This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.

Textbooks actually say that a worker will be paid no more than the marginal product of labor, and if labor is in short supply, they will be paid very close to their marginal product of labor. If there are a huge number of workers willing to work for $5/hr then workers won't tend to make even a penny more than this.

Information asymmetry and differences in negotiating power will further distort this, but the initial premise is already a strawman of basic microeconomics.

> This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.

In the econ 101 textbook simplified free market that the author is refering to firms do not make any economic profit. If a firm in a free market is turning an economic profit more firms will enter that market, raising supply, lowering price and driving profits to zero.

A better translation from the original German is probably "Joyful Science", though.

Not sure if that's where the parent was going, but I learned something new today.

[1] https://en.wikipedia.org/wiki/The_Gay_Science

Wasn't Nietzsche nihilist, though? Seems like it would be hard to be joyful if your science leads to nihilism.

It's more accurate to call Nietzsche an existentialist, as long as one keeps in mind that this term can refer to a wide spectrum of different moral and ontological ideas.

I'd call myself a realist -- and I think there's a lot of overlap with nihilism there, in that I try and see the world "as it is", and not "how I wish it was".

The world is a messy, ugly, dark place. It really is, and it's kind of amazing how people go out of their way to pretend that either that darkness doesn't exist, or that it's somebody else's job to keep it at bay.

There is a light in our world, though -- it's us, if we choose to be.

And so, regardless of the futility in the grand scheme of things, I invest effort to find joy in all that I can, and bring that sense of joyfulness to those around me, because it makes my corner of the world just a little brighter.

> There is a light in our world, though -- it's us, if we choose to be.

I can easily argue the opposite. The world itself is beautiful. Just sit at a mountain top or in the forest or on a beach and take in their beauty. Look at stars, galaxies, how they interact, it's absolutely stunning. Or zoom in looking at microbes, cells, molecules, atoms. The world is a gorgeous place.

What brings darkness is people. So much hate, greed, awful intrigues, all over the place. Look at the U.S. today, it's the epicenter. Everybody could be so happy. But no, hate because somebody wants to raise taxes. Or wears a gun. Or "wants to take away your 2nd amendment". Or is a misogynist. All covered over with a culture that expects everybody to find everything amazing, wonderful, best country in the world, or hate, cancel, exclude.

It's not the world that's ugly. It's the people.

If you can zoom out from that at see it as some grand, beautiful, process, then you have to apply the same filter to all of the evil stuff humans do as well, IMO.

We humans know exactly what's going on. Wr do it anyway. We keep animals in horrible conditions. And we know it. Yet we keep doing it. We treat each other horribly. We have really terrible weapons. We use them anyway. It's cruel and we know it. We spread hate and participate in racism and dehumanisation. Many of us thrive in either participating or at least watching conflict. We celebrate movies depicting humans mistreating or killing each other. We know it and we like it. Oh but it's only against the bad guys!!!1

I think it's not a fair comparison.

What if a human, or groups of humans, don't feel any guilt or don't believe what they're doing is cruel? I don't think that would help you sleep better...

Also, at least some animals are, in fact, capable of complex emotions. Pigs, apparently, can feel empathy: https://www.psychologytoday.com/us/blog/animal-emotions/2015...

It shouldn't be surprising. We are animals, after all.

> We humans know exactly what's going on. Wr[sic] do it anyway.

Perhaps that makes it worse, but I don't know that it means that animals being cruel doesn't count as "darkness" as in the grandparent comment. (It certainly doesn't refute the point that cancer is still a thing from nature and it's pretty damn dark)

But I'm pretty sure that animals would do the same stuff we do if they ever developed the capacity to do so. I see no reason to assume they wouldn't. Again- we are animals. We evolved from the same ancestors. I'm sure if my dog learned how to farm for meat, pretty much all of dog-civilization would play out with a lot of the same themes as human civilization. Not because I'm not creative enough to imagine other outcomes, but because I have no reason or evidence to assume that their form of life is fundamentally different from ours.

I'm fairly sure that aliens would observe us and the Orca who throws the crying seal in the air as the same. They would either see both as sad, or neither because "That's just what Earth life does. They kill others. They form packs and fight over territory. Some exhibit anti-social behaviors."

If I was just like some serial killer, then I'd also behave like a serial killer. Does that mean the other serial killer should not get punished? No. It just means that I should be pun8ished too if I was like them.

But I'm not really arguing humans-vs-animals. I'm arguing against world-is-dark-humans-are-light. It's the world that's light and humans who make it dark, for other humans. With exceptions of course.

Cancer is a bad example. It doesn't have an agenda. It's just a side effect of some mutation or such. Sure we can consider it dark. But compared to humans who actually have an agenda, i.e., they choose to be dark, that's a different ballpark.

Oh, there certainly is a lot of beauty in the world as well.

But it comes at a cost.

Every year or so, I try and get in at least one overnight backpacking trip, or at least one day of off-trail hiking. I'd do more, but I live in a country that cranked the "civilization" knob to 11 about a thousand years ago, and hasn't looked back since.

You really begin to appreciate things like "a hot shower" after a couple of days in the backcountry.

We can journey to those breathtaking vistas, relax, and bask in the majesty of creation because civilization makes that possible. With aircraft, roads, park rangers, clean water, nearly limitless food, all the rest.

Subsistence hunters, fishermen, and farmers certainly got to enjoy that same beauty, but I rather doubt it was as relaxing for them as it is for us.

And the reality is that violence is the price of civilization. There is not one civilization on the face of the earth that has escaped a baptism of blood and fire.

This has only gotten worse as our technological prowess has progressed.

Spending time, alone, in nature, you realize just how... vulnerable human beings are. Last time I went hiking, solo, in the US, I heard an animal approaching about twenty yards ahead of me. Turned out to be a bull, of all things.

I'm glad he was obviously used to humans -- and I was sure to give him all the room he wanted, and then some -- because, combined, my bear spray and my subcompact 9mm would have just pissed him off.

Nature, for all her beauty, is indifferent to suffering.

Human hunters work hard for an instant kill. Most other predators only work hard enough to disable their prey, and then eat it whether it is alive or dead.

As for humans being ugly... well, that's what I mean by choice.

You're totally right -- there's plenty of happiness to go around.

Part of the problem is that there's money to be made in making people unhappy.

Happy people buy less stuff.

But at least the stuff-sellers give you something. The real hustlers are the people that take your money for "the cause", whether the cause is Jesus, or Social Justice, or something else where you can be convinced to part with resources in exchange for a feeling of moral superiority.

It really is kind of amazing how wealthy politicians, preachers, and pundits can get when they successfully engineer or leverage a large social movement.

It is even more amazing how little they actually need to deliver.

That's what real greed looks like.

Another part of the problem is comparing yourself to your neighbor. I think that's even a cognitive bias, but I forgot the name -- that isn't not absolute wealth that we value, but that instead, we want to have more than the people that we can see around us.

Unless you master envy, you can never be satisfied in a world where you are always comparing yourself against the apex of whatever it is you value: wealth, strength, beauty, etc.

But all of those horrible things about humanity -- greed, envy, hatred, all the rest -- are things we can choose to overcome.

We can be better than the worst parts of our nature.

That's kind of where I was going.

You raise many good points though.

The economic definition is for a “perfectly competitive market,” one with extremely low barriers to entry. And one of the arguments about these markets is that they are the least profitable markets because firms in a less-profitable market will want to jump the extremely low barriers to switch into that market; this dilutes per-firm profits in the competitive market and concentrates them in the less-competitive market.

Economists consider those least-profits an “opportunity cost” of spending your time in the first place, and if you include that as an explicit cost then the “profit” is indeed zero.

It is true regardless that the theory predicts an economic profit of zero, but to see why it's necessary to consider the rental cost of capital. Also, since many firms own rather than rent capital, they often have a positive accounting profit even though economic profit is zero (economic profit is less since it takes into account opportunity cost: if you are using your own capital then you can't rent it out to someone else).

