Why is minimum wage a bad thing?

[caden]

kadams - I plan on responding to you later tonight. My kids are back to attacking my phone.

[y4m]

Nitaw I don't think I do understand. Does that say something about states below the minimum wage? I would also look at higher/lower than 8.3 UE since that's the average, rather than 6%.

Can I just say that communal spreadsheet making is something I can totally get behind!

[kadams767]

Aug 10, 2012 15:49:27 GMT -5 caden said:

kadams - I plan on responding to you later tonight. My kids are back to attacking my phone.

Thanks. I'll take a look later, I am hoping to leave the office at some point today.

[NitaX]

Aug 10, 2012 15:50:28 GMT -5 y4m said:

Nitaw I don't think I do understand. Does that say something about states below the minimum wage? I would also look at higher/lower than 8.3 UE since that's the average, rather than 6%.

I'm using the federal standard min wage. I see what you're doing. You're only looking at states who have a min wage over the federal and comparing those UE rates which would give you the trend that those states have higher UE. I'm looking at the whole vs just those over the fed min wage.

[y4m]

Well I calculated average unemployment for both groups--once for states at the minimum wage and once for states above it.

When I get back to excel I will play with the COL stuff some

[ESF]

Aug 10, 2012 15:47:44 GMT -5 pescalita said:

After 10 pages of useless snipping and "why do you hate the poors" and martyr juice, you people made a group google doc to share stats and multiple people contributed to it?!?!?!?!

Goddamn I love you forever P&CE.

Word.

I love that this is how we end the week that began with Compassion 101.

[Deleted]

Aug 10, 2012 12:28:04 GMT -5 caden said:

Aug 10, 2012 9:46:19 GMT -5 @reeve said:

No one will answer it. History has proved time and time again that businesses will take advantage of workers if there is nothing to stop them. Not just history - current wages in China, sweatshops etc - pretty much everywhere in the world where there is not protection for workers, workers get abused.

If minimum wage was removed here, that wouldn't happen because...MAGIC!

Umm Reeve, when the Brits controlled Hong Kong, there was extremely low unemployment. Like below 2% in the early 90s, almost unthinkable for people here. When China, which actually does have minimum wages, took over it imposed several costly labor benefit laws on employers in Hong Kong and predictably their unemployment rose significantly. It was at 8.3% in 2003. Today it's average is still higher than it used to be.

Well, I could be wrong, but I suspect that other things also had an effect - what with it being China and all. Communism, for example. A zillion Chinese people living outside of Hong Kong and looking for work. It was 15 years ago, and the world has certainly changed in that time, China especially. There are other things I am sure.

I should also point out that my post was a general one - the minimum wage is part of many things that protect workers, including unions etc etc. I care about unemployment rates, but I was arguing how workers are treated, not how many people get employed. So even if I take your statistics at face value, it doesn't change my position. Its more important to me that the people working aren't doing 20 hour days and sleeping on the floor, than that everyone has a job. If we are only talking employment rates, then yeah, get rid of unions and the minimum wage - I am sure we can employ everyone pretty quickly.


Lastly, lets put that all aside and pretend that I accept that your example is accurate. Do you therefore think that this one example is evidence that when workers aren't protected, they get treated well? Are you saying that China has a stellar reputation for enhancing the lives of their workers? I don't doubt that sometimes businesses take care of their people - I run one myself, and do so. I also worked for a big corporation that treated its staff amazingly well. I just dont believe that is what usually happens, and I think it is easy to see evidence of that historically.

ALl I am saying is that history shows that no protection for workers usually doesn't lead to workers being treated well.

[druidp]

Aug 10, 2012 16:18:15 GMT -5 @reeve said:

Well, I could be wrong, but I suspect that other things also had an effect - what with it being China and all. Communism, for example. A zillion Chinese people living outside of Hong Kong and looking for work. It was 15 years ago, and the world has certainly changed in that time, China especially. There are other things I am sure.

I should also point out that my post was a general one - the minimum wage is part of many things that protect workers, including unions etc etc. I care about unemployment rates, but I was arguing how workers are treated, not how many people get employed. So even if I take your statistics at face value, it doesn't change my position. Its more important to me that the people working aren't doing 20 hour days and sleeping on the floor, than that everyone has a job. If we are only talking employment rates, then yeah, get rid of unions and the minimum wage - I am sure we can employ everyone pretty quickly.


Lastly, lets put that all aside and pretend that I accept that your example is accurate. Do you therefore think that this one example is evidence that when workers aren't protected, they get treated well? Are you saying that China has a stellar reputation for enhancing the lives of their workers? I don't doubt that sometimes businesses take care of their people - I run one myself, and do so. I also worked for a big corporation that treated its staff amazingly well. I just dont believe that is what usually happens, and I think it is easy to see evidence of that historically.

