this solution is not what you think it is. You declined to educate yourself and fell back into your usual pattern of insults vs. rational discussion. Please do not let me slow you down further. Continue your insults.
> 
> Cheers


Despite your attempt to indicate that raising prices is not an effective way of dealing with increased costs, that's what most companies do at some point. Otherwise we'd never see price increases, and we see them frequently. Are our rising gas prices, for example, not an example of passing increased costs on to the consumer? (Giving the oil companies the benefit of the doubt that they are not merely gouging us.)


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## Wayfarer (Mar 19, 2006)

crs said:


> Despite your attempt to indicate that raising prices is not an effective way of dealing with increased costs, that's what most companies do at some point. Otherwise we'd never see price increases, and we see them frequently. Are our rising gas prices, for example, not an example of passing increased costs on to the consumer? (Giving the oil companies the benefit of the doubt that they are not merely gouging us.)


I do not believe I indicated prices never rise, if you would be so kind as to point out where I did I would appreciate that. What you indicated seemed to be that when costs go up, an organization merely raise the price and _viola!_, problem solved. Again, I indicated to you that the fact is the case is not so simple. I again invite you to read some micro-economics so you will understand this concept better. Gregory Mankiw, Harvard professor, has a primer on both macro and micro that is rather a standard one at undergraduate level. Perhaps investing in these two books would be of benefit to you?

Regards


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## crs (Dec 30, 2004)

Wayfarer said:


> I do not believe I indicated prices never rise, if you would be so kind as to point out where I did I would appreciate that. What you indicated seemed to be that when costs go up, an organization merely raise the price and _viola!_, problem solved.


This seems to exclude the possibility of raising prices as a solution:



Wayfarer said:


> If you only had the slightest knowledge of micro economics, you would know that adage "it all gets passed to the consumer" is false. You would know that as costs go up, companies must actually absorb some (or all) of the increase in costs as consumer's indifference curves are affected.


So are you saying the oil companies are absorbing even "some" of these costs? Doesn't seem that way.


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## Wayfarer (Mar 19, 2006)

crs said:


> So are you saying the oil companies are absorbing even "some" of these costs? Doesn't seem that way.


You are quoting out of context. You had laid out a binary solution, namely raise prices vs. cutting labour. I pointed out, correctly, raising prices does not always solve this problem. In fact, raising prices can cause even less revenues, depending on the price elasticity (or inelasticity) of demand. Further, I did not say this was "always" the case. Please read, I used a qualifier as sometimes one can pass along all costs. However, many times one cannot. Again, please do not take my word for it, read some economics.


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## crs (Dec 30, 2004)

Wayfarer said:


> You are quoting out of context. You had laid out a binary solution, namely raise prices vs. cutting labour. I pointed out, correctly, raising prices does not always solve this problem. In fact, raising prices can cause even less revenues, depending on the price elasticity (or inelasticity) of demand. Further, I did not say this was "always" the case. Please read, I used a qualifier as sometimes one can pass along all costs. However, many times one cannot. Again, please do not take my word for it, read some economics.


I see no qualifier in what you wrote. It seemed rather all-inclusive. Also, I don't believe it is out of context, as the only remaining matter that I didn't quote was insults directed at me.

Certainly all of us know that if a McDonald's attempted to charge $20 for a Big Mac, there would be few takers. However, the 10-cent increase that I mentioned is not that extreme. And this is not economic theory, but personal experience (1977 dollars, too).

I worked for a newspaper a decade ago that dropped 15 percent of its circulation after a price increase from 25 to 35 cents, almost completely on street sales, which are an impulse buy, compared with home delivery. However, market research indicated this was less a price factor than A.) the inconvenience of needing two coins and B.) the competitor remaining at 25 cents at the ajoining newsracks.

But a fast-food restaurant? How many people go to the trouble of comparison shopping, except perhaps at a food court in a mall? In the OP, we are not talking significant pricing problems. In fact, it does not appear from the story that these businesses even considered other solutions before cutting workforce.


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## Wayfarer (Mar 19, 2006)

crs said:


> I worked for a newspaper a decade ago that dropped 15 percent of its circulation after a price increase from 25 to 35 cents, almost completely on street sales, which are an impulse buy, compared with home delivery. However, market research indicated this was less a price factor than A.) the inconvenience of needing two coins and B.) the competitor remaining at 25 cents at the ajoining newsracks.


Actually, that is a perfect example for what I am saying. What the competition is doing of course figures into the elasticity of your product's demand curve. The coin thing is interesting and I can certainly see that. Thanks for sharing that, it is something to thing about.


crs said:


> But a fast-food restaurant? How many people go to the trouble of comparison shopping, except perhaps at a food court in a mall? In the OP, we are not talking significant pricing problems. In fact, it does not appear from the story that these businesses even considered other solutions before cutting workforce.


I simply put forth that at times, cutting costs, such as labour, is indeed needed. Organizations, again, cannot always raise the price as the answer, exactly what you seemed to indicate. A good example is healthcare, a sector of the economy that has a very significant percentage of its revenues determined by government decree. Therefore providers are forced to cut costs, the easiest of which is FTE count.

Fast food is another good example also for price elasticity. I will hit a fast food joint maybe 3-5 times a year due to the fact that for another five dollars, I can avoid a line and have an actual waitress for lunch. It is not just the price of the fast food itself, it is the price of substitute items in relation to it.


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## Phinn (Apr 18, 2006)

> Now this is more like it. Leave it to Phurious Phinn to liven things up. In the Phinnish world of neoclassical clockwork, minor increases in the minimum wage inevitably lead to job loss and untold human suffering. In the real world they apparently do not. Ever since Card and Krueger's landmark work in the nineties, "[t]he evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss," to quote former Fed Vice-Chairman, Alan Blinder.


It pleases me to no end to see you resort to _ad hominem_ attacks, the abuse of strawmen, and myriad other logical fallacies. It demonstrates that you have reached the end of your ability to argue the merits of the issue.

In any event, I highly recommend that you read Henry Hazlitt's _Economics in One Lesson_. It is rather basic, but the gist of it is that a lot of economic error stems from the curious habit that people have of only looking at the economic effects of a proposed law as they pertain to (a) too few people or (b) too short of a time scale.

In other words, if you expand the scope of your inquiry to include more people, over a longer period of time, you will typically see that the net effect of Statist interference in the market is detrimental. Statists invariably want us to consider fewer people over a shorter period of time.

In this light, the shortcomings of the Card & Krueger "study" are obvious -- 
1. Their conclusions are based on observations of a single industry. 
2. A survey of the short-term effects proves nothing about longer term effects.

To understand the complete picture, you would have to examine all industries. You would also have to address long-term effects. A marginal business may be forced to pay higher wages in the short term, but doing so will have a negative effect on its ability to expand, to develop new products, or make other changes. These effects might not be seen for months or years.

One the possible explanations for the Card & Kreuger results (ignoring their many methodological problems) is that minimum wage laws give an advantage to the more automated, systematic employers, such as national fast food chains, as compared to local, traditional businesses. Let's say that McDonalds saw no change to their hiring and amount of business. But what happened to the local diners? What happened to other vendors of cheap food? One of the ways that places like McDonalds deal with rising labor costs is to make their production line more automated. They introduce more assembly-line methods. The local diner does this less readily. How many of these places closed down? If so, then the fast food joints would absorb the failed diners' business. If you only look at McDonalds, then you would never consider these wider effects.

A second failing of the Card & Krueger study is that it compares apples to oranges. This is the problem with ALL so-called empirical economic studies -- there is no control group for the experiment. You can _never_ replicate the results because the economic conditions that affect the results are always changing. You cannot go back in time and replay all of the things that everyone did, with all of the decisions that everyone made, but change only the minimum wage law as the sole, isolated element. The reality of the situation is that when you make one change (e.g., a new minimum wage), all of the _other_ factors that affect wages do not remain equal.

As a result, the only thing that Card & Krueger can do is compare the rate of unemployment before the new wage law and the rate of unemployment after the new wage law. They do not (and cannot) ever compare the post-wage-law rate of unemployment to what the rate of unemployment _*would have been*_ if the wage law had never been passed.

It's entirely possible that if the minimum wage had not been changed, unemployment would have gone down. If so, then by enacting a new wage law, after which unemployment remains unchanged, the legislators would have effectively increased unemployment, relative to what it would have been, even though the unemployment percentage remains the same.

Here's the minimum-wage debate in a nutshell: if a firm is going to stay in business, then any legally-forced increase in wages can _*only*_ be paid for in 3 ways:

1. a decrease in profits, 
2. an increase in prices, and 
3. cut costs and make the remaining employees work harder.

What really happens is a combination of all three, and a net loss of economic efficiency for everyone as the employers and employees adjust their behavior to avoid punishment. More work gets outsourced to other countries where wages are cheaper. More of the domestic economy gets pushed under the table. (I'm sure Lushington will be there to complain about that, too.)

But what people like Lushington want, of course, is to see No. 1 maximized as much as possible -- the minimum wage is _supposed_ to be paid for out of profits. See, in Lushington's world, capitalists are evil and must be punished. When A hires B for $1000 a month, and makes $1300 off of B's labor, Lushington thinks that A is _stealing_ $300 from B by skimming the surplus value of B's labor.

In Lushington's world, the government is merely correcting this intolerable evil. By forcibly adjusting B's wage to $1100 per month, the government is simply expropriating some of the money that A would have stolen from B. (The government takes a finders fee for this service, but we'll ignore that for now.) The evil capitalist should get down on his knees and THANK us that he is still allowed to steal $200 dollars from the worker.

Of course, then the income tax will help expropriate some of that ...


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## crs (Dec 30, 2004)

Phinn said:


> Here's the minimum-wage debate in a nutshell: if a firm is going to stay in business, then any legally-forced increase in wages can _*only*_ be paid for in 3 ways:
> 
> 1. a decrease in profits,
> 2. an increase in prices, and
> 3. cut costs and make the remaining employees work harder.


4.) New products to tap different markets

5.) Aggressive marketing plan to increase market share


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## Phinn (Apr 18, 2006)

I suppose you are trying to be helpful, but items 4 and 5 that you added are not relevant.

I thought that from the general tenor of the conversation, you would have understood that we are talking about the effects of the minimum wage. Thus, the list of 3 items refers to the ways that a business can cope with an artificial increase in labor costs, _all else being equal_. It's an artificial assumption, I know, but one that is implicit in a discussion about economic theory. I shall be more careful in the future for your benefit. (FYI: if there are any big words you don't understand, try the dictionary first.)

Also, I was referring to the actions that a business could take unilaterally, concerning the things over which he has direct control. Both of your items refer to things that are directed toward increasing revenue. But businesses have no _direct_ control over revenue. They can control costs. They can set prices. They can manage employees. The effects that these decisions have on revenue depend on the reactions they provoke on the part of (a) competitors and (b) customers. But the business owner has no direct control over them.

Businesses (and investors) are always on the lookout for new products and new markets. A change in the minimum wage would certainly not increase these efforts. In fact, to the extent that an increase in minimum wage tends to cut into profits, reducing the ability to accumulate capital, expansion into new product lines and new regions would, if at all, tend to be less prevalent following a hike in the minimum wage.

The same goes for your recommendation to consider a "marketing plan to increase market share." I'm sure that executives the world over are reading your comment and exclaiming to themselves, "Why didn't we think of that before??!! Let's try to beat the competition! Brilliant!" The rest of them would see immediately that an artificial increase in labor costs would do nothing to their tendency to adopt marketing plans.


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## pt4u67 (Apr 27, 2006)

crs said:


> 4.) New products to tap different markets
> 
> 5.) Aggressive marketing plan to increase market share


4) Profits are used by firms to stimulate R&D. By increasing the obligation on the part of an employer to pay more in wages and benefits you are in effect taxing that firm and therefore making R&D more difficult.

5) Sorry but its not as simple as pushing a button. Besides, by creating an environment where a firms efforts are rewarded only by having more taxes imposed on it hardly motivates that firm to drum up more business. At some point the associated efforts and costs reach an equilibrium and profits can be better stimulated by increases in productivity (more work from less workers).


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## crs (Dec 30, 2004)

Phinn said:


> I suppose you are trying to be helpful, but items 4 and 5 that you added are not relevant.
> 
> I thought that from the general tenor of the conversation, you would have understood that we are talking about the effects of the minimum wage. Thus, the list of 3 items refers to the ways that a business can cope with an artificial increase in labor costs, _all else being equal_. It's an artificial assumption, I know, but one that is implicit in a discussion about economic theory. I shall be more careful in the future for your benefit. (FYI: if there are any big words you don't understand, try the dictionary first.)
> 
> ...


Well, to educate you, my company's response to increased costs has been to create niche products to bring in more revenue. And to advertise more heavily in other forms of media.

In the real world, your ideological attempt to say there are _only three ways_ to respond to an increase in minimum wage is ridiculous. There are three passive ways to deal with it and at least two active ways.

Further, let it be noted that I responded to your post without insult, and you insulted me first. I disproved your point and you had to respond by being a horse's patootie, as usual.


