How should minimum wage be determined?

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elasto
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Re: How should minimum wage be determined?

Postby elasto » Sat Feb 28, 2015 12:28 pm UTC

ucim wrote:Who's going to pay it?
How about the rich?

And who's going to flip burgers for next to nothing if they already get paid for doing next to nothing?
Anyone not satisfied with sitting on their arse all day - which will be almost everyone. I dunno if you've ever been out of work but, after the novelty factor of having free time it's damn boring and unsatisfying. Sure, if the citizen's wage was set ridiculously high, and a burger flipper's wage was set ridiculously low, what you say would become true - but that's why the citizen's wage wouldn't be that high or a burger flipper's wage that low.

There is nothing wrong with needing to work for a living. It's what drives the economy.
That's fine in a full employment society. But ours is not one of those. If you need to work for a living but have no skills worth anything, then, what, you deserve to crawl in a hole and die?

Any, anyway, how is that principle supposed to play when AI and mechanization eventually becomes cheaper and better than human labor at every job - skilled and unskilled? We might disagree on the timescale that will come about (I think it will be 50-100 years), but unless we bomb ourselves back to the stone age it will come about...

Back to right now, It's fine saying 'people should have to work for a living', but this is the reality of that ideology (quoted from another board):

Hell, I was 15 working at McDonald's for $3.something/hr and one lady with a 5 year old daughter that I knew from church offered me MULTIPLE TIMES to let me do *anything* I wanted to her sexually if I could spare $20 so she could buy some bulk cereal for her kid, (I just gave her some money I had to spare here and there instead and told my parents I blew it renting video games), and yeah, I've seen a few start peddling, including that lady. (weed in her case, she used it to lure in potential "suitors")

She was doing everything in her power to put food in her kid's mouth and pay the bills, but if you can't afford new clothes, only have walking distance to get to your multiple jobs, and are stuck in any job that will hire you when you hand-wash and hang-dry your 4 or 5 combinations of clothing by unscrewing the hose from the coin-operated washing machines, jimmying the nozzle-free water spigot on and off, and scrubbing/rinsing them in a bucket, it's hard to "Dress For Success" and she was only IN this position because her husband stole everything she had and left the state because he "didn't feel like being a dad at this time in his life".


Basically, there's this huge fear of people 'living the high life on welfare off your hard-earned tax dollars' that is nothing close to reality. You absolutely cannot convince me that a CEO buying his second private jet needs that money more than this woman does. He'd be annoyed at being taxed more but, actually, once you are earning more than a subsistence wage your happiness is mostly relative: If a CEO is being paid more than his peers he's happy - whether they're all being taxed 25% or 50%.

No, that's not the purpose [of the minimum wage] at all. That's the purpose of welfare.
That's my point: Minimum wage is welfare - just poorly done. Imo it should be abolished and done more efficiently and directly.

Oh, think of the children! Yanno, if you have children, they are your responsibility, not mine.
It's nothing like as simple as that. Not only is there the inhumanity of a child suffering through no fault of their own, there is the extra financial cost down the road of a child more likely to end up a criminal, drug addict or other drain on society. Ever heard of a stitch in time saving nine?

Sorry, giving that child food stamps and a high quality school meal today so his IQ doesn't suffer is MUCH cheaper than paying for an extra prison place in 20 years time...

That said, I think that, wealthy nation that we are, there are some important things that we as a nation can afford to make more universal, and education and health care are in that set.
We agree on this. To that I'd add universal healthy food, legal aid, housing, basic utilities and a few others.

But burritos, movies, and beer are not in that set.
We agree on this too, to an extent. Anyone would go insane if permanently denied all leisure pursuits - but leisure is so damn cheap these days I'm happy to class most of it in the category of people having to work for it.

(Just how high are you imagining I'm advocating a citizen's wage to be set at..? Hint: I'm advocating it be very low - perhaps even in the low thousands - but that the above essentials are provided for free in lieu of it)

And ideologically, it's corrupt if you don't give this "citizens' wage" to non-citizens too. After all, you're not supposed to "do" anything to "deserve" this wage, right?

I agree. And once there is a world-wide government and tax system I'll be advocating a world-wide citizen's wage. But while nations exist it only makes sense for each nation to implement their own, which pragmatically means not paying other nation's citizens a citizen's wage - else you could claim a wage from every government on the planet...

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Re: How should minimum wage be determined?

Postby jseah » Sat Feb 28, 2015 1:47 pm UTC

elasto wrote:Any, anyway, how is that principle supposed to play when AI and mechanization eventually becomes cheaper and better than human labor at every job - skilled and unskilled? We might disagree on the timescale that will come about (I think it will be 50-100 years), but unless we bomb ourselves back to the stone age it will come about...

Part of the reason why I supported higher minimum wage as an indirect subsidy of automation is for this. Higher pressure on automation as an alternative to labour will lead to higher demand and faster innovation in automation technology, skills and organizational structure.

The faster we work towards automation of work, the faster we get to the point where people don't need to work. After which, a citizen's wage makes sense.

I would like to see that world.
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Re: How should minimum wage be determined?

Postby EMTP » Sat Feb 28, 2015 6:01 pm UTC

elasto wrote:And all of this is why, ultimately, I think a citizen's wage is a much better idea: Then the market could determine the correct wage for a position even if it's 10c/hour. Unskilled jobs could even start returning from overseas...

Because, let's think what the purpose of a minimum wage is: It's to ensure that noone is in poverty when our nations are so rich: because the children of a labourer deserve peace of mind just like the children of a stockbroker; Because the children of a road-sweeper should have access to quality healthcare and education just like the children of a Senator; Because the children of a janitor should be able to afford three healthy meals a day and a heated home just like the children of a CEO...

The minimum wage is the right idea - liberty to all through being free to improve themselves through the lower levels of Maslow's Hierarchy of needs being taken care of - just the wrong vehicle to deliver it.

(It's complicated by notions of the 'deserving' and 'undeserving' poor: If someone works then they are more 'deserving' of society's blessing, and a minimum wage appears to target thusly - but there are many 'deserving' reasons someone might be unwilling or unable to work - for example maybe they want to take care of a disabled parent. Unlike the minimum wage, a citizen's wage ensures noone 'deserving' gets overlooked.)


I agree that a basic income or citizen's wage is a good idea, and I would add a few other reasons:

1. We spend a lot of time, energy, and money trying to separate the "deserving" from the "undeserving." This leads to inefficiency, fraud, and waste. A classic example is disability insurance. Disability insurance is well-intended and helps keep us out of the Dickensian situation in which people who can't work starve. But it also creates a whole class of people whose job it is to be sick. And that is bad for their physical and mental health. And billions of dollars are spent every year trying to determine who qualifies and who doesn't. So abolish that. If everyone is getting enough money to survive without working, no one needs disability insurance. Same with unemployment insurance, food stamps, social security, etc., etc. You could simplify and slim down government considerably with a citizen's wage.

2. The most market-efficient way to discourage certain harmful behaviors is through consumption taxes. These taxes are inherently regressive. With a citizen's wage you can pursue these more aggressively with the confidence that you are not further burdening people on the brink of destitution. Carbon taxes are the archetypal example. Eliminating agricultural subsidies and requiring more humane treatment of livestock would be good for people and the environment, but would raise the price of food. And so on.

3. Many of our social problems -- a lot of the crime, some of the mental illness, a lot of the failures of the educational system, a lot of the substance abuse -- can be traced back to unstable homes and poor upbringing. To address this, we direct a lot of aid at children (who are "deserving") without acknowledging the basic reality that the children will not prosper without stable homes, and you do not have stable homes without stable parents.

This may seem like feel-goodism, but in fact it's supported by data:

Here’s a story about Norway. On August 21, 1969,massive oil reserves were discovered under Norway’s sovereign waters in the North Sea. Previously poor regions became suddenly wealthy as the petroleum boom–later bolstered by a natural gas discovery–poured new income into the region.But the wealth wasn’t spread evenly—not every Norwegian in the north could get in on the action. Suddenly there were the makings of a great natural experiment (PDF). Researchers wanted to see what the impact of sudden cash infusions–a significant environmental change–had on previously poor students, as compared with their still-impoverished peers. The influx of money bested almost every other popular solution to the education gap: students in suddenly-well-off families saw an average of 3 percent increase in absolute IQ and a 6 percent increase in college attendance. The results were as good as the best American charter schools at a fraction of the cost and logistical hassle.

Another set of circumstances conspired to demonstrate the same principle in the United States. During the course of along longitudinal study, the calculation of the Earned Income Tax Credit–an essentially unconditional cash transfer to poor parents–changed several times, allowing researchers to plot the causal achievement impact of cash transfers on a curve of multiple benefit levels (PDF). These results were even more significant: for a mere $3,000 given annually to the parents of poor children, the data suggests a 7 percent increase in expected student test scores.


I'm tempted to cross-post that on the "genetic engineering" thread. Yes, you can make people smarter! No, you don't need genetic engineering to do it.
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Re: How should minimum wage be determined?

Postby Quercus » Sat Feb 28, 2015 6:17 pm UTC

EMTP wrote:If everyone is getting enough money to survive without working, no one needs disability insurance.


Maybe I'm misunderstanding how disability insurance works in the US (I don't know if the amount received is scaled depending on individual care needs for example), but the problem with that is that some people need a lot more money to survive without working than others. The cost of living for a severely disabled person (someone with tetraplegia above C4 for example) might be an order of magnitude higher than for a non-disabled person. If you want to avoid either disabled people suffering and dying due to lack of adequate care, or giving everyone a ridiculously generous citizens wage to cover a small proportion of people with complex care needs, you need to do some form of testing/assessment. I agree that the use of it can probably be substantially reduced, but I don't think it can be eliminated.

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Re: How should minimum wage be determined?

Postby sevenperforce » Sat Feb 28, 2015 6:31 pm UTC

Quercus wrote:
EMTP wrote:If everyone is getting enough money to survive without working, no one needs disability insurance.


Maybe I'm misunderstanding how disability insurance works in the US (I don't know if the amount received is scaled depending on individual care needs for example), but the problem with that is that some people need a lot more money to survive without working than others. The cost of living for a severely disabled person (someone with tetraplegia above C4 for example) might be an order of magnitude higher than for a non-disabled person. If you want to avoid either disabled people suffering and dying due to lack of adequate care, or giving everyone a ridiculously generous citizens wage to cover a small proportion of people with complex care needs, you need to do some form of testing/assessment. I agree that the use of it can probably be substantially reduced, but I don't think it can be eliminated.