It's always difficult to jump into online discussions about economics because you need to give the entire econ 101 micro course in single comment just to make sure everyone is talking about the same thing.

In almost every sector of the modern American economy, the rules benefit capital over competition. In my area in New York, there were dozens of small bakeries pumping out good bread... today we pay more for shitty frozen stuff baked at the supermarket. ISPs were plentiful, now they are a monopolist service that costs 10x more than they did in 1999. We broke up standard oil decades ago... That monopoly is mostly reassembled today and we have weaker competitive forces around prices of fuel commodities than we did in the 90s.

That's not necessarily true. You assume that demand for workers exceeds supply. That is true for some vertical skilled labor. The often unspoken truth is that most jobs are commodity positions and people can be interchanged (from a labor standpoint). There is no upward trajectory of salaries for those positions.

It inevitably generates huge concentrations of capital which have immense political, social, and economic leverage, with no effective democratic checks and balances - except patchy application of anti-trust action.

The sum of the production of workers is not equal to the production of a business.

Otherwise, if a business increases revenues significantly by simply replacing its CEO, does it mean that the CEO contributes to the increased revenue all alone?

With the possible exception of lights-out facilities, the sum of the production of workers is equal to the production of a business, and even with lights out facilities, you would attribute the production of the facilities to those who build and maintain them.

A good CEO is absolutely invaluable.

A CEO differs from a General Manager.

"A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO is elected by the board and its shareholders." ~ https://www.investopedia.com/terms/c/ceo.asp

"A general manager (GM) is in charge of part or all of a company's operations, including generating revenue and controlling costs." ~ https://www.investopedia.com/terms/g/general-manager.asp

That's true for a single employee, but you don't need to make a profit out of every single employee.

If you do, your CEO will be extremely underpaid in relation to the rest of the market.

1. Voting Walmart shareholders think that the having Doug McMillon for $24M/year is a better deal than having me for $750k/year

2. Voting Walmart shareholders are unaware that reasonably intelligent people with no executive experience are willing to work for a lot less than McMillon.

3. There are other forces at play; e.g. CEOs as Veblen goods or good-old-fashioned corruption. Maybe the board members are also C level employees (at different companies) and they are colluding to keep the C level compensation high.

#2 seems rather unlikely so pick one of #1 and #3.

#1 Certainly does not contradict my use of intentionally, since they believe that McMillon

> This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.

It's correct. You're assuming whatever the worker produces is sold at cost.

1. Worker(s) make a thing.

2. Worker(s) sell a thing.

3. All the above worker(s) (if there's more than one) receive a portion of the proceeds. If it reflects their actual contribution to that thing at its selling price, it's their marginal product of labor, putting aside things like reinvestment and power imbalances. This leaves nothing left over for profits, for owners / investors to take, who did not contribute the labor to production (otherwise, they'd also be workers and we'd call that part of their compensation, not profit).

It must be, in the same idealized (free, perfectly competitive, no transaction costs) market conditions being discussed.

The textbooks are talking about economic profit, not absolute profit.

In very in-precise terms, it’s the expected profit for the given amount of risk, which to massively oversimplify can be represented by beta.

addiction to profit is a hell of a habit to kick, but it's not impossible.

Prices in the job market are set exactly the same way as any other market: by supply and demand.

They may not be directly related but to claim the CAPM “has nothing to do with this discussion” of economic profit is a bit strong.

Marginal value of production is almost always lower than average value, because of diminishing returns. Profits are made on the average value.

A Marxist take in this is that labour should be paid on the average value of production, and labour should get all the profits.

and the question becomes "who supplies the capital to enable the labour, if labour gets all the profits".

I used to work at a company which gave 10% of its profits to the workers each month as a bonus. But I was only there during some money-losing months so I got zero bonus. Imagine if that had been my entire pay!

good question - the current system ensures that labour gets paid, regardless of profits being negative or not (until the company collapses). This is enshrined into law - you cannot leave wages unpaid, and it sits above creditors in seniority.

Instead, Marx argued for worker control over the profits.

The only way "labour gets all the profits" is under the umbrella of communism - and even then, the state still extracts profit anyway (just under a different name - that of central allocation).

Communism also implies getting rid of currency altogether.

You mean socialism.

The value of their production is NOT the value of the production of the enterprise in which their production is employed.

Take a worker, whose work is worth $5 an hour according to market forces. Employing him to operate a $40,000 bakery, which generates $40 an hour in operating profits sans labor costs, does not mean the worker's labor is suddenly worth $40 an hour.

You can 100% pay workers what their labor is worth, and make a profit, and believing otherwise is a layman's understanding of the factors of production and the definition of value, and exactly the fallacy that underpinned Marx's quackery.

I see so many of these comments in Hackernews, which misunderstand basic economics, endeavor to expose some Big Lie allegedly being promoted by Economics/capitalists, and seek to defend some allegedly exploited underdog who needs laws limiting private-property/contract rights to be protected from said exploitation.

Also, there is no indication of information asymmetry playing any role in contract negotiations. Signals like market prices are an emergent phenomenon that are easily accessible to all prices.

They are easily accessible because well-resourced parties are incentivized to carry out actions that make them accessible, like a firm advertising a job opening and the pay offered as widely as possible, to maximize the number of potential applicants that see it.

I'm generally in favor of stronger job protections and so on, but I'm not aware of any definition of "free market" which supposes that all players have equal leverage. As I understand it, an economy with powerful corporations and relatively weak workers could still satisfy the definition for 'free market'; in other words, power dynamics are orthogonal to market freedom.

bog standard microeconomics 101 uses as an assumption that no player can thru individual choices affect prices in the market, i.e. all players do have equal leverage, zero.

"free market" has more than one usage, but economics's conclusions are valid only if the assumptions are met.

"Free market" is a political term regarding the level of government regulation.

Neither "free market" nor "competitive market" adequately describe all (or even significant) levels of power differentials between economic (and social) actors.

But the author used a “textbook” result that is only true in case of perfect competition, so he must be talking about perfect competition right?

That might be Econ 101 with fully continuous utility curves, and realized price equilbria, but anyone who has traded on a market knows that as soon as most bids are fulfilled it causes a dislocation of the price, so in reality the opposite is true: all individual choices affect prices in the market.

There is an old concept that rolls through bernanke, krugman, keynes, marx, smith, and aristotle (you're in very smart company if you make this mistake), that somehow prices represent an equivalence class of values. That's a very mistaken view of the world and also, in a perverse way, considering the progressive bona fides of some of those smart people, reflects an illiberal fetishization of the power of money and numericism.

Price, at equilibrium, is a true representation of value. But other market forces ensure that equilibrium is seldom met. Tax, tariffs, subsidies on the product and its components skew price away from value.

Also, this kind of analysis only works at market level. Individual actors all have different values. It has to be viewed in aggregate. Think anecdote vs data.

What do you mean by that?

Um... quite exactly the opposite? Very nearly the most basic assumption of all economic theory is that wealth is created through trade (which includes trading labor for a salary) because each party values the thing they are receiving more than the thing they are giving away.

We're not disagreeing. I think I could have been imprecise. It seems a lot of arguments made by economists who should know better quietly use models which which effectively ignore the "most basic assumption" or average it out, which is a nonsensical operation.

Value to an individual is very different to value to a market.

Value in this sense is the aggregate of the individual values to all of the buyers and all of the sellers.

Price and value only match when supply and demand are at equilibrium.

How do you avoid Simpson's paradoxes?

If you don't bother buying them, then the total value to you is probably less than the value of $100 for you.

It's possible that the value just happens to be equal to the value of $100. That's a vanishingly unlikely coincidence.

> employers can afford to wait for a given worker's labor prices to come down

So employers can wait.

> is affirmative evidence that the labor market is free

For employers.

> whereas the OP considers this evidence that the labor market is unfree

For employees - they can't wait (that much), see above.

That seriously underestimates the cost of a business being idle. Ample evidence for that is the devastation wreaked on businesses from the recent lockdowns.

Individually, with any positive level of unemployment, any one worker's nonparticipation is mooted by a ready waiting pool of available workers. Eventually the hold-out gets hungry. Or starves.