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## crs (Dec 30, 2004)

pt4u67 said:


> 4) Profits are used by firms to stimulate R&D. By increasing the obligation on the part of an employer to pay more in wages and benefits you are in effect taxing that firm and therefore making R&D more difficult.
> 
> 5) Sorry but its not as simple as pushing a button. Besides, by creating an environment where a firms efforts are rewarded only by having more taxes imposed on it hardly motivates that firm to drum up more business. At some point the associated efforts and costs reach an equilibrium and profits can be better stimulated by increases in productivity (more work from less workers).


The posted article noted the cost of replacing and training new employees in these high-turnover businesses. One way that our company has avoided much of this has been to take a long-range view of the business and build employee loyalty by not laying off people and not underpaying them. As a result, there is a veteran workforce -- and an expensive one -- but one that does well in the most competitive market in the United States.

We've seen it on this site, posters complaining about uninformed clothing sales personnel. Well, there is no free lunch if you own a business. If your first response is to cut staff or underpay them, the customer will notice the decline in service and it will affect the bottom line. Too many businesses today have replaced shortsighted, knee-jerk cost-cutting as a replacement for American ingenuity and expansion. The most aggressive cost-cutters in my field have seen the most significant circulation declines. A fast-food restaurant that cuts staff will soon be taking the "fast" out of fast food, the only advantage aside from pricing and brand recognition that they've offered over regular restaurants.

What I've seen in my company is huge investment in the latest technology (and buyouts, not layoffs, as well as retraining for different jobs in the production end), creation of new products and better marketing because the philosophy is that layoffs are the option of last resort, not an easy quick fix.


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## Laxplayer (Apr 26, 2006)

Phinn said:


> It pleases me to no end to see you resort to _ad hominem_ attacks, the abuse of strawmen, and myriad other logical fallacies. It demonstrates that you have reached the end of your ability to argue the merits of the issue.
> 
> In any event, I highly recommend that you read Henry Hazlitt's _Economics in One Lesson_. It is rather basic, but the gist of it is that a lot of economic error stems from the curious habit that people have of only looking at the economic effects of a proposed law as they pertain to (a) too few people or (b) too short of a time scale.
> 
> ...


WalMart is hardly making only $300 per employee per month. If Costco, Trader Joe's and Whole Foods can pay their employees a decent wage, so can WalMart.


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## Wayfarer (Mar 19, 2006)

Discuss.


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## crs (Dec 30, 2004)

Wayfarer, I cannot see the writing on the left side. Also, what is the source?


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## Laxplayer (Apr 26, 2006)

crs said:


> The posted article noted the cost of replacing and training new employees in these high-turnover businesses. One way that our company has avoided much of this has been to take a long-range view of the business and build employee loyalty by not laying off people and not underpaying them. As a result, there is a veteran workforce -- and an expensive one -- but one that does well in the most competitive market in the United States.
> 
> *We've seen it on this site, posters complaining about uninformed clothing sales personnel. Well, there is no free lunch if you own a business. If your first response is to cut staff or underpay them, the customer will notice and it will affect the bottom line.* Too many businesses today have replaced shortsighted, knee-jerk cost-cutting as a replacement for American ingenuity and expansion. The most aggressive cost-cutters in my field have seen the most significant circulation declines. A fast-food restaurant that cuts staff will soon be taking the "fast" out of fast food, the only advantage aside from pricing and brand recognition that they've offered over regular restaurants.
> 
> What I've seen in my company is huge investment in the latest technology (and buyouts, not layoffs, as well as retraining for different jobs in the production end), creation of new products and better marketing because the philosophy is that layoffs are the option of last resort, not an easy quick fix.


I agree, I have a friend who is a pharmacist, and he is always complaining about the turnover among pharmacy techs. He often tells me that he wishes the company would pay the techs better, so they would have some incentive to stay with the company, as it is difficult to have to re-train people constantly. Also, when the techs quit, they can't just be quickly replaced, as they must be trained first. So, the pharmacists have to work even harder, and the customer has to wait longer for their prescriptions.


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## Wayfarer (Mar 19, 2006)

crs said:


> Wayfarer, I cannot see the writing on the left side. Also, what is the source?


The side is W* (wage at start) and Wmin wage, the new legislated wage. The source? That is your standard Nash Equilibrium and nothing more. You can find it in any micro-econ book, such as the one I suggested you purchase.

Edit: You asked the source and this just made me wonder something....you *have* seen this graph before, have you not?


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## pt4u67 (Apr 27, 2006)

crs said:


> The posted article noted the cost of replacing and training new employees in these high-turnover businesses. One way that our company has avoided much of this has been to take a long-range view of the business and build employee loyalty by not laying off people and not underpaying them. As a result, there is a veteran workforce -- and an expensive one -- but one that does well in the most competitive market in the United States.
> 
> We've seen it on this site, posters complaining about uninformed clothing sales personnel. Well, there is no free lunch if you own a business. If your first response is to cut staff or underpay them, the customer will notice the decline in service and it will affect the bottom line. Too many businesses today have replaced shortsighted, knee-jerk cost-cutting as a replacement for American ingenuity and expansion. The most aggressive cost-cutters in my field have seen the most significant circulation declines. A fast-food restaurant that cuts staff will soon be taking the "fast" out of fast food, the only advantage aside from pricing and brand recognition that they've offered over regular restaurants.
> 
> What I've seen in my company is huge investment in the latest technology (and buyouts, not layoffs, as well as retraining for different jobs in the production end), creation of new products and better marketing because the philosophy is that layoffs are the option of last resort, not an easy quick fix.


All the things you say make sense, but those options need to be organic to the company and not an imposed need brought on by government regulation. Your basically saying that "we're going to impose a new tax on you, how you deal with the consequences is up to you. Oh and by the way, we expect you to stay competitive."

There is one flaw in your argument however: we're talking about the minimum wage. Minimum wage workers perform mostly menial tasks for which little to no "veteran" skill is required. I would venture that 90%+ of businesses that hire at the minimum wage could care less about a veteran workforce and so when it comes time to cutting costs layoffs are most expeditious. What is the risk? That a precious skill set will leave the organization and go to a competitor? That's why when many of us argue that an increase in minimum wage will actually lead to less employment within the organization. Growth in wages and marketshare must be organic otherwise it will lead to decay.


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## Phinn (Apr 18, 2006)

You still don't get it.

Listing all the ways that businesses deal with the general, universal pressure to increase revenue has no bearing on the minimum wage.

Yes, increasing costs will force businesses to react or fail. This is nothing new, and applies to all businesses at all times, regardless of the minimum wage. Some change their marketing approach. Some try new products. Some relocate. Some change their pension plans. Some change their dental plans. They do all sorts of things. But only some of those changes are specifically and directly related to an artificially-imposed increase in the minimum wage, _all else being equal_, the rest being generalized business matters.

Perhaps you should look into getting the phrase _ceteris paribus_ tattooed in reverse on your forehead. Perhaps it would be a daily reminder of your need to use logical reasoning.

In all your vast business experience, which you trot out in lieu of any economic theory or logical argument whatsoever, can you tell us how much of your employer's increasing costs are attributable to an increase in the minimum wage? How many minimum wage employees does your employer have? What percentage of its labor costs are represented by minimum wage employees? To what extent were all of these marketing changes prompted by increased costs from factors other than minimum wage employees?

In the meantime, I will take it from the fact that you ignored the entire substance of my post in order to nitpick an irrelevant matter, that you have nothing to say regarding the limited scope (in terms of numbers of businesses and time scale) of the Card & Krueger survey, or the inherent limitations of supposedly empirical economic data.


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## Wayfarer (Mar 19, 2006)

_Ceteris paribus_ translates to "with all other things being equal", just to save people from having to go look it up.


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## crs (Dec 30, 2004)

pt4u67 said:


> Minimum wage workers perform mostly menial tasks for which little to no "veteran" skill is required. I would venture that 90%+ of businesses that hire at the minimum wage could care less about a veteran workforce and so when it comes time to cutting costs layoffs are most expeditious. What is the risk? That a precious skill set will leave the organization and go to a competitor?


We could, then, pay minimum wage to the people who scrub our toilets. However, if we pay these people badly, there is a greater risk that they will steal things from the desks of employees as they clean during the wee hours, leading to unhappiness among the skilled workforce. I am happy that, unlike in some previous places of employment, I can forget a jacket some night and not have it wind up on eBay within 24 hours, so I am glad that my company is willing to pay the bottom end better than the bare minimum allowed by law. It is not that we require especially talented toilet-scrubbers, but especially loyal toilet-scrubbers are a good thing, and you don't get loyalty by paying people the least you can. These employees understand that they are being paid better than the minimum, but if this minimum does not exist, how do they know that they ought to treat this job as relatively special? Minimum wage sets a bar from which unskilled labor can make a comparison. I am sorry, but if a business can't do better than minimum wage for all its employees, it is a badly run business.


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## Wayfarer (Mar 19, 2006)

crs said:


> I am sorry, but if a business can't do better than minimum wage for all its employees, it is a badly run business.


So I guess these [email protected] deserve to go out of business?



> At stake is the fate of several thousand developmentally disabled workers, many of whom have been idled from their jobs because their employers are unable to pay them Arizona's new minimum wage of $6.75 an hour....Disabled individuals work under a "special certificate" authorized by the federal Fair Labor Standards Act.


Source: https://www.tucsoncitizen.com/daily/local/41373.php

Now give some rebut to the graph please.


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## crs (Dec 30, 2004)

Phinn said:


> Perhaps you should look into getting the phrase _ceteris paribus_ tattooed in reverse on your forehead. Perhaps it would be a daily reminder of your need to use logical reasoning.


You are still incapable of making a point without being a jackass. Were you an abused child?


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## Wayfarer (Mar 19, 2006)

crs:

I took the time to post the graph showing the standard treatment of minimum wage, all things being equal. You seem to have decided not to offer critique. Please do offer some formal disproof of this classical equilibrium.

Regards


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## crs (Dec 30, 2004)

Wayfarer said:


> So I guess these [email protected] deserve to go out of business?
> 
> Source: https://www.tucsoncitizen.com/daily/local/41373.php
> 
> Now give some rebut to the graph please.


I would favor tax credits to businesses that employ the developmentally disabled, rather than an exemption of minimum-wage laws.

Did you mean "graph" as in the "paragraph" you just posted or "graph" as in the chart you previously posted? If the latter, I believe that the chart starts out with some assumptions that are not universally held, thus I am not going to accept it as a "given" and a basis for discussion.


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## Wayfarer (Mar 19, 2006)

crs said:


> I would favor tax credits to businesses that employ the developmentally disabled, rather than an exemption of minimum-wage laws.


So basically further social engineering to counter the social engineering. Good solution.



crs said:


> Did you mean "graph" as in the "paragraph" you just posted or "graph" as in the chart you previously posted? If the latter, *I believe that the chart starts out with some assumptions that are not universally held, *thus I am not going to accept it as a "given" and a basis for discussion.


Name me an assumption that is universally held. There is still a flat Earth society. Yes, I too would question the thought that the more a product costs, the less of it I wish to buy or that the more someone is willing to pay for any given job, the more people are willing to do it. WHAT A CONCEPT! If you are placing yourself over the greatest minds in economics by ignoring their models, I think we can safely assume any intelligent conversation between us on this matter has quite firmly ended. It is also now quite apparent that this was indeed the first time you viewed such a diagram. That is amazing, considering how much you have trumpted to all over this topic. Amazing.

Cheers


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## crs (Dec 30, 2004)

Wayfarer said:


> the greatest minds in economics by ignoring their models


"Greatest minds in economics" is a subjective term. By that you mean the economists with whom you agree. I believe we have established on a previous thread that not all respected economists agree on the impact of minimum-wage law. I believe another poster, while agreeing with your position that minimum-wage law is bad, acknowledged at the time that not all economists agree, then discounted the work of academic economists in favor of his real-world experience. This is why I asked for the source of your chart, so I could investigate further and read both sides before making a judgment. I am not going to take your chart at face value as a "given," knowing full well that experts in the field disagree.


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## crs (Dec 30, 2004)

Wayfarer said:


> So basically further social engineering to counter the social engineering. Good solution.


You act is if "social engineering" is a bad thing. That's your opinion and that's fine, plenty of intelligent people share that view. However, plenty of intelligent people take the opposite view. You are starting from a bias.


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## Lushington (Jul 12, 2006)

Phinn said:


> It pleases me to no end to see you resort to _ad hominem_ attacks, the abuse of strawmen, and myriad other logical fallacies. It demonstrates that you have reached the end of your ability to argue the merits of the issue.
> 
> In any event, I highly recommend that you read Henry Hazlitt's _Economics in One Lesson_. It is rather basic, but the gist of it is that a lot of economic error stems from the curious habit that people have of only looking at the economic effects of a proposed law as they pertain to (a) too few people or (b) too short of a time scale.
> 
> ...


