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Author Topic: What we need is FAIR markets, not free markets.  (Read 9403 times)
JoelKatz
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July 06, 2011, 12:54:39 PM
 #121

Not all actions of any given government are against/towards  equality. For example minimum wages rise equality and are enforced by the government.
Minimum wages decrease equality by taking the people whose labor is worth the least and making it worth nothing at all.

Suppose the minimum wage is $6/hour. A person whose labor is worth $7/hour in the absence of the minimum wage will find they can fetch near $7/hour in the market even with the minimum wage. Now suppose the minimum wage is raised to $8/hour. Now, the person whose labor was worth $7/hour will find that their labor is worth nothing at all. Those whose labor is worth more than the minimum wage are unaffected. They'll get jobs either way.

Minimum wage laws simply ensure that those whose labor is worth less than the minimum wage cannot get a job even if they would prefer to have it (if for no other reason than to gain experience, to keep their skills current, to have a reference for their next job, to make a little bit of extra cash, just to have something to do, and so on). To claim that overriding people's rational decisions somehow benefits them is absurd.

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July 06, 2011, 01:11:26 PM
 #122

So, this is what myrkul asks for:


You don't understand what I'm saying there. I'm just saying that if a worker can get the job done for $7.25 an hour, the employer should never hire Joe and Tom for $5.25 an hour and that fact has nothing to do with minimum wage. I'm just saying that in that case your scenario is absurd if your objective is to evaluate the costs of rising the minimum wage.

Then evaluate the benefits for me. Paint me a scenary.


-Another way I see minimum wages actually "hurting" economy is when, because of the minimum wage increase, the employer rises the price of the service to his clients so inflation rises. This anyways represents a wealth redistribution mechanism and, if the minimum wage is not very high, it's not a big problem to me.

How does this illustrate the benefits of a minimum wage?

Of course, if the employer doesn't rise the price of his products because of the minimum wage increase, that also helps economy. In any case where the job is not eliminated because of the minimum wage increase, I'd say that there's a benefit to society (because of wealth redistribution), if minimum wages are not excesive. My objective is not to have the wealthiest society, just a wealthy enough society with a good enough income distribution. I'm social democrat, which means I do not want an absolutely free market, nor an absolutely intervened/planned economy, but a mix of both worlds.

Or this, for that matter. The employer will increase the price of his products, I've watched it done. (hell, I helped change the signs) Jobs will be eliminated, I've seen it done.

The scariest thing is right here: "My objective is not to have the wealthiest society, just a wealthy enough society with a good enough income distribution. I'm social democrat, which means I do not want an absolutely free market, nor an absolutely intervened/planned economy, but a mix of both worlds."

You know intervention damages the economy, and you're OK with it.

Please give me an example of a minimum wage increasing prosperity.


Emphasis added.

And this is what Findeton responds with:


You know intervention damages the economy, and you're OK with it.

I know it might cause some inflation or unemployment rise, but it will redistribute wealth too. You just take into account total wealth of society, whilst I consider total wealth of society AND wealth distribution. You are trying to maximize one variable, I'm trying to maximize two variables.


It seems as if Findeton simply will never answer the request to illustrate how a minimum wage actuallly increases prosperity (or wealth, or whatever he wants to call it.) I wonder if it's because, really, he knows he can't.

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July 06, 2011, 06:17:57 PM
 #123

Arent you drinking the kool aid?

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July 06, 2011, 06:51:11 PM
 #124

It seems as if Findeton simply will never answer the request to illustrate how a minimum wage actuallly increases prosperity (or wealth, or whatever he wants to call it.) I wonder if it's because, really, he knows he can't.

Hey it's OBVIOUS:

Imagine that you are paid the minimum wage. Suddenly, there's a minimum wage increase. Therefore, if you don't get fired, you are now paid more therefore your income has increased. As wealth hasn't increased, someone has to pay for your income rise, therefore there's been a wealth redistribution under that scenario.

(Man, kids these days don't see the obvious)

You can argue that you don't like this particular scenario. It's basically what we've been discussing all the way down this thread: whether and under what circunstances this scenario will happen.

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July 06, 2011, 06:58:37 PM
 #125

It seems as if Findeton simply will never answer the request to illustrate how a minimum wage actuallly increases prosperity (or wealth, or whatever he wants to call it.) I wonder if it's because, really, he knows he can't.

Hey it's OBVIOUS:

Imagine that you are paid the minimum wage. Suddenly, there's a minimum wage increase. Therefore, if you don't get fired, you are now paid more therefore your income has increased. As wealth hasn't increased, someone has to pay for your income rise, therefore there's been a wealth redistribution under that scenario.

But if you don't, someone will. You're not redistributing wealth down, you're redistributing it up. You're increasing the Gini Coefficient, by adding more people whose wealth is zero, and giving their wealth to the people on the next rung up. It is obvious, and that's why we're so amazed you can't see it.