I could be wrong, but it's my understanding that disability insurance is merely a modest living wage provided to qualifying individuals who are disabled and are therefore unable to work, while medical care for a quadriplegic would be treated as a medical expense and will be dealt with through medical insurance.

Disability pay is a set living wage; disability medical benefits are based on actual costs of care.

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Re: How should minimum wage be determined?

Postby Quercus » Sat Feb 28, 2015 6:49 pm UTC

sevenperforce wrote:
Quercus wrote:
EMTP wrote:If everyone is getting enough money to survive without working, no one needs disability insurance.


Maybe I'm misunderstanding how disability insurance works in the US (I don't know if the amount received is scaled depending on individual care needs for example), but the problem with that is that some people need a lot more money to survive without working than others. The cost of living for a severely disabled person (someone with tetraplegia above C4 for example) might be an order of magnitude higher than for a non-disabled person. If you want to avoid either disabled people suffering and dying due to lack of adequate care, or giving everyone a ridiculously generous citizens wage to cover a small proportion of people with complex care needs, you need to do some form of testing/assessment. I agree that the use of it can probably be substantially reduced, but I don't think it can be eliminated.

I could be wrong, but it's my understanding that disability insurance is merely a modest living wage provided to qualifying individuals who are disabled and are therefore unable to work, while medical care for a quadriplegic would be treated as a medical expense and will be dealt with through medical insurance.

Disability pay is a set living wage; disability medical benefits are based on actual costs of care.


Ah, okay, I assumed it was like the UK "disability living allowance" (which is now called the "personal independence payment" because politics), which is scaled depending on the extra living costs incurred by someone with a disability.

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Re: How should minimum wage be determined?

Postby morriswalters » Sat Feb 28, 2015 8:07 pm UTC

In the US there are 2 disability types. SSI and Social Security Disability. SSI is means tested and has no prior work requirement while Social Security Disability is based on the payments made into the Social Security System. SSI would be eligible for Medicaid and Social Security Disability could be eligible for Medicaid but after two years is covered under Medicare as well. Welcome to America, the not so bright.

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Re: How should minimum wage be determined?

Postby ucim » Sun Mar 01, 2015 12:33 am UTC

elasto wrote:
ucim wrote:Who's going to pay it?
How about the rich?
Yeah. They have "too much money".

Everyone likes the rich to give them money for free. Do you have too much money?

Anybody who thinks they have too much money should throw it in a pot. The rest of us will divvy up the pot amongst ourselves.

elasto wrote:if the citizen's wage was set ridiculously high, and a burger flipper's wage was set ridiculously low, what you say would become true - but that's why the citizen's wage wouldn't be that high or a burger flipper's wage that low.
What assurance is there of that? And what assurance is there that this is sustainable?

Will this "citizen's wage" prevent the scenario you describe here below?
...I was 15 working at McDonald's for $3.something/hr and one lady with a 5 year old daughter that I knew from church offered me MULTIPLE TIMES to let me do *anything* I wanted to her sexually if I could spare $20 so she could buy some bulk cereal for her kid...
I think not. It has to be low enough to still provide incentive to flip burgers, and high enough to fill the gap so there's no incentive to earn a quick $20. And it has to stay that way in the face of the inflation that it would inevitably cause. Free money drives prices up until the free money isn't enough any more. And on top of that, it forms another welfare cliff.
Spoiler:
Not quite a cliff since the citizens wage is not needs based, but it increases the slope, making dollars earned less valuable.
elasto wrote:You absolutely cannot convince me that a CEO buying his second private jet needs that money...
How do you decide what somebody else needs?

elasto wrote:Ever heard of a stitch in time saving nine?
Yes, I have. And I believe in it. But it's the stitch that does it. You're proposing throwing thread around. I'm in favor of public libraries, public education, public health care, but not public largesse.

quoting a news story, EMTP wrote:for a mere $3,000 given annually to the parents of poor children, the data suggests a 7 percent increase in expected student test scores.
What sticks out is "suggests" and "expected". This does not sound like data. OTOH,
quoting from another news story, EMTP wrote:The influx of money bested almost every other popular solution to the education gap: students in suddenly-well-off families saw an average of 3 percent increase in absolute IQ and a 6 percent increase in college attendance.
That sounds more like data, but doesn't say what the amount of money these families got was. Is it anywhere near the amount proposed for a citzen's wage?

elasto wrote:And once there is a world-wide government and tax system I'll be advocating a world-wide citizen's wage. But while nations exist it only makes sense for each nation to implement their own, which pragmatically means not paying other nation's citizens a citizen's wage - else you could claim a wage from every government on the planet...
Why not try it on a small scale. Get the town you live in to buy into the idea. Everyone in the town gets taxed enough to provide a citizen's wage to all the town folk. If it works, we'll see it work. If it doesn't, we'll know before the entire nation (or world, if you take it all the way) drinks the kool-aid.

Remember though; if you have a citizen's wage, you have a citizen's obligation too. I can easily see that obligation as being to not breed on the public's dime. Be careful what you wish for - you might get it.

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Re: How should minimum wage be determined?

Postby CorruptUser » Sun Mar 01, 2015 12:55 am UTC

ucim wrote:Remember though; if you have a citizen's wage, you have a citizen's obligation too. I can easily see that obligation as being to not breed on the public's dime. Be careful what you wish for - you might get it.

Jose


You only receive the citizen's wage if don't belong to someone else's household? Or maybe you get child support for the first 2 children but no more?

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Re: How should minimum wage be determined?

Postby elasto » Sun Mar 01, 2015 7:57 am UTC

ucim wrote:Yeah. They [the rich] have "too much money".


On a utility curve they absolutely do. One extra dollar to a millionaire makes them less happier than giving an extra dollar to a starving person. It's a no-brainer who should get the extra dollar - unless you regard a rich person's extra happiness more important than a poor person's?

Everyone likes the rich to give them money for free. Do you have too much money?

Well, I have less money than a rich person and yet I lose a higher proportion of my wealth each year though taxation than they do. I don't begrudge sharing my wealth with those in greater need than me so I'd hope the rich would feel the same way?

What assurance is there of that [that a citizen's wage won't be set too high]?

Well, people like you for a start. (People like me too - since, as I say, I'm advocating a citizen's wage in the low thousands.)

Will this "citizen's wage" prevent the scenario you describe here below? [A person prostituting themselves to buy their kid food]

Combined with the other forms of welfare mentioned it absolutely can. For example I'm advocating that child be given enough healthy food to eat that that reason to prostitute oneself would be redundant.

How do you decide what somebody else needs?

I don't need to. Maslow already did it. Private jets are about as firmly in the 'want' side of the want-need paradigm as can be. Besides, video-conferencing is making private jet travel increasingly irrelevant and wasteful.

Yes, I have. And I believe in it. But it's the stitch that does it. You're proposing throwing thread around. I'm in favor of public libraries, public education, public health care, but not public largesse.

Not sure where I'm proposing public largesse? As far as I know I'm proposing people be given no more than unemployment currently pays. In fact I might actually be proposing payouts be reduced...

Why not try it on a small scale. Get the town you live in to buy into the idea. Everyone in the town gets taxed enough to provide a citizen's wage to all the town folk. If it works, we'll see it work. If it doesn't, we'll know before the entire nation (or world, if you take it all the way) drinks the kool-aid.

A town is far too small a unit to be practicable: People join and leave it far too rapidly when it takes at least a generation to get a return on the taxpayer investment in housing, schooling, farming, hospitals, water, electricity, internet and so on. The citizen's wage portion of it is by far the least important element.

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Re: How should minimum wage be determined?

Postby EMTP » Sun Mar 01, 2015 5:32 pm UTC

I realize I never answered the first question. I think a good number for a minimum wage is one that keeps someone working full time out of poverty. For a family of 4, the poverty line is about $24k. $12 * 40 hours * 50 weeks = $24. So I'd say $12/hour is a good starting point, indexed to inflation.

Yes, I have. And I believe in it. But it's the stitch that does it. You're proposing throwing thread around. I'm in favor of public libraries, public education, public health care, but not public largesse.


This is a philosophical difference at its root (lucky we are already in SB!) Largesse means gift. A gift is something belonging to you that you give to someone else. That is one way to look at a basic income (although it's hard to see how it wouldn't also apply to a library or a school): the government takes your property and gives it to others. That was how I looked at it in my libertarian days.

But there is another way to look at it, which seems more accurate to me now: the economy is a game. Property is a social construct. Ownership is conditional, not absolute, and one of the conditions is taxation. Similarly, anything we agree to do with that money (or money we borrow, or print, or whatever) is not "largesse" to those who benefit; it's part of the rules of the game. When you pass "GO" in Monopoly, you get $200. That's not "largesse" from the banker; it's the rules of the game. If you wanted to you could agree to different rules.

I realize that this way of thinking about property is very foreign to those of a libertarian bent, who are accustomed to thinking of property as almost an extension of the self. But it makes a lot more sense in the end. Without society, there is no money. There are no land rights. There are no businesses. These things cannot exist without the social order and the rule of law. But the rule of law, as the name implies, has rules, just like Monopoly. Part of those rules includes the state taking some of what we conventionally call "your" money and spending it on various things. But that's not "largesse" any more than it's "largesse" when you pay big bucks to the owner of Broadway. It's just the rules of the game.

Now if you have a natural rights theory of property and you want to argue that that is prior to society and society is bound to respect it, you can make that argument. I think it is difficult going to try and show a prior and absolute right to money that it actually created by the government, especially when we acknowledge that the government does have to claim some of "our" money in order for society to function.
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Re: How should minimum wage be determined?

Postby Cradarc » Sun Mar 01, 2015 7:39 pm UTC

You guys brought discussion to a far deeper level than I anticipated!

I think most people agree that everyone should be given the opportunity to do something productive in exchange for a healthy life. The crux of the problem is how to implement that without heavily regulating economic transactions
Ideally everyone should be given just enough to live a healthy life and must work for luxuries. However, that is incredibly hard to implement on a large, diverse population, and even harder to enforce. At the same time we can't do nothing.
What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living? Each state can then implement it however they want.
States that like minimum wage can use it. States who fear businesses may be hurt by minimum wage can use food stamps. States who would rather delegate funds to local authorities to do the task can do that.

On a tangential note:
I think prisons should be a place of education. If these people aren't doing anything productive for society and we still have to feed them, at least try to make them more productive people.
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Re: How should minimum wage be determined?

Postby Quercus » Sun Mar 01, 2015 8:21 pm UTC

Cradarc wrote:What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living?