Blacklists operate similarly: businesses can afford the exclusion, the (unorganised) excluded cannot.

[I]n every part of Europe, twenty workmen serve under a master for one that is independent... What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen....

-- Adam Smith, Wealth of Nations, 1776

https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...

As for blacklists, there are solutions. Blacklisted people can join together and start their own enterprises. One of the nice things about a free market is you can't stop people from doing that.

The five following are the principal circumstances which, so far as I have been able to observe, make up for a small pecuniary gain in some employments, and counterbalance a great one in others: first, the agreeableness or disagreeableness of the employments themselves; secondly, the easiness and cheapness, or the difficulty and expense of learning them; thirdly, the constancy or inconstancy of employment in them; fourthly, the small or great trust which must be reposed in those who exercise them; and, fifthly, the probability or improbability of success in them.

Ibid., Book 1, Chapter 10

https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...

> One of the nice things about a free market is you can't stop people from doing that.

The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it.

Ibid., Book1, Chaper 8. Immediately follows my first cite.

Notice how they used the law to prevent the free market from operating. They had to use the law because the free market did work around it.

Ibid., Book 1, Chapter 5.

Who buys and sells those guns? Using what currency? And do you really want to kick the hornets' nest of slaver repressions, traders, anti-union violence, including multiple open wars, range wars, the Johnson County War, the Great Potato Famine, Opium War, British occupation of India, China, Egypt, Palestine, et cetera, et cetera, et cetera? All in the name of commerce and markets.

I'll let you find the passages in Smith yourself where he talks of the joint-stock-company created and operated garrisons in India, Africa, and the Americas.

And just to preempt a likely upcoming reference to Weber, his famous [hrase has three conditions, not one: it conerns the monopoly on the legitimate use of force.

Absent government, what is lost isn't violence, but the monopoly on legitimacy. Ony entity that succeeds in reimposing that monopoly is by the definition a government, and absent monopoly or legitimacy what remains is illegitimate and/or multiparty violence.

(A nominal government itself may lose its claim to legitimacy, as recent public protests in the US and elsewhere have suggested).

You've managed to have numerous horses shot from under you with no apparent grieving on your part in this exchange. In sympathy with the horses, I think I've pursued this as far as I care to.

But you might care to examine your premises and their foundations a bit more carefully.

If other people are using force, that is a failure of the government, not of free markets.

Wars, for example, are not free market operations, even if they are done "in the name of".

The OP's position is IMO wrong in that (rational) employers aren't incentivized to wait for the absolute lowest-price worker because of opportunity cost. Consider the example of a successful restaurant looking to fill the role of 'marketer'. The company is already profitable and could continue indefinitely without filling the role. However, the company is looking to fill this role precisely because it believes that it stands to profit a lot, and every day that the role goes unfilled they're losing out on that profit. So here the worker has some leverage. Further, the restaurant isn't the only game in town, the worker can have offers from multiple employers and parlay them against each other for still better offers. The wage ultimately depends on the size of the opportunity (the company won't pay the marketer 100% of the opportunity or it won't be worth hiring them) and the supply of marketers. Ultimately, the restaurant wants to hire the least-expensive marketer (ignoring variance in worker quality for sake of argument) without waiting too long (losing out on the opportunity). This is what a free market looks like--the OP is arguing that because an employer can theoretically avoid bankruptcy indefinitely without filling the position that the market is not free, but I think they misunderstand what "free market" means.

Although Adam Smith grasped this better than many modern economists and was hence a strong supporter of Labour Unions.

Of course Smith had not gotten his brain poisoned by excessive reliance on overly mathematical models of the economy.

Do you have a source for this? I can't find anything but SEO junk.

Free market in the microeconomic context is a market in which no one entity can significantly move the prices of a product but deciding how much to supply, therefore they don't have price setting power.

A second condition is relative ease of entering and exiting a market for competitors.

Coase's theorem is a good place to look for when thinking about power dynamics in a free market. Essentially, perfect information is a requirement when it comes to optimal decisions. Absent that, some party will be able to absorb some surplus, one essence "getting a better deal"

>the situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers.

so everyone has equal leverage (zero).

These requirements are not remotely necessary for free markets to work and work well.

Most generally, transactions can be freely negotiated by either party. I.e. no force or fraud. Contracts need to be enforceable. Individual liberties must be guaranteed.

> working well

Delivering on prosperity.

To clarify, imperfect information is not fraud.

Force in this context is something proactively applied, such as your signature will be on the contract or your brains. Force is not withholding something you have that the other party needs.

Charity, voluntarily helping others in need, etc., is perfectly in line with free market principles. Unions are perfectly in line, too, although laws bestowing monopoly powers on unions are not.

A free market does not have to be a perfect free market in order to deliver prosperity. Even small amounts of free markets can have outsized positive benefits, as the Soviet Union discovered when it allowed farmers to farm small plots, sell the produce, and pocket the proceeds.

Life expectancy was a good proxy in the 1800s because it improved dramatically, but now it has asymptotically approached a biological limit so is less useful. The same for average height.

Well, sure in a way, but that includes the parts that lay people ignore like the perfect information element and perfect value optimizing decisionmaking of the rational actor model, and the absence of externalities. But most economists recognize that people aren't omniscient, don't always optimally apply the information they so have, and that you can't avoid econonicndecisions having impacts on people other than those voluntarily participating in them.

Far fewer economists (basically, just the Chicago/Austrian schools, the latter of which does so as pretty overtly an article of faith) think that if you can't magically handwave those elements of the model into reality, the rest of 101-level simplified regulation-free markets still remains desirable as an ideal.

The almost purely "logical" and "ideological" statements of 19th and early-to-mid 20th century economics have been supplanted with with more empirical methods.

See Debunking Economics by Steve Keen.

You say they are orthogonal, and I provided evidence that they are not.

To be clear, I wasn't remarking about any comments you made about my orthogonality claim.

Sure, this can be true.

> in other words, power dynamics are orthogonal to market freedom.

No, they are certainly not orthogonal. One needs to only perform a simple thought experiment and increase the corporations' power to the point which constitutes a monopoly, to see immediately that they are not orthogonal. Do the same thing with increasing the power of unions and workers and you will again quickly leave free market territory.

It's a bit astounding to make the (false) claim power dynamics are orthogonal to market freedom.

You'll find it in the same chapter of the textbooks that state “that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces.”. This is also called “perfect competition”, and you won't find a textbook to say that the marginal cost equals the marginal value without summoning this hypothesis.

Freidman and Hayek both emphasize this point in their works.

Academics hold all the power in the "free" market and have their snouts in the trough. In a truly free market Milton Friedman would be on minimum wage at best (or find a rich sponsor).

BUT without a minimum wage, someone worth $50/hr can be paid $5/hr if anyone can do the job. It strikes me that this situation is far more common than the first scenario, and minimum wage opponents tend to ignore it in their arguments.

Minimum wage sets a floor for the market. That could theoretically increase unemployment in some industries with razor thin margins, but it's far from a given.

Not necessarily. A lot of factors might give one company an exclusive position. Another coal mine can't just open up. There might be a large barrier to entry into the market or it might just take time for a competitor to surface.

And if the other company is a newcomer looking to gain market share by undercutting, they'll likely find themselves strongarmed or bought out of the market.

Because that's how newcomers gain market share.

> And if the other company is a newcomer looking to gain market share by undercutting, they'll likely find themselves strongarmed or bought out of the market.

But then the high margins are still there, so the dynamic that attracts new entrants is still there.

The markets that maintain high margins are the ones with barriers to entry. Which, of course, we try to avoid as a matter of policy, so any policy that relies on their existence is quite problematic.

Services like Straight Talk and others that sublease towers and bandwidth from companies like AT&T or Verizon have massively cheaper costs due to the lack of contract phones (lower risk), lower support costs, lower advertising costs, etc. These lower costs are then passed on to consumers in the form of lower prices to the point that Verizon or AT&T prepay services have changed in an attempt to compete and even their main contract service prices have lowered somewhat.

