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Liberty News ForumLNF Forums HereEconomics, Financial News › Is the minimum wage Constitutional?
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Very Hot Topic (More than 25 Replies) Is the minimum wage Constitutional? (Read 12,762 times)
TowardLiberty
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Re: Is the minimum wage Constitutional?
Reply #110 - Apr 1st, 2016 at 12:16am
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EF wrote on Mar 31st, 2016 at 11:55pm:
So would I.  And I would expect the good from increasing the minimum wage to be long term, and the bad to be short term.  I think the good far outweighs the bad, and I think an observation of what has occurred over the last 50 years that is unencumbered by hundreds of pounds of economic theory bears that out. 


Now we are going in circles.

You cannot compare cost and benefit across people.

And what "good" are you speaking of?

We have already discussed the fact that real wage gains cannot be legislated into existence. That means there is no multiplier effect in a minimum wage increase.

The size of labors share of national income does not go up in real terms owing to a change in the minimum wage. It can go down, though.

Things adjust in a thousand different ways. Companies cut back on perqs. They raise the a.c. a degree or what have you.

They cut back on the size of the goods they sell or raise the price. 11 inch subway footlongs, for instance.

That's an effective price increase.

They substitute capital for labor and thereby remove resources from where they are more urgently needed, costing us all.

This has all been gone through before. And you have had nothing to say in response.

I don't think for a moment these costs have found their way into your calculus while the benefits that are being focused on are non-existent..


« Last Edit: Apr 1st, 2016 at 12:28am by TowardLiberty »  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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TowardLiberty
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Re: Is the minimum wage Constitutional?
Reply #111 - Apr 1st, 2016 at 12:18am
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EF wrote on Apr 1st, 2016 at 12:01am:
Thanks for the PM.  If you can hold off on the five dollar words, can you answer this question?

Are you saying that even though things, like living standards and employment, often improve after an increase in the minimum wage, they would improve MORE if it were left alone?


Something along those lines, yes.

Though I would question the idea that these things improve after an increase in the mw, in some measurable/ empirical way.

Rather I would argue that they are increasing all the time right along with a stable or sporadically rising wage floor.

There are a lot of things that diminish economic growth.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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EF
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Re: Is the minimum wage Constitutional?
Reply #112 - Apr 1st, 2016 at 10:35am
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TowardLiberty wrote on Mar 31st, 2016 at 11:24pm:
And so what?

What is that supposed to tell you?

The minimum wage has existed and the world has not fallen apart. So what?

The point is the minimum wage reduces the number of these jobs. The point is not that it eliminates them outright.

Are you even following this discussion at all?

That does not follow.

You're speaking nonsense here.

But do go on. I love these aborted attempts at logical deduction.

They reveal quite a lot
.


Since you asked so nicely, okay.  Cut and paste followed by link followed by additional comments from moi:

"Conclusion Minimum wage increases have at least two purposes. The first is to lift the earnings of low-wage workers. Opponents of the policy have often raised the potential disemployment effects, but this analysis shows that minimum wage increases do not price low-wage workers out of the labor market. The employment effects, while negative in some models, never reach anywhere near the level where the benefits to low-wage workers would be outweighed by their costs in terms of job losses. These findings, especially when taking into consideration the characteristics and incomes of minimum wage workers and their families, provide convincing evidence that the policy is effective in raising the earnings of low-wage workers, most of whom (though not all) reside in below-average income households. The second purpose of the minimum wage is to maintain a floor underneath the low-wage labor market. This role of the minimum is important, because low-wage workers have historically had the least bargaining power in the U.S. workforce. As shown in Table 1, they are least likely to be represented by unions and more likely to be female or minority, two groups whose wages and incomes have historically been lowered by discrimination. Figure 3 makes the point that this floor used to be significantly higher, high enough, in fact, to lift a working mother with two children above the poverty line. This is no longer the case, and this worker must now depend on other supports, such as food stamps and the Earned Income Tax Credit, to provide her family with an income that enables the family to meet its basic needs. These subsidies are an important part of a package of income supports that help working families make ends meet. But it should also be stressed that the minimum wage, which has the direct effect of raising the market wage paid to the low-wage workforce, is an important component of that policy package."
http://www.epi.org/publication/briefingpapers_min_wage_bp/