ALl I am saying is that history shows that no protection for workers usually doesn't lead to workers being treated well.

This actually leads to something I wanted to discuss as it got hinted at earlier in the thread - about what is stopping businesses from being the stereotypical Scrooge McDuck and mistreating employees in the name of their almighty dollar and bottom line.

My thought is that with today's immediate media and sharing of information - tweets, Facebook, review sites, message boards like this, etc - isn't there a much greater potential for citizens and employees/consumers in general to drive a sort of control over employers? With the whole trend of people using their social media profiles to circulate/report their observations and commentary, it seems like that risk of negative PR, which a company has no control over other than maintaining positive business and employer practices and reacting to the negative feedback as it comes, would be an incentive for them to "behave themselves."

Examples coming to mind: Urban Decay (testing on animals I think?); Chick-fil-A; Starbucks (known for their employee incentives and benefits); Walmart (not so much for the employee benefits), etc.

Thoughts? It's not a perfect catch-all by any means, but I would ASSume it has some bearing on today's business practices - unique from what might have been say 100 years ago.

[Deleted]

druid, that's really hard to answer because I don't know that there's a way to collect comprehensive data on employers mistreating their employees. And "mistreatment" is also difficult to define.

I would argue that my employer mistreats me. My employer treats me like shit in many, many ways, but the most obviously problematic is the paycheck issue. I've been paid late on multiple occasions, and when I complained, I was told that my complaints were "totally inappropriate."

Yes, technically there is a state law mandating that I be paid with certain frequency. But actually litigating that when I do get my paycheck if I ask for it is more trouble than its worth. And making a big stink about it will just further enrage my boss, leading to even shittier treatment. In theory, the market should take care of this, but there are way more lawyers than there are jobs, so really, they're free to treat their employees like shit. They know that I can't afford to walk away, and they know that if I push them too hard, they can fire me and have 100 people willing to take my place tomorrow.

Now, none of that anecdote really has anything to do with the minimum wage debate because I don't make anything close to minimum wage. BUT I do think there are probably more employers mistreating employees than we know about. Again, I don't know how to measure that, so I could be wrong.

[druidp]

Thx, angryharpy - that makes sense. And again, anecdotes do carry validity, obviously.

Wasn't there a coach or someone in the news today who "liked" an opposing team's leader and got fired for it? And I saw something else about how Facebook is fighting for the "like" button to have First Amendment status.

So those factored in here as well. Makes you wonder how this quasi-new realm of social media and online commentary will figure in to employee rights to free speech and also outing their employer's practices (good or bad) and what consequences might stem from that.

This is likely a different thread topic, though...

[ESF]

Aug 10, 2012 16:26:09 GMT -5 druidp said:

Aug 10, 2012 16:18:15 GMT -5 @reeve said:

Well, I could be wrong, but I suspect that other things also had an effect - what with it being China and all. Communism, for example. A zillion Chinese people living outside of Hong Kong and looking for work. It was 15 years ago, and the world has certainly changed in that time, China especially. There are other things I am sure.

I should also point out that my post was a general one - the minimum wage is part of many things that protect workers, including unions etc etc. I care about unemployment rates, but I was arguing how workers are treated, not how many people get employed. So even if I take your statistics at face value, it doesn't change my position. Its more important to me that the people working aren't doing 20 hour days and sleeping on the floor, than that everyone has a job. If we are only talking employment rates, then yeah, get rid of unions and the minimum wage - I am sure we can employ everyone pretty quickly.


Lastly, lets put that all aside and pretend that I accept that your example is accurate. Do you therefore think that this one example is evidence that when workers aren't protected, they get treated well? Are you saying that China has a stellar reputation for enhancing the lives of their workers? I don't doubt that sometimes businesses take care of their people - I run one myself, and do so. I also worked for a big corporation that treated its staff amazingly well. I just dont believe that is what usually happens, and I think it is easy to see evidence of that historically.

ALl I am saying is that history shows that no protection for workers usually doesn't lead to workers being treated well.

This actually leads to something I wanted to discuss as it got hinted at earlier in the thread - about what is stopping businesses from being the stereotypical Scrooge McDuck and mistreating employees in the name of their almighty dollar and bottom line.

My thought is that with today's immediate media and sharing of information - tweets, Facebook, review sites, message boards like this, etc - isn't there a much greater potential for citizens and employees/consumers in general to drive a sort of control over employers? With the whole trend of people using their social media profiles to circulate/report their observations and commentary, it seems like that risk of negative PR, which a company has no control over other than maintaining positive business and employer practices and reacting to the negative feedback as it comes, would be an incentive for them to "behave themselves."