As an aside, AT&T or Verizon actually rent most of their towers from other companies like American Tower or Crown Castle. They market how they're upgrading their towers, but that's not entirely true (they're basically bidding against each other on priority for tower upgrades).

Sometimes even in the real world things do flip, and there is a demand for low skilled labor that isn't being met. I overheard a few restaurant owners talking about the pandemic and their business while I was in line outside the grocery store a month or two ago. They bemoaned how no one wanted to come back to work at the restaurant since they were making more on unemployment. Neither brought up the idea of paying more if they failed to find labor at that price point in the market. Instead, they quipped back and forth about how lazy their staff are behaving after these owners themselves laid them off not too long ago and put them on unemployment in the first place. This anecdote is American capitalism in a nutshell, imo, just pure cognitive dissonance between the realities of the working class and the perceptions from the capital class.

For example, rich kids can take unpaid internships because they don't have to worry about food or rent for the duration of internships.

Poor kids can't usually afford to take jobs that don't pay.

Only about 40% of poor people 18-64 even have jobs.

1. teenage children of the upper middle class or higher

2. poor adults with a history of bad decisions

It's kind of a weird mix. Where are the children of the poor? You'd think they might want money much more than the children of better-off families do.

Surgeons, business owners, passenger jet pilots, software developers, and corporate executives all send their teenagers off to work minimum wage jobs. The point seems to be to learn about answering to a boss and/or to learn why success in school is important.

The ice cream parlor in Sausalito is run by (and frequented by) the children (and parents) of one class?

The Denny’s in Excelsior by that of another?

Definition 1. - your version "a worker is only "worth" $50/hour if there is a supply of people willing to pay them $50/hour."

Definition 2. "a worker is "worth" $50/hour if they add $50/hour value for the business." (who then goes on to pay the worker as little as possible, maybe only $5/hr)

Not sure which definition is "correct".

Definition 1 includes both supply and demand. You have a worker willing to work for $50/hr and someone willing to pay them $50/hr.

Definition 2 is only taking into account demand. You have a supplier who has set their price, but no buyers at that level.

This doesn't seem like a particularly helpful illustration.

Another way to look at it is: what is the maximum a company could conceivably pay for a particular role, even if that amount was way above the market rate? That number would presumably be a bit below the value that role is expected to contribute.

It's not a given when you're talking about a small region like Seattle. However, increasing the minimum wage to the entire US would dramatically increase unemployment in the poorest areas. The minimum wage is why territories like American Samoa and Puerto Rico have the highest unemployment.

Edit: changed Guam to American Samoa

But...they don't, even though Guam, unlike several states, has a higher minimum wage than the Federal level.

https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr...

There are, if I counted right, 19 states and all other federal districts except DC and the Virgin Island at (well, below for American Samoa) the federal $7.25 level (American Samoa's level is also a federal level, but it's federally set lower than the rest of the US), and a few more states at the same level as Guam; so it's pretty close to the middle, not really much on the low side.

PR's minimum wage has very little to do with it, except for being a convenient scapegoat.

What business sectors enjoy consistent 90% gross margins?

Of course it is pretty weird to think of a social network as a utility.

Does it omit or include those costs?

When someone is directly contributing to revenue, like a factory worker or salesperson, it's a bit simpler since you can look at their output, but you still need more information than gross margin to know the maximum a company could profitably pay an employee, since a company might design their operations very differently depending on the price of labor.

The value of maintenance, safety, quality are often only only apparent after being cut

They don't produce revenue, but one must assume they provide some value and in this case avoiding the loss of revenue due to theft, fires, etc.

How do you define "worth" here?

I suspect - but obviously can't speak on behalf of - the GP is using a definition of:worth $50/hr for the business bottom line.

You know that we have search engines, right?

https://www.healthaffairs.org/do/10.1377/hpb20180622.107025/...

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=267875

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3381978

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3520915

You might find this CBO report useful. https://www.cbo.gov/publication/55410

Minimum wage means "All employees you hire must be paid at least $X/hour". Note that if this means that employers decide to fire all employees below that wage (or not hire them), the average amount of money going to poor people would be less than before. Maybe employers fire some, and raises the wage for others, and it's wash. Maybe they do raise the wage for everyone below the minimum, and poor people do end up earning more.

I'm not claiming knowledge of which of these cases will happen. My point is that we shouldn't simplify complex situations to simple descriptions and argue against strawman arguements.

Another way of putting it: if it really was the case that minimum wage means "paying poor people more", why don't we just set minimum wage to $20/hour? $30/hour? $50/hr? Surely that would give even more money to poor people, and poverty rates would be reduced even further! (Because there are tradeoffs involved, and we need to balance them carefully.)

If it's really the case that minimum wage means paying poor people more, surely we could just set the minimum wage at $30/hr and pay poor people even more.

I'm not even opposed to the minimum wage myself. I just don't think it's good to simplify a complex situation, and then use that to strawman someone's legitimate point (that it is not a given that minimum wages will reduces poverty rate).

[0] - Another example is that minimum wages vary across jurisdictions, and employers are able to arbitrage that fairly effectively for many jobs.

You take the benefit of efficiency and productivity from the entire economy and return it to the people at the bottom.

You don't have a right to a job, or a particular income. You have a right for society to not leave you dangling when in need. Your ability to get a job or have more income should be determined by market forces.

Put a negative income tax in place and ensure a minimum level of funds for every citizen and see how quickly Amazon's treatment of its warehouse workers improve. Far more than any union could provide.

Removing the minimum wage is effectively a subsidy for companies and industry’s that would then pay below the old minimum wage. Considering how often people in the US make below minimum wage even when it’s illegal, it seems like a bad idea. Instead even higher minimum wages can be used to drive automation.

The arguments for minimum wage are always to insure it provides a livable wage, but economists generally rightly dislike it for limiting labor opportunities to ones above that wage threshold.

In the absence of a minimum standard of living you rightly should cling to minimum wage laws like the lifeboats they are for the working poor. Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law.

I think I'd rather see UBI / NIT and have progress towards the singularity slowed for lack of a high minimum wage to pressure automation than the status quo of extreme unhappiness and poverty (and the corresponding social unrest, drug abuse, crime, mental illness, physical ailment, etc). Of course if we can have our cake and eat it too that would be great... I'm just saying to leave the minimum wage on the bargaining table, insuring survival seems like the more important goal.

Arguably most competent endeavors are capable of paying minimum wage.

Cratering the truly incompent is a service to the market and reallocates resources to more capable players and retaining a minimum wage fosters automation and forces capital to give a larger share to labor. Either is desirable. I understand the concerns you have about automation. They are potential not fate.

> I don't think a minimum wage is ethically justified in a minimum standard of living society

The owner class does not make decisions based on what is ethical they act to secure their own benefits everyone might consider doing the same.

> Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law.

In a democracy we ought to be able to vote our own interests as soon as enough people see the merit of the idea. Fuck negotiations. If democracy remains in truth eventually inequality will make selling this idea a trivial sale beforehand its unlikely to come to pass here in the US.

Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.)

(EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.)

> what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)

The transfer payment is taken from the entire economy through a tax. A slice off the top.

If a business has higher profits it would also pay larger portion of that transfer to low income persons.

A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. Then it is in the interest of everyone paying taxes to figure out ways to reduce costs of living.

If you pick a value too low it does not actually keep someone alive, fed, and housed.

If you pay enough to live half the shitty jobs everyone hates become not worth doing.

The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT.

If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.

It’s like taking the worst part of “tipping in the US” and running with just that’s.

You take X% off the top of the economy and distribute it to everyone who needs it on a sliding scale basically below a certain income level Y.

You also get the benefit of not pricing low skilled workers out of the labor market. It is much better for the government to subsidize a person at 40% while they are obtaining skills and building their social network, than subsidizing them at 100% while they are on their couch.

Your point on mispricing labor is often overlooked. It is important that society knows the real value of a specific skill/labor. This is important information that will drive innovation/efficiency as well as giving young people or those going through transitions in employment more guidance in decision making.