Now, you probably will not have any trouble reading the entire link because they use the same kind of language and analysis you are accustomed to using from your many years of reading hundreds of economic treatises.  But I did.  I dang near blacked out at one point.  But I pressed on, skipping occasionally over five dollar words, figuring these guys probably had a summary some place, generally styled as "conclusion," so I went right to the end and BANG! there it was. 

Now, I also know these guys are represented by one of those economists hovering over that building in post 11.  But these guys differ in this respect: they analyzed what DID happen versus analyzing what MIGHT happen. 

So I am hanging my hat on them.  Not because I am as smart as they are or as smart or well read as you are, but because what they observe is what I have observed, too, over a period of approximately 50 years.
  

non sumus stulti
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Re: Is the minimum wage Constitutional?
Reply #113 - Apr 1st, 2016 at 10:52am
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And  here's another cut and paste from that same link - this one occurred early enough that I had not become numb from all the jargon and tables:

Opponents, however, make two basic arguments. First, they claim that the minimum wage costs jobs by pricing low-wage workers out of the labor market. Second, opponents argue that the minimum wage is poorly targeted, since most low-wage workers live in families with relatively high levels of income. An examination of the empirical evidence on low-wage workers and the effects of minimum wage increases reveals that: • No evidence exists that teenagers or less-than-high-school-educated adults lost work as a result of the 1996-97 minimum wage increases. • Historically, analyses of the minimum wage’s impact on young workers have never shown the predicted large job-loss effects. •
  

non sumus stulti
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Re: Is the minimum wage Constitutional?
Reply #114 - Apr 1st, 2016 at 10:57am
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That's a single study that is quite dated. But what's more is it is resting it's conclusion regarding the employment effects on the widely discredited Card & Kruger study.

There have been many, many, many (piles even) of studies that have come since then that have better experimental designs and show that there is an employment effect.

We have gone over all this already with the first link I provided which was a meta study of the studies regarding the impact of the minimum wage.

The main reason that Card and Kruger found unreliable results is that they focused on Quote:
the capital intensive part of the food industry, not the industry as a whole. And depending upon how we want to specify our theoretical model, the various elasticities within it, we can come up with a result that, in that capital intensive part of the industry, leads to a fall in employment, no change at all, or an increase in employment. However, that’s not at all the same thing as showing that the rise in the minimum wage did not increase unemployment (or increased employment) overall in the entire industry.
http://www.forbes.com/sites/timworstall/2015/08/01/why-the-card-and-krueger-pape...

The conclusion being that the demand elasticities that came out of the model were incomplete.

But let me say one more thing that is very important to understand...

Those piles of studies I have refereed to are not prognostications or predictions. They are historical studies of what actually happened. In this sense they are no different from the study you have referenced.

This is important to understand or we will not be on the same page.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Is the minimum wage Constitutional?
Reply #115 - Apr 1st, 2016 at 10:59am
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When you take a meta view of the studies (plural) in general, as the Fed has done and I have referenced, you will see that the overwhelming conclusion is that there is an employment effect.

The debate is simply on how large it is.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Is the minimum wage Constitutional?
Reply #116 - Apr 1st, 2016 at 8:34pm
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Oh boy.  Once again I must bring some sanity to the discussion.

Here is a funny thing to ponder.  If the federal government were to raise the minimum wage to $50.00 an hour then there is at least ONE thing we would know for sure.  If the day before the raise you made the minimum $10.00 per hour then the day after the raise you would be making...MINIMUM WAGE STILL!  This is what people don't seem to understand.  The NUMBER is insignificant.  The only thing that that number does it set the minimum COST of HIRING.

