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Thread: Minimum Wage Does Not Destroy Jobs

  1. Top | #21
    Veteran Member Lumpenproletariat's Avatar
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    Cheap labor = More production gets done, driven by supply-and-demand = higher living standard.

    Quote Originally Posted by Jolly_Penguin View Post
    UBI is the better solution. Equalize the bargaining power so that workers aren't negotiating under duress of starvation if they don't have jobs. Then they can get paid what their work is actually worth to a business. Equalize the bargaining power and then supply and demand will fix the wage issue.

    Minimum wage does nothing for the unemployed. Unlink health Care from employment too. End the duress against workers in their negotiation for wages.

    I think you will find many jobs that are now minimum wage jobs will then suddenly pay considerably more than $15 per hour.
    This solution has a good part to it: It would allow desperate job-seekers to find employment who otherwise would be chronically unemployed because employers don't like them at first, so that they never get hired in the first place.

    With no MW at all, these desperate job-seekers would be allowed to take a low-paying job in order to have a chance to break into the workforce. Thus, more work would get done, at wages low enough that employers are willing to hire desperate job-seekers, so that jobs would be filled which otherwise would go unfilled.

    We actually have something like this today, with many job openings only at low wages, and those jobs go unfilled because employers are not willing to pay anything higher. Many of these would be filled if more immigrant workers were allowed into the country, who are willing to work at lower wages.

    The economy, i.e., ALL of us, all consumers, would benefit if the low-wage jobs were allowed, and were taken by desperate job-seekers, so that more production would take place = higher standard of living for all.

    But, because of symbolism, labor-union fanaticism, and Crybaby Economics ideology, these jobs are outlawed, or workers who would take them are excluded. To the detriment of us all.

  2. Top | #22
    Elder Contributor DBT's Avatar
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    Quote Originally Posted by Lumpenproletariat View Post
    Trump's artificial "jobs! jobs! jobs! jobs!" -- NO!



    Quote Originally Posted by DBT View Post
    The California unemployment rate fell to 4.0 percent in September 2019, setting a new record low in a data series going back to the 1970s.

    ''California payroll jobs totaled 17,538,500 in September 2019, up 21,300 from August 2019 and up 320,000 from September of last year.

    California’s Labor Market, by the Numbers...


    The state’s unemployment rate fell to 4.0 percent1 in September, setting a new record low in a data series going back to the 1970s.

    California’s record low unemployment rate in September coincided with a 0.2 percent drop in the national unemployment rate to 3.5 percent for the month, a 50-year low.

    September’s 21,300 nonfarm payroll gain extended California’s current job expansion to an all-time record of 115 months. Gains were concentrated in the professional and business services industry, particularly for firms providing employment services, along with increases in the manufacturing and education and health services industry sectors.

    California added an average 29,120 jobs2 per month over the entire 115-month-long expansion — far more than the 8,000-9,000 jobs needed monthly to match labor force growth.''
    Thanks to President Trump's unprecedented high budget deficits. And the gradual recovery since the Crash. And the artificially-suppressed interest rates. Probably also some of the increased suppression of trade, or trade war, and suppression of immigrant labor and work visas. We might ask why the jobs numbers are not even better than this, in view of the extreme factors causing (artificial?) job-creation.

    Most of this will have long-term detrimental impact. But if you don't think so, then surely you'll vote to re-elect him so he can increase the annual deficit to 2 trillion, or even 3 trillion.

    Sky's the limit, as long as it means more "jobs! jobs! jobs! jobs! jobs! jobs!"
    The point was that raising minimum wage did not effect employment rates but did at least go some way in improving the lives of low income earners. Which actually helps boost the economy because people have extra money to spend.

    Everyone benefits through higher incomes for workers.

  3. Top | #23
    Veteran Member Lumpenproletariat's Avatar
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    Quote Originally Posted by DBT View Post
    Quote Originally Posted by Lumpenproletariat View Post
    Trump's artificial "jobs! jobs! jobs! jobs!" -- NO!



    Quote Originally Posted by DBT View Post
    The California unemployment rate fell to 4.0 percent in September 2019, setting a new record low in a data series going back to the 1970s.

    ''California payroll jobs totaled 17,538,500 in September 2019, up 21,300 from August 2019 and up 320,000 from September of last year.

    California’s Labor Market, by the Numbers...


    The state’s unemployment rate fell to 4.0 percent1 in September, setting a new record low in a data series going back to the 1970s.

    California’s record low unemployment rate in September coincided with a 0.2 percent drop in the national unemployment rate to 3.5 percent for the month, a 50-year low.

    September’s 21,300 nonfarm payroll gain extended California’s current job expansion to an all-time record of 115 months. Gains were concentrated in the professional and business services industry, particularly for firms providing employment services, along with increases in the manufacturing and education and health services industry sectors.