What is more likely to play out is that assuming that when currently minimum pay for a hour is $10 and tax 0% then with negative tax X and no minimum the pay would become $10 / (1-X/100). The worker will get the same (hopefully) and the company will pay less.

It means the worker has voluntarily participated in selling their labor, even if its for a lower price than they would have made before, and they would always have the option to stop doing it and do something - anything - else.

If the NIT is insufficient to provide the necessities of life than its institution failed in its primary objective, albeit I would still argue any NIT is better than none because it raises the poverty floor some amount above zero.

We ALREADY have negative income taxes. 20% of the population are given more in refunds than they paid in. 40% pay zero taxes. When you add in government benefits and programs, 60% of households take in more from the government than they pay in.

https://taxfoundation.org/60-percent-households-now-receive-...

The point here being that hourly wages from these companies ALREADY account for theses factors. We could abolish these programs and raise wages, but that would be unpopular among a decent portion of the country.

A more interesting discussion is Consumption taxes -- taxes on spending your money. Consumption taxes account for 17-18% of all taxes. These taxes kinda slide under the radar for most people despite accounting for a huge portion of the taxes they pay. These are also the MOST IMPORTANT taxes because they affect goods and services directly (corporations pay attention even if most individuals do not).

A lot of states still charge sales taxes for things like food, diapers, and personal hygiene products (most at a reduced rate). These taxes definitely disproportionately affect the poor and should be abolished. Likewise, most states exempt prescription drugs, but still tax OTC drugs which also adversely affects the poor who are less likely to visit a doctor and/or have healthcare coverage.

Taxing services to "improve or repair personal property" exists in almost half of states and is also a bad idea. It disincentivizes maintaining things and all the important things like cars, property, buildings, etc are already taxed (and most are subject to tax increases based on improvements). Then they ALSO tax the person doing the improvement service effectively taxing one improvement THREE times. This is especially important when looking at small businesses or contractors who have to pay extra overhead to deal with the additional accounting. The most egregious part is that only two states tax white-collar jobs because the white-collar workers are rich enough to lobby while blue-collar service jobs like janitors or construction workers cannot afford such luxuries.

Finally, I'd love to see vehicles under $10,000 be tax-free (value as assessed by the state). Reducing vehicle costs for the poor would drastically increase their access jobs and offer an easier way to leave impoverished areas. In contrast, the electric vehicle incentives are almost entirely tax breaks for the well-off and disappear before the vehicles are cheap enough for the less well-off (if battery prices ever drop low enough for that to happen).

A free market means that the supply and demand of goods rely on price signals rather than a centralized planner. Labour is absolutely a free market. As wages in one particular area increase, people respond to that price signal by learning the relevant skills and working in that field and getting greater salaries. It's also why Amazon (and essentially no business) pay $7.25 an hour, even though they legally could.

This simply isn’t true for the labour market, ignoring the monopoly aspect for the moment, workers don’t have good market information.

Worker pay is usually heavily obfuscated by employers so it’s almost impossible for an individual worker to accurately gauge how much they can demand.

Addition workers have very limited time and resources to spend on gather information on the labour market. How are they supposed to discover better paying jobs, or better industries without constantly job hunting?

Compare this to companies who in comparison have a huge amount data. At a minimum they know the wages of all their employees, they also have the resources to be constantly surveying the labour market and adjusting to it.

All of this compounds to produce a heavily skewed labour market, that skews in the favour of employers.

I'm going to guess in this case it's more the latter than the former.

A free market will not solve climate change as long as coal and fossil fuels are inexpensive.

A free market prioritizes one thing: Profit. That is all. A free market only solves problems when it is profitable to do so. Yeah, charities exist, but they typically aren't big enough to solve the big problems on a big scale.

> Profit. That is all.

Free markets also have intense competition so "Profits" that you talk about don't just go out of control - Prices are set at the intersection of supply and demand curves. Companies would need to shave off profit margins to stay competitive.

I think it is fair to say that there are no ideal free markets. There are always asymmetries, downsides, side cashing and a whole bunch of complexities in any market - nothing is ideal.

So, we should have regulations that control those asymmetries.

No, it's not.

Usually, that's covered by the adjective “perfectly competitive” rather than “free” modifying “markets”, but it is an aspect of textbook idealized markets.

Yes, but you can buy from anywhere other than Krogers and the cost of switching is almost negligible. A job is very, very different in that regard.

Responding to your edit:

> As wages in one particular area increase, people respond to that price signal by learning the relevant skills and working in that field and getting greater salaries.

Learning the relevant skills costs time and money. If your wage is too low, you won't be able to learn new skills. And moving and changing jobs is not that easy for most people.

It doesn't matter who I buy from, I need food much more than any retailer needs my business. I can sell my labour to many different companies with a relatively low switching cost. The average time people between jobs is lower than it has ever been.

Learning the relevant skills costs time and money. If your wage is too low, you won't be able to learn new skills. And moving and changing jobs is not that easy for most people.

If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods.

Well, I disagree on this. Maybe you specifically can do it, but housing prices, healthcare costs, transport cost, family charges, etc, can make the cost and risk of switching prohibitive. Not to mention that "just switching" doesn't mean prices will be better. Just have a look at the latest stats on working poor people to imagine whether those can easily switch jobs and get better education.

> If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods.

So there's a high cost of entry? That's very much a non-perfect market. A free market doesn't just "respond to price signals", that's a very low threshold as you'll hardly find a market that doesn't respond in any way to price changes. A free market has to respond to them in an elastic way.

Many people stay in jobs they don't like or that don't pay enough because they need the healthcare or don't have the resources (including time) to learn new skills and move to a higher paying job. So the fact that people can't freely respond to price signals means that it is not a free market.

A free market means that the distribution and production of goods and services do not rely on centralized planning, but on price signals.

As for being stuck in a job for health or skill reasons, those are choices, crappy choices but still free choices.

Universal Healthcare would, IMO, do more for the worker than a nominal pay-rise. The link between employment and healthcare is an abomination.

And that what's skewed here: as a (low-income) labourer, I often don't have all that much choice but to say "yes" since my bargaining power and alternatives are extremely limited. Often times people can't really "compare options".

That's one definition but it's not one of the more common ones.

It also begs the question what counts as a centralized planner. Does Boeing count if it sets the price of jet planes that only it and Airbus sell? What about when Singapore fixes the price of medical care even though anybody who wants can cross the border to have it done? Or Venezuela that fixes the price of its own money - at a rate literally nobody pays?

Remove the state and there are still many things that can go wrong with a market. Price signals become a way of laundering this fact past a certain point.

In what sense is a market with price controls absolutely a free market?

This will be the case as long as we have monetary policy based on the idea that "100% employment is the apocalypse".

It seems like it is accepted as fact that 100% employment would lead to hyperinflation, despite the fact that this has never occurred. It is a totally untested theory that is suspiciously convenient for employers and shitty for workers.

Central Banks' (the primary institutions behind monetary policy) primary goal is to promote a stable environment for commerce. This typically means maintaining a stable rate of inflation (2-4% for mature economies, 4-7% for frontier economies). This often requires performing a balancing act between managing unemployment and inflation. We have PLENTY of evidence to suggest that inflation is harmful for everyone, ESPECIALLY for low income workers. The stock market usually has ZERO consideration in the decisions central bankers typically make.

Also, I would disagree with you about the Federal Reserve not targeting the stock market or other assets. Anytime in the past couple of years that the stock market in the USA has dropped roughly 10-15%, the Federal Reserve has jumped in dropped rates. They might say the don't target the market, but in reality that is what they are doing.

I think biggest issue in the future will be how will the Federal Reserve ever raise rates. They can't even go above 2.5% without the market collapsing.

If economic growth is more than the interest rate, the owners pocket the difference. If economic growth is less than the interest rate, the owners get bailed out. But in all cases, growth for the sellers of labor always lag the growth for the owners of capital.

I'm under the impression that inflation is disproportionately hurts those with large amounts of cash saved. In this hypothetical scenario where we have 100% employment and it causes inflation, wages would rise with inflation, so rising prices wouldn't be an issue... right?