Ah, Phinn, I was just tweaking your whistle a little. Free Market Libertarians have replaced Trots as the most humorless creatures paddling about in the murky waters of the politcal swamp. Hazlitt's text is elementary - that's its drawback. In an earlier post in this thread your argued that economic systems are extremely complex, dynamic and volatile (or words to that effect, I haven't time to go back check), and you were quite correct in doing so; yet you also seem to believe that a simple clockwork model of economic behavior is sufficient to describe and explain these complex, dynamic, and volatile systems. Unless one is simply to accept the predictions of the neoclassical model as a matter of faith one must test them empirically as Card and Krueger tested the effect of the minimum wage in an industry that is said to be highly sensitive to adjustments in the minimum wage. In doing so they found that the job destruction predictions of the neoclassical model are not confirmed by the evidence. Your complaint that C&K cannot compare their results to what would have occurred had no increase in the MW cuts both ways, does it not? Perhaps employment in the affected industries would have gone *down* had there been no increase in the minimum wage; in that case the minimum wage may be said to *create *jobs; but no one knows. All that can be examined is what did or did not happen when the MW was increased in the affected markets and industries, and the findings were that the job destruction predictions did not come to pass. There are other arguments to be made against the MW, as you and I both note in our posts: even if jobs are not destroyed, the benefits may be illusory (additional costs are more likely passed on to consumers earning the minimum wage themselves); or the benefits may be inequitable or unintended (increases in the minumum wage primarly benefit young, part-time employees, rather the adult poor); or increases in the MW may favor mammoth enterprises that can absorb and offset the increased labor cost, to the detriment of smaller, local entities; or the increased labor cost may make the workplace a harsher place because increases in productivity are needed to offset higher wages; or many other things. And no one is going to know if these assumptions and predictions are accurate until they, too, are empirically examined in the same manner that the job destruction prediction has been tested. The rest is conjecture at this point. One needn't add that this view argues in favor of a highly conservative approach to the social sciences in general and economics in particular.



> But what people like Lushington want, of course, is to see No. 1 maximized as much as possible -- the minimum wage is _supposed_ to be paid for out of profits. See, in Lushington's world, capitalists are evil and must be punished. When A hires B for $1000 a month, and makes $1300 off of B's labor, Lushington thinks that A is _stealing_ $300 from B by skimming the surplus value of B's labor.
> 
> In Lushington's world, the government is merely correcting this intolerable evil. By forcibly adjusting B's wage to $1100 per month, the government is simply expropriating some of the money that A would have stolen from B. (The government takes a finders fee for this service, but we'll ignore that for now.) The evil capitalist should get down on his knees and THANK us that he is still allowed to steal $200 dollars from the worker.


More or less. I'd much prefer to see the evil capitalist removed from the picture altogether. Set him to an honest day's work shoveling mud or picking strawberries. Wait, I'd better get an emoticon . . . :icon_smile:


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## Wayfarer (Mar 19, 2006)

crs said:


> "Greatest minds in economics" is a subjective term. By that you mean the economists with whom you agree. I believe we have established on a previous thread that not all respected economists agree on the impact of minimum-wage law. I believe another poster, while agreeing with your position that minimum-wage law is bad, aknowledged at the time that not all economists agree, then discounted the work of academic economists in favor of his real-world experience. This is why I asked for the source of your chart, so I could investigate further and read both sides before making a judgment. I am not going to take your chart at face value as a "given," knowing full well that experts in the field disagree.


Again, the "source" is basic, I mean Econ 101, stuff crs. Go educate yourself just a little bit! I have already given you the author of a good basic primer, must I order it from Amazon for you? In the prior thread you reference, Lushington found a most interesting study. It showed the vast majority of economists agree about minimum wage and that an increasing number of them do after recent large scale empirical studies. Do a search of this site, find that link, the go do your homework.

Again, just because you cannot deal with an argument, one that no matter what you say is taught to every single student in economics, you do not get to dismiss it. I think you would call that "shoddy journalism".

Carry on, you have declared yourself this is a useless thing to discuss with you are you refuse to provide yourself with the intellectual tools needed to think about this subject. You will probably call this an insult but it is merely what you have already stated yourself: I will not deal with this line of inquiry!


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## Wayfarer (Mar 19, 2006)

crs said:


> You act is if "social engineering" is a bad thing. That's your opinion and that's fine, plenty of intelligent people share that view. However, plenty of intelligent people take the opposite view. You are starting from a bias.


Any intelligent person would have to scratch their head and wonder if one needs a cure for the cure, if you are headed in the best direction.


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## Phinn (Apr 18, 2006)

> This is why I asked for the source of your chart, so I could investigate further and read both sides before making a judgment.


You've never seen diagram that before, have you? Oy.

I'm reminded of one of Rothbard's quotes:



> It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.


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## Wayfarer (Mar 19, 2006)

Phinn said:


> You've never seen diagram that before, have you? Oy.


Amazing, is it not? I will readily admit that both you and Lushington seem much better educated in economics than I, but then again I am not going to plunge into an argument over something I am not even remotely familiar with and then just decide to ignore the classic treatment!


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## Phinn (Apr 18, 2006)

> Your complaint that C&K cannot compare their results to what would have occurred had no increase in the MW cuts both ways, does it not?


It does. Which is why so-called empirical studies of economic data can not prove what they purport to prove. They can illustrate only economic history, in a specific time, as to a limited number of actors. Unfortunately, the conditions that affect the outcome are always changing, thus undermining the validity of the study.

In the alternative, there is only _a priori_ reasoning and logical rigor.



> no one is going to know if these assumptions and predictions are accurate until they, too, are empirically examined in the same manner that the job destruction prediction has been tested. The rest is conjecture at this point. One needn't add that this view argues in favor of a highly conservative approach to the social sciences in general and economics in particular.


I'm sure that people at the lowest end of the income scale, with the fewest options and the greatest vulnerability to financial hardships, who are laid off and unable to find productive work as the result of their pay scale being outlawed, will thank you for tinkering with economic processes, even though you admittedly cannot predict whether doing so will make things better or worse. After all, your experimental curiosity is more important than their welfare. Who says that liberals are elitists?


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## crs (Dec 30, 2004)

Wayfarer said:


> It showed the vast majority of economists agree about minimum wage


Again, there are plenty of economists who disagree. You can say "vast majority," but there are still respected professional economists who disagree, correct? The dissenters make their living as economists, they have not been run out of the field because of their views. I am not qualified to say which side is right, and I don't believe you are either. As long as there are trained, respected professionals who have an opposing opinion, we cannot say the matter has been settled. I didn't say your chart was wrong, I said there is disagreement among people who have studied it the most. This is not an argument that can be won here, given that economists cannot honestly say the argument has been won among them.


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## Wayfarer (Mar 19, 2006)

crs:

Here is the bottom line:

1) You have been giving endless advice to business people, declaring if they cannot profitably run a business paying whatever the government decrees and not eliminate jobs, they are "bad" business owners/operators and deserve to go out of business (of course, that is good for employment, having even a "bad" business go out of business, and you have yet to share with us your experience running a P&L....but I am being too harsh no doubt!)

2) You quite obviously have never even been exposed to the classic treatment regarding minimum wage and the Nash Equilibrium I posted.

3) Not being able to deal with this model, you simply decide to ignore it.

Have I missed something you had to offer?


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## crs (Dec 30, 2004)

> It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.


In my line of work, it is not necessary for me to decide which side is right. We are aware that we are generalists and gatherers of information from others, not scientific researchers. We seek the input of experts and where there is disagreement among those experts, we note that and as best we can we present both sides of the argument. When there is disagreement among respected experts, as there is on this issue, the professional thing is to remain skeptical of both sides. If "four out of five dentists recommend Crest," we will seek out the fifth and present his argument as well. Because at this point, saying one side has won would be intellectually dishonest.


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## crs (Dec 30, 2004)

Wayfarer said:


> the classic treatment regarding minimum wage and the Nash Equilibrium I posted.


Are you saying all trained economists accept this "classic treatment" as fact?


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## Wayfarer (Mar 19, 2006)

crs said:


> In my line of work, it is not necessary for me to decide which side is right. We are aware that we are generalists and gatherers of information from others, not scientific researchers. We seek the input of experts and where there is disagreement among those experts, we note that and as best we can we present both sides of the argument. When there is disagreement among respected experts, as there is on this issue, the professional thing is to remain skeptical of both sides. If "four out of five dentists recommend Crest," we will seek out the fifth and present his argument as well. Because at this point, saying one side has won would be intellectually dishonest.


100% strawman. That is *most assuredly not* the role you have taken in this thread. You have defended a position endlessly and then decided to ignore something that cannot be ignored in this discussion. Your role has not been that of reporter, it has been that of antagonist.

Nice try though. Sounded very holier-than-thou and moral highground and all that.

Cheers


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## Wayfarer (Mar 19, 2006)

crs said:


> Are you saying all trained economists accept this "classic treatment" as fact?


I am saying that you would be hard pressed to find a trained economist that would not state that is the classic treatment. This is a far cry from ignoring the damn thing as you have opted to do.


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## crs (Dec 30, 2004)

Wayfarer said:


> I am saying that you would be hard pressed to find a trained economist that would not state that is the classic treatment. This is a far cry from ignoring the damn thing as you have opted to do.


So some economists, while acknowledging it is a classic treatment, nevertheless disagree with it?


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## Wayfarer (Mar 19, 2006)

crs said:


> So some economists, while acknowledging it is a classic treatment, nevertheless disagree with it?


I have yet to deny this is the case, but you know that.

Again though, this is not the path you have followed. Offering an intelligent criticism is one thing, ignoring the model is completely another. Even Lushington has yet to disagree that this model is the primary one. Despite your pretty speech above, you know, the 100% bullshyte one, the _ad hoc_ attempt to defend your ignorance with a strawman.....you just simply decided to tell us you are going to refuse to deal with this model.


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## Phinn (Apr 18, 2006)

> In my line of work, it is not necessary for me to decide which side is right. We are aware that we are generalists and gatherers of information from others, not scientific researchers. We seek the input of experts and where there is disagreement among those experts, we note that and as best we can we present both sides of the argument. When there is disagreement among respected experts, as there is on this issue, the professional thing is to remain skeptical of both sides. If "four out of five dentists recommend Crest," we will seek out the fifth and present his argument as well. Because at this point, saying one side has won would be intellectually dishonest.


Who are you trying to deceive with this pretense of objectivity and neutrality? Us, or you?

Because, although I can't speak to the success or failure of your self-deception, I don't think anyone here on the outside is buying it.


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## crs (Dec 30, 2004)

Wayfarer said:


> 100% strawman. That is *most assuredly not* the role you have taken in this thread. You have defended a position endlessly and then decided to ignore something that cannot be ignored in this discussion. Your role has not been that of reporter, it has been that of antagonist.
> 
> Nice try though. Sounded very holier-than-thou and moral highground and all that.
> 
> Cheers


When the link to the story was posted, I critiqued it as one-sided because it seemed to offer only one possible solution to increased costs: layoffs. We know that is simply not true, that other businesses take other options. You see my position as antagonism, I see it as wanting more than one side represented. Few things in life are that cut-and-dried.


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## Wayfarer (Mar 19, 2006)

crs said:


> When the link to the story was posted, I critiqued it as one-sided because it seemed to offer only one possible solution to increased costs: layoffs. We know that is simply not true, that other businesses take other options. You see my position as antagonism, I see it as wanting more than one side represented. Few things in life are that cut-and-dried.


Again, strawman. We were discussing the model.


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## Laxplayer (Apr 26, 2006)

_I am now convinced that the simplest approach will prove to be the most effective -- the solution to poverty is to abolish it directly by a now widely discussed measure: the *guaranteed income*_.--Martin Luther King Jr.

Other alternatives:
1. Fair Tax
2. Negative income tax


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> _I am now convinced that the simplest approach will prove to be the most effective -- the solution to poverty is to abolish it directly by a now widely discussed measure: the *guaranteed income*_.--Martin Luther King Jr.
> 
> Other alternatives:
> 1. Fair Tax
> 2. Negative income tax


Count me in! I'll quit working tomorrow and collect me some guaranteed income!


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## crs (Dec 30, 2004)

Wayfarer said:


> I have yet to deny this is the case, but you know that.
> 
> Again though, this is not the path you have followed. Offering an intelligent criticism is one thing, ignoring the model is completely another. Even Lushington has yet to disagree that this model is the primary one. Despite your pretty speech above, you know, the 100% bullshyte one, the _ad hoc_ attempt to defend your ignorance with a strawman.....you just simply decided to tell us you are going to refuse to deal with this model.


If there is disagreement among economists, then why should I take one side's argument as a given?

Bottom line is experts disagree. That's all I need to know. It is not a tidy package.

There is disagreement in my field over business strategy regarding trying to reach a younger audience, a position I have long called not only fruitless but destructive. Intelligent people acknowledge that we must choose a position, but we cannot say the other position is without merit because in fact we do not know. There are studies that say one thing and studies that say the opposite. Bottom line is that we are guessing, an educated guess, but a guess nonetheless. My views on readership, once seen as radical, appear to be coming into vogue in the past year. However, I cannot say, "see, I was right," I can only take satisfaction that more people are guessing my way.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> Count me in! I'll quit working tomorrow and collect me some guaranteed income!