    California added an average 29,120 jobs2 per month over the entire 115-month-long expansion — far more than the 8,000-9,000 jobs needed monthly to match labor force growth.''
    Thanks to President Trump's unprecedented high budget deficits. And the gradual recovery since the Crash. And the artificially-suppressed interest rates. Probably also some of the increased suppression of trade, or trade war, and suppression of immigrant labor and work visas. We might ask why the jobs numbers are not even better than this, in view of the extreme factors causing (artificial?) job-creation.

    Most of this will have long-term detrimental impact. But if you don't think so, then surely you'll vote to re-elect him so he can increase the annual deficit to 2 trillion, or even 3 trillion.

    Sky's the limit, as long as it means more "jobs! jobs! jobs! jobs! jobs! jobs!"
    The point was that raising minimum wage did not effect employment rates but did at least go some way in improving the lives of low income earners.
    It eliminates some jobs which would otherwise be done = less production. Also increases labor cost = higher prices = all consumers worse off.


    Which actually helps boost the economy because people have extra money to spend [= higher inflation].

    Everyone benefits through higher incomes for workers.
    No, everyone has to pay higher prices = worse off.

  4. Top | #24
    Veteran Member Lumpenproletariat's Avatar
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    Quote Originally Posted by DBT View Post
    Quote Originally Posted by Lumpenproletariat View Post
    Trump's artificial "jobs! jobs! jobs! jobs!" -- NO!



    Quote Originally Posted by DBT View Post
    The California unemployment rate fell to 4.0 percent in September 2019, setting a new record low in a data series going back to the 1970s.

    ''California payroll jobs totaled 17,538,500 in September 2019, up 21,300 from August 2019 and up 320,000 from September of last year.

    California’s Labor Market, by the Numbers...


    The state’s unemployment rate fell to 4.0 percent1 in September, setting a new record low in a data series going back to the 1970s.

    California’s record low unemployment rate in September coincided with a 0.2 percent drop in the national unemployment rate to 3.5 percent for the month, a 50-year low.

    September’s 21,300 nonfarm payroll gain extended California’s current job expansion to an all-time record of 115 months. Gains were concentrated in the professional and business services industry, particularly for firms providing employment services, along with increases in the manufacturing and education and health services industry sectors.

    California added an average 29,120 jobs2 per month over the entire 115-month-long expansion — far more than the 8,000-9,000 jobs needed monthly to match labor force growth.''
    Thanks to President Trump's unprecedented high budget deficits. And the gradual recovery since the Crash. And the artificially-suppressed interest rates. Probably also some of the increased suppression of trade, or trade war, and suppression of immigrant labor and work visas. We might ask why the jobs numbers are not even better than this, in view of the extreme factors causing (artificial?) job-creation.

    Most of this will have long-term detrimental impact. But if you don't think so, then surely you'll vote to re-elect him so he can increase the annual deficit to 2 trillion, or even 3 trillion.

    Sky's the limit, as long as it means more "jobs! jobs! jobs! jobs! jobs! jobs!"
    The point was that raising minimum wage did not affect employment rates but . . .
    It actually did cause some unemployment, as always, but what I explained is the overall higher jobs numbers, or the net higher jobs, in recent years, offsetting the damage from the higher labor cost. Namely, Trump's unusually high budget deficits, which are effectively an economic stimulus, therefore putting downward pressure on the unemployment numbers.

    I'm explaining WHY "raising minimum wage did not affect" the NET RESULTANT employment percentage downward from earlier, or cause the overall number to go down -- i.e., the numbers you're posting -- Those numbers also include the upward pressure on employment from Trump's economic stimulus.

    Do you understand that an ECONOMIC STIMULUS causes increased employment? And an "economic stimulus" means to increase spending and reduce taxes and cause higher deficit, which is what Trump has done. Without that deficit, now a trillion $$$ per year, the jobs numbers would not be nearly as optimistic.

    So it's that artificial boost to the jobs numbers, caused by the deficit, and also the artificially-suppressed interest rates, which is offsetting the job losses due to the higher minimum wage. I.e., the causal factors work against each other.

  5. Top | #25
    Fair dinkum thinkum bilby's Avatar
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    Cheap labour = less consumption gets done = economic stagnation = lower living standard

    The question is whether economic growth is currently limited by a lack of supply, or by a lack of demand. In the past, supply side constraints were usually the most significant; Cheap labour in such an environment will promote growth by increasing the availability of goods and services. But in an automated economy, labour is available without mass employment. A couple of technicians servicing a large pool of automated plant can produce a volume of goods that fifty years ago required thousands of workers.

    Today the constraint is demand - people don't have enough disposable income to buy the stuff our automated factories are able to produce. Stimulating the economy by reducing the cost of investment (lowering interest rates) is no longer effective. What's needed now is to provide the masses with ready cash - and it's not very important where that comes from. Wages is a good place to start, but frankly you could just print money and hand it out to the poor, and it would be a net benefit in the current environment. While both interest rates and inflation are low, this is the sensible strategy.