I hope they have that kind of integrity but I won’t be surprised if there’s a gap between theory and practice

I hesitate to call this a fantasy thought experiment (like all the atoms in the right place for a brick wall to allow a baseball to pass through). Not to mention the illusion of employment statistics (how it's measured), in many countries.

This stable equilibrium is impractical. The world is not a singular country. Employment within a single country is not representative of labor supply/demand, in this context.

Can you share where you are deriving this from? I don't think monetary policy is based on this idea. I think it is based more on managing inflation and economic growth, with employment impacts being a side-effect.

> It seems like it is accepted as fact that 100% employment would lead to hyperinflation

I also don't think it is that 100% employment would lead to hyperinflation. It's more that full employment might imply inflation has taken place, meaning that a basket of goods/services might cost more (in terms of number of Dollars). But maybe I don't understand the argument here?

https://en.wikipedia.org/wiki/Full_employment#The_NAIRU

> It seems like it is accepted as fact that 100% employment would lead to hyperinflation

is a strawman. The argument is that 100% employment will cause an undesirably high inflation, but serious economists almost never talk about hyperinflation. (It tends to be a boogeyman used by deficit hawks and the like, since it almost never happens except in cases of war or truly disastrous policy).

> Only with continuously accelerating inflation could rates of unemployment below the natural rate be maintained. [0]

[0]: https://en.wikipedia.org/wiki/NAIRU#The_natural_rate_hypothe...

This is the downfall of most economic theories people hold. They miss taking it a step or two out and assume all conditions will hold true forever. The market changes. You can eat a bad egg for breakfast and decide you hate eggs forever. Yet the day before eggs would have been an acceptable form of breakfast transaction. Now these theories have a place to play 'what if'. But usually are not that good to follow.

I buy a lot of notionally 'American' products (iPhone, computer gear, electronics) that are all manufactured in Asia for cost reasons. A bunch of places have become extremely wealthy in the last century, basically creating a middle class out of poverty, through a strategy of cheap-wages-lots-of-manufacturing. Coincidentally, the greatest reductions in poverty are all in Asia. And one shudders to think what the Chinese could be achieving if their government was a bit more competent and left people alone to prosper.

Is there evidence that the poor in America are prospering under high minimum wages? The stats I've seen suggested it is basically status-quo for the last 50 years. Minimum wage is a small part of the puzzle, granted, but it isn't necessary to generate absurd improvements in the general welfare.

Make it a requirement that companies publish salaries.

We did this with CEO pay and it resulted in huge increases in CEO pay because it removed the information asymmetry. We make companies disclose important safety and nutrition information to the public so consumers can make good decisions about purchases, why not enable people to make good decisions about employers as well?

If the minimum wage is set too high to plant grapes for example, grapes will not be grown.

$15/h too high to flip burgers? Ok, I guess we don’t need fast food. Oh wait. Except it somehow doesn’t put the corps out of business.

Now, you could make Flippy the robot illegal, and maybe x number of businesses would eat the cost of the more expensive workers. But something else will suffer as a result, and I would argue it would involve price, efficiency, quality, and compliance...

I think back to my minimum wage job working as a grounds keeper at a golf course. To the uninformed, it seems like a perfect space to deploy a roomba with knives and never hire a groundskeeper again. I can tell you that this high tech course would sooner burst into flames than maintain playable conditions for a golf season. For a groundskeeper, the generalized routine is the same, cut the same greens and teeboxes every morning with a shotgun start and the fairways and rough every other day or so, but how you cut those sections changes by the day, even by the minute over the course of a dynamic weather event. What angle you cut, how high or low the cutting surface should be, whether or not the grass is slightly slippery that day and would require more focus with the mower to maintain a straight line, how the grass was cut yesterday and the day before are all variables that an experienced greensmower accounts for subconsciously and instantly. Then you might have a drought which changes how the grass should be cut, or a rain storm which might require a lot of emergency drainage work to keep irrigation equipment functional or to preserve the playing surface before you could even begin regular cutting, which would be with extreme care given the rain soaked earth (you might even opt to roll rather than cut).

A comprehensive automated solution for many jobs is exceedingly complex and highly custom, which could really add up in pricier engineer-man-hours and service contracts, versus having your own maintenance shop hidden on the course and hiring a low skilled crew to operate that equipment. It's so much easier to tell a human to cut grass than to spend 100x the man hours maintaining an automated solution that continually captures all the variability of that dynamic job.

If burger flipping robot is more productive than human, we should replace all humans with such robots.

That's certainly has been true, but I don't think it's absolutely always going to be true.

Further, what we've seen is that primarily low skill high wage jobs have been replaced with high skill jobs. This is evidenced by the fact that you simply can't make a good living off a high school degree.

Based off this

https://www.careerprofiles.info/careers-largest-employment.h...

How many of those jobs are in danger of being automated?

    Cashiers,
    food preparation,
    freight,
    Customer service representatives (I know, you're thinking no way, but a lot of effort is going into AI chatbots to cut down on CS requirements).

What happens to the millions when those jobs are slowly eroded away? It's easy to cheat and say "Something else will probably come up" but I simply don't think that will continue to happen in the next 10->20 years.

There's only so much productivity we can utilize. What happens when we've saturated? Unemployment.

I don't think any nation is really well equipped at this point to handle large portions of their workforce being automated away.

Sure, the standard of living will go up for everyone with jobs. However, that will be less and less of the population as time goes on.

This is why programs like UBI and universal healthcare are important. Without them, things are going to be pretty bleak for a lot of people (even with them, and a constant population growth, things won't look good).

There's only so much productivity we can utilize _at a given price point_. It's possible wages could fall instead, although there's definitely a floor to that.

That's one of the interesting implications of UBI; it would theoretically make it easier to find free or close to free labor. I still don't think it would be plentiful, but I would guess there will be an uptick in the number of people like amateur astronomers who will sit and watch the sky at night for free.

Working 40 hours a week is not a natural law, peasants in the Middle Age worked less hours annually than us today. Reducing work hours would also have a positive environmental effect.

Otherwise, I wholly agree with your diagnosis of the situation.

Because either that reduces total wages for everyone, or it makes more people permanently unemployable by raising the cost floor per unit of labor value.

Also, you can't reduce working hours for everyone, only the currently employed, and in practice reliably only the near-full-time-employed-on-hourly-wages.

> The risk of UBI is that rent-seekers might just engulf this guaranteed income by raising their prices

Not really, since UBI funded by progressive tax increases compresses post-policy incomes rather than raising them uniformly. You'd need ironclad market segmentation that survives income distribution compression to “capture” any groups increase in post-policy income, and if you have that, you can just take all of that groups income anyway, which is a problem that needs addressed independently of whether UBI is adopted.

Making fast food isn't a job "meant for humans", it's a job humans perform for the legal minimum of pay. The moment fast food chains can replace humans with Flippy without a PR backlash they will do so without hesitation.

I like the idea of humans not having to do trivial work.

But I am concerned as to whether as a society we'll transition to "more leisure without reduction of living standards" or "higher competition to make ends meet, with the 'failures' being cast aside".

So far it is the latter.

Maybe you can help them by getting them food at lower prices. Just a thought.

Now, if there were a real safety net - UBI, or something else that gives enough to live a normal life and afford a computer, internet, food, shelter, and reasonable hobbies - well, then, we can reconsider. Until we have choice with viable options - including not working for exploitative employers - then we might be able to do such things.

And minimum wage prices those unable to produce that much in value out of any job whatsoever.

How do you translate that into numbers? If $15/hr is better than $14/hr, wouldn’t $150/hr be 10x better, and if so, what’s wrong with a comfortable $1,500/hr?

I think that’s where economists start to differ.

What exactly is "livable" anyways? Millions of people live every day with only a couple of dollars a day.

Not in the USA they don't. There is no possible way that an individual could pay for food, clothing, and shelter on that income.

What exactly is the benefit of wholly depriving the putative worker of a job vs. making up the difference with something like food stamps and Medicaid?