It's not quite that simple. It would be a living wage, in addition to a regular salary paid by their employer, not the lifestyle you are accustomed to. I doubt you would want to downsize. I really don't see this as a bad idea. As much money as our country wastes on other programs, I don't see why we can't lessen poverty in our own country.


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## Phinn (Apr 18, 2006)

> Bottom line is experts disagree. That's all I need to know.


Then why do you support the minimum wage?


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## crs (Dec 30, 2004)

Phinn said:


> Then why do you support the minimum wage?


Because I believe it to be the humane thing. I understand that is clearly open to disagreement and that the other side believes their stance is the more humane one. And I am willing to live with whatever a democracy decides.


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## Phinn (Apr 18, 2006)

What is the basis for your conclusion that a minimum wage is more humane than a free market? What was your reasoning process?


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## Wayfarer (Mar 19, 2006)

crs said:


> Because I believe it to be the humane thing. I understand that is clearly open to disagreement and that the other side believes their stance is the more humane one. And I am willing to live with whatever a democracy decides.


Wait a minute. What happened to that whole line of crap where you made out you were just reporting?


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> It's not quite that simple. It would be a living wage, in addition to a regular salary paid by their employer, not the lifestyle you are accustomed to. I doubt you would want to downsize. I really don't see this as a bad idea. As much money as our country wastes on other programs, I don't see why we can't lessen poverty in our own country.


Lax, you might be surprised. Here's the thing in the current situation; as it stands most people have to work 40 or more hours per week for a basic level (the living wage level if you will) of lifestyle. Given that I must donate these hours of my life for the basic minimum, my personal calculus would have me greater maximize the efficiency of said hours and allow me to live above the basic level. However, given a zero hour need to obtain the basic level, I might well be ready to accept that. I do not know, I have worked at least 30 hours per week since I was 15, but it is very possible I might be willing to trade zero work hours for the basic guaranteed income. If one must work, when not work smarter/harder and make far over the minimum?

So basically, we would have another Nash graph showing my decreasing need for income given a decreasing need to exert time and effort to obtain said income. The minimum for one axis would be the guaranteed income you have proposed.


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## Wayfarer (Mar 19, 2006)

crs said:


> Bottom line is experts disagree. That's all I need to know.


"Experts" disagree on most anything. I do not let that relieve me of the responsibility to inform myself on issues pertinent to my life. Experts disagree on what a "healthy diet" constitutes, however, I strive not to consume inordinate amounts of saturated fats, artificial additives, and endeavor to eat fresh fruits and vegetables with healthy amounts of fiber. Experts disagree on the best route to save for retirement, yet I think most of us do this.

No crs, merely because experts disagree does not absolve us from critical thought. Again, I find it very frightening that you feel you are so well equipped to provide people with their news when you think this way.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> Lax, you might be surprised. Here's the thing in the current situation; as it stands most people have to work 40 or more hours per week for a basic level (the living wage level if you will) of lifestyle. Given that I must donate these hours of my life for the basic minimum, my personal calculus would have me greater maximize the efficiency of said hours and allow me to live above the basic level. However, given a zero hour need to obtain the basic level, I might well be ready to accept that. I do not know, I have worked at least 30 hours per week since I was 15, but it is very possible I might be willing to trade zero work hours for the basic guaranteed income. If one must work, when not work smarter/harder and make far over the minimum?
> 
> So basically, we would have another Nash graph showing my decreasing need for income given a decreasing need to exert time and effort to obtain said income. The minimum for one axis would be the guaranteed income you have proposed.


I'm not proposing that people are to be given money for not working, but instead of the business raising the minimum wage to say $7-$8 dollars an hour have the governement kick in the extra $2 an hour. You once posted an idea about a flat tax, with little to no taxes paid by the lower income levels. I'm no economist, but if we implemented some program such as this, and then supplemented the lower level earners, maybe it would help to eliminate some of the poverty in the US. Cut out some of the pork projects and have a flat tax plan like you suggested with no loopholes and no tax returns and use this money to help those in the lower income levels. Small businesses wouldn't have to pay higher wages like they would if we just increased minimum wage, so they wouldn't suffer, and the larger corporations would still make their huge profits. I'm not a socialist, so I don't think we should just hand out money to people that don't want to work, but I do think our government could help it's own citizens more than it does. 
Another program I'd like to see is instead of universal healthcare, is a group rate for those unable to afford health insurance. There is a widow at my church who had to have back surgery five years ago when she was working as a dental hygenist. Her surgery was covered, but now she works from home as a babysitter, since she can't stand for too many hours. She now has to pay a ridiculous amout each month for individual coverage, that includes a rider for her back injury. She hasn't been to the doctor in years outside of regular checkups, so most of this money just goes to the insurance company. Now, why can't people like this be grouped together and receive a group rate like she would get if she worked for a company?


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## crs (Dec 30, 2004)

Wayfarer said:


> "Experts" disagree on most anything. I do not let that relieve me of the responsibility to inform myself on issues pertinent to my life. Experts disagree on what a "healthy diet" constitutes, however, I strive not to consume inordinate amounts of saturated fats, artificial additives, and endeavor to eat fresh fruits and vegetables with healthy amounts of fiber. Experts disagree on the best route to save for retirement, yet I think most of us do this.
> 
> No crs, merely because experts disagree does not absolve us from critical thought. Again, I find it very frightening that you feel you are so well equipped to provide people with their news when you think this way.


You are choosing which economists to believe, dismissing the others, when in fact the economists on either side of the issue are more qualified than you. I would imagine that the economists with whom you agree are more willing to respect the other economists than you are because they know that their dissenting colleagues have earned their credentials and come by their differences honestly. This is why journalists go to the trouble to seek input from both sides and hopefully present them without judgment. I find it frightening that you cannot grasp this, but then you are not a consumer of mainstream newspapers, therefore you are uncomfortable with the concept that undecided issues must be treated as such instead of presenting which side is "right." In your tunnel-vision world, there must be a black-and-white decision on every social issue, rather than taking the agnostic view that we do not know. You would not last very long in my business because people who have such an inflexible view, and an intolerance for credible dissenting viewpoints, are tuned out.

Finally, I think it's extremely low and ignorant of you to resort to criticizing my profession and my professional abilities every time we disagree rather than simply disagreeing without making it personal. I do not criticize your abilities as a health-care professional just because we disagree on politics. However, I must say on the rare occasions when I seek health care, I'll fire a doctor or dentist when I determine on a first visit that one is a subhuman, so I doubt I'd be a repeat customer if I encountered a nasty know-it-all like you.


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## crs (Dec 30, 2004)

Phinn said:


> What is the basis for your conclusion that a minimum wage is more humane than a free market? What was your reasoning process?


Because, unfortunately, before the U.S. government stepped in to prevent a number of workplace abuses, business showed no qualms about exploiting and mistreating people. I cannot buy the idea that it would be any different if we repealed minimum wage, child labor laws, 40 hour weeks, OSHA, you name it. I believe such changes were enacted for good reason. You, of course, can disagree, but I don't think you can prove you're right, any more than I can.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> "Experts" disagree on most anything. I do not let that relieve me of the responsibility to inform myself on issues pertinent to my life. Experts disagree on what a "healthy diet" constitutes, however, I strive not to consume inordinate amounts of saturated fats, artificial additives, and endeavor to eat fresh fruits and vegetables with healthy amounts of fiber. Experts disagree on the best route to save for retirement, yet I think most of us do this.
> 
> No crs, merely because experts disagree does not absolve us from critical thought. Again, *I find it very frightening that you feel you are so well equipped to provide people with their news when you think this way.*





crs said:


> You are choosing which economists to believe, dismissing the others, when in fact the economists on either side of the issue are more qualified than you. I would imagine that the economists with whom you agree are more willing to respect the other economists than you are because they know that their dissenting colleagues have earned their credentials and come by their differences honestly. This is why journalists go to the trouble to seek input from both sides and hopefully present them without judgment. I find it frightening that you cannot grasp this, but then you are not a consumer of mainstream newspapers, therefore you are uncomfortable with the concept that undecided issues must be treated as such instead of presenting which side is "right." In your tunnel-vision world, there must be a black-and-white decision on every social issue, rather than taking the agnostic view that we do not know. You would not last very long in my business because people who have such an inflexible view, and an intolerance for credible dissenting viewpoints, are tuned out.
> 
> Finally, I think it's extremely low and ignorant of you to resort to criticizing my profession and my professional abilities every time we disagree rather than simply disagreeing without making it personal. I do not criticize your abilities as a health-care professional just because we disagree on politics. However, *I must say on the rare occasions when I seek health care, I'll fire a doctor or dentist when I determine on a first visit that one is a subhuman, so I doubt I'd be a repeat customer if I encountered a nasty know-it-all like you.*


You two always make me smile. The Unstoppable Force vs. The Immovable Object. There is no Interchange Championship trophy guys. :icon_smile_big:


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## Wayfarer (Mar 19, 2006)

crs said:


> You are choosing which economists to believe, dismissing the others, when in fact the economists on either side of the issue are more qualified than you.


Here is the difference between you and I on this topic crs: I have bothered to become at least somewhat educated on the topic. When presented with the most basic of treatments on this topic, it was obvious for all to see you have never even seen it. Yet this lack of knowledge in no way prevented you from blathering on in a very lengthy and judgemental way, telling us all what poor business people one must be if they cannot deal with mandated wages yet not cut staff.



crs said:


> This is why journalists go to the trouble to seek input from both sides and hopefully present them without judgment. I find it frightening that you cannot grasp this, but then you are not a consumer of mainstream newspapers, therefore you are uncomfortable with the concept that undecided issues must be treated as such instead of presenting which side is "right." In your tunnel-vision world, there must be a black-and-white decision on every social issue, rather than taking the agnostic view that we do not know. You would not last very long in my business because people who have such an inflexible view, and an intolerance for credible dissenting viewpoints, are tuned out.


Yeah, all that would be very credible if you just had not rendered a rather strident stance without even knowing *one side* of the issue. Again, by dismissing that graph, you just shot yourself right in the femoral artery. All of this is just tripe to try and turn the light from your self-announced ignorance and your self-avowed lack of desire to become informed.



crs said:


> Finally, I think it's extremely low and ignorant of you to resort to criticizing my profession and my professional abilities every time we disagree rather than simply disagreeing without making it personal. I do not criticize your abilities as a health-care professional just because we disagree on politics. However, I must say on the rare occasions when I seek health care, I'll fire a doctor or dentist when I determine on a first visit that one is a subhuman, so I doubt I'd be a repeat customer if I encountered a nasty know-it-all like you.


Hello? Are you the same fellow that disparged me and my brethren over call offs for snow? How you can type this stuff and think we will not remember your past tripe is beyond me.


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## pt4u67 (Apr 27, 2006)

crs said:


> Because, unfortunately, before the U.S. government stepped in to prevent a number of workplace abuses, business showed no qualms about exploiting and mistreating people. I cannot buy the idea that it would be any different if we repealed minimum wage, child labor laws, 40 hour weeks, OSHA, you name it. I believe such changes were enacted for good reason.


Your argument is a false analogy. You are equating minimum wage and the increase of it to baseline workplace safety standards. Under your logic, why stop with minimum wage. The examples you stated have nothing to do with the minimum wage. By the way, my understanding is that a 40 hr work week is applied only to a limited criteria of employees.


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## crs (Dec 30, 2004)

Wayfarer said:


> Again, by dismissing that graph, you just shot yourself right in the femoral artery.


You agree that some respected economists dispute that the graph proves minimum wage is bad, thus it is theory, not fact. That is really _all_ I need to know as a layman, that the experts are still in disagreement. I will let them continue to thrash it out while hoping the government keeps the minimum-wage laws until we know more. This is not a topic that keeps me up nights, nor do I wish to make an intense study of it.

Regardless, I do not understand your need to use personal attacks to make your point. My inclination is to be especially skeptical about people who behave as you do. Those who are sure of themselves tend to let the facts speak for them without resorting to insults.


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## crs (Dec 30, 2004)

pt4u67 said:


> Your argument is a false analogy. You are equating minimum wage and the increase of it to baseline workplace safety standards. Under your logic, why stop with minimum wage. The examples you stated have nothing to do with the minimum wage. By the way, my understanding is that a 40 hr work week is applied only to a limited criteria of employees.


I don't quite follow you. What I am saying is that I distrust business to give a minimal amount of care about their employees. That's why all these rules were enacted, long before I was born. I think generations before us decided this this was not the America they wanted, they wanted some minimum acceptable standards for all. Obviously I feel that it defeats the purpose of having a minimum wage if it is not periodically increased because of inflation.