I'm not sure that goes quite far enough. If my (limited) understanding of economics is correct even a well functioning economy will operate with a small, but non-zero, unemployment rate. Therefore it is a consequence of the economic system we use that not everyone who wants one can obtain a full-time job. It seems rather invidious to choose to operate a system which mostly guarantees that not everyone employable can be employed, and then simultaneously say "if you're not employed you don't deserve an acceptable standard of living".

Feel free to shoot this down if it is bollocks, like I said my understanding of economics is limited.

I think prisons should be a place of education. If these people aren't doing anything productive for society and we still have to feed them, at least try to make them more productive people.

Absolutely. Norway does this, with quite astonishingly good results. To do this you have to basically forget about the idea of prisons as places of punishment (beyond the denial of freedom), and think about them as places of rehabilitation.

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Re: How should minimum wage be determined?

Postby leady » Mon Mar 02, 2015 12:10 pm UTC

EMTP wrote:I realize that this way of thinking about property is very foreign to those of a libertarian bent, who are accustomed to thinking of property as almost an extension of the self. But it makes a lot more sense in the end. Without society, there is no money. There are no land rights. There are no businesses. These things cannot exist without the social order and the rule of law. But the rule of law, as the name implies, has rules, just like Monopoly. Part of those rules includes the state taking some of what we conventionally call "your" money and spending it on various things. But that's not "largesse" any more than it's "largesse" when you pay big bucks to the owner of Broadway. It's just the rules of the game.

Now if you have a natural rights theory of property and you want to argue that that is prior to society and society is bound to respect it, you can make that argument. I think it is difficult going to try and show a prior and absolute right to money that it actually created by the government, especially when we acknowledge that the government does have to claim some of "our" money in order for society to function.


This is essentially the argument that property is only yours unless a 2nd party decides to remove it through force. No one truely believes that as a moral position, but may accept it as a pragmatic outcome - so they end up doing some mental gymnastics to close the gap. Conceptualisations do have serious power in the world unfortnately, such as the one you strongly implying "that the government is the one true owner of your property by virture of its control of society and can therefore legitmately claim it back at will", which is at worse is morally neutral. If you change the conceptualisaion to "government is the entity which monopolises the initiation of force within an area and will use this to extract property from people in order to achieve its ends", which immediately paints government as a necessary evil, one which has no "claim" but can overwhelming just "do". As a final aside government does create and enforce the use of its money, but its what money represents that important, which is time and effort. The same moral logic for government to have a demand on 25% of your income, also works directly for forced servitude (which of course some countries still have) - but once again that way of doing things, putting the efficiency issues aside, is far less ambiguous to the average citizen. This is deliberate, the further the threat of violence is from the tax payer the more accepting everyone is - there is a reason that in historical times that the tax collectors were so hated :)

Now all of the above also applies to the minimum wage, i.e. should the threat of force be valid in setting an agreement between two parties with regards to employment. Then you can have the discussion as to whether this threat is needed to rebalance against the indirect coercive power of employers (work for me or starve) or whether like I suspect that in practice for the open jobs that are trackable on min wage (maccy ds) the coercive power is fairly minimal and thus the threat of force on min wage is a purely political statement (such as your initial arbitrary family of four suggestion). Of course as usual with blunt laws, those that are really in coercive environments (illegals, non native speakers, family members), the folks you'd really want these laws to hit, just dodge them with impunity. Its almost like if you can coerce someone into an artificially low wage, then you can coerce them not to go to the cops - if only such things were predictable...

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Re: How should minimum wage be determined?

Postby Quercus » Mon Mar 02, 2015 12:49 pm UTC

leady wrote:As a final aside government does create and enforce the use of its money, but its what money represents that important, which is time and effort.


That's what money should represent, but that's often very far from the reality. Are you really telling me that CEOs put in hundreds of times more time and effort than the lowest paid workers in their company, to justify their hundreds of times higher salary? Nah - money doesn't simply represent value - it accrues around power. That can be political power leading to regressive taxation, power over controlling renumeration for employees (look what happened to the UK parliament when you let MPs set their own rules around expenses). The question is - what, if anything, can/should be done about this distortion of value by power? Anything effective pretty much has to involve the threat of violence at some point - people do not willingly give up either wealth or power.

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Re: How should minimum wage be determined?

Postby leady » Mon Mar 02, 2015 2:58 pm UTC

It still mostly represents that - just that different people have higher value time & effort. Whether the CEO is putting in 100x more time and effort is a moot point - their time is definitely worth more that the lowest cleaner in the company, some for good reasons (experience, decision making, clear strategy etc), some for less good reasons (political allies, nepotistic networks). What people are really arguing is that 100x is wrong and to limit the bad reasons, we must generate legislation that make the bad reasons even more valuable. The same types of effects happen on minimum wage laws and other employment laws, the subset of pure criminals increases, a subset gets a bump and another set gets frozen out. The economic question is whether the bump group outweighs the other, the political question is whether it buys enough votes

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Re: How should minimum wage be determined?

Postby Tyndmyr » Mon Mar 02, 2015 6:22 pm UTC

jseah wrote:On the other hand, I support a minimum wage for the completely wrong reason.

Namely that I think our organizations have not been that enthusiastic at implementing the changes required to make full use of automation technology. There is still a ton more productivity to be gained by adding a few more machines.

Minimum wage is effectively an indirect subsidy to investment in labour productivity increasing technologies and organizational structure, by way of increasing the cost of the default (have more people).


*shrug* That's a valid economic effect, yes. While I quite like automation, I'm not sure that subsidzing it is ideal. Like others have said, net negative. But it's definitely an interesting point to argue, and one could construct a pretty good argument for minimum wages based upon such a goal. Perhaps one feels that creation of AIs is some great public good, and this would push that along.

morriswalters wrote:Anytime I see something like that and realize that Glenn Beck believes it, I hold my nose and take a second look. I'm still reading but my take away to this point is that while some dicks believed this, others who supported a minimum age didn't. From a footnote on page 214.
Not all progressives endorsed eugenics, and not all of those who endorsed eugenics were progressives, traditionally defined, still less proponents of minimum wages. Taussig was not especially well-disposed to minimum wages, but his intemperate remarks measure the influence of eugenic ideas upon economics in the Progressive Era.

However it informs my beliefs about economists in general.


It's important to note that you've usually got a lot of different factions even among economists. Sure, some have advocated some terrible things. So have some scientists. And some doctors. In certain time frames, you have some pretty terrible popular ideas. Studying why these ideas died out, and who opposed them and why, can be quite interesting. Decrying all economists is a bit like decrying all scientists. It's just too broad.

elasto wrote:
ucim wrote:Who's going to pay it?
How about the rich?


This is always a pat answer, but it rarely is accompanied by an actual plan that's reasonable. Citizen's wage is an economically terrible idea, regardless of who you intend to pay for it.

elasto wrote:
And who's going to flip burgers for next to nothing if they already get paid for doing next to nothing?
Anyone not satisfied with sitting on their arse all day - which will be almost everyone. I dunno if you've ever been out of work but, after the novelty factor of having free time it's damn boring and unsatisfying. Sure, if the citizen's wage was set ridiculously high, and a burger flipper's wage was set ridiculously low, what you say would become true - but that's why the citizen's wage wouldn't be that high or a burger flipper's wage that low.


I am a crazy person, and thus, work multiple jobs basically constantly because I hate boredom. And also, because I like money. If money ceased to be a large factor, I'm sure I would still keep busy, because that desire would be unchanged. But the things I pursued would not necessarily be the things society needs if the money factor went away. The simple fact is that while we like doing things, the things we enjoy are not necessarily the same as the things others need. PLENTY of jobs are sort of tedious and unenjoyable, and have occupants that wish to do other things, but who need to pay bills. Few people dream of flipping burgers at McDonalds.

elasto wrote:
There is nothing wrong with needing to work for a living. It's what drives the economy.
That's fine in a full employment society. But ours is not one of those. If you need to work for a living but have no skills worth anything, then, what, you deserve to crawl in a hole and die?


That's inefficient. Growing a human to adult age, training them, etc is a costly thing. It is better that this person gain skills.

Additionally, full employment is not a thing. There will always be frictional unemployment, and that's fine. It is persistant unemployment that is of great concern.

elasto wrote:Any, anyway, how is that principle supposed to play when AI and mechanization eventually becomes cheaper and better than human labor at every job - skilled and unskilled? We might disagree on the timescale that will come about (I think it will be 50-100 years), but unless we bomb ourselves back to the stone age it will come about...


Ah, yes, technology will get TOO good, and thus ruin everything. Nah. We'll handle that just fine. We've had tech advances throughout all of human history, and it's been quite nice.

And seriously, people LOVE to worry about AI. Why is artificial intelligence any more worrying than natural intelligence? What, precisely, are we even worrying about, given the number of different portrayals? We'll likely just keep making incremental improvements, and as we learn more and more, we will be far better equipped to make realistic assessments of capabilities, rather than fear-mongering about unknowns.

You absolutely cannot convince me that a CEO buying his second private jet needs that money more than this woman does.


Perhaps. But it is possible that society needs him to have that private jet more than that woman to have money. This is an unpleasant truth, but people starve to death every day. Oh, maybe not so often in civilized countries, but in less bountiful regions, a famine can kill a ton of people.

And yet, we do not dismantle our middle class lives to subsidize them. Why, we even spend money on entertainment and status symbols instead of spending it to them. How are we different from the rich?

Is it reasonable to expect a person to give up all entertainment, status symbols, etc? Would our system work if such was expected of the middle class? Why are the rich different?

Quercus wrote:
EMTP wrote:If everyone is getting enough money to survive without working, no one needs disability insurance.


Maybe I'm misunderstanding how disability insurance works in the US (I don't know if the amount received is scaled depending on individual care needs for example), but the problem with that is that some people need a lot more money to survive without working than others. The cost of living for a severely disabled person (someone with tetraplegia above C4 for example) might be an order of magnitude higher than for a non-disabled person. If you want to avoid either disabled people suffering and dying due to lack of adequate care, or giving everyone a ridiculously generous citizens wage to cover a small proportion of people with complex care needs, you need to do some form of testing/assessment. I agree that the use of it can probably be substantially reduced, but I don't think it can be eliminated.


You are correct. No potential living wage scenario can possibly remove this. You'd need a very high wage to cover all such scenarios*. Significantly higher than the current average. You cannot possibly pay everyone above average wages.