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July 06, 2011, 07:22:23 PM
 #126

Hey it's OBVIOUS:

Imagine that you are paid the minimum wage. Suddenly, there's a minimum wage increase. Therefore, if you don't get fired, you are now paid more therefore your income has increased. As wealth hasn't increased, someone has to pay for your income rise, therefore there's been a wealth redistribution under that scenario.

But if you don't, someone will.

You've asked for a scenario in which the Gini coeficient is lowered, and I presented it. Maybe you think it's not very likely to happen, but it's theoretically possible.

It's theoretically possible that no one gets fired if, for example, the employer just rises prices, which in turn rises inflation. So in this scenario, no one gets fired, the Gini coeficient is lowered and inflation is increased.

Also, it's theoretically possible that no one gets fired if, for example, the employer or some other employees just get their income lowered. In this case the Gini coeficient is lowered with zero inflation.

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July 06, 2011, 07:49:26 PM
 #127

You've asked for a scenario in which the Gini coeficient is lowered, and I presented it. Maybe you think it's not very likely to happen, but it's theoretically possible.

It's theoretically possible that no one gets fired if, for example, the employer just rises prices, which in turn rises inflation. So in this scenario, no one gets fired, the Gini coeficient is lowered and inflation is increased.

Also, it's theoretically possible that no one gets fired if, for example, the employer or some other employees just get their income lowered. In this case the Gini coeficient is lowered with zero inflation.

It's clear you don't understand inflation, either... but that's OK, too.

So you've presented two possibilities: 1, Prices go up (they do, As I said, I've helped change the signs), or 2, the employer or some other employees get a pay cut.

Most businesses who pay minimum wage are very low margin businesses, such as fast food. There's no room in the budget for increased wages. Even raising the prices, people still have to be cut, either in hours, or fired completely.

It's theoretically possible that Steven Hawking might spontaneously regenerate his nerve damage and start marathon running. Doesn't mean it's logically likely.

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July 06, 2011, 08:23:23 PM
 #128

Most businesses who pay minimum wage are very low margin businesses, such as fast food. There's no room in the budget for increased wages. Even raising the prices, people still have to be cut, either in hours, or fired completely.

I don't know very well US economy, but here in Spain, cashiers and shop assistants for example get the minimum wage, even though executives of those businesses are paid millions.

In fact, I do know something about US economy: executives get paid more than 1000 times the sallary of the worst paid worker (this also happens in Europe, but somehow not just so often as you can see with the Gini coefficient). So yeah, there's PLENTY of room for pay cuts. Which is normal when you have a 45 as Gini coefficient on income distribution (according to CIA, in 2007).

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July 06, 2011, 08:42:12 PM
 #129

Most businesses who pay minimum wage are very low margin businesses, such as fast food. There's no room in the budget for increased wages. Even raising the prices, people still have to be cut, either in hours, or fired completely.

I don't know very well US economy, but here in Spain, cashiers and shop assistants for example get the minimum wage, even though executives of those businesses are paid millions.

In fact, I do know something about US economy: executives get paid more than 1000 times the sallary of the worst paid worker (this also happens in Europe, but somehow not just so often as you can see with the Gini coefficient). So yeah, there's PLENTY of room for pay cuts. Which is normal when you have a 45 as Gini coefficient on income distribution (according to CIA, in 2007).

McDonalds Corporate (For instance) has nothing to do with the individual franchises. They get their fees, they make sure the place isn't a cesspool, and they let the franchises run their own businesses.

Also, If you're comparing the duties and responsibilities of a CEO to a cashier, we're done here. Logic is out the window.

I'm not defending the big corporations. I'm saying that the reason the executives make the big bucks is: 1, They worked their way up there. With a few (notable, and short-lived) exceptions, Nobody was born into a CEO or other executive position. 2, Not only did they earn that salary, they continue to. CEOs put in 60+ hours a week, rarely see their families, and, except when government regulation gets in the way, bear the responsibility for the entire company. Cashier fucks up, a customer gets short-changed. CEO fucks up, Company goes out of business.

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July 06, 2011, 09:07:18 PM
 #130

I'm not defending the big corporations. I'm saying that the reason the executives make the big bucks is: 1, They worked their way up there. With a few (notable, and short-lived) exceptions, Nobody was born into a CEO or other executive position. 2, Not only did they earn that salary, they continue to. CEOs put in 60+ hours a week, rarely see their families, and, except when government regulation gets in the way, bear the responsibility for the entire company. Cashier fucks up, a customer gets short-changed. CEO fucks up, Company goes out of business.