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## Wayfarer (Mar 19, 2006)

crs said:


> You agree that some respected economists dispute that the graph proves minimum wage is bad, thus it is theory, not fact. That is really _all_ I need to know as a layman, that the experts are still in disagreement. I will let them continue to thrash it out while hoping the government keeps the minimum-wage laws until we know more. This is not a topic that keeps me up nights, nor do I wish to make an intense study of it.


So basically, you feel even though about 8 out of 10 economists (according to the survey of 1000 economists Lushington found), you feel you have the justification to defend the contrary position. This is also, as you have admitted and demonstrated, without even the most basic concept of the model in question. And to top it off, even with zero experience running a P&L, you feel qualified to insult experienced and educated managers, based of course in your self-admitted ignorance.

To say this is both amazing and presumptuous on your part would be the understatment of the century.

Carry on my good man, my work here is done.

Next topic: Dispute that Gutenburg had an impact on print media. crs's position: Who is Gutenburg?


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## crs (Dec 30, 2004)

Wayfarer said:


> So basically, you feel even though about 8 out of 10 economists (according to the survey of 1000 economists Lushington found


Two hundred economists -- I assume they are big-time economists -- is a significant number. Outnumbered, yes, but I don't think we can call it a crackpot fringe.

As I mentioned earlier, there is disagreement in my line of work about what works and what doesn't, but intelligent people do not claim victory just because their school of thought is currently in style, because it will be out of style soon enough. So it is in everything but the hard sciences.


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## Karl89 (Feb 20, 2005)

Gents,

In principle I don't agree with the idea of a Minimum Wage. But let's be pragmatic the MW isn't going anywhere. I would propose instead of massively hiking it every decade (I am talking in percentage terms) why not just index it to inflation. And while we are at it why don't we index every COLA to inflation, especially Social Security. Would provide a stable inflation adjusted benefit and provide more cost certainty to employers and the government.

Karl


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## pt4u67 (Apr 27, 2006)

crs said:


> I don't quite follow you. What I am saying is that I distrust business to give a minimal amount of care about their employees. That's why all these rules were enacted, long before I was born. I think generations before us decided this this was not the America they wanted, they wanted some minimum acceptable standards for all. Obviously I feel that it defeats the purpose of having a minimum wage if it is not periodically increased because of inflation.


Your fallacy is contained within the term "care" as you use it. OSHA and other workplace safety regulations apply to everyone in every industry. Salary and other compensation matters are not equally distributed. Is that to say that an workers in one part of a factory are cared for any more or less than in another section because they are paid differently based on work. Paying an employee is not a matter of care. It is a matter of market appropriate compensation. What we need to begin to do is to remove the idea of right and proper compensation out of the moral realm and into the free market realm.


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## crs (Dec 30, 2004)

pt4u67 said:


> What we need to begin to do is to remove the idea of right and proper compensation out of the moral realm and into the free market realm.


Even if I agreed with you, I wouldn't think this would ever happen. I think morality permeates every aspect of American society and most of us want it that way: some level of government-imposed decency in all things. Hard-liners on the First Amendment, for instance, would argue that expression should be completely unfettered, but I have no problem with libel law, in fact I favor it, as it tends to even the playing field to a level I find tolerable; less than that and I would not feel comfortable being involved in such work, or for that matter even being part of a society that allows such chaos. Americans want freedom but not at the expense of a basic level of decency and humanity in all things, including business and income. I hope to God we never lose this.


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## Lushington (Jul 12, 2006)

Wayfarer said:


> Even Lushington has yet to disagree that this model is the primary one.


Why would I disagree? Your graph represents the standard model of a labor market with a price floor. This model predicts that if the price of labor is "artificially" maintained above the equilibrium price the supply of workers will increase and the demand for these workers will decrease. This is a testable hypothesis, and Card and Krueger - among others - set out to test it. The empirical results did not conform to the model's predictions, as the demand for workers at the "artificial" price did not decrease. These results suggest that there is something wrong with the model, at least as it is applied to the labor market empirically examined.



Wayfarer said:


> So basically, you feel even though about 8 out of 10 economists (according to the survey of 1000 economists Lushington found), you feel you have the justification to defend the contrary position.


Actually, I believe that the survey I linked indicated that only 45% of economists surveyed in 2000 agreed unconditionally with the proposal that a minimum wage increases unemployment among young and unskilled workers. This was a decline from 62% of economists surveyed in 1990 - a fairly substantial drop in a decade's time. This change in professional opinion is almost certainly due to the debate generated by C&K's initial study, published, I believe, in 1995. Here's a new link to the survey:

While useful and interesting, the survey is not the most rigorous examination of the consensus among professional economists. The minimum wage question is rather vague and contains many unstated assumptions, and this may explain why the largest increase from 1990 to 2000 was among those answering "agree with provisos." That said, there is a large and growing number of heterodox economists who dispute much of the theoretical foundation of neoclassical orthodoxy. I freely admit that I find this development congenial for ideological reasons, in the same manner that champions of neoclassical orthodoxy find its tenets of rational maximization ideologically convenient.


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## hopkins_student (Jun 25, 2004)

crs said:


> I am sorry, but if a business can't do better than minimum wage for all its employees, it is a badly run business.


Businesses do not exist to employee anyone other than the entrepreneur. Any other job creation is merely a positive externality.


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## Laxplayer (Apr 26, 2006)

hopkins_student said:


> Businesses do not exist to employee anyone other than the entrepreneur. Any other job creation is merely a positive externality.


You can't have a successful business without employees.


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## hopkins_student (Jun 25, 2004)

crs said:


> Even if I agreed with you, I wouldn't think this would ever happen. I think morality permeates every aspect of American society and most of us want it that way: some level of government-imposed decency in all things.


Is it fair for me now to expect that in future debates involving abortion, homosexual marriage, or euthanasia you will never complain about some groups wanting to legislate morality?


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## Phinn (Apr 18, 2006)

> You can't have a successful business without employees.


You can't have a successful economy when a third party manipulates prices by force.


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## crs (Dec 30, 2004)

hopkins_student said:


> Is it fair for me now to expect that in future debates involving abortion, homosexual marriage, or euthanasia you will never complain about some groups wanting to legislate morality?


Obviously we do that. Morality is a subjective thing. Abortion-rights advocates, for example, would argue that it's immoral to force a woman to carry the fetus to term. We discriminate against gays, but not as badly as in the past. But all our laws are based on some form of morality, correct? In a democracy usually we eventually hit middle ground, a basic level of decency as defined by a majority.


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## Phinn (Apr 18, 2006)

> Morality is a subjective thing.


No, it isn't. Morality is no more subjective than law is.

But, in any event, all intentional behavior has a moral dimension, and government action is certainly a form of intentional behavior. Government is organized violence.

In this case, we are dealing with the morality of using organized violence to squelch the economic liberty of two persons who, if left alone, would voluntarily, mutually agree, for their mutual benefit, without any hint of fraud or aggression between them, to a price for the performance of certain tasks.

So, yes, in addition to being economically harmful, price-fixing is aggressive and therefore immoral.


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## Wayfarer (Mar 19, 2006)

crs said:


> Morality is a subjective thing.


I am surprised you would head down this road again after the last time I turned you inside over cultural relativism. That was a good thread


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## Lushington (Jul 12, 2006)

a


Phinn said:


> No, it isn't. Morality is no more subjective than law is.


The Positivists, with their separation thesis, might argue this point. Or one might argue that law is _just as _subjective as morality.



> But, in any event, all intentional behavior has a moral dimension, and government action is certainly a form of intentional behavior. Government is organized violence.


There are other forms of organized violence existing independently of the state. However, it is characteristic of the state to exercise a monopoly of legitimate violence within its dominion. Thus, one might describe the state as a rationalization or normalization of violence, or an attempt at such.



> In this case, we are dealing with the morality of using organized violence to squelch the economic liberty of two persons who, if left alone, would voluntarily, mutually agree, for their mutual benefit, without any hint of fraud or aggression between them, to a price for the performance of certain tasks.


This is certainly the neoclassical ideal; but, again, does it conform to experience? Are markets that operate outside the purview of the state characterized by mutual agreement between autonomous agents, acting for their maximum mutual benefit, without any hint of fraud or aggression between them? Perhaps in some cases. In other cases - in many other cases - such markets are characterized by extreme violence and coercion, by frequent fraud and aggression. I suppose that you would maintain that these baleful features are a consequence of these markets being compelled to operate _outside_ the state; thus, if there were no state to speak of these markets would not be characterized by illegality and would conform to social norms. I would tend to doubt this.


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## Phinn (Apr 18, 2006)

> There are other forms of organized violence existing independently of the state. However, it is charcteristic of the state to exercise a monopoly of legitimate violence within its dominion. Thus, one might describe the state as a rationalization or normalization of violence, or an attempt at such.


Of course there are other forms of organized violence. But none so successful. No other organization I know of has yet sought to punish people for walking across an intersection while distracted.

The characteristic of the State is not that it _exercises_ a monopoly on the use of violence, but that it _claims_ to be the final arbiter on the use of violence. The real problems arise when the State gets otherwise normal, sane people to actually accept this proposition, to internalize it, and automatically look to the State for validation and its supposedly official declarations on what's what.

It is, nevertheless, clear that the State achieves its goals through the threat of violence (i.e., fear and intimidation) far more than its actual use.



> I suppose that you would maintain that these baleful features are a consequence of these markets being compelled to operate outside the state; thus, if there were no state to speak of these markets would not be characterized by illegality and would conform to social norms. I would tend to doubt this.


I would maintain that the point is moot inasmuch as price-fixing is not justified by it proponents on the grounds that it supposedly remedies fraud or aggression, but I would be pleased if these were the criteria by which government action were judged.

I would also maintain that acts of fraud and aggressive violence are endemic to the human race, but that the creation of a State is an exceedingly poor solution to these problems, and is instead the perpetrator of far more fraud and aggressive violence than it could ever pretend to remedy.


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## Lushington (Jul 12, 2006)

Phinn said:


> Of course there are other forms of organized violence. But none so successful. No other organization I know of has yet sought to punish people for walking across an intersection while distracted.
> 
> The characteristic of the State is not that it _exercises_ a monopoly on the use of violence, but that it _claims_ to be the final arbiter on the use of violence. The real problems arise when the State gets otherwise normal, sane people to actually accept this proposition, to internalize it, and automatically look to the State for validation and its supposedly official declarations on what's what.
> 
> ...


Fair enough.


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## Wayfarer (Mar 19, 2006)

crs said:


> Obviously we do that. Morality is a subjective thing. Abortion-rights advocates, for example, would argue that it's immoral to force a woman to carry the fetus to term. We discriminate against gays, but not as badly as in the past. But all our laws are based on some form of morality, correct? In a democracy usually we eventually hit middle ground, a basic level of decency as *defined by a majority.*


So if you are defining what is "moral" or what is right by having a majority, you are holding an immoral stance over minimum wage, _*per your own logic!*_


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## Wayfarer (Mar 19, 2006)

Lushington:

I remember that the original link was to indiana.edu as this one is, but somehow I do not think that is the exact same survey. However, let us post the numbers for all to see. In 1990, 62.4% of the economists surveyed agreed out right over the neoclassical model, an additional 19.5% with provisos (so they did not discount the basic treatment per se), for a total of 81.9%. In 2000 it was 45.6% outright, 27.9 with provisos for a total of 73.5%, a marked difference. Given that over ten years, the actual members of this survey no doubt changed, so I would be interested to see some controlling efforts, but still we have a landslide giving validation to the basic model.

Another amazing concensus was built on welfare reform. A total of 75.2% agree or agree with provisos that ending the old welfare system has improved the general welfare (economic sense) of society. It is an interesting survey, no doubt about it.


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## Lushington (Jul 12, 2006)

Wayfarer said:


> Lushington:
> 
> I remember that the original link was to indiana.edu as this one is, but somehow I do not think that is the exact same survey. However, let us post the numbers for all to see. In 1990, 62.4% of the economists surveyed agreed out right over the neoclassical model, an additional 19.5% with provisos (so they did not discount the basic treatment per se), for a total of 81.9%. In 2000 it was 45.6% outright, 27.9 with provisos for a total of 73.5%, a marked difference. Given that over ten years, the actual members of this survey no doubt changed, so I would be interested to see some controlling efforts, but still we have a landslide giving validation to the basic model.


Well, that is one way of looking at it certainly, but without more information we just don't know. What were the provisos? There could have been many. As the minimum wage question is phrased it assumes something like "does a minimum wage at or near the current US federal rate cause job loss, etc. . . .?" However that is not expressly stated in the question. I imagine that those answering exclusively yea or nay would simply assume that condition in the question; but many of those answering with provisos might not have assumed that condition. I don't think that even the most rabid proponent of the minimum wage contends that there is not some level of minimum compensation that will adversely affect the labor market; they simply contend that the current and proposed rates are not near that adverse level. Thus, many answering with provisios might believe that the current minimum wage does not cause job loss among the targeted labor demographic, but a very substantial increase, say a doubling of the federal minimum, might do so. Without more information we just don't know, so the results are open to interpretation.