Point number two.  The ONLY people who receive anything cost to wages based on COST of LIVING are those on fixed incomes.  Social security and believe it or not, the military.  Housing allowance varies from place to place based on cost of living.  Yearly increases in benefits or pay are based on cost of living increases.  That is why an E-3 today makes NO MORE, and in some cases LESS than an E-3 in comparable purchasing power to 1985.

Point number three.  Have any of the "raise the minimum wage crowd" thought of $15.00 an hour today?  Do you guys somehow think that the cost of hiring a phlebotomist, for example, will not go up? (they make on average $15.00 an hour starting out).  Now if the cost of hiring a phlebotomist goes up in check with the minimum wage then the cost of laboratory studies will have to follow suit.  Why?  On to point number four!

Point number four...Businesses are not in the business of job creation, livable wage making, empowering employees to buy homes and cars, eat out at Ruth's Chris, be able to have more babies, provide those babies with the family income to go to college, etc. etc. etc.  They ONLY exist for ONE thing.  To build wealth for the owners (shareholders, proprietors, partners).  That's it.

At the end of the day, constitutionality is not even important.  What is important is giving people a false sense of accomplishment and hope by making the excited about and look forward to making....MINIMUM wage..

If average is the cream of the crap, the worst of the best, then what is minimum with regard to anything?
  


I have never seen a wild thing feel sorry for itself. A little bird will fall dead, frozen from a bough, without ever having felt sorry for itself.--D.H. Lawrence
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Re: Is the minimum wage Constitutional?
Reply #117 - Apr 1st, 2016 at 8:48pm
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Goose wrote on Apr 1st, 2016 at 8:34pm:
Oh boy.  Once again I must bring some sanity to the discussion.

Here is a funny thing to ponder.  If the federal government were to raise the minimum wage to $50.00 an hour then there is at least ONE thing we would know for sure.  If the day before the raise you made the minimum $10.00 per hour then the day after the raise you would be making...MINIMUM WAGE STILL!  This is what people don't seem to understand.  The NUMBER is insignificant.  The only thing that that number does it set the minimum COST of HIRING.

Point number two.  The ONLY people who receive anything cost to wages based on COST of LIVING are those on fixed incomes.  Social security and believe it or not, the military.  Housing allowance varies from place to place based on cost of living.  Yearly increases in benefits or pay are based on cost of living increases.  That is why an E-3 today makes NO MORE, and in some cases LESS than an E-3 in comparable purchasing power to 1985.

Point number three.  Have any of the "raise the minimum wage crowd" thought of $15.00 an hour today?  Do you guys somehow think that the cost of hiring a phlebotomist, for example, will not go up? (they make on average $15.00 an hour starting out).  Now if the cost of hiring a phlebotomist goes up in check with the minimum wage then the cost of laboratory studies will have to follow suit.  Why?  On to point number four!

Point number four...Businesses are not in the business of job creation, livable wage making, empowering employees to buy homes and cars, eat out at Ruth's Chris, be able to have more babies, provide those babies with the family income to go to college, etc. etc. etc.  They ONLY exist for ONE thing.  To build wealth for the owners (shareholders, proprietors, partners).  That's it.

At the end of the day, constitutionality is not even important.  What is important is giving people a false sense of accomplishment and hope by making the excited about and look forward to making....MINIMUM wage..

If average is the cream of the crap, the worst of the best, then what is minimum with regard to anything?

- and the minimum cost of hiring means you cant hire for less - meaning jobs lost?
  

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Re: Is the minimum wage Constitutional?
Reply #118 - Apr 2nd, 2016 at 10:35am
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Goose wrote on Apr 1st, 2016 at 8:34pm:
Oh boy.  Once again I must bring some sanity to the discussion.