Examples coming to mind: Urban Decay (testing on animals I think?); Chick-fil-A; Starbucks (known for their employee incentives and benefits); Walmart (not so much for the employee benefits), etc.

Thoughts? It's not a perfect catch-all by any means, but I would ASSume it has some bearing on today's business practices - unique from what might have been say 100 years ago.

First, I think you are giving too much credit to people's ability to care. I still maintain that the vast majority of people who "boycott" CFA and Walmart are people who wouldn't go to those places anyway, or wouldn't go with any sort of meaningful regularity.

I mean, I don't know anyone that doesn't buy Apple because of the shit they do in the Chinese sweatshops or Amazon because of their sales tax evasion or Target for being anti-union.

Liberals are the laziest boycotters ever.

Second, and more importantly, it is easier than ever for employers to sweep things under the rug. Brace yourself, this is my favorite topic. For years, states have tried to regulate the use of mandated arbitration in employment contracts. For two decades, SCOTUS has repeatedly shat all over those attempts. Now, employment disputes are, increasingly, being forced into private arbitration. That means that the disputes cannot be made public, and no public record will ever exist of the employers bad acts. In essence, it is becoming increasingly impossible to vote with your feet. The reality is that we have NO IDEA how shitty many employers are because they are able to arbitrate many disputes in private forums. All this talk about how there's no evidence that many employers suck would mean a lot more if it were not a legal and increasingly widespread practice for employers to hire their own judge and pay that person to secretly resolve employment disputes.

[MrsAxilla]

Aug 10, 2012 16:48:15 GMT -5 druidp said:

Thx, angryharpy - that makes sense. And again, anecdotes do carry validity, obviously.

Wasn't there a coach or someone in the news today who "liked" an opposing team's leader and got fired for it? And I saw something else about how Facebook is fighting for the "like" button to have First Amendment status.

So those factored in here as well. Makes you wonder how this quasi-new realm of social media and online commentary will figure in to employee rights to free speech and also outing their employer's practices (good or bad) and what consequences might stem from that.

This is likely a different thread topic, though...

Many companies have policies that prevent employees from bad-mouthing them on social media sites, so any negative word of mouth would come after the employee leaves (or, alternatively, the employee would be fired for saying something.) Employers are also protected by defamation laws.

[MrsAxilla]

Aug 10, 2012 16:49:26 GMT -5 ESF said:

All this talk about how there's no evidence that many employers suck would mean a lot more if it were not a legal and increasingly widespread practice for employers to hire their own judge and pay that person to secretly resolve employment disputes.

Or they take the cheaper route and offer a token settlement with confidentiality, non-disparagement, and liquidated damages clauses.

[mominatrix]

esf said:

Second, and more importantly, it is easier than ever for employers to sweep things under the rug. Brace yourself, this is my favorite topic. For years, states have tried to regulate the use of mandated arbitration in employment contracts. For two decades, SCOTUS has repeatedly shat all over those attempts. Now, employment disputes are, increasingly, being forced into private arbitration. That means that the disputes cannot be made public, and no public record will ever exist of the employers bad acts. In essence, it is becoming increasingly impossible to vote with your feet. The reality is that we have NO IDEA how shitty many employers are because they are able to arbitrate many disputes in private forums. All this talk about how there's no evidence that many employers suck would mean a lot more if it were not a legal and increasingly widespread practice for employers to hire their own judge and pay that person to secretly resolve employment disputes.

There is so much truth here. I saw it firsthand over and over again.

...via mobile.

[NitaX]

Aug 10, 2012 16:26:09 GMT -5 druidp said:

This actually leads to something I wanted to discuss as it got hinted at earlier in the thread - about what is stopping businesses from being the stereotypical Scrooge McDuck and mistreating employees in the name of their almighty dollar and bottom line.

My thought is that with today's immediate media and sharing of information - tweets, Facebook, review sites, message boards like this, etc - isn't there a much greater potential for citizens and employees/consumers in general to drive a sort of control over employers? With the whole trend of people using their social media profiles to circulate/report their observations and commentary, it seems like that risk of negative PR, which a company has no control over other than maintaining positive business and employer practices and reacting to the negative feedback as it comes, would be an incentive for them to "behave themselves."

Examples coming to mind: Urban Decay (testing on animals I think?); Chick-fil-A; Starbucks (known for their employee incentives and benefits); Walmart (not so much for the employee benefits), etc.

Thoughts? It's not a perfect catch-all by any means, but I would ASSume it has some bearing on today's business practices - unique from what might have been say 100 years ago.