Yeah but some 50 years ago the difference between CEOs and lowest level workers was 50x, not 1000x. I say we go back to the 50x rate. You might not like my scenario but it's a possible scenario. Yes there's plenty of room for pay cuts on those fat CEOs checks. (1000-50)*100/1000 % = 95% of the CEOs check is just waiting to be cut back to improve minimum wage.

So:

It seems as if Findeton simply will never answer the request to illustrate how a minimum wage actuallly increases prosperity (or wealth, or whatever he wants to call it.) I wonder if it's because, really, he knows he can't.

I just answered that. Get over it.

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July 06, 2011, 09:16:47 PM
 #131

I'm not defending the big corporations. I'm saying that the reason the executives make the big bucks is: 1, They worked their way up there. With a few (notable, and short-lived) exceptions, Nobody was born into a CEO or other executive position. 2, Not only did they earn that salary, they continue to. CEOs put in 60+ hours a week, rarely see their families, and, except when government regulation gets in the way, bear the responsibility for the entire company. Cashier fucks up, a customer gets short-changed. CEO fucks up, Company goes out of business.

Yeah but some 50 years ago the difference between CEOs and lowest level workers was 50x, not 1000x. I say we go back to the 50x rate. You might not like my scenario but it's a possible scenario. Yes there's plenty of room for pay cuts on those fat CEOs checks. (1000-50)*100/1000 % = 95% of the CEOs check is just waiting to be cut back to improve minimum wage.

US Minimum wage in 1961 (50 years ago) was $1.15.

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July 06, 2011, 10:07:45 PM
 #132

US Minimum wage in 1961 (50 years ago) was $1.15.

That would be $8.69 an hour of 2011 dollars (inflation adjusted). For 40h/week that's $1390/month of 2011 dollars.

Not bad at all If you ask me for a minimum wage.

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July 06, 2011, 10:25:05 PM
 #133

Not all actions of any given government are against/towards  equality. For example minimum wages rise equality and are enforced by the government.
Minimum wages decrease equality by taking the people whose labor is worth the least and making it worth nothing at all.

Suppose the minimum wage is $6/hour. A person whose labor is worth $7/hour in the absence of the minimum wage will find they can fetch near $7/hour in the market even with the minimum wage. Now suppose the minimum wage is raised to $8/hour. Now, the person whose labor was worth $7/hour will find that their labor is worth nothing at all. Those whose labor is worth more than the minimum wage are unaffected. They'll get jobs either way.

Minimum wage laws simply ensure that those whose labor is worth less than the minimum wage cannot get a job even if they would prefer to have it (if for no other reason than to gain experience, to keep their skills current, to have a reference for their next job, to make a little bit of extra cash, just to have something to do, and so on). To claim that overriding people's rational decisions somehow benefits them is absurd.

There's a misconception between what you get paid and what you are really worth. As Carl Marx would say, you are worth the value you generate, not what you get paid. The difference is the surplus value.

Let me give you an example that comes from my own experience. If I haven't got a degree yet, although I've got more than 90% of collegue done, I get paid about $700/month. When I get the degree I'll magically get paid at least $2400/month. Have I just increased my efficiency 3.5 times in the second I get the title that says I've finnished college? Hell no. So I know that while I'm being paid $700/month my real value is MORE than $2400. So when we rise the minimum wage what normally happens is NOT that the job is killed, but that the surplus value is lowered, creating a wealth redistribution.

I just don't accept the theory that you are worth what you get paid. You are worth the value you generate, not the value you are paid, and the surplus value's been rising for decades so there's plenty of room now to get minimum wages rised in many countries.

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July 06, 2011, 10:28:42 PM
 #134

US Minimum wage in 1961 (50 years ago) was $1.15.

That would be $8.69 an hour of 2011 dollars (inflation adjusted). For 40h/week that's $1390/month of 2011 dollars.

Not bad at all If you ask me for a minimum wage.

Well, Now that you've brought in inflation, let's talk about that, shall we?

Let's say that minimum wage worker sets back some money from his meager check. The government puts out more money, reducing the value of his money, both in the check, and in the bank account. Minimum wage never keeps pace with inflation, so the poor get poorer. (even assuming that minimum wage helps people)

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July 06, 2011, 11:14:33 PM
 #135

Quote
I just don't accept the theory that you are worth what you get paid. You are worth the value you generate, not the value you are paid, and the surplus value's been rising for decades so there's plenty of room now to get minimum wages rised in many countries.

That's fine. If someone "generates" less than the minimum wage, there's no way they can get a job by even people who'd be willing to take a huge financial by hiring that person. In order to hire someone, they would have to generate enough money for the company to cover their wages, the bills, and have enough left over in profit to help grow the company. This means they'd have to earn far less than what they generate under any circumstance. What someone is worth is completely opinion based.

Minimum wage, like ALL price floors AND price ceilings are logically flawed and do absolutely NO good for the economy or society.