> Another amazing concensus was built on welfare reform. A total of 75.2% agree or agree with provisos that ending the old welfare system has improved the general welfare (economic sense) of society. It is an interesting survey, no doubt about it.


It is an interesting survey. Some of the responses seem to be contradictory. I think this reflects the current state of research in the discipline. Most of the respondents probably have their individual fields of expertise, and outside of those specialized fields many might simply be replying to any particular question with the prevailing academic opinion. When that opinion is challenged, as it was by C&K, et al, many economists who don't specialize in the microeconomic effects of wage adjustments may take notice and change their view. And so on.


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## Wayfarer (Mar 19, 2006)

Lushington said:


> I don't think that even the most rabid proponent of the minimum wage contends that there is not some level of minimum compensation that will adversely affect the labor market; they simply contend that the current and proposed rates are not near that adverse level.


I too question what an effective minimum wage would be (I know you know this better than I do Lush and Phinn, but after yesterday's discovered ignorance, I shall mention that this term means the minimum wage is over the equilibrium point in the posted Nash graph. If the minimum wage is not "effective", it is merely window dressing for Dem votes, as it is a moot point then). But the important thing here is, your above statment indicates that you do not totally dismiss the model, as you give a nod to the concept that at some point, a legislated wage will have negative impact on employment. This is a far, far cry from proclaiming that any business that cannot be run profitably, without cost containment of labour when mandated wages are raised, is being run badly. At some point, the external environment has created an impossible set of conditions.


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## crs (Dec 30, 2004)

Wayfarer said:


> I am surprised you would head down this road again after the last time I turned you inside over cultural relativism. That was a good thread


Seriously, do you ever have a reality check with your ego? Your "victories" are in your mind and have no effect whatsoever on those you believe you have defeated. All braggarts look pathetic, but especially those like you who have no basis for it. Go buy some shoes or something -- it will give you the same artificial boost, only you won't look so pitiful.


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## crs (Dec 30, 2004)

Phinn said:


> No, it isn't. Morality is no more subjective than law is.
> 
> But, in any event, all intentional behavior has a moral dimension, and government action is certainly a form of intentional behavior. Government is organized violence.
> 
> ...


So are you an anarchist? There used to be quite a bunch of them in a city here called Paterson, but they closed their office about 10 years ago.

I don't see government as organized violence, I see it as organized protection.


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## Wayfarer (Mar 19, 2006)

crs said:


> Seriously, do you ever have a reality check with your ego? Your "victories" are in your mind and have no effect whatsoever on those you believe you have defeated. All braggarts look pathetic, but especially those like you who have no basis for it. Go buy some shoes or something -- it will give you the same artificial boost, only you won't look so pitiful.


Oh come now cr(a)s, I was just tweeking your nose abit!


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## crs (Dec 30, 2004)

Wayfarer said:


> Oh come now cr(a)s, I was just tweeking your nose abit!


You can drag out all the charts you want, but you and your kind will never win on this issue. Why? Because most people think you and your kind are kooky and out to screw the poor people out of sheer meanness. And you'll never change that perception until there are palatable people voicing your dogma. But the fact is, your line of thinking just doesn't attract good human beings, it attracts people such as you, so there never will be a palatable spokesperson for your line of thought. So your lot in life is to be annoyance on message boards, endlessly complaining about both Democrats and Republicans, but otherwise have zero effect on American life. Because the vast majority of Americans simply do not like people like you, so they will go the other way for that reason above all others.


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## Wayfarer (Mar 19, 2006)

crs said:


> You can drag out all the charts you want, but you and your kind will never win on this issue. Why? Because most people think you and your kind are kooky and out to screw the poor people out of sheer meanness. And you'll never change that perception until there are palatable people voicing your dogma. But the fact is, your line of thinking just doesn't attract good human beings, it attracts people such as you, so there never will be a palatable spokesperson for your line of thought. So your lot in life is to be annoyance on message boards, endlessly complaining about both Democrats and Republicans, but otherwise have zero effect on American life. Because the vast majority of Americans simply do not like people like you, so they will go the other way for that reason above all others.


lol cr(a)s, is that so? Think about this my lad, the reason I care about the effects of minimum wage are why? What are the projections all about? Ensuring we do not actually decrease overall welfare (an economic term, not a government one so you probably have never seen this one either) through heavy handed social engineering. There is where your ilk simply just does not get it; merely because one wishes to apply reason and logic to things does not mean one wishes ill on others. In fact, I want the most successful, prosperous society possible. Success raises all boats, something people like either refuse to understand or *actually do not wish it to happen* as then the failure of your big government programs that merely addict the poor to being poor will be seen for what they are. Yesterday I confronted you with an unintended consequence the social engineering in Arizona caused and what was your answer? MORE SOCIAL ENGINEERING! Brilliant.


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## Wayfarer (Mar 19, 2006)

crs said:


> You can drag out all the charts you want, but you and your kind will never win on this issue.


Yes crasy, because who needs a coherent thought process when you can just make moral pronouncments in lieu of any education, and proudly refusing to learn anything, on the topic. Crasy, that is how fundie religions work. Who'd have thought a good liberal like you crasy would work like a fundie?

Something new everyday


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## crs (Dec 30, 2004)

Wayfarer said:


> lol cr(a)s, is that so? Think about this my lad, the reason I care about the effects of minimum wage are why? What are the projections all about? Ensuring we do not actually decrease overall welfare (an economic term, not a government one so you probably have never seen this one either) through heavy handed social engineering. There is where your ilk simply just does not get it; merely because one wishes to apply reason and logic to things does not mean one wishes ill on others. In fact, I want the most successful, prosperous society possible. Success raises all boats, something people like either refuse to understand or *actually do not wish it to happen* as then the failure of your big government programs that merely addict the poor to being poor will be seen for what they are. Yesterday I confronted you with an unintended consequence the social engineering in Arizona caused and what was your answer? MORE SOCIAL ENGINEERING! Brilliant.


I understand that your ilk believes your way would be better for the poor people, and I don't even doubt your sincerity. But when voters see that people who are pushing this agenda are basically creepy, they will not listen. You can explain it to them, you could teach them all about your precious chart, and they still will vote with their gut, which means, _I do not like Wayfarer, I do not want to be lumped in with that nasty crew, therefore their message must be wrong._ This is why we wind up with bland candidates; that is what most people are comfortable with. People who have the personality of starved, trapped rodent are tuned out. And that is the only kind of politician who will voice your message.


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## Phinn (Apr 18, 2006)

> You can drag out all the charts you want, but you and your kind will never win on this issue. Why? Because most people think you and your kind are kooky and out to screw the poor people out of sheer meanness. ... You can explain it to them, you could teach them all about your precious chart, and they still will vote with their gut, which means, _I do not like Wayfarer, I do not want to be lumped in with that nasty crew, therefore their message must be wrong_.


This is precisely how propaganda has always worked.

(I'm not calling you a Nazi, by the way. It's just that the history of propaganda is a subject that I've studied since I was an undergrad.)



> I don't see government as organized violence, I see it as organized protection.


"Organized protection" is defensive. Everyone has the fundamental human right to use defensive force, and therefore has the right to delegate that power to others (i.e., designate others to do what I could do myself).

The problem is all of the other forms of governmental action that are not defensive.


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## hopkins_student (Jun 25, 2004)

The good vs. evil argument of political ideologies is tired.


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## Wayfarer (Mar 19, 2006)

crs said:


> I understand that your ilk believes your way would be better for the poor people, and I don't even doubt your sincerity. But when voters see that people who are pushing this agenda are basically creepy, they will not listen. You can explain it to them, you could teach them all about your precious chart, and they still will vote with their gut, which means, _I do not like Wayfarer, I do not want to be lumped in with that nasty crew, therefore their message must be wrong._ This is why we wind up with bland candidates; that is what most people are comfortable with. People who have the personality of starved, trapped rodent are tuned out. And that is the only kind of politician who will voice your message.


Odd. You are the only one taking such personal umbrage here crasy. I like the way you are trying to back me into the classic, "When did you stop beating your wife" type fallacy here. It is a shame I will not rise to your logical fallacy. It is also a shame crasy, that you have deemed an intellectual approach to helping foster a prosperous society as "creepy". Again, this is very much like the most devout member of any fundie religion. You have totally attempted to marginalize advanced thought on the subject and anyone advancing it.

You are growing more and more strident here crasy. I really do not know how you are continuing in this fashion. I would be totally mortified if I had taken a loud and vociferous stance on a top and then demonstrated for the entire 'Net to see I was talking out of my anus as you have done. When you admitted to never seeing the Econ 101 graph I posted, I thought even you would have some shame at your ignorance. However, just like the fundie religionist, you trumpet your ignorance like it is a virtue and now malign science.

You worry me crasy. If print journalism is populated by people like you, I am seriously concerned.


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## crs (Dec 30, 2004)

Phinn said:


> This is precisely how propaganda has always worked.


It has nothing to do with propaganda and everything to do with a revulsion factor. Most Americans do not want a radical change from either left or right. Phrases like "government is organized violence" automatically marginalize you because, if our government collapsed, most people would seek the establishment of a similar one.

The fact is that people on the far reaches of either left or right are perceived as nuts, as angry misfits, the type of person few people liked as kids. John Lennon captured the lefty version perfectly in "Working-class Hero." Few people will choose someone like that to lead them -- sometimes they are temporarily imposed on us in the workplace, but usually they do not get elected.

The American people rightly surmise that decent, well-adjusted, responsible people are unlikely to be found on the political fringes. And that is the territory of the people who want minimum wage killed. You will never find an electable presidential candidate to voice your agenda.


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## Wayfarer (Mar 19, 2006)

crs said:


> It has nothing to do with propaganda and everything to do with a revulsion factor. Most Americans do not want a radical change from either left or right. Phrases like "government is organized violence" automatically marginalizes you because, if our government collapsed, most people would seek the establishment of a similar one.
> 
> The fact is that people on the far reaches of either left or right *are perceived as nuts, as angry misfits, the type of person few people liked as kids.* John Lennon captured the lefty version perfectly in "Workingman's Hero." Few people will choose someone like that to lead them -- sometimes they are temporarily imposed on us in the workplace, but usually they do not get elected.
> 
> The American people rightly surmise that decent, well-adjusted, responsible people are unlikely to be found on the political fringes. And that is the territory of the people who want minimum wage killed. You will never find an electable presidential candidate to voice your agenda.


So you see Phinn, if you disagree with crasy, show him for the ignorant ass he is, then you are unpopular and he alludes to a bad childhood for you. Forgot that on this topic it has been demonstrated to him that the stance we are maintaining is actually the one far in the majority for trained economists and that he is actually in the minority. What do they call this is psych terms? Transference?


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## crs (Dec 30, 2004)

Wayfarer said:


> Odd. You are the only one taking such personal umbrage here crasy. I like the way you are trying to back me into the classic, "When did you stop beating your wife" type fallacy here. It is a shame I will not rise to your logical fallacy. It is also a shame crasy, that you have deemed an intellectual approach to helping foster a prosperous society as "creepy". Again, this is very much like the most devout member of any fundie religion. You have totally attempted to marginalize advanced thought on the subject and anyone advancing it.
> 
> You are growing more and more strident here crasy. I really do not know how you are continuing in this fashion. I would be totally mortified if I had taken a loud and vociferous stance on a top and then demonstrated for the entire 'Net to see I was talking out of my anus as you have done. When you admitted to never seeing the Econ 101 graph I posted, I thought even you would have some shame at your ignorance. However, just like the fundie religionist, you trumpet your ignorance like it is a virtue and now malign science.
> 
> You worry me crasy. If print journalism is populated by people like you, I am seriously concerned.


Your chart will never prove anything to the majority as long as respected economists dispute its relevancy to this issue.

And most people will not listen to the arrogant. They will go the other way just to spite unpalatable people like you.


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## crs (Dec 30, 2004)

Wayfarer said:


> So you see Phinn, if you disagree with crasy, show him for the ignorant ass he is, then you are unpopular and he alludes to a bad childhood for you. Forgot that on this topic it has been demonstrated to him that the stance we are maintaining is actually the one far in the majority for trained economists and that he is actually in the minority. What do they call this is psych terms? Transference?


I base this on the fact that you have accumulated 2,700 posts here in less than a year. Obviously you have no life. It is probably the only social interaction you have because real people shun misfits like you.


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## Wayfarer (Mar 19, 2006)

crs said:


> Your chart will never prove anything to the majority as long as respected economists dispute its relevancy to this issue.


Here's the thing crasy: it is not "my" chart. I only wish I had that brain power. I bet you saw A Beautiful Mind and have yet to put two and two together. However, I am starting to think you might be related, it seems the mental profile is somewhat similar.....


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## Wayfarer (Mar 19, 2006)

crs said:


> I base this on the fact that you have accumulated 2,700 posts here in less than a year. Obviously you have no life. It is probably the only social interaction you have because real people shun misfits like you.


LOL, do tell. So when did you stop beating your wife? LOL, nice to see you are correct about something: you really do not learn.