    But of course, conservatives are living in the past, and will just keep trying the same old failed ideas, on the basis that what worked a half century, or even a century, ago should still work now. Because nothing about the world has really changed since 1950, or even since 1920, right?

    An economic stimulus aimed at business owners, and designed to encourage them to increase production, is pointless in an environment constrained by lack of demand. In such an environment, a stimulus must target consumers, not producers, if it is to be effective.

  6. Top | #26
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    Quote Originally Posted by bilby View Post
    Cheap labour = less consumption gets done = economic stagnation = lower living standard

    The question is whether economic growth is currently limited by a lack of supply, or by a lack of demand. In the past, supply side constraints were usually the most significant; Cheap labour in such an environment will promote growth by increasing the availability of goods and services. But in an automated economy, labour is available without mass employment. A couple of technicians servicing a large pool of automated plant can produce a volume of goods that fifty years ago required thousands of workers.

    Today the constraint is demand - people don't have enough disposable income to buy the stuff our automated factories are able to produce. Stimulating the economy by reducing the cost of investment (lowering interest rates) is no longer effective. What's needed now is to provide the masses with ready cash - and it's not very important where that comes from. Wages is a good place to start, but frankly you could just print money and hand it out to the poor, and it would be a net benefit in the current environment. While both interest rates and inflation are low, this is the sensible strategy.

    But of course, conservatives are living in the past, and will just keep trying the same old failed ideas, on the basis that what worked a half century, or even a century, ago should still work now. Because nothing about the world has really changed since 1950, or even since 1920, right?

    An economic stimulus aimed at business owners, and designed to encourage them to increase production, is pointless in an environment constrained by lack of demand. In such an environment, a stimulus must target consumers, not producers, if it is to be effective.
    Factories are near 100% unless we are in a recession. And the only reason you'll get actual growth from adding money is if there wasn't enough money in the system. If there was enough you just get inflation.

  7. Top | #27
    Fair dinkum thinkum bilby's Avatar
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    Quote Originally Posted by Loren Pechtel View Post
    Quote Originally Posted by bilby View Post
    Cheap labour = less consumption gets done = economic stagnation = lower living standard

    The question is whether economic growth is currently limited by a lack of supply, or by a lack of demand. In the past, supply side constraints were usually the most significant; Cheap labour in such an environment will promote growth by increasing the availability of goods and services. But in an automated economy, labour is available without mass employment. A couple of technicians servicing a large pool of automated plant can produce a volume of goods that fifty years ago required thousands of workers.

    Today the constraint is demand - people don't have enough disposable income to buy the stuff our automated factories are able to produce. Stimulating the economy by reducing the cost of investment (lowering interest rates) is no longer effective. What's needed now is to provide the masses with ready cash - and it's not very important where that comes from. Wages is a good place to start, but frankly you could just print money and hand it out to the poor, and it would be a net benefit in the current environment. While both interest rates and inflation are low, this is the sensible strategy.

    But of course, conservatives are living in the past, and will just keep trying the same old failed ideas, on the basis that what worked a half century, or even a century, ago should still work now. Because nothing about the world has really changed since 1950, or even since 1920, right?

    An economic stimulus aimed at business owners, and designed to encourage them to increase production, is pointless in an environment constrained by lack of demand. In such an environment, a stimulus must target consumers, not producers, if it is to be effective.
    Factories are near 100% unless we are in a recession. And the only reason you'll get actual growth from adding money is if there wasn't enough money in the system. If there was enough you just get inflation.
    Read the part I bolded. I bolded it for a reason. The reason was to preempt some idiot saying how what I am suggesting will cause inflation.

    In an era where inflation is dangerously low, that's a GOOD thing.

    I am very explicitly saying that the best option NOW is not likely to be the best option ALWAYS, and that the best options from the past are likely not the best options toay.

    There's no single set of policy directions that is beneficial in all circumstances. Which is my point - Lumpenproletariat appears to be struggling under the very common delusion that there's one 'right' policy direction that is always applicable. He couldn't be more wrong. But that's the fundamental problem with fundamentalists.

    Right now, inflation, GDP growth, and interest rates are all simultaneously low. That tells us that there's not enough money at the mass consumption end of the system (the low interest rate shows that the cost of money for entrepreneurs is low, so there's plenty of potential to expand production; Just no incentive to do so, due to an absence of demand). The solution is to put more money in the pockets of those who will immediately spend it on stuff - ie the poor. Increased minimum wages is one way to do that, though it's obviously not the only, and may not be the best, way. But it's certainly not a bad option in the current climate.