Also, you can refer to Karl Marx all day but that's just going to make you look like a literal communist. As we saw in the 20th century, socialism doesn't work. It destroys entire economies and leads to the worst kinds of human suffering imaginable. I just can't believe how after over a hundred million people died due to this flawed idea, so many people still support it. It's like these people don't want to understand basic facts. They are "flat-worlders".

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July 07, 2011, 02:54:41 AM
 #136

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I just don't accept the theory that you are worth what you get paid. You are worth the value you generate, not the value you are paid, and the surplus value's been rising for decades so there's plenty of room now to get minimum wages rised in many countries.

That's fine. If someone "generates" less than the minimum wage, there's no way they can get a job by even people who'd be willing to take a huge financial by hiring that person. In order to hire someone, they would have to generate enough money for the company to cover their wages, the bills, and have enough left over in profit to help grow the company. This means they'd have to earn far less than what they generate under any circumstance. What someone is worth is completely opinion based.

Minimum wage, like ALL price floors AND price ceilings are logically flawed and do absolutely NO good for the economy or society.

Also, you can refer to Karl Marx all day but that's just going to make you look like a literal communist. As we saw in the 20th century, socialism doesn't work. It destroys entire economies and leads to the worst kinds of human suffering imaginable. I just can't believe how after over a hundred million people died due to this flawed idea, so many people still support it. It's like these people don't want to understand basic facts. They are "flat-worlders".

ok, let's try quoting a different author then.

"Servants, labourers and workmen of different kinds make up far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part is of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, cloathed and lodged. "

"The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards."
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July 07, 2011, 03:02:22 AM
 #137

Let me give you an example that comes from my own experience. If I haven't got a degree yet, although I've got more than 90% of collegue done, I get paid about $700/month. When I get the degree I'll magically get paid at least $2400/month. Have I just increased my efficiency 3.5 times in the second I get the title that says I've finnished college? Hell no. So I know that while I'm being paid $700/month my real value is MORE than $2400. So when we rise the minimum wage what normally happens is NOT that the job is killed, but that the surplus value is lowered, creating a wealth redistribution.
Right, this is exactly right for the 1% of people with the $700/month job that are 90% of the way to their college degree. However, for the other 99% of the people with that job who aren't being underpaid because of an unusual quirk in how employers judge value, ...

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July 07, 2011, 03:13:17 AM
 #138

It seems as if Findeton simply will never answer the request to illustrate how a minimum wage actuallly increases prosperity (or wealth, or whatever he wants to call it.) I wonder if it's because, really, he knows he can't.

Hey it's OBVIOUS:

Imagine that you are paid the minimum wage. Suddenly, there's a minimum wage increase. Therefore, if you don't get fired, you are now paid more therefore your income has increased. As wealth hasn't increased, someone has to pay for your income rise, therefore there's been a wealth redistribution under that scenario.

(Man, kids these days don't see the obvious)

You can argue that you don't like this particular scenario. It's basically what we've been discussing all the way down this thread: whether and under what circunstances this scenario will happen.


Finally. Thank you. Now we have a nail to hammer at:

In any reasonably-sized society (100,000+ people), what percent of employees do you think will fall into the above scenario, versus the percent who get fired, have their hours cut, etc.? (It would help too if you explain how you came to estimate that percent.)


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July 07, 2011, 04:09:22 AM
 #139

It is good thing that bitcoin is on a free market based on offer and demand, a market that can be manipulated is not good since history has shown it usually helps those who are in control of the money supply.

The only reason the bitcoin market can be manipulated to some degree is because it is a very young and small market, once the bitcoin acceptance grows, the market for bitcoins grows, and bitcoin will be a very stable currency by then.

What is needed is good press, and to support vendors that accept bitcoins, for example is not the same for the bitcoin economy to trade dollars  and spends the dollars on a restaurant, than go to a restaurant that takes bitcoins, the more bitcoins are used the stronger the bitcoin economy will get. I predict that if people that have bitcoins start using them as currency in 5 years, the bitcoin economy will be very strong. No need to speed all your bitcoins since savings are good for a solid economy also, just need to get more movement in bitcoins so if vendors see their sales increase more vendors will follow therefore increasing the demand for bitcoins.
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July 07, 2011, 04:18:23 AM
 #140

It is good thing that bitcoin is on a free market based on offer and demand, a market that can be manipulated is not good since history has shown it usually helps those who are in control of the money supply.

The only reason the bitcoin market can be manipulated to some degree is because it is a very young and small market, once the bitcoin acceptance grows, the market for bitcoins grows, and bitcoin will be a very stable currency by then.

I would imagine the early adopters of Bitcoin can also manipulate the market as they have a disproportionate portion of the money supply.  Even in the Bitcoin world, there are the elite that can pull strings.

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