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## Wayfarer (Mar 19, 2006)

Time to bow out of the thread. I do apologize for repeating essentially the same thing many times. It was 10 or so pages of fun, but it is time to let crs have the final rant.

Cheers all.


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## Phinn (Apr 18, 2006)

> What do they call this is psych terms? Transference?


Projection.


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## Karl89 (Feb 20, 2005)

Crs,

Is there anyway you can have a third arm attached? That way you could continuously pat yourself on the back. 

But I do envy your bliss if not your ignorance.

Karl


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## Harry96 (Aug 3, 2005)

crs said:


> Because, unfortunately, before the U.S. government stepped in to prevent a number of workplace abuses, business showed no qualms about exploiting and mistreating people. I cannot buy the idea that it would be any different if we repealed minimum wage, child labor laws, 40 hour weeks, OSHA, you name it. I believe such changes were enacted for good reason. You, of course, can disagree, but I don't think you can prove you're right, any more than I can.


It's patently false that these things died out because of legislation. Today virtually all U.S. workers make far more than the minimum wage; if wage rates only go as high as legislation dictates, then most people logically should only be making the minimum wage. Child labor died out for the most part before any laws were passed because technology advanced to the point that adult workers became productive enough that they no longer needed their children to work in order for the family to survive. The same is true of the 40-hour week; people now tend to work closer to 40 hours a week instead of 60-80 hours a week, as previous generations had to, because technology and education have made them productive enough to live whatever they feel is a comfortable life from working only 40 hours. These things came about from market advances made possible by voluntary exchange, not from legislation.

These laws were enacted for a reason -- but not a good one. The history of virtually every business regulation I've ever seen is the same -- big business uses its money and political connections to get the government to forcibly give it advantages, monopolies and profit levels that it wouldn't be able to achieve through voluntary market exchanges.

Then the history is rewritten that noble, selfless bureaucrats and politicians, working with the more selfless, far-seeing businesses in an industry who are willing to put the "public good" ahead of their own selfish profits, work to enact laws to "protect" someone (workers, consumers, children, etc.). They're fought by other businesses that are so selfish and greedy that they care about nothing but money and by ignorant rubes who are so short-sighted that they only care about things like not having to pay more taxes, oblivious to the effect that such desires have on society. Eventually, the "good guys" win out and the "much needed" legislation is enacted to "protect" the "exploited" group.

What a crock. It's amazing to me that anyone over the age of 25 or so could have such a naive, child-like view of paternalistic government. The state claims to represent the interests of society, but "society" does not have interests or needs; only individuals do. And the state is largely there for individuals with political power to advance their interests at the expense of others through coercion. Strange how when someone without political power coerces peaceful people, he or she is correctly considered a criminal, but when someone does the exact same thing through political power, it's regarded as acceptable or even admirable.


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## Harry96 (Aug 3, 2005)

crs said:


> Because I believe it to be the humane thing. I understand that is clearly open to disagreement and that the other side believes their stance is the more humane one. And I am willing to live with whatever a democracy decides.


So if the majority in a democracy decided to exterminate Jews the way the Nazis did, would that be okay with you? I realize that, technically, you only said you'd support what the majority decided on the minimum wage, but if that's your basis for determining the moral acceptability of something, then logically you'd accept anything the majority decided to do. And if the will of the majority would not be legitimate if it were to exterminate Jews (or to commit any other atrocity), then why is it legitimate for coercing everyone to pay at least a certain wage -- or for coercing people for any purpose?


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## crs (Dec 30, 2004)

Harry96 said:


> So if the majority in a democracy decided to exterminate Jews the way the Nazis did, would that be okay with you? I realize that, technically, you only said you'd support what the majority decided on the minimum wage, but if that's your basis for determining the moral acceptability of something, then logically you'd accept anything the majority decided to do. And if the will of the majority would not be legitimate if it were to exterminate Jews (or to commit any other atrocity), then why is it legitimate for coercing everyone to pay at least a certain wage -- or for coercing people for any purpose?


That is undoubtedly the stupidest thing I've ever read. Are you arguing against democracy? Have you no faith in the American people to do the right thing? Go back to your compound in the hills.


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## RSS (Dec 30, 2003)

crs said:


> I base this on the fact that you have accumulated 2,700 posts here in less than a year. Obviously you have no life. It is probably the only social interaction you have because real people shun misfits like you.


This is a stunning accusation. It never ceases to amaze me that those who cannot sufficiently make their own case resort to this type of personal attack. Sadly it happens far too often on AAAC's interchange.

Even though my opinion is quite often at odds with that of the person you are attacking ... I'd never dream of resorting to this less than gentlemanly tactic.

EDIT: Personal attack destroys all credibility.


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## crs (Dec 30, 2004)

RSS said:


> I'd never dream of resorting to this less than gentlemanly tactic.


A.) You just did.

B.) If you would read more carefully, you'd see I did not fire the first shot.

C.) My, aren't you superior? If you are often "at odds" with that person, why don't you try disagreeing with him and see how that goes?


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## RSS (Dec 30, 2003)

crs said:


> My, aren't you superior?


Another personal attack. Why is it that some can't avoid personal attack?


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## crs (Dec 30, 2004)

RSS said:


> Another personal attack. Why is it that some can't avoid personal attack?


Hey, man, you took the first shot. Mind your own business and I'd never have known you existed.


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## RSS (Dec 30, 2003)

crs said:


> Hey, man, you took the first shot. Mind your own business and I'd never have known you existed.


You misunderstand, I am not offended. And whether or not you know I exist is of no concern. I simply quoted a comment as an example of less than gentlemanly debate.

It's sad when someone resorts to personal insult. The reader is left only to assume he hasn't the time or ability to make a coherent point.

And sadly, AskAndyAboutClothes is the loser.


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## Harry96 (Aug 3, 2005)

crs said:


> That is undoubtedly the stupidest thing I've ever read. Are you arguing against democracy? Have you no faith in the American people to do the right thing? Go back to your compound in the hills.


This is a perfect example of why I rarely post on the interchange. If I take the time to write a lengthy, cogent post that raises some tough questions, if anyone responds, it's usually with a one or two sentence dismissive, usually with an ad hominem attack, that doesn't even acknowledge -- much less attempt to refute -- any of my points. Basically your entire "rebuttal" was: "Anyone who dares to even question democracy is a right-wing militia member nut job."

I realize this is probably heretical to someone who worships political power, but yes I'm absolutely arguing against democracy, which is basically mob rule dressed in a coat and tie. (What's important to me is liberty, not the type of government under which it exists.)

My comment was meant to be a generic one about democracy irrespective of the time or place, so I think you're changing the subject by asking about the American people. But I'll address that first:

First of all, the government and the American people are not the same thing. The state claims to represent the collective interests of its citizens, but this is an absurd excuse that individuals with political power use to further their interests at the expense of others. Collectives do not have interests; only individuals do.

Second, I do not believe that even a sizable minority of Americans, or even a sizable minority of people in government, wish to commit atrocities like the Holocaust. I don't believe the majority of ordinary Germans supported the Holocaust either, but it still happened. But that wasn't the point; the point was to question the legitimacy of majority rule.

I'd like you to answer several questions. If my attack on democracy is as laughable as you make it, then you should easily be able to answer these questions and expose me as a fool. However, if you respond at all, I expect you to ignore the questions, or attack them as too ridiculous to even consider, and then launch another personal attack against me.

1. What makes the will of the majority legitimate (I'm looking for something deeper than "It's just how our government is set up.")?

2. Are there any conditions when the will of the majority would not be legitimate?

3. If so, what are they?

4. How do you distinguish between majority decisions that are legitimate and ones that are not?

5. How did you arrive at these criteria?

My suspicion is that most people arbitrarily decide whether majority will is legitimate in a given case based on what they like or want, although they may not be consciously aware of this. If the majority wants to coerce others for goals that you like, that's good; if it's for goals you don't like, that's bad.

By this logic (assuming you wish to be "democratic" and afford all other individuals the same power to decide for themselves whether a majority goal is legitimate that you've afforded yourself), nothing is legitimate based on majority support, because there will always be people who will disagree with something.

In my view, if there is ever even ONE case where a majority decision would be illegitimate, then majority support cannot EVER be used as the sole criterion for justifying something, because if it's not a legitimate criterion in another case, why is it in this one?

A perfect example of this kind of thinking is the left-liberal's "anti-war" rally in DC a few weeks ago. The word "justice" was used far more than the word "peace," and there was constant harping about "unmet needs at home." To cut through the rhetoric: "Coercing people to force a change of government in Iraq (or for oil or a family vendetta or to spread democracy in the Middle East or whatever the real reason was) is bad. But coercing people to force them to pay for our various social programs, or to force them into our universal health care plan or etc, etc, etc, is good." Those people weren't coming out with a principled stand against the state initiating violence against peaceful people; they were coming out to say the state should be attacking a different set of enemies.


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## eg1 (Jan 17, 2007)

*so now what?*

OK, I'll bite. Then if democracy ("mob rule in a shirt and tie" was it?)is not the solution, what is?


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## Phinn (Apr 18, 2006)

> if democracy ("mob rule in a shirt and tie" was it?)is not the solution, what is?


Private property.

More here.


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## crs (Dec 30, 2004)

RSS said:


> And sadly, AskAndyAboutClothes is the looser.


Looser than what?


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## crs (Dec 30, 2004)

Harry96 said:


> but yes I'm absolutely arguing against democracy, which is basically mob rule dressed in a coat and tie.


Have you considered that perhaps you are living in the wrong country? Seriously. I just take democracy as a given here. I don't always like how it turns out (GWB in office), but I can't even consider an alternative.


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## ksinc (May 30, 2005)

crs said:


> Have you considered that perhaps you are living in the wrong country? Seriously. I just take democracy as a given here. I don't always like how it turns out (GWB in office), but I can't even consider an alternative.


FYI: perhaps you live in the wrong country - you live in a Republic not a Democracy.

A Republic is a hybrid-democratic form of government. He is referring to Democracy. If we lived in a Democracy, Al Gore would have won the 2000 election on the popular vote and you would be happy. Clearly he didn't, you aren't, and we don't. Cheers!


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## Wayfarer (Mar 19, 2006)

ksinc said:


> FYI: perhaps you live in the wrong country - you live in a Republic not a Democracy.
> 
> A Republic is a hybrid-democratic form of government. He is referring to Democracy. If we lived in a Democracy, Al Gore would have won the 2000 election on the popular vote and you would be happy. Clearly he didn't, you aren't, and we don't. Cheers!


Do not go confusing the boy with your fancy talk! You are verging on "creepy" with such high falutin' ideas.


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## crs (Dec 30, 2004)

No offense, but I think I will believe the encyclopedia:


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## Wayfarer (Mar 19, 2006)

*CIA World Fact Book says different....and so does US Politics 101*



> Government type:
> Constitution-based federal republic


Undergrad US Government 101 will tell you that too......but I feel I might be getting "creepy" again with all these fancy facts. Also, if you actually read your citation for comprehension crasy, you'd see you missed the "representative" part of "representative democracy" in your Encarta entry. Take a good stab at the common label for a "representative democracy".....

And you edit newspapers? Amazing.


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## crs (Dec 30, 2004)

You edited out ''with strong democratic tradition.'' Now why would you do that?


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## Wayfarer (Mar 19, 2006)

crs said:


> You edited out ''with strong democratic tradition.'' Now why would you do that?


Edit out? It was not part of the definition and I know how easy you are to confuse crasy. It was a very lengthy page and I did not quote the rest of it either. Care to wonder why? (hint: not pertinent to your assertion). Now please tell me how this makes you anything less than quite incorrect? The form of government in the US is, just as ksinc said, republican. Further, you still did not comprehend the Encarta link you cited, as evidenced by your use of it to "prove" the US is a democracy and not a republic.

Simply admit you were wrong and we can move on from this Lecture II in undergrad US Gov 101 discussion, m'kay?


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## crs (Dec 30, 2004)

Wayfarer said:


> Edit out? It was not part of the definition and I know how easy you are to confuse crasy. It was a very lengthy page and I did not quote the rest of it either.


It said, in its entirety, "Government type: Constitution-based federal republic; strong democratic tradition."

You're being dishonest, Mr. Latent.


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## Wayfarer (Mar 19, 2006)

crs said:


> It said, in its entirety, "Government type: Constitution-based federal republic; strong democratic tradition."
> 
> You're being dishonest, Mr. Latent.


crasy, your assertion that the US is not a republic is clearly incorrect. No one will dissuade you with the facts, you have made that abundantly clear in the recent past. I also stand by my assertion the second clause was not pertinent to proof the US is a republic.

Your new reference to me being a closet homosexual, clearly meant to be an insult, does not bother me in the least and I urge you to continue with this juvenile tactic. However I am willing to bet it offends those of our AAAC brethren that happen to be homosexual. I know I would be offended if someone was using one of my intrinsic qualities, i.e. that I am caucasion, male, etc. as an insult towards another.