Also, while paying everyone would remove some incentive for fraud, and fraud is certainly undesirable, our mechanisms for avoiding fraud are fairly effective in general. The vast majority of people receiving help are not doing so fraudulently.

*Even ignoring medical expenses as a seperate issue, people have different incomes, different expenses, and thus, require different levels of insurance. If you live in an expensive part of the country, your mortgage alone might be 2-3 thousand a month. On a townhouse or similar, not a mansion. To provide a reasonable income replacement, you would need a quite large "living wage". Note that current disability insurance does often contain allowances for some extra expenses due to the disability, though medical insurance is usually purchased as well.

elasto wrote:
ucim wrote:Yeah. They [the rich] have "too much money".


On a utility curve they absolutely do. One extra dollar to a millionaire makes them less happier than giving an extra dollar to a starving person. It's a no-brainer who should get the extra dollar - unless you regard a rich person's extra happiness more important than a poor person's?


That guy who wants to buy heroin but has no heroin money will be EXTRA happy to get it. Therefore, all money should be spent on heroin.

EMTP wrote:Now if you have a natural rights theory of property and you want to argue that that is prior to society and society is bound to respect it, you can make that argument. I think it is difficult going to try and show a prior and absolute right to money that it actually created by the government, especially when we acknowledge that the government does have to claim some of "our" money in order for society to function.


This argument relies on equating money and wealth. Yes, the government prints the money and runs that system. Obviously. But the wealth is created by many people. Money is merely a means of conveniently transferring wealth. It is a representation of wealth, it is not wealth itself.

Cradarc wrote:You guys brought discussion to a far deeper level than I anticipated!

I think most people agree that everyone should be given the opportunity to do something productive in exchange for a healthy life.


If you have a healthy life, you already have that opportunity. That is intrinsic.

I am generally for people being healthy, but there are practical difficulties in guaranteeing perfect health. There are always outliers that we don't yet know how to fix.

Quercus wrote:
Cradarc wrote:What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living?

I'm not sure that goes quite far enough. If my (limited) understanding of economics is correct even a well functioning economy will operate with a small, but non-zero, unemployment rate. Therefore it is a consequence of the economic system we use that not everyone who wants one can obtain a full-time job. It seems rather invidious to choose to operate a system which mostly guarantees that not everyone employable can be employed, and then simultaneously say "if you're not employed you don't deserve an acceptable standard of living".

Feel free to shoot this down if it is bollocks, like I said my understanding of economics is limited.


You can't kill frictional unemployment entirely. There's a degree of it at all times. This does not mean "you can't get a job". It merely means that it takes some degree of time to find a job, during which time you are unemployed. If this is, for most people, a reasonably short time period, it can be planned for and dealt with. It is not entirely avoidable, because information does not travel instantly. You need time to find a new job which is mutually suitable to you and your prospective employer. Structural unemployment, where a person basically cannot find a job at all, is much different, and far worse. This is not a required thing, and should be avoided.

Quercus wrote:
leady wrote:As a final aside government does create and enforce the use of its money, but its what money represents that important, which is time and effort.


That's what money should represent, but that's often very far from the reality. Are you really telling me that CEOs put in hundreds of times more time and effort than the lowest paid workers in their company, to justify their hundreds of times higher salary? Nah - money doesn't simply represent value - it accrues around power. That can be political power leading to regressive taxation, power over controlling renumeration for employees (look what happened to the UK parliament when you let MPs set their own rules around expenses). The question is - what, if anything, can/should be done about this distortion of value by power? Anything effective pretty much has to involve the threat of violence at some point - people do not willingly give up either wealth or power.


And you have equated money with time and effort with your example. This is the labor theory of value, and it is false, and a bit of a strawman. Nobody is proposing that.

They are proposing that the CEO's time is significantly more valuable than the janitor's may be, and that his skillset is rarer.

Also, wages do correlate with time spent at work, so the CEO is generally spending more time at the office. This is particularly true when speaking of minimum wage jobs, which are often part time employment. Now, there is still usually a very large $/hr gap, and connections ARE important, but there is a very real element of "these people work harder" which gets ignored, distorted, or contradicted.

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Re: How should minimum wage be determined?

Postby Quercus » Mon Mar 02, 2015 6:45 pm UTC

Tyndmyr wrote:
Quercus wrote:
leady wrote:As a final aside government does create and enforce the use of its money, but its what money represents that important, which is time and effort.


That's what money should represent, but that's often very far from the reality. Are you really telling me that CEOs put in hundreds of times more time and effort than the lowest paid workers in their company, to justify their hundreds of times higher salary? Nah - money doesn't simply represent value - it accrues around power. That can be political power leading to regressive taxation, power over controlling renumeration for employees (look what happened to the UK parliament when you let MPs set their own rules around expenses). The question is - what, if anything, can/should be done about this distortion of value by power? Anything effective pretty much has to involve the threat of violence at some point - people do not willingly give up either wealth or power.


And you have equated money with time and effort with your example. This is the labor theory of value, and it is false, and a bit of a strawman. Nobody is proposing that.

They are proposing that the CEO's time is significantly more valuable than the janitor's may be, and that his skillset is rarer.

Also, wages do correlate with time spent at work, so the CEO is generally spending more time at the office. This is particularly true when speaking of minimum wage jobs, which are often part time employment. Now, there is still usually a very large $/hr gap, and connections ARE important, but there is a very real element of "these people work harder" which gets ignored, distorted, or contradicted.


Yeh, I agree with this. I just didn't express it very well at all.

I simply suspect that that value difference in most cases lies somewhere in the region of 20-100 fold, not 300-900 fold (which seems to be common from my minimal googling). Maybe I've got the numbers for actual pay gaps wrong, and maybe the value difference really is extremely high, both of which would invalidate my point.

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Re: How should minimum wage be determined?

Postby sevenperforce » Mon Mar 02, 2015 8:44 pm UTC

leady wrote:
EMTP wrote:Without society, there is no money. There are no land rights. There are no businesses. These things cannot exist without the social order and the rule of law. But the rule of law, as the name implies, has rules, just like Monopoly.

Now if you have a natural rights theory of property and you want to argue that that is prior to society and society is bound to respect it, you can make that argument.

This is essentially the argument that property is only yours unless a 2nd party decides to remove it through force.

No, it's the argument that ownership of anything is a social agreement, full stop. Your recharacterization of it -- "property is only yours unless a 2nd party decides to remove it through force" -- begs the question by assuming intrinsic property rights actually exist.

Tyndmyr wrote:
elasto wrote:One extra dollar to a millionaire makes them less happier than giving an extra dollar to a starving person. It's a no-brainer who should get the extra dollar - unless you regard a rich person's extra happiness more important than a poor person's?

That guy who wants to buy heroin but has no heroin money will be EXTRA happy to get it. Therefore, all money should be spent on heroin.

Humor aside, this does present a problem. Obviously we are all aware that recipients of public assistance are not typically habitual drug abusers, as ill-conceived laws to drug test people on welfare have demonstrated. However, the concept of a citizen's wage for everyone would seem to have a high risk of directly subsidizing substance abuse. There are many addicts who work only in order to ensure they can consistently support their habit and depend heavily on public assistance to supplement their basic needs and those of their dependents. It's not unreasonable to assume that if public assistance were to be largely replaced with a regular citizen's wage check, many addicts might quit working entirely and spend all their citizen's wage on whatever they were addicted to (licit or illicit), meaning their dependents would still be forced to rely on additional public assistance for housing and food.

If this issue were common enough to pose a major problem (and I think it could be; there are a lot of functioning addicts out there), it would mean the citizen's wage would fail as a replacement for general public assistance.

To prevent this, what if it was done on a reimbursement basis? You pay rent, you get a receipt, you show the receipt, and the government reimburses you up to some standard amount. Same for groceries and other basic necessities. I'm sure there would be a way to streamline it so you wouldn't end up with a complete flustercluck of paperwork. If someone didn't have any income and couldn't make rent, they could apply for emergency exemption from the reimbursement rule, but that would be the exception rather than the norm.

Quercus wrote:
Tyndmyr wrote:They are proposing that the CEO's time is significantly more valuable than the janitor's may be, and that his skillset is rarer.

Yeh, I agree with this. I just didn't express it very well at all.

I simply suspect that that value difference in most cases lies somewhere in the region of 20-100 fold, not 300-900 fold (which seems to be common from my minimal googling). Maybe I've got the numbers for actual pay gaps wrong, and maybe the value difference really is extremely high, both of which would invalidate my point.

To what degree can we trust the market to accurately reflect the value difference? Is there something driving the appraisal of the CEO's skillset higher than true market value, or something driving the appraisal of the minimum-wage worker's skillset lower than the true market value, or both? Can such pressures be identified and quantified? I would argue that the problem (if there truly is one) is more the result of devaluation on the low end rather than over-appraisal on the high end.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Mon Mar 02, 2015 9:43 pm UTC

Quercus wrote:Yeh, I agree with this. I just didn't express it very well at all.

I simply suspect that that value difference in most cases lies somewhere in the region of 20-100 fold, not 300-900 fold (which seems to be common from my minimal googling). Maybe I've got the numbers for actual pay gaps wrong, and maybe the value difference really is extremely high, both of which would invalidate my point.


Ah, I gotcha.

Strictly speaking, I'm not even sure that every worker's value is positive. Some might be very marginal indeed.

sevenperforce wrote:Humor aside, this does present a problem. Obviously we are all aware that recipients of public assistance are not typically habitual drug abusers, as ill-conceived laws to drug test people on welfare have demonstrated. However, the concept of a citizen's wage for everyone would seem to have a high risk of directly subsidizing substance abuse. There are many addicts who work only in order to ensure they can consistently support their habit and depend heavily on public assistance to supplement their basic needs and those of their dependents. It's not unreasonable to assume that if public assistance were to be largely replaced with a regular citizen's wage check, many addicts might quit working entirely and spend all their citizen's wage on whatever they were addicted to (licit or illicit), meaning their dependents would still be forced to rely on additional public assistance for housing and food.


It's a cross of the standard utility monster argument along with of course, pointing out the practical problem. Enabling addicts to withdraw further from the rest of the world may reduce opportunities to cure the problem. Sure, we're subsidizing the drug buying directly, but it also runs the risk of reducing healthy human contact.

But...long story short, I do not believe that happiness is a sufficient criteria for determining spending. Even if we skip past the drug issue, we have other sorts of issues. Maybe some people are very money oriented, and giving them money pleases them a great deal, while others are less money centric, for instance. You can draw lines in many different ways, and get very different answers...and eventually we run into the point that making people happy isn't the only purpose for money.