When you pay for yourself, you're price sensitive and try to choose what makes sense for you. When you're not price sensitive, you run into a major incentive problem. If your life is funded by taxpayers, you have no reason not to argue that basic subsistence requires a lifestyle as expensive as you can get away with.

Decent.

Roosevelt:

""" In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.

By business I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.

"""

> A smartphone?

Yes

> A recent one?

Define "recent". One that has internet connectivity, allows you to install apps that are increasingly required today (banks, school, mail, auth etc.)

> What standard of medical care?

All of it except cosmetic. A.k.a. universal healthcare.

> What about entertainment?

What about it? Define entertainment. Let's do this way more broadly: how about vacations, sick leaves and parental leave?

> What if someone wants only to eat organic, fair trade food?

Yes. The poor cannot escape bad eating habits because (especially in the US) more often than not they have no access to healthy food, and healthy food is much more expensive than current government assistance can cover.

BTW: Are you American, and do you by any chance identify as Christian? Because I've only seen two groups of people so hellbent on never helping their fellow man. American Christians and American libertarians.

No, disagreeing with your must mean I want people to stay in poverty forever...

Learn from immigrants: they earn their way to a better life by applying themselves and helping each other.

Also OCASM: You can't make me help other people, it's slavery

I've yet to see an austerity measure that strips away even the most basic protections the way US does.

> this kind of behavior on a large scale.

The US: 40 million people one month away from eviction. 30 million people are one medical emergency away from life-time of crippling debt.

Americans: oh, look at austerity measures in Europe.

I really wish people were more educated about this. In 2013, the US Government spent $4,981 PER PERSON (only $4,500 was privately funded per person) [1].

That is more government money per person than Sweden, Germany, Canada, Great Britain, Australia, etc (more than almost every first-world country).

The US has a pricing problem and a healthy-living problem. Almost 2/3 of all healthcare spending goes toward the obese 1/3 of the population [2].

Under 45, costs are less than 3k per person per year on average. The next 2 decades see prices soar to over double at almost 6.5k and over 65 they almost double again to 11.3k [3].

Why should I have to pay twice as much because someone else is overeating?

Put more interestingly, if obese people were denied government funds, the current amount of government spending at current prices would not only pay for EVERYONE, but would even have money left over (most likely gradually reaching equilibrium as those people lost weight to gain coverage).

[1] https://www.visualcapitalist.com/u-s-spends-public-money-hea...

[2] https://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.89.8....

[3] https://www.registerednursing.org/healthcare-costs-by-age/

Why do you pay for car insurance just because someone is driving recklessly? ;)

Also: as you correctly pointed out, the US spends more on healthcare than any other country. But people in those countries pay for obese people, too. And still...

Healthcare is a complex problem which should also include solutions for crazy amounts of sugar in American foods and drinks, better food in schools, better access to healthy foods for low-income families etc. etc.

I've paid much higher premiums than my sister simply because of my sex. If I get a speeding ticket, reckless driving, at-fault accident, or any number of things, my insurance will skyrocket enough to cover my added costs to the system (interesting, in my earlier years with my perfect record and despite my sister's many speeding tickets, I still wound up paying more for insurance for an equivalent vehicle).

EVERY insurance increases premiums for high-risk situations EXCEPT health insurance because reasons.

> But people in those countries pay for obese people, too. And still...

Obesity in the US happens at a much higher rate than other countries. My main point was that we are already super-socialized and the real issue lies elsewhere.

Of course, because reasons. Because health is a bit more complex than "you get a speeding ticket, you're a bad driver"

> My main point was that we are already super-socialized

You mean to say that the US already has super-socialized medical care? Erm, no. It's nowhere even close to being "super-socialized".

> and the real issue lies elsewhere.

Indeed. And I mentioned this in my comment:

Healthcare is a complex problem which should also include solutions for crazy amounts of sugar in American foods and drinks, better food in schools, better access to healthy foods for low-income families etc. etc.

Before punishing obese people the US should take quite a few steps towards helping people not become obese. Because even fast food is healthier in Europe: https://www.youtube.com/watch?v=ZMaW6TamNAc

No, the government is subsidizing the worker, and in a system of means-tested aid doing so less than it would be without the job.

If you can't employ people at wages that don't get them fully off public aid, then people can't get the jobs that let them build the skills to be employable at decent wages. Your plan is a recipe for (1) killing businesses and tax revenue that support public assistance, and (2) killing people's ability to move up and off of public assistance, so that for any given minimum standard of living we’ll need more public funds to reach it but have less available.

It's much better to tax capital returns and use the proceeds to support the un- and under-employed (whether permanent or transitional) then it is to block the onramps to people becoming employable at wages that are livable.

And that's even ignoring that Medicaid and other public assistance usually aren't based solely on individual income but household circumstance, so that the required minimum wage by that standard would be dependent on household circumstances, which is problematic.

There's always talk about market failures when many times government failures are the true causal mechanism.

I wonder why states/municipalities don't just leave it at that - a specific consumption basket whose cost is recalculated annually, vs having recurrent loud debates about it with some arbitrary round numbers.

Because the level at which it is safe to set local minimum wage without net adverse effects from job loss depends on a variety of conditions besides price levels, including prevailing low-end wages in localities that compete to attract employment. Building a formula that fully addresses this is nontrivial, and even with one that worked locally there would be a reason for broader regional/national campaigns to kick the floor up.

I think the better solution is to set a reasonable rate, fix it to inflation, and use corporate taxes to fund social safety nets.

A minimum wage is not set in a vacuum, and high numbers that ignore this fact do not illustrate anything useful.

“In Sweden about 90 per cent of all employees are covered by collective agreements, in the private sector 83 per cent (2017). Collective agreements usually contain provisions concerning minimum wages. Sweden does not have statutory regulation of minimum wages or legislation on extension of collective agreements to unorganized employers.”

https://en.wikipedia.org/wiki/Collective_agreement#Sweden

False. Corporations are golems, not people at all.

Article 3

Everyone has the right to life, liberty and the security of person.

Article 22

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 23

1. Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. 2. Everyone, without any discrimination, has the right to equal pay for equal work. 3. Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. 4. Everyone has the right to form and to join trade unions for the protection of his interests.

------------

You can either give people unemployment (wage without work)[as per 22 or 23(3)] by taxing the companies you mention, or you can make the companies to give money directly to the people in return for work. There is no third way. You can't deprive people of a dignified life by ignoring them.

"Negative and positive rights are rights that oblige either inaction (negative rights) or action (positive rights). These obligations may be of either a legal or moral character. The notion of positive and negative rights may also be applied to liberty rights." https://en.wikipedia.org/wiki/Negative_and_positive_rights

Rights are either (1) liberties that are stipulated to not be infringed by the government (Saying "Dear Leader is a bad leader" is protected speech and taxes/government cannot be used to prosecute someone for saying it) or (2) The ability to demand services to be rendered by the government so one's desires are fulfilled (I demand the ability to take from you via taxes to pay police so that I can have protective forces / police to defend me saying "Dear Leader is a bad leader")

Organizing political unions around negative rights (1) is socially scalable and recursible: "who among us agrees we will never kill our fellow man? of those in the subset, who will agree to never assault someone unless if and only if the person who is to be assaulted, has already assaulted someone" (2) is not socially scalable "Who agrees we should coerce person/group x if some of you feel person/group y wants what person/group x has"

If you think it's possible to write laws the subsidize the well-being of the destitute, Please let me know who I should sue for landing on a desert island and starving to death. Reality isn't fortunate nor charitable -- consensual, opt-in unions can be.

Well, I declare differently. Words are wind (unless backed up by an argument).

> You can't deprive people of a dignified life by ignoring them.

Ignoring someone is not depriving them of anything.

Sacrificing some people for the sake of other people--what you are advocating--deprives both groups of a dignified life.

Human sacrifice is utterly barbaric and would be outlawed in a truly civilized society.

> There is no third way

You can give them a piece of fertile land.

----

Article 6753 Everyone has the right to play video games 24 hours a day.