Cheers


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## crs (Dec 30, 2004)

https://www.il-democrats.org/ilrepordem.html


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## Wayfarer (Mar 19, 2006)

As your link states crasy:



> The United States of America is a Republic....


I hope we can all agree now on something that was settled well over 200 years ago.

Cheers


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## crs (Dec 30, 2004)

You started the namecalling today, you supercilious subhuman. I am done trying to have any kind of conversation with you, you festering pile of mucus. Don't PM me anymore, you cruising Canuck.

Edit: I am done here. I have asked to be removed from membership.


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## Phinn (Apr 18, 2006)

After dozens of contentious political discussions, the dissection of your bias and pretense of neutrality, bitter struggles over the mode of discourse, crs decides to resign the board over (a) homophobia and (b) the status of the U.S. as a Republic vs. a Democracy? 

Which was it? I'm curious. What was the straw that broke the camel's proverbial back? The "cruising" or the Republic?


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## Acct2000 (Sep 24, 2005)

Does this put us back to 9,999 members?

I really don't understand the gay bashing. To my knowledge, Wayfarer is married. Also, aren't Liberals supposed to refrain from that.

Honestly, Wayfarer, sometimes you can be a bit ruthless, but I don't think you deserved this.


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## Chase Hamilton (Jan 15, 2007)

forsbergacct2000 said:


> Does this put us back to 9,999 members?


Not just yet. According to the official Membership list here at AAAC, crs is still a member. However, per that same list, he is no longer accepting Private Messages, unless possibly from a Moderator and a Member he has designated as his 'Buddy.'

--Chase


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## Wayfarer (Mar 19, 2006)

I do want to express my apologies for not reacting as hoped at the recent spate of insults directed at me and at least attempting to bring the insults back into the realm of opinions, ideas, and the ability to logically present them. 

Possibly finding out one lives in a republic is enough to send one over the edge? Either way, I did extend the olive branch only to have it trampled and spat on. While one is always saddened to see someone become so emotional it stops being about ideas and starts being about hurting someone, I would gladly welcome his return.

Cheers


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## Harry96 (Aug 3, 2005)

eg1 said:


> OK, I'll bite. Then if democracy ("mob rule in a shirt and tie" was it?)is not the solution, what is?


First, I can't resist making this point about what kind of government I want if I don't want a democracy:

"I don't want colon cancer."

"Then what kind of cancer do you want?"

Now, to expound a little on Phinn's response, in my view, the basic solution is having a society where the vast majority of people have a deep respect for private property and liberty, which is a condition where everyone is legally free to do as they choose so long as they do not encroach on anyone else's body or property. In short, the solution is a society made up of people who have no desire to confiscate the property or liberty of others and who will not stand for having theirs confiscated.

I haven't fully resolved for myself the infinite questions that arise from this, and perhaps I never will. And any answers or suggestions that I make today may not be my final answers, because I'm learning new things every day (as I hope most people are). Such questions include how to bring about such a society (the number one way to bring this about is unquestionably getting government completely out of education, but then there's the question of how to bring that about); whether such efforts are worth it to me personally to be involved with them, and why (obviously this is something people have to decide for themselves); whether there should ultimately be no government; if there should be governments, how many in a jurisdiction and what kind; etc.

I suppose the best of the worst as it pertains to government it to have a constitutional republic, which I'll get to in a later post.


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## Chase Hamilton (Jan 15, 2007)

forsbergacct2000 said:


> I really don't understand the gay bashing. To my knowledge, Wayfarer is married.


forsberg, please allow me to educate you: _*plenty*_ of gay men are married--for all kinds of reasons. I've known some.

*Please understand that I am in no way commenting on Wayfarer's or any Member's sexuality. I just wanted to set the record straight on that comment.

*I apologize for the threadjack.

Kind Regards,

Chase


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## hopkins_student (Jun 25, 2004)

crs said:


> Edit: I am done here. I have asked to be removed from membership.


Really?


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## Wayfarer (Mar 19, 2006)

forsbergacct2000 said:


> Does this put us back to 9,999 members?
> 
> I really don't understand the gay bashing. To my knowledge, Wayfarer is married. Also, aren't Liberals supposed to refrain from that.
> 
> Honestly, Wayfarer, sometimes you can be a bit ruthless, but I don't think you deserved this.


I did not even feel I needed to answer to this forsberg, just like his allegations that I am "creepy" and have no friends. It is the old, "When did you stop beating your wife?" type fallacy. I feel the fact I did not react as hoped was part of the frustration.

I agree, I can be ruthless. I suppose I should be more accepting but I feel much of the current problems in the West, are that too many people are too accepting. Take the topic of this thread for instance. Sure, there are many people that know much more about the topic than I do and there is some difference of opinion amongst credible economists. However when you rant on and on and on about the topic and then it turns out you are not even aware of that very basic graph I posted....well, you have exposed your own jugular, do not blame a carnivore like me if I take a bite


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## Harry96 (Aug 3, 2005)

crs said:


> Have you considered that perhaps you are living in the wrong country? Seriously. I just take democracy as a given here. I don't always like how it turns out (GWB in office), but I can't even consider an alternative.


Based on your last post, I don't know if you're still here. But I'll respond anyway.

I guess your reply is basically, "I don't have rebuttals for the troubling questions you raised about democracy. But I see government as necessary and democracy, in my view, is the best kind of government, even if it's not perfect."

Assuming this is a fair representation of your view, although I'd like to ask specifically why you think government is necessary or why you think democracy is the best kind of government, I still accept "I don't know" as a reasonable answer. If I raise deeply troubling questions about deeply held beliefs that a person had had for many years, the fact that the person doesn't have a logical response to my questions doesn't mean I expect him to discard his beliefs -- especially not overnight.

As several people have touched on, the United States wasn't supposed to be a democracy; it was supposed to be a constitutional republic. Have you ever read what the Founding Fathers wrote about democracy? It's not the least bit flattering.

The distinction is that, in a democracy, technically the government can do anything so long as it can get the majority of people who vote to support it -- or even just be apathetic about it. In contrast, a constitutional republic is (at least theoretically) governed by a set of rules that cannot be changed by the voters without going through an arduous process, and politicians cannot violate those rules otherwise -- even if the majority supports it.

The purpose is to keep people from voting away their own rights or the rights of others. As an example, if the majority wanted laws to impede free speech, the First Amendment is supposed to block it. As another example, in the panicked aftermath of 9/11, many Americans fell all over themselves rushing to tear up the constitution. If things like the Patriot Act, the Dept. of Homeland Security and the TSA had required constitutional amendments to be passed, which I believe is a process of a minimum of more than two years, people would've had more time to calm down and think about what they were doing, and those things probably would not have passed.

Even though the U.S. is a republic in theory, I might take slight issue with those who argue that the U.S. is a republic, not a democracy, in practice. It certainly is supposed to be a republic, but in reality, the republic is dead today. The 9th and 10th Amendments make easily 90% of what the federal government does today illegal, and Jefferson said the 10th Amendment was the cornerstone of the whole document. But that doesn't stop the unconstitutional activities; today, the federal government recognizes no limits on its authority to regulate literally every facet of life in some way. If the government no longer has to abide by the rules that make it a republic, then how, in practice, is it still a republic?

As a sign of the times, I heard Congressman Ron Paul remark recently that, when he voted against the Iraq resolution in 2002, he suggested to his colleagues that, while he opposed going to war at all, they should at least formally declare war on Iraq, as the constitution requires. He said they openly ridiculed his views on the constitution as being anachronistic.


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## ksinc (May 30, 2005)

Harry96 said:


> Have you ever read what the Founding Fathers wrote about democracy?


CRS is some kind of journalist. As best I can tell, that means he does write, but doesn't actually read anything.


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## Phinn (Apr 18, 2006)

> I haven't fully resolved for myself the infinite questions that arise from this, and perhaps I never will. And any answers or suggestions that I make today may not be my final answers, because I'm learning new things every day (as I hope most people are). Such questions include how to bring about such a society (*the number one way to bring this about is unquestionably getting government completely out of education*, but then there's the question of how to bring that about)


Control of the educational system is certainly critical, but I believe the number one way to change the course of our country is to get the government out of the business of controlling the currency. When you control the money, you control everything.

But I don't think this will actually happen. When I was growing up, I never expected myself to be such a pessimist and a fatalist, but I fully expect our government to collapse sometime in the next 50 years, as the direct result of the inflation of the currency. Right now it's primarily in the housing-finance market, which is why ordinary 3-bedroom houses cost nearly half a million dollars.

This sort of thing has happened too many times throughout world history to ignore the pattern. The government inflates the crap out the currency in order to finance various self-serving projects (war and welfare, mostly). They control commerce to benefit their contributors (e.g., the minimum wage).

Then, when these things cause their inevitable dislocations and hardships and price fluctuations, they step in with price controls that grow increasingly strict.

This is how the Sumerian government collapsed. The Greeks. The Persians. The Romans. The Egyptians. Revolutionary France. Chang Kai-Shek's China. The Soviet Union. Countless others.

Are we so much smarter than all of them that we won't do the same thing?



> in reality, the republic is dead today


It's been dead for a long time. 1913 at the latest. Although one could easily argue that the invasion of 1861 ended the idea of a republic, inasmuch as it ended the idea of a federation of free and independent states.


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## Acct2000 (Sep 24, 2005)

Chase, I should have expressed my thought about Wayfarer's marriage differently. The way I wrote it, a reader would assume that I did not know that some gay people are married (to women.) Thus, I have no real problem with your response. 

(I'm a little embarrassed to have appeared to be so ignorant, but that's MY fault, not yours! LOL)

My sin was in my communication; I did know that and should have said something like "he's never indicated that he's gay."

Sorry about the miscommunication.


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## Harry96 (Aug 3, 2005)

Phinn said:


> Control of the educational system is certainly critical, but I believe the number one way to change the course of our country is to get the government out of the business of controlling the currency. When you control the money, you control everything.
> 
> But I don't think this will actually happen. When I was growing up, I never expected myself to be such a pessimist and a fatalist, but I fully expect our government to collapse sometime in the next 50 years, as the direct result of the inflation of the currency. Right now it's primarily in the housing-finance market, which is why ordinary 3-bedroom houses cost nearly half a million dollars.
> 
> ...


Phinn, have you read G. Edward Griffin's book, The Creature from Jekyll Island? I've only recently become aware of how insidious the Federal Reserve is. Many who've read Griffin's book say it's so eye-opening that they almost feel like they're not the same people after reading it. I've been meaning to buy it for awhile, but I find that I have neither the money to buy all the books I want nor the time to read them all.

This is kind of a chicken and egg question, and it could just be a coincidence, but I can't help but notice that things like the Federal Reserve, the income tax, business regulation getting started in earnest, etc. all happened about a generation after government completely took over schooling around the 1890s. It makes me wonder whether people accepted such things because they were much less educated about liberty, private property and economics than previous generations had been.


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## Phinn (Apr 18, 2006)

I have read it. It not very well organized, but it does hit the high points, and is reasonably thorough.

As an introductory text on currency and the Federal Reserve and currency generally, I would highly recommend _What Has Government Done to Our Money?_, by Murray Rothbard. It's freely available online, although you can also buy hardbound copies as well. It's shorter, better organized, and more readable than the Griffin book, and covers the years from 1914 to the present very well.

It's an interesting idea -- that the government schools fostered the environment where the disasters of 1913 were possible. The efforts to impose a central bank are obviously much older than 1913, inasmuch as England had one such bank as early as the 17th century, and centralizing, power-mongering advocates like Hamilton tried to institute them in the US from the very beginning. Lincoln did, too. But they didn't succeed in robbing us on a daily basis with inflation until 1913.


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## eg1 (Jan 17, 2007)

*hmmmm ...*



Phinn said:


> Private property.
> 
> More here.


Can you give me an historical example of where this has been tried? I ask this only because it appears to me that ideas (software, if you will) which appear logically unassailable result in all sorts of unintended consequences once they hit the messy realm of human behaviour (the wetware, so to speak).


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## Phinn (Apr 18, 2006)

The American West from 1830 onward.

Although many of us, due to its portrayal in countless movies, think of this period as one of rampant crime and lawlessness, consider that:



> in five of the major cattle towns (Abilene, Ellsworth, Wichita, Dodge City, and Caldwell) for the years from 1870 to 1885, only 45 homicides were reported-an average of 1.5 per cattle-trading season.' In Abilene, supposedly one of the wildest of the cow towns, "nobody was killed in 1869 or 1870. In fact, nobody was killed until the advent of officers of the law, employed to prevent killings." Only two towns, Ellsworth in 1873 and Dodge City in 1876, ever had five killings in any one year.


The ending of _High Noon_ alone would have been considered a flurry of homicides of historic proportions.

Of course, these statistics don't include _state-sponsored_ murder. It wasn't until the campaign of genocide headed by Grant, Sherman and Sheridan (not surprisingly, the very same people who forcibly annexed the Confederacy, using the very same army), who brought the glorious benefits of centralized government, that we see a sharp increase in genuinely enthusiastic murder west of the Mississippi.


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