To prevent this, what if it was done on a reimbursement basis? You pay rent, you get a receipt, you show the receipt, and the government reimburses you up to some standard amount. Same for groceries and other basic necessities. I'm sure there would be a way to streamline it so you wouldn't end up with a complete flustercluck of paperwork. If someone didn't have any income and couldn't make rent, they could apply for emergency exemption from the reimbursement rule, but that would be the exception rather than the norm.


Such a model seems difficult. Reimbursement systems require having money up front. This is something of a problem for poor folk. Your exception IS the norm, because not having money is kind of intrinsic to being poor.

Voucher systems have been tried to some extent. They get complex.

Plus, you now have a much less granular system. Instead of giving $x to use as you will, you're now giving specific amounts for rent, groceries, and whatever else. This reduces flexibility, and has an increased reliance on central planning. This sort of issue plagues current systems like WiC(the subset where food is given directly), where someone may have a genuine need for food, but the mix given may not match their needs well. Therefore, they get some needs met at least somewhat, but in an inefficient fashion, as some is wasted.

To what degree can we trust the market to accurately reflect the value difference? Is there something driving the appraisal of the CEO's skillset higher than true market value, or something driving the appraisal of the minimum-wage worker's skillset lower than the true market value, or both? Can such pressures be identified and quantified? I would argue that the problem (if there truly is one) is more the result of devaluation on the low end rather than over-appraisal on the high end.


What devaluation force would you cite, and why? Why do you believe an unskilled worker is more valuable?

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Re: How should minimum wage be determined?

Postby mcd001 » Mon Mar 02, 2015 10:33 pm UTC

Tyndmyr wrote:What devaluation force would you cite, and why?

Wouldn't an influx of immigrants act to drive down wages?

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Re: How should minimum wage be determined?

Postby Tyndmyr » Tue Mar 03, 2015 2:54 pm UTC

mcd001 wrote:
Tyndmyr wrote:What devaluation force would you cite, and why?

Wouldn't an influx of immigrants act to drive down wages?


Sort of. Short term bursts certainly would, but that's not as important as long term effects. Long term effects, immigrants are more productive on average than natives*. So, you would expect an immigration friendly policy to increase productivity. Productivity is valuable.

If the supply of a given kind of worker greatly outpaces demand, that's an issue, but it's not really any different than the same issue with natives. An oversupply of workers for a given sector would depress wages for that sector. But on an economy-wide model, while you are increasing the number of workers, you are also increasing the size of the economy in exactly equal proportion. So, if skill sets are a good mix, then immigration should be increasing scale, not simply devaluing jobs. The "they took er jerbs" line of thinking is simplistic and wrong.

*This is likely selection bias. The people with the foresight and motivation to immigrate, a usually non-trivial undertaking, also happen to be better prepared to meet other challenges.

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Re: How should minimum wage be determined?

Postby CorruptUser » Tue Mar 03, 2015 4:01 pm UTC

Tyndmyr wrote:But on an economy-wide model, while you are increasing the number of workers, you are also increasing the size of the economy in exactly equal proportion.


No.

Y = A*N^(a)*K^(1-a)
Output = Technology*Workers*Capital.
Output/Worker = Technology*Capital.

Adding workers can add to technology too (they may have knowledge you lack), but it usually always drives per worker output down. Especially if the workers are unskilled; there is a reason every nation tries to restrict unskilled workers but allows in highly skilled ones. At least until Capital catches up, Solow growth model and all. Which depends on what kind of Capital; you can always build more factories, but raw resources are limited.

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Re: How should minimum wage be determined?

Postby sevenperforce » Tue Mar 03, 2015 7:57 pm UTC

Tyndmyr wrote:Enabling addicts to withdraw further from the rest of the world may reduce opportunities to cure the problem. Sure, we're subsidizing the drug buying directly, but it also runs the risk of reducing healthy human contact.

But...long story short, I do not believe that happiness is a sufficient criteria for determining spending. Even if we skip past the drug issue, we have other sorts of issues. Maybe some people are very money oriented, and giving them money pleases them a great deal, while others are less money centric, for instance. You can draw lines in many different ways, and get very different answers...and eventually we run into the point that making people happy isn't the only purpose for money.

I don't think the purpose of a citizen's wage is to maximize happiness; I think the purpose of a citizen's wage is to maximize social utility by eliminating homelessness, starvation, and so forth. A society with less of those things will have greater overall utility and function.

To prevent this, what if it was done on a reimbursement basis? You pay rent, you get a receipt, you show the receipt, and the government reimburses you up to some standard amount. Same for groceries and other basic necessities. I'm sure there would be a way to streamline it so you wouldn't end up with a complete flustercluck of paperwork. If someone didn't have any income and couldn't make rent, they could apply for emergency exemption from the reimbursement rule, but that would be the exception rather than the norm.

Voucher systems have been tried to some extent. They get complex.

Yeah, it would be tough to make this go smoothly.

Plus, you now have a much less granular system. Instead of giving $x to use as you will, you're now giving specific amounts for rent, groceries, and whatever else. This reduces flexibility, and has an increased reliance on central planning. This sort of issue plagues current systems like WiC(the subset where food is given directly), where someone may have a genuine need for food, but the mix given may not match their needs well. Therefore, they get some needs met at least somewhat, but in an inefficient fashion, as some is wasted.

Definitely another area it needs to be adjusted.

To what degree can we trust the market to accurately reflect the value difference? Is there something driving the appraisal of the CEO's skillset higher than true market value, or something driving the appraisal of the minimum-wage worker's skillset lower than the true market value, or both? Can such pressures be identified and quantified? I would argue that the problem (if there truly is one) is more the result of devaluation on the low end rather than over-appraisal on the high end.

What devaluation force would you cite, and why? Why do you believe an unskilled worker is more valuable?

I could be wrong, but I would tend to think an unskilled worker is more valuable because an unskilled worker has greater absolute mobility on a societal level. We say that only a few people can do what a CEO can do, and that's probably true, but it's also true that there are only a few jobs in which a CEO can use that particular skill set.

While there are certainly exceptions, it seems that skill and mobility are inversely related. Thus a market with a surplus of unskilled workers tends to devalue those workers further because it fails to take their mobility into account.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Tue Mar 03, 2015 8:06 pm UTC

sevenperforce wrote:
Tyndmyr wrote:Enabling addicts to withdraw further from the rest of the world may reduce opportunities to cure the problem. Sure, we're subsidizing the drug buying directly, but it also runs the risk of reducing healthy human contact.

But...long story short, I do not believe that happiness is a sufficient criteria for determining spending. Even if we skip past the drug issue, we have other sorts of issues. Maybe some people are very money oriented, and giving them money pleases them a great deal, while others are less money centric, for instance. You can draw lines in many different ways, and get very different answers...and eventually we run into the point that making people happy isn't the only purpose for money.

I don't think the purpose of a citizen's wage is to maximize happiness; I think the purpose of a citizen's wage is to maximize social utility by eliminating homelessness, starvation, and so forth. A society with less of those things will have greater overall utility and function.


And has it been demonstrated that a citizen's wage is a more efficient means of maximizing social utility? Or even that it does eliminate those things?


To what degree can we trust the market to accurately reflect the value difference? Is there something driving the appraisal of the CEO's skillset higher than true market value, or something driving the appraisal of the minimum-wage worker's skillset lower than the true market value, or both? Can such pressures be identified and quantified? I would argue that the problem (if there truly is one) is more the result of devaluation on the low end rather than over-appraisal on the high end.

What devaluation force would you cite, and why? Why do you believe an unskilled worker is more valuable?

I could be wrong, but I would tend to think an unskilled worker is more valuable because an unskilled worker has greater absolute mobility on a societal level. We say that only a few people can do what a CEO can do, and that's probably true, but it's also true that there are only a few jobs in which a CEO can use that particular skill set.


Why would that grant the unskilled worker greater mobility? If someone with a CEO skillset WANTS to work in an unskilled job, he can. If he wants to live in the crappy part of town, he can. The converse is not true.

Therefore, skilled workers have greater potential mobility than unskilled workers.

Granted, unskilled workers tend to swap jobs more often, which is likely what you are referring to, but why would that mean they are more valuable? Would not companies fight to keep a valuable worker, and be more carefree about losing a less valuable worker?

And, swapping jobs often is not quite the same as mobility. The guy who works random crap jobs in the same town his whole life may be swapping jobs frequently, but that isn't the same as having options. More likely, he has few options, and is simply taking whichever he has...but he may not even know about jobs in a distant locale, or lack the education to apply for them, or whatever. A worker's mobility is strongly tied to outcomes and education.

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Re: How should minimum wage be determined?

Postby sevenperforce » Tue Mar 03, 2015 8:34 pm UTC

Tyndmyr wrote:
sevenperforce wrote:I don't think the purpose of a citizen's wage is to maximize happiness; I think the purpose of a citizen's wage is to maximize social utility by eliminating homelessness, starvation, and so forth. A society with less of those things will have greater overall utility and function.


And has it been demonstrated that a citizen's wage is a more efficient means of maximizing social utility? Or even that it does eliminate those things?

More efficient than what? And no, I don't think it has been demonstrated that a citizen's wage can be implemented in such a way as to guarantee a universally acceptable standard of living, but it's worth discussing.


I would tend to think an unskilled worker is more valuable because an unskilled worker has greater absolute mobility on a societal level. We say that only a few people can do what a CEO can do, and that's probably true, but it's also true that there are only a few jobs in which a CEO can use that particular skill set.

If someone with a CEO skillset WANTS to work in an unskilled job, he can. If he wants to live in the crappy part of town, he can. The converse is not true. Therefore, skilled workers have greater potential mobility than unskilled workers.

I didn't say the CEO cannot work in an unskilled job; I said he could not use the particular skill set which makes him valuable outside of the handful of jobs where it is needed. Without the ability to use that skill set, he becomes a de facto unskilled worker.

However, a de facto unskilled worker (as opposed to a truly unskilled worker) will be less likely to choose an unskilled job, less likely to be satisfied, and thus less likely to be successful. I daresay that society benefits more from an unskilled but dedicated burger-flipper than from a former CEO who is being forced to flip burgers.

Swapping jobs often is not quite the same as mobility. The guy who works random crap jobs in the same town his whole life may be swapping jobs frequently, but that isn't the same as having options.

No, but I didn't say he had options. I'm talking about his value in the market overall. A pool of workers whose skills (or lack thereof) make them suited for a wider range of jobs is a more valuable pool than one in which comparatively greater skill sets are restricted to a smaller group of tasks.