  8. Top | #28
    Elder Contributor DBT's Avatar
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    Quote Originally Posted by Lumpenproletariat View Post
    Quote Originally Posted by DBT View Post

    The point was that raising minimum wage did not affect employment rates but . . .
    It actually did cause some unemployment, as always, but what I explained is the overall higher jobs numbers, or the net higher jobs, in recent years, offsetting the damage from the higher labor cost. Namely, Trump's unusually high budget deficits, which are effectively an economic stimulus, therefore putting downward pressure on the unemployment numbers.

    I'm explaining WHY "raising minimum wage did not affect" the NET RESULTANT employment percentage downward from earlier, or cause the overall number to go down -- i.e., the numbers you're posting -- Those numbers also include the upward pressure on employment from Trump's economic stimulus.

    Do you understand that an ECONOMIC STIMULUS causes increased employment? And an "economic stimulus" means to increase spending and reduce taxes and cause higher deficit, which is what Trump has done. Without that deficit, now a trillion $$$ per year, the jobs numbers would not be nearly as optimistic.

    So it's that artificial boost to the jobs numbers, caused by the deficit, and also the artificially-suppressed interest rates, which is offsetting the job losses due to the higher minimum wage. I.e., the causal factors work against each other.
    The stats I provided do not support your claim.

    If unemployment fell, there was no net rise in unemployment. The overall employment rate has actually improved.

    Nor was I talking about economic stimulus, which is a different issue.

    If people earn more, they have more money to spend, cafes, a few luxuries, movies, etc, which spreads the money around and everyone is better off.

    A decent income for all workers is a great benefit for society, including a sense of well-being, not having to struggle for basic needs.

  9. Top | #29
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    Quote Originally Posted by bilby View Post
    Quote Originally Posted by Loren Pechtel View Post
    Quote Originally Posted by bilby View Post
    Cheap labour = less consumption gets done = economic stagnation = lower living standard

    The question is whether economic growth is currently limited by a lack of supply, or by a lack of demand. In the past, supply side constraints were usually the most significant; Cheap labour in such an environment will promote growth by increasing the availability of goods and services. But in an automated economy, labour is available without mass employment. A couple of technicians servicing a large pool of automated plant can produce a volume of goods that fifty years ago required thousands of workers.

    Today the constraint is demand - people don't have enough disposable income to buy the stuff our automated factories are able to produce. Stimulating the economy by reducing the cost of investment (lowering interest rates) is no longer effective. What's needed now is to provide the masses with ready cash - and it's not very important where that comes from. Wages is a good place to start, but frankly you could just print money and hand it out to the poor, and it would be a net benefit in the current environment. While both interest rates and inflation are low, this is the sensible strategy.

    But of course, conservatives are living in the past, and will just keep trying the same old failed ideas, on the basis that what worked a half century, or even a century, ago should still work now. Because nothing about the world has really changed since 1950, or even since 1920, right?

    An economic stimulus aimed at business owners, and designed to encourage them to increase production, is pointless in an environment constrained by lack of demand. In such an environment, a stimulus must target consumers, not producers, if it is to be effective.
    Factories are near 100% unless we are in a recession. And the only reason you'll get actual growth from adding money is if there wasn't enough money in the system. If there was enough you just get inflation.
    Read the part I bolded. I bolded it for a reason. The reason was to preempt some idiot saying how what I am suggesting will cause inflation.

    In an era where inflation is dangerously low, that's a GOOD thing.
    Inflation is only dangerously low if there is an appreciable risk of slipping into deflation. Furthermore, deliberately created inflation does not produce economic growth--we learned that the hard way in the 70s. It's only unanticipated inflation that causes growth--because companies mistake it for increased demand.

    Right now, inflation, GDP growth, and interest rates are all simultaneously low. That tells us that there's not enough money at the mass consumption end of the system (the low interest rate shows that the cost of money for entrepreneurs is low, so there's plenty of potential to expand production; Just no incentive to do so, due to an absence of demand). The solution is to put more money in the pockets of those who will immediately spend it on stuff - ie the poor. Increased minimum wages is one way to do that, though it's obviously not the only, and may not be the best, way. But it's certainly not a bad option in the current climate.
    But that just results in bidding up the price of goods.

  10. Top | #30
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    Quote Originally Posted by Loren Pechtel View Post
    Quote Originally Posted by bilby View Post

    Read the part I bolded. I bolded it for a reason. The reason was to preempt some idiot saying how what I am suggesting will cause inflation.

    In an era where inflation is dangerously low, that's a GOOD thing.
    Inflation is only dangerously low if there is an appreciable risk of slipping into deflation. Furthermore, deliberately created inflation does not produce economic growth--we learned that the hard way in the 70s. It's only unanticipated inflation that causes growth--because companies mistake it for increased demand.
    Growth requires an increase in productive capacity. Unanticipated inflation does not tend increase productive capacity.

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