Here is a funny thing to ponder.  If the federal government were to raise the minimum wage to $50.00 an hour then there is at least ONE thing we would know for sure.  If the day before the raise you made the minimum $10.00 per hour then the day after the raise you would be making...MINIMUM WAGE STILL!  This is what people don't seem to understand.  The NUMBER is insignificant.  The only thing that that number does it set the minimum COST of HIRING.

Point number two.  The ONLY people who receive anything cost to wages based on COST of LIVING are those on fixed incomes.  Social security and believe it or not, the military.  Housing allowance varies from place to place based on cost of living.  Yearly increases in benefits or pay are based on cost of living increases.  That is why an E-3 today makes NO MORE, and in some cases LESS than an E-3 in comparable purchasing power to 1985.

Point number three.  Have any of the "raise the minimum wage crowd" thought of $15.00 an hour today?  Do you guys somehow think that the cost of hiring a phlebotomist, for example, will not go up? (they make on average $15.00 an hour starting out).  Now if the cost of hiring a phlebotomist goes up in check with the minimum wage then the cost of laboratory studies will have to follow suit.  Why?  On to point number four!

Point number four...Businesses are not in the business of job creation, livable wage making, empowering employees to buy homes and cars, eat out at Ruth's Chris, be able to have more babies, provide those babies with the family income to go to college, etc. etc. etc.  They ONLY exist for ONE thing.  To build wealth for the owners (shareholders, proprietors, partners).  That's it.

At the end of the day, constitutionality is not even important.  What is important is giving people a false sense of accomplishment and hope by making the excited about and look forward to making....MINIMUM wage..

If average is the cream of the crap, the worst of the best, then what is minimum with regard to anything?


Thanks for the dose of "sanity."

But you're absolutely right about one thing - businesses exist to create wealth for owners. And another thing, raising the minimum wage DOES have a ripple effect on jobs higher up in the job ladder, and it's true that does drive some price increases.

But what people fail to understand is that people are not totally rational.  They THINK they're doing better, and in most cases it can be demonstrated that they ARE, even if not as much as they thought and even if it's somewhat temporary (but how temporary is a matter of opinion rather than fact), but even if they just THINK they are, then they are.  One's perception of reality is pretty important.  That's why placebos sometimes "cure" symptoms.

Think of this:  if we live in a world where everything stays in balance, then every time wages go up costs of everything bought with those wages goes up by the same percent.  If wages go down, cost go down by the same percent.  So it does not matter, economically speaking, whether wages change or stay the same.  Economically speaking, everybody is in exactly the same position ALL the time.

But try explaining that to people whose pay just went down 10%.  They're still pissed.  Give them all a 10% raise and they're elated.  But their position, in economic terms, NEVER changes.
  

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Re: Is the minimum wage Constitutional?
Reply #119 - Apr 2nd, 2016 at 10:47am
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EF wrote on Apr 2nd, 2016 at 10:35am:
Thanks for the dose of "sanity."

But you're absolutely right about one thing - businesses exist to create wealth for owners. And another thing, raising the minimum wage DOES have a ripple effect on jobs higher up in the job ladder, and it's true that does drive some price increases.

But what people fail to understand is that people are not totally rational.  They THINK they're doing better, and in most cases it can be demonstrated that they ARE, even if not as much as they thought and even if it's somewhat temporary (but how temporary is a matter of opinion rather than fact), but even if they just THINK they are, then they are.  One's perception of reality is pretty important.  That's why placebos sometimes "cure" symptoms.

Think of this:  if we live in a world where everything stays in balance, then every time wages go up costs of everything bought with those wages goes up by the same percent.  If wages go down, cost go down by the same percent.  So it does not matter, economically speaking, whether wages change or stay the same.  Economically speaking, everybody is in exactly the same position ALL the time.

But try explaining that to people whose pay just went down 10%.  They're still pissed.  Give them all a 10% raise and they're elated.  But their position, in economic terms, NEVER changes. 


Exactly.

It's nothing more than feel good bullshit intended to placate the ignorant masses.
  

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