Changes in the market or economy frequently force reorganization, redistribution, shuffling of positions, and so forth. Obviously, unskilled workers are more easily shuffleable than skilled workers. A skilled worker may be very valuable to a company in a given position, but less valuable (or even completely worthless) if that position changes; an unskilled worker does not lose value if the needs of his position change.

This is what I mean about the devaluing of unskilled labor. Unskilled laborers have a greater potential utility and thus are more valuable in aggregate than skilled workers are in aggregate. However, the devaluing takes place precisely because of that positional mobility. The unskilled worker does not benefit from the greater value of the pool.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Tue Mar 03, 2015 9:10 pm UTC

sevenperforce wrote:
Tyndmyr wrote:
sevenperforce wrote:I don't think the purpose of a citizen's wage is to maximize happiness; I think the purpose of a citizen's wage is to maximize social utility by eliminating homelessness, starvation, and so forth. A society with less of those things will have greater overall utility and function.


And has it been demonstrated that a citizen's wage is a more efficient means of maximizing social utility? Or even that it does eliminate those things?

More efficient than what? And no, I don't think it has been demonstrated that a citizen's wage can be implemented in such a way as to guarantee a universally acceptable standard of living, but it's worth discussing.


Than the status quo. Generally, if something would be worse than the status quo, we probably shouldn't do it.

I would tend to think an unskilled worker is more valuable because an unskilled worker has greater absolute mobility on a societal level. We say that only a few people can do what a CEO can do, and that's probably true, but it's also true that there are only a few jobs in which a CEO can use that particular skill set.

If someone with a CEO skillset WANTS to work in an unskilled job, he can. If he wants to live in the crappy part of town, he can. The converse is not true. Therefore, skilled workers have greater potential mobility than unskilled workers.

I didn't say the CEO cannot work in an unskilled job; I said he could not use the particular skill set which makes him valuable outside of the handful of jobs where it is needed. Without the ability to use that skill set, he becomes a de facto unskilled worker.[/quote]

Well, yes. But he can do A or B, whereas the unskilled worker can only do B. Therefore, he has more options. His options are a superset of the unskilled worker's options.

However, a de facto unskilled worker (as opposed to a truly unskilled worker) will be less likely to choose an unskilled job, less likely to be satisfied, and thus less likely to be successful. I daresay that society benefits more from an unskilled but dedicated burger-flipper than from a former CEO who is being forced to flip burgers.


Do you have any evidence for this viewpoint?

Are ex-CEOs particularly prone to poverty and failure, compared to unskilled workers? I rather doubt it.

Swapping jobs often is not quite the same as mobility. The guy who works random crap jobs in the same town his whole life may be swapping jobs frequently, but that isn't the same as having options.

No, but I didn't say he had options. I'm talking about his value in the market overall. A pool of workers whose skills (or lack thereof) make them suited for a wider range of jobs is a more valuable pool than one in which comparatively greater skill sets are restricted to a smaller group of tasks.


Your definitions of "wider range" are strange. Plus, not all options are equally valuable. A minimum wage job is generally less desirable than one paying millions.

We live in a world of specialization. Specialized skills have value. Value is not derived from LACK of skills.

Changes in the market or economy frequently force reorganization, redistribution, shuffling of positions, and so forth. Obviously, unskilled workers are more easily shuffleable than skilled workers. A skilled worker may be very valuable to a company in a given position, but less valuable (or even completely worthless) if that position changes; an unskilled worker does not lose value if the needs of his position change.


Uh, yeah they do. Unskilled workers become unemployed all the time because needs change.

Basically, you're making a job security argument. But it's in defiance of facts. Unskilled workers have lower job security. Lower paid jobs have a high turnover rate. Most higher paid positions have a low turnover rate, and often enjoy greater protections against sudden unemployment(contracts, benefits such as insurance).

This is what I mean about the devaluing of unskilled labor. Unskilled laborers have a greater potential utility and thus are more valuable in aggregate than skilled workers are in aggregate. However, the devaluing takes place precisely because of that positional mobility. The unskilled worker does not benefit from the greater value of the pool.


This is the sort of bullshit "potential" argument that labels going to school as reducing potential, because you had more choices beforehand.

It stems from a drastic misunderstanding of potential. You could never take all choices for careers. You must pick one(or a small subset, at any rate). Or zero. But choosing zero is going to result in worse outcomes than picking a good one. The traded off potential of your choice is the difference between your choice and the ideal choice, whatever value calculation you're using. Perhaps you picked wisely, perhaps not.

But not pursing any career is still a choice. And it will generally have a high cost.

You do not sum all of the careers you didn't choose, because that isn't an option.

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Re: How should minimum wage be determined?

Postby sevenperforce » Tue Mar 03, 2015 10:04 pm UTC

You missed a quote tag in there somewhere.

But, seriously, how can I make this more clear to you? I'm not talking about the individual. I'm not talking about what the individual wants, or the individual desires, or how many absolute options the individual has. I'm certainly not claiming that ex-CEOs inevitably fall into poverty, or that unskilled workers have better job security. That would be stupid.

I'm talking about the aggregate value of the class. Not the desirability of the status to the individual, but the value of the class to the economy. OBVIOUSLY it sucks big donkey balls to be restricted to low-income unskilled jobs; no one is disputing that. For the individual, having skills is almost always better than not having skills. But for the employer or the economy, the value of a given skill set must be divided by the lack of horizontal mobility associated with that skill set. Unskilled workers are practically a liquid commodity; they can be acquired, dismissed, replaced, or rearranged at very low cost. Skilled workers cost the company more and are far less mobile.

And that's what is devalued. Obviously, the utility value of a skilled worker is still higher than the utility value of an unskilled worker, but perhaps not as much more valuable as an open market would predict once you adjust for the lower mobility of the skilled worker. To the company and economy, not for the individual's benefit.

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Re: How should minimum wage be determined?

Postby ucim » Wed Mar 04, 2015 5:00 pm UTC

This seems to have devolved into another citizens' wage discussion. It's related in that similar reasoning could apply, but I think it's still missing the boat.
Spoiler:
CorruptUser wrote:Or maybe you get child support for the first 2 children but no more?
The point of is is that nobody gets left out... certainly no innocents. The third child is an innocent.

elasto wrote:I don't begrudge sharing my wealth with those in greater need than me so I'd hope the rich would feel the same way?
Some of them do. They help fund charitable organizations. They just don't do it your way. And hope is not justification for implementing policy.

elasto wrote:
ucim wrote:What assurance is there of that [that a citizen's wage won't be set too high]?
Well, people like you for a start. (People like me too - since, as I say, I'm advocating a citizen's wage in the low thousands.)
I don't see "people like us" being a powerful enough force, nor do I want to be a political force. I have my own life to live; Fighting a policy I didn't think should be implemented is not justification for implementing it in the first place. This citizens' wage is likely to balloon like welfare.

elasto wrote:
ucim wrote:Will this "citizen's wage" prevent the scenario you describe here below? [A person prostituting themselves to buy their kid food]
Combined with the other forms of welfare mentioned it absolutely can. For example I'm advocating that child be given enough healthy food to eat that that reason to prostitute oneself would be redundant.
Combined with two dollars it will also get me on the subway. My understanding of the citizens' wage is that it is supposed to take the place of all those other forms of welfare. Your statement seems to be an admission that it would not work. Also, unless you control what people do with their money, there is no assurance that they will do the right things (and thus, have this policy actually accomplish its goals).

elasato wrote:A town is far too small a unit to be practicable: People join and leave it far too rapidly when it takes at least a generation to get a return on the taxpayer investment in housing, schooling, farming, hospitals, water, electricity, internet and so on. The citizen's wage portion of it is by far the least important element.
Perhaps I've lost sight of what the "it" is that you are talking about. The thread is about minimum wage (which requires you to work for it, and thus at least comes from productivity). It moved into citizens' wage (which you don't have to work for, and therefore does not come from any kind of productivity - it's magic money), and now it seems you have an entire socialism-like system in mind.

EMTP wrote:But there is another way to look at it [...]: the economy is a game. Property is a social construct. Ownership is conditional, not absolute, and one of the conditions is....
You are describing an ism... capitalism, socialism, communism, whateverism. The OP is specifically about minimum wage in a capitalistic system.

Tyndmyr wrote:The simple fact is that while we like doing things, the things we enjoy are not necessarily the same as the things others need.
Exactly! This puts the lie to the "volunteer economy" that the citizens' wage is supposed to engender. It will instead just distort the relationship between the value of the job and the reward for doing it, undermining the thing that makes capitalism work to begin with.
Cradarc wrote:Ideally everyone should be given just enough to live a healthy life and must work for luxuries.
Given?? Money represents productivity, and is only useful as a means of exchange because it is desirable, and part of what makes it desirable is that it is hard to get. The more free money there is, the less desirable money becomes.

Money has to be hard to get.
Cradarc wrote:What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living?
My problem with this is "some sort", "guarantees", "full-time", and "acceptable". That's a seaish amount of wiggle room.

Quercus wrote:Are you really telling me that CEOs put in hundreds of times more time and effort than the lowest paid workers in their company
They do it smarter, on many different levels. Smart is good. Yes, they also do it with fraudulent power. Fraud is bad. But that has nothing to do with minimum wage.

Tyndmyr wrote:Why is artificial intelligence any more worrying than natural intelligence?
Because it is developing much faster than natural intelligence, and faster than we'll be able to adapt to it. We'll be subsumed.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Wed Mar 04, 2015 7:42 pm UTC

sevenperforce wrote:You missed a quote tag in there somewhere.

But, seriously, how can I make this more clear to you? I'm not talking about the individual. I'm not talking about what the individual wants, or the individual desires, or how many absolute options the individual has. I'm certainly not claiming that ex-CEOs inevitably fall into poverty, or that unskilled workers have better job security. That would be stupid.

I'm talking about the aggregate value of the class. Not the desirability of the status to the individual, but the value of the class to the economy. OBVIOUSLY it sucks big donkey balls to be restricted to low-income unskilled jobs; no one is disputing that. For the individual, having skills is almost always better than not having skills. But for the employer or the economy, the value of a given skill set must be divided by the lack of horizontal mobility associated with that skill set. Unskilled workers are practically a liquid commodity; they can be acquired, dismissed, replaced, or rearranged at very low cost. Skilled workers cost the company more and are far less mobile.


They are so very liquid and disposable precisely because of their ubitquity. This is a result of something being valued little, not it being of great value. One works to keep the things that are precious.