To that end - answer would be regulations. OSHA being the one I used earlier. To your other items, moral/social norm issues are something else. If what's his face at Chik-Fil-A hates the gays, fine, but workplace regulations stipulate he can't discriminate lest he be sued.

OAN - Team Reeve. I makes no secret that I believe companies will always do what is just/right. The end game is always a profit. History has proven that many times over.

[EllieArroway]

I think if social media/publicity could force a company to be a better employer then Walmart would have stepped up to the plate years ago. Everyone has always known that they are awful and do as little as absolutely possible for their employees. It's no secret, yet they still suck. I worked there for years in high school/college and ugh--I hate that place.

[caden]

Aug 10, 2012 15:25:40 GMT -5 kadams767 said:

For the record, I do not disagree with you that it is generally accepted among economists. I just wish there was more concrete "HOW" and "WHY" evidence that I could wrap my head around. This is just me postulating, by the way, but I have trouble looking at the stats of who actually earns minimum wage and who would be impacted without questioning the reality of why it wouldn't technically impact a greater proportion of people.

I understand that only X% of the workers truly earn minimum wage and would be impacted by a decrease, based on the statistics. But then I think about real life, and knowing that there are other minimum wage workers that aren't accounted for in those statistics (like those whose employers don't offer them full-time hours because then they would need to offer other benefits, as an example or people who work just under full-time for whatever other reason). I wonder how to truly account for everyone.

I found a good policy analysis about the minimum wage if you (and others) are interested in a thorough analysis of why people think the minimum wage is bad and how studies show it harms poor people. The link is below. If you go through the list of all the ways employers make up the extra cost of payroll, you can see how far reaching the benefits would be in its absence.

Now for what to do about the minimum wage, the random person in the OP and Michelle Bachmann aside, hardly anyone is recommending to all of a sudden do away with it. I searched around Mises's site b/c if any economists are proposing we eliminate it, they would. And I did find some sources about what they would expect to happen in that scenario. link and link To summarize, they predict the only wages that will fall are those that were artificially raised by the minimum wage law. Because the min wage is not a price floor for all wages, just those that would otherwise be paying less than the minimum. If a worker's productivity means he is worth $20/hr, he will continue to be worth $20/hr. His productivity would not go down based on changes in legal minimums for less productive people. They also predict an increase in employment, etc etc. But like I said, I almost never see people seriously proposing we wipe it out overnight. I'm (and the vast majority of other Cons) much more in favor of gradual extinction via inflation. That way it would for sure only affect marginal wages and employment and we'd have plenty of time to judge the effects.


www.cato.org/publications/policy-analysis/negative-effects-minimum-wage-laws

[caden]

Aug 10, 2012 16:18:15 GMT -5 @reeve said:

Well, I could be wrong, but I suspect that other things also had an effect - what with it being China and all. Communism, for example. A zillion Chinese people living outside of Hong Kong and looking for work. It was 15 years ago, and the world has certainly changed in that time, China especially. There are other things I am sure.

I should also point out that my post was a general one - the minimum wage is part of many things that protect workers, including unions etc etc. I care about unemployment rates, but I was arguing how workers are treated, not how many people get employed. So even if I take your statistics at face value, it doesn't change my position. Its more important to me that the people working aren't doing 20 hour days and sleeping on the floor, than that everyone has a job. If we are only talking employment rates, then yeah, get rid of unions and the minimum wage - I am sure we can employ everyone pretty quickly.


Lastly, lets put that all aside and pretend that I accept that your example is accurate. Do you therefore think that this one example is evidence that when workers aren't protected, they get treated well? Are you saying that China has a stellar reputation for enhancing the lives of their workers? I don't doubt that sometimes businesses take care of their people - I run one myself, and do so. I also worked for a big corporation that treated its staff amazingly well. I just dont believe that is what usually happens, and I think it is easy to see evidence of that historically.

ALl I am saying is that history shows that no protection for workers usually doesn't lead to workers being treated well.

Yes Hong Kong has changed a lot in the past 15 years, but it's not communist. It's one of the freest economies in the world. it also isn't flooded with unemployed Chinese nationals. It's unemployment rate is actually 3-4%. Great, but not as good as it used to be and unfortunately people are predicting it will be less free as time goes on. And no I don't think China is stellar at treating their employees. Did you seriously just ask that? China is the one that imposed labor regulations on Hong Kong, not the other way around. Under your way of thinking China should be the glittering jewel of employee benefits because they're the ones with all the regulations, compared to HK. Anyway this isn't even a discussion about all the many protections we can and or should create for all workers. The minimum wage doesn't protect anyone from working 20 hours days and sleeping on a floor. I'm sure there are a great many protections we can both agree should be enforced. One that tells people "if you aren't worth $X you get no job" isn't beneficial.