And that's what is devalued. Obviously, the utility value of a skilled worker is still higher than the utility value of an unskilled worker, but perhaps not as much more valuable as an open market would predict once you adjust for the lower mobility of the skilled worker. To the company and economy, not for the individual's benefit.


This isn't "devaluation", this is how market economies value literally everything. It is intrinsic to the very concept of value in economics.

ucim wrote:
Tyndmyr wrote:Why is artificial intelligence any more worrying than natural intelligence?
Because it is developing much faster than natural intelligence, and faster than we'll be able to adapt to it. We'll be subsumed.

Jose


How do you know these things?

1. AI is a hard problem. It is NOT developing extremely rapidly. Software, in general, does not follow the amazing growth curve of Moore's law. That is for hardware. And even there, there's little reason to think it will continue indefinitely. Indeed, in some respects, it has already failed. Generalizing this to intelligence is not necessarily valid. Life does not evolve solely for more intelligence. There is little reason to suspect that it is developing significant faster than natural intelligence.

2. Faster than we'll be able to adapt to it. How can you predict this? On what basis can you assume this to be true?
Last edited by Tyndmyr on Wed Mar 04, 2015 8:05 pm UTC, edited 1 time in total.

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Re: How should minimum wage be determined?

Postby KrytenKoro » Wed Mar 04, 2015 7:58 pm UTC

Anybody who thinks they have too much money should throw it in a pot. The rest of us will divvy up the pot amongst ourselves.

You laugh, but tithing actually happened. Still happens in places, and it wasn't the end of the world. Rich people still exist in spite of it.

Will this "citizen's wage" prevent the scenario you describe here below?
...I was 15 working at McDonald's for $3.something/hr and one lady with a 5 year old daughter that I knew from church offered me MULTIPLE TIMES to let me do *anything* I wanted to her sexually if I could spare $20 so she could buy some bulk cereal for her kid...
I think not. It has to be low enough to still provide incentive to flip burgers, and high enough to fill the gap so there's no incentive to earn a quick $20. And it has to stay that way in the face of the inflation that it would inevitably cause. Free money drives prices up until the free money isn't enough any more. And on top of that, it forms another welfare cliff.
Spoiler:
Not quite a cliff since the citizens wage is not needs based, but it increases the slope, making dollars earned less valuable.


Did you miss the part of the story where she was doing that to put food on the table, not for the novelty of gaining 20$ "easily"?

elasto wrote:Yes, I have. And I believe in it. But it's the stitch that does it. You're proposing throwing thread around. I'm in favor of public libraries, public education, public health care, but not public largesse.

Even when what evidence there is suggests it works?

Remember though; if you have a citizen's wage, you have a citizen's obligation too. I can easily see that obligation as being to not breed on the public's dime. Be careful what you wish for - you might get it.

If the potential sacrifice to be made is less burdensome than the definite infliction we're currently suffering, it seems even the most rational choicemaking would point to accepting a citizen's wage.
From the elegant yelling of this compelling dispute comes the ghastly suspicion my opposition's a fruit.

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Re: How should minimum wage be determined?

Postby KrytenKoro » Wed Mar 04, 2015 8:05 pm UTC

What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living? Each state can then implement it however they want.

You'll get a host of companies being unwilling to schedule a worker for forty hours, but almost all of them happy to demand 39.


The "full-time = 40 hr/wk" model is exploitative bullshit. It might be rescuable by modifying it to "40 hours of work for a "week" of benefits, so that you can get half health insurance from one part time job and half from another, but right now it is blatantly and unacceptably abused by corporations to screw over workers who can't hold out for a full-time job.
From the elegant yelling of this compelling dispute comes the ghastly suspicion my opposition's a fruit.

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Re: How should minimum wage be determined?

Postby sevenperforce » Wed Mar 04, 2015 9:03 pm UTC

Tyndmyr wrote:
sevenperforce wrote:I'm talking about the aggregate value of the class. Not the desirability of the status to the individual, but the value of the class to the economy. For the individual, having skills is almost always better than not having skills. But for the employer or the economy, the value of a given skill set must be divided by the lack of horizontal mobility associated with that skill set. Unskilled workers are practically a liquid commodity; they can be acquired, dismissed, replaced, or rearranged at very low cost. Skilled workers cost the company more and are far less mobile.

They are so very liquid and disposable precisely because of their ubitquity. This is a result of something being valued little, not it being of great value. One works to keep the things that are precious.

And that's what is devalued. Obviously, the utility value of a skilled worker is still higher than the utility value of an unskilled worker, but perhaps not as much more valuable as an open market would predict once you adjust for the lower mobility of the skilled worker. To the company and economy, not for the individual's benefit.

This isn't "devaluation", this is how market economies value literally everything. It is intrinsic to the very concept of value in economics.

Look, we don't disagree on these things. On the contrary, I think they are all pretty obvious. But that's my point.

My original point was that the market value of unskilled labor may either over-appraise the value of a CEO or under-appraise the value of an unskilled worker. You asked for a possible mechanism, and I'm pointing out how the economic value of the unskilled labor pool can be greater than the sum of its parts.

Here, I'll put this in absolute terms.

In the market, the value of any employee to a company is necessarily greater than the wages paid to the employee. We know that a CEO making an annual salary of $11 million must be worth more than $11 million annually to the company (actual value or perceived value), or they would stop paying him that much. Likewise, the company's twenty vice presidents each making annual salaries of $300,000 must collectively be worth more than $6 million annually to the company (again, actual value or perceived value) or they wouldn't be getting paid that much. And we know that the 10,000 workers all working full time at minimum wage must collectively be worth more than $150,800,000 annually to the company.

We can reduce this to a formula:

( S * N ) / X = V

where S is the salary an individual employee can demand, N is the number of employees in that salary class, X is some number less than 1, and V is the total value of the overall class to the company.

My contention is that X gets closer and closer to unity as S goes up and N goes down. That is, as you move up in salary and down in class population, your class is able to demand more and more of its aggregate value, and vice versa. The CEO can demand maybe 95% of his value to a company, so if he can demand $11 million if he is worth at least $11.6 million to the company. The twenty vice presidents can demand maybe 80% of their value, so they can demand salaries of $300,000 each only if their collective value to the company is at least $7.5 million. But the 10,000 low-income workers can only demand perhaps 20% of their total value to the company, so they can only demand a wage increase if they are collectively earning the company more than $754 million annually.

Does that make sense? The value of the employee pool is greater than the sum of employee salaries within that pool, and the disproportion increases the more members you have in the pool.

KrytenKoro wrote:
What if instead of a federal minimum wage, we have a law that mandates every state to have some sort of legislation that guarantees any full-time employee can afford a acceptable standard of living? Each state can then implement it however they want.

You'll get a host of companies being unwilling to schedule a worker for forty hours, but almost all of them happy to demand 39.

Perhaps the former poster meant "any employee working 40 total hours per week" not "any employee working 40 hours a week at a single company". Because it was stated as a mandate for states rather than for employers. In other words, if Jane Singlemom is working 12 hours a week at one job and 20 hours a week at a second job and 9 hours a week at a third job, the state is responsible for making sure she and her dependents can afford an acceptable standard of living in one way or another.

The "full-time = 40 hr/wk" model is exploitative bullshit. It might be rescuable by modifying it to "40 hours of work for a "week" of benefits, so that you can get half health insurance from one part time job and half from another, but right now it is blatantly and unacceptably abused by corporations to screw over workers who can't hold out for a full-time job.

Well, I'm not sure if this is exactly the law, but I believe "full-time" is considered to be anything between 35 and 40 hours. Obviously companies will rarely schedule employees for more than 40 hours because they don't want to pay overtime, so there has to be some sort of buffer there for employees who consistently work just under forty hours per week.

But yeah, having a fractional contribution of some kind would probably be good. Another good thing would be to mandate a lower term for benefits...like, you only have to work somewhere for 2 months before you will become eligible for benefits, rather than the 1-year term most places use. Right now, everything is weighted against hourly-wage employees earning benefits. You have to work there consistently for a year without taking more than a week off, you have to have worked at least 35 hours every week you worked, et cetera.

It should be structured differently. For example: if an employee has worked an average of between five and ten hours per week in the past four weeks, the employer must offer them 25% of the benefits a full-time employee receives. If an employee has worked an average of between ten and fifteen hours per week in the past four weeks, the employer must offer them 32.5% of the benefits a full-time employee receives, and so forth:

<5 hrs/wk: no benefits
5-10 hrs/wk: 25% benefits
10-15 hrs/wk: 37.5% benefits
15-20 hrs/wk: 50% benefits
20-25 hrs/wk: 62.5% benefits
25-30 hrs/wk: 75% benefits
30-35 hrs/wk: 87.5% benefits
35+ hrs/wk: 100% benefits


This is stepped, so employers can still plan ahead, but not so widely stepped that employers will go out of their way to keep employees under any particular level. Employers have an incentive to give more hours rather than fewer hours, because they're paying out the same benefits within each step. For example, if I have to pay 50% benefits for a given employee, I'm going to work him as close to 20 hours as possible; otherwise I'm losing money.

This would enable someone working multiple jobs to still earn full-time benefits. Of course, I'm not sure what would happen if someone was working 32 hrs/wk at his first job and 15 hrs/wk at his second job -- would he somehow be drawing 137.5% of full-time benefits?

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Re: How should minimum wage be determined?

Postby ucim » Wed Mar 04, 2015 10:34 pm UTC

Tyndmyr wrote:How do you know [AI is developing faster than natural intelligence]?
Artificial intelligence has gone from zero to google in less than one hundred years. Granted, neither google nor Deep Blue is really "intelligent" when compared to you, but it is not a stretch to say it's more intelligent than a slug. It took millions of years for nature to get to a slug.

Human intelligence is not increasing at a noticable rate. It may be increasing at a measurable rate, but I doubt that if you took a baby from a thousand years ago and brought them up in the modern world, that we'd notice anything unusually inept about him or her.

Further, as machines start to do more of our thinking for us (facebook, I'm looking at you), there may not be as strong a selection pressure on intellegence. At least not the kind that the machines are doing for us.

KrytenKoro wrote:You laugh, but tithing actually happened. Still happens in places, and it wasn't the end of the world. Rich people still exist in spite of it.
Well, is the object to get rid of rich people? I thought it was to mitigate abject poverty. If you just want to get rid of rich people, that's a separate thread having nothing to do with minimum wage.

spoilered for OT
Spoiler:
KrytenKoro wrote:Did you miss the part of the story where she was doing that to put food on the table, not for the novelty of gaining 20$ "easily"?
No, I didn't miss it. But a quick $20 means she still has time to cook the food and be with her children. $20 that takes all day does not. There is value in higher dollars/hour.

KrytenKoro wrote:If the potential sacrifice to be made is less burdensome than the definite infliction we're currently suffering, it seems even the most rational choicemaking would point to accepting a citizen's wage.
The "potential sacrifice" is loss of personal freedom. It's important enough that people have sacrificed their lives for this.
sevenperforce wrote: That is, as you move up in salary and down in class population, your class is able to demand more and more of its aggregate value, and vice versa.
Those on the low end have less bargaining power. Thus were created unions, which greatly benefitted union members (while they screwed over non-members and extracted more value from the company). Acting in a similar stead are the government's minimum wage laws.

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Re: How should minimum wage be determined?

Postby sevenperforce » Wed Mar 04, 2015 11:01 pm UTC

ucim wrote:
sevenperforce wrote: That is, as you move up in salary and down in class population, your class is able to demand more and more of its aggregate value, and vice versa.
Those on the low end have less bargaining power. Thus were created unions, which greatly benefitted union members (while they screwed over non-members and extracted more value from the company). Acting in a similar stead are the government's minimum wage laws.

Precisely. Collective bargaining is great, except for when it does little more than place power in the hands of the people running the union and enable them to skim off the top.

The point -- which seems to have taken quite a while to get to -- is that the wages an employee can demand are not exactly proportional to the per capita value of his labor class; they are proportional to some percentage of that per capita value, and the percentage he can demand depends on his bargaining power, which goes down as the size of his class goes up.

Minimum wage, then, should not be about eliminating the rich or removing all wage gaps or guaranteeing a certain lifestyle. Rather, it should be about increasing the percentage of per-capita value that lower-income workers can demand.

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Re: How should minimum wage be determined?

Postby EMTP » Wed Mar 04, 2015 11:32 pm UTC

ucim wrote:Human intelligence is not increasing at a noticable rate. It may be increasing at a measurable rate, but I doubt that if you took a baby from a thousand years ago and brought them up in the modern world, that we'd notice anything unusually inept about him or her.


If you boil this down, it's purely circular. Human intelligence may be increasing, but I don't think it's increasing that much because I don't think if I were to check it would seem to be increasing that much. You are basically just stating that you have an opinion, and hung a lamp post on it to the effect that if the evidence says something different, you don't care.

"AI," such as it is, is terrible. Perhaps it will improve in the next few centuries. All social change precedes quite a bit faster than evolutionary change, computer technology included. But social change also includes nutrition, education, medical care, communications, and other technologies that make humans smarter.

It's likely a moot point, however, because there is no reason to think that if machines become smarter, there will be less work for humans. Machines have become thousands of times more physically powerful in the last four hundred years, but there are still plenty of jobs for humans, including many jobs directing the machines. I imagine many knowledge jobs in the future will involve directing software, as some already do. Hypothetical AIs will have to compete not with naked human brains, but with human brains managing other AIs.
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Re: How should minimum wage be determined?

Postby ucim » Wed Mar 04, 2015 11:44 pm UTC

sevenperforce wrote:Minimum wage, then, should not be about eliminating the rich or removing all wage gaps or guaranteeing a certain lifestyle. Rather, it should be about increasing the percentage of per-capita value that lower-income workers can demand.
But this is only a problem if the result is that the low end cannot afford a "decent" standard of living. If, without minimum wage laws, the low end can afford a decent (FSVO "decent") standard of living, then such laws are unnecessary, and should not exist.

The mere fact that people in a better bargaining position can get better bargains does not support minimum wage laws.

So... the question then becomes "who does the minimum wage law protect?" and "at what cost?" To me it looks like it protects those whose skills are not in sufficient demand but still manage to get "a job", and does so at the cost of those whose skills are not in sufficient demand but cannot (or do not) get a job (perhaps as a result of minimum wage).
Spoiler:
It also raises costs, which raises prices and depresses profits, which reduces dividends, and ends up hurting those on a fixed income whose pensions hold stock in companies who employ low-end labor. This slows the economy down, though this is mitigated by the speedup due to more money being in the hands of the low end workers; that money is almost guaranteed to be spent on something so will circulate. I don't know what the net would be.
It probably doesn't hurt "the rich", nor does it seem to put pressure on CEO salaries.

edit to respond to EMTP, spoilerd as OT:
Spoiler:
EMTP wrote:You are basically just stating that you have an opinion, and hung a lamp post on it to the effect that if the evidence says something different, you don't care.
I suppose that's fair. Does anybody think that human intelligence is evolving noticably quickly?

EMTP wrote:But social change also includes nutrition, education, medical care, communications, and other technologies that make humans smarter.
Well, sort of, on some points. Nutrition and medical care allow humans to reach their potential (not be held back by organic deficiencies in their own bodies). Education allows them to utilize their intelligence. Communications and other technologies do not affect human intelligence; rather, they amplify intelligent (and stupid!) actions, in the same way that a jackhammer makes a person strong enough to break pavement. It's not the same.

EMTP wrote:It's likely a moot point, however, because there is no reason to think that if machines become smarter, there will be less work for humans.
It's not about "less work for humans". It's about who is deciding. If the combination of google, mastercard, microsoft, facebook, New York Times, and OKCupid (who are probably already sharing everything they know about you) get to decide what shows up on your screen, what prices you are offered, and who you will be seeing on Saturday, they have taken over a good deal of your decisionmaking. You are just left to enjoy the results.

I have no doubt the results will be more and more enjoyable as the system gets to know you. But these results are customized "for you", for somebody else's benefit, by a whole slew of different pieces of software that is increasingly not being managed by any single person, and in some cases not even written by people.

And this is only in the last fifty years. Most of it in the last ten.

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Re: How should minimum wage be determined?

Postby KrytenKoro » Thu Mar 05, 2015 3:31 pm UTC

ucim wrote:Well, is the object to get rid of rich people? I thought it was to mitigate abject poverty. If you just want to get rid of rich people, that's a separate thread having nothing to do with minimum wage.

No, I don't. I was responding to my interpretation of what you were saying, about the citizen's wage. If that's not what you were going for, then I apologize for misinterpreting you.

No, I didn't miss it. But a quick $20 means she still has time to cook the food and be with her children. $20 that takes all day does not. There is value in higher dollars/hour.

And there is also a value in not having to prostitute oneself if one does not wish to be a sex worker. The point of the story was that this person was so screwed over that the only way to keep their child alive was to prostitute themselves -- making sure the state keeps that child alive as a default absolutely would prevent that story from happening, because the story wasn't "well, I have enough food now, but I had such a good time offering up my body to strangers against my will."

(Clarifying that I'm not denigrating being a sex worker here, I'm saying it's a tragedy to be forced into being a sex worker if one does not desire, just as it would be a tragedy to be forced into any other job.)


KrytenKoro wrote:If the potential sacrifice to be made is less burdensome than the definite infliction we're currently suffering, it seems even the most rational choicemaking would point to accepting a citizen's wage.


The "potential sacrifice" is loss of personal freedom. It's important enough that people have sacrificed their lives for this.

(1) potential. You're the one raising the spectre of the government using the citizen's wage to enforce such a thing. (2) There's a potential loss of freedom either way -- losing the freedom to be alive if you starve, or losing the freedom to...possibly choose to do X without paying fees (3) No, it's really not. People have sacrificed their lives for the big infringements on freedom, like mandatory sterilization or police brutality. Contrary to the beliefs of zealous libertarians, everyone but them is willing to accept some small loss of liberty for an increase in safety, and that's pretty much always been true. For example, I'm required to purchase car insurance if I want to drive my car. I may grumble about it, but in the end, I pay and go on with my life. I don't set myself on fire on the insurance company's lawn. I'm willing to hazard that those other commentors here who pay car insurance also have not immolated themselves.
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Re: How should minimum wage be determined?

Postby leady » Thu Mar 05, 2015 4:13 pm UTC

KrytenKoro wrote:And there is also a value in not having to prostitute oneself if one does not wish to be a sex worker. The point of the story was that this person was so screwed over that the only way to keep their child alive was to prostitute themselves -- making sure the state keeps that child alive as a default absolutely would prevent that story from happening, because the story wasn't "well, I have enough food now, but I had such a good time offering up my body to strangers against my will."


Of course as sad as that individual story might be, what you missing from the narrative are the stream of bad decisions (and maybe some bad luck) that they will have taken to get to this junction. Unfortunately all type of welfare at best mitigate or at worse subsidise bad decision making.

(3) No, it's really not. People have sacrificed their lives for the big infringements on freedom, like mandatory sterilization or police brutality. Contrary to the beliefs of zealous libertarians, everyone but them is willing to accept some small loss of liberty for an increase in safety, and that's pretty much always been true. For example, I'm required to purchase car insurance if I want to drive my car. I may grumble about it, but in the end, I pay and go on with my life. I don't set myself on fire on the insurance company's lawn. I'm willing to hazard that those other commentors here who pay car insurance also have not immolated themselves


A minimum wage is a pretty big infringement of freedom to the people it effects - i.e enterprises that rely on low skilled low wage labour (I'm thinking more self owned restaurants rather than Maccy Ds) and the people it renders unemployable. The very reason it was introduced in the US was specifically to attack a big freedom that lots of people have died for ( I think its already been referenced earlier)

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Re: How should minimum wage be determined?

Postby Mokele » Thu Mar 05, 2015 4:38 pm UTC

leady wrote:Of course as sad as that individual story might be, what you missing from the narrative are the stream of bad decisions (and maybe some bad luck) that they will have taken to get to this junction. Unfortunately all type of welfare at best mitigate or at worse subsidise bad decision making.


And those decisions are grounds for forcing them into sexual slavery or starving to death?

The fundamental basis of a decent and moral society is that society doesn't condemn you to death for any decision, no matter how poor, short of murder.

People make mistakes, take stupid chances, and do stupid things. I don't think they should die for that.

A minimum wage is a pretty big infringement of freedom to the people it effects - i.e enterprises that rely on low skilled low wage labour (I'm thinking more self owned restaurants rather than Maccy Ds) and the people it renders unemployable. The very reason it was introduced in the US was specifically to attack a big freedom that lots of people have died for ( I think its already been referenced earlier)


If you can only stay in business by paying people less than they can live on, your business deserves to fail.

And I'm pretty sure these exact same arguments were made about child labor and workplace safety laws. Ethics trumps economics, always. Profits cannot make an action moral.
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