----

Nobody is entitled to life, nor dignity. Simply because someone else exists on the planet doesn't mean their livelihood is now my burden. Me existing doesn't mean you ought to be enslaved to provide for me.

Think about it. Indentured servitude is nothing but a contract between two people. By your ideology it should be of no one else's concern. Yet, it is considered slavery and is illegal. Why?

Because it turns out life isn't as simple as "you're not entitled to anything". This same sentence has been uttered by people throughout the ages who profited by the status quo until the commoners got their heads, literally or figuratively.

Every law we have, including the ones that allow you to have private property, private land and virtual property such as copyrights and patents are man-made and arbitrary.

Regardless, one has a right to their body. It is their property. More explicitly, any individual intelligent agent that exists takes up some physical space and that space they occupy at any point in time to continue their existence is theirs only. Property can be given up voluntarily or if nobody else has a claim to it - in this case it extends that clearly rape is wrong, but prostitution is okay, as it's voluntary on both sides. Seizing someone's house is wrong, but exploring space and building new structures in the middle of nowhere is not.

Whether laws exist regarding private property (or the lack thereof), we can define a set of natural rights that any person has regardless of any local, regional, or global laws, constructs, or ideologies. We can all agree murder is wrong, rape is wrong, stealing is wrong, slavery is wrong, and the clearest and most concise way of setting this forward is by understanding that nobody is entitled to anything other than their body and any property they have gained which was either unclaimed or voluntarily from another agent.

Certain schools of thought disagree on unclaimed property, e.g. if one settles a piece of land and the landowner doesn't notice, but after a decade or so has passed and the resident has worked the land and only then the landowner notices, who really owns it? I am not in a position to answer this but I don't think it's "arbitrary" or "man-made" to expect natural rights over your body and property. Everything else, indeed, is abstract.

To what extent? Does this principle apply to indentured servitude? How about work related accidents, should a company be legally required to prevent them? Should a mining company pay compensation for the lung damage sustained by their miners, even though that was not in their contract? How about the environment, does this principle imply I have a right to breathe fresh air? How about drinking water?

>Whether laws exist regarding private property (or the lack thereof), we can define a set of natural rights that any person has regardless of any local, regional, or global laws, constructs, or ideologies.

You can, but it doesn't mean I or anyone else will agree to them.

>We can all agree murder is wrong, rape is wrong, stealing is wrong, slavery is wrong

No, we can't. People used to think slavery was ethical. What changed? Raping and plundering used to be ethical for a victorious army. What changed? Today the majority of the world eats meat, and it is very possible that in a century we will be seen as primitive carnivores.

You are also not defining what constitutes these crimes. Is capital punishment murder? Is it murder to kill an enemy soldier? How about an enemy civilian? How about collateral damage? Is it slavery if a company destroys all your other options, forcing you to work for them on their terms?

Is it unethical for companies to collude and fix prices or wages? Is it unethical when workers do the same? Is it unethical when a company pays the local police to break a strike?

The thought that "you only own your body, and you have to earn everything else" falls down pretty quickly once you look outside that idealistic bubble and see historical or ongoing issues.

People today still think those crimes are right, as evidenced by the fact that there are many people who still do them. That's why we have laws against those crimes: to punish the many thousands of people who still attempt to carry them out, and in many cases succeed.

If we could "all agree that they were wrong", then we wouldn't need laws against those crimes, because no one would ever commit them.

That's an ideological statement. You may subscribe to it, but not everyone has to. Society is fundamentally based on the notion of shared rights and duties, what these rights and duties entail can be up for debate, but if you don't want to owe anyone, you will have to live a pretty lonely, primitive existance in Siberia or Alaska.

https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

Nowadays with the internet one does not need to be lonely even if they are away from society.

In addition others might decide to follow them.

> primitive existance in Siberia or Alaska.

This does not make much sense. Why would living somewhere else automatically give them any duties?

Anyway, I do not see the point of this argument. It is like saying to a gay person "if you don't want to be discriminated by anyone, you will have to live a pretty lonely, primitive existance in Siberia or Alaska."

How are you going to pay for the internet? If you want to operate with state currency, you need to abide by the rules of the state. Render unto Caesar ...

Edit: I suppose you could try doing it with bitcoin. Best of luck if you try!

Time to forget all the issues regarding privacy too, after all in order to not be tracked by facebook we have to live in siberia.

As a result, I can consider a libertarian to be genocidal. For they would be mostly fine with a Holodomor.

We could have a dog-eat-dog society like Mad Max or something. Or we could set simple rules and live a decent life. Its kind of what Democracy is about.

Workers indeed show up and make things run, but only because they voluntarily chose to agree to a contract where that is their duty. If they don't like the terms of their contract, they can not take it, renegotiate their current one, find a new one, or take on risk and start your own income. You can't "accidentally" fall into a job.

We have to grow up, and recognize that as our country grew from 10M to 450M people, certain processes and activities have to be streamlined and organized. You don't run the company by letting folks show up for shifts at random and hope for the best. You don't run a country's infrastructure that way either.

There's no inherent entitlement or human right to give your children your money, or to not be simply turfed off what ever land you are using when society decided there's a better use for it, for a competitor simply stealing your inventory, expecting protection from thugs taking your business etc., etc.

Because wealth begats wealth, there needs to be certain checks and balances, minimum wages are one of them, inheritance taxes and capital gains taxes are others.

For that, you get the protection of strong laws, an infrastructure you paid almost nothing towards, legal protections for your property, protection from foreign governments, access to skilled trained workers you didn't pay to educate, etc.

Your argument is circular, Fred is wealthy and can afford to speculate, therefore Fred deserves more wealth.

But Fred is only wealthy when everyone else buys into the system, otherwise Fred would soon be Dead Fred.

I do not think we need checks and balances. Minimum wage actually harms those who are most disadvantaged - if I am hiring two people and I must pay them the same amount, there's no reason I would take the socially less valuable person. At the very least, eliminating the floor would allow the disadvantaged to compete and make racists pay for their prejudice, i.e. "Do I really want to pay $10.00 for a white straight privileged [whatever insert here] or $5.00 for a black trans [etc]".

Inheritance tax is violence against those who pass on their wealth. If you have indeed earned so much that you would like to ensure your lineage, what right does anyone else have to stop you? Why is it wrong for you pass on wealth to your children? Whose business is it? What if instead, you simply lived a thousand years and kept your wealth?

If you want to donate money because you are very rich and have a lot of money to spare and truly believe this, then by all means, you can even pay more in taxes nowadays and never file a return. Nobody will stop you.

There is an absolute mountain of evidence that the economic status of your parents is a strong influencer of your own economic status. This is the cause of a great many problems, including things like the problems with the black community in the US for example.

Your entire argument on this is a contradiction; no one is entitled to anything yet you are entitled to the money from your parents? What right do your children have on the money someone else earned with their merit? Let them prove their own worth.

Your view is merely dogmatic and ignorant, the opposite of what I come to HN for.

> You aren't de facto entitled to receiving a return on any capital you may provide, regardless of whether that capital is put to productive use or not. A company exists because one or more people provided their labor in order to create a net positive system.

and the tone clearly changes from the original. I agree that neither capital nor labor is entitled to a return, but I don't think that's what the parent comment was suggesting.

What about companies that exist solely as rent seekers? TurboTax is a net negative on society - congress has tried repeatedly to simply mail people a bill or refund, instead of the silly song and dance we go through now, but Intuit has lobbied aggressively to prevent this.

The issue is with government enabling the monopoly.

Reality and all of history tells us that doesn't work at scale.

This is a value judgment you have made, and one that seems popular in USA. It's not a priori true and it's not necessarily so popular in other parts of the world.

> Can you reasonably claim that all citizens consent to the policies of their government?

People will disagree with each other whether they have a government or not. Those who live ungoverned tend to experience more coercion, violence, and violations of their rights than those who are governed.

The takeaway is that Econ theory only explains what it’s capable of explaining. The real market clearly has a lot more going on than purely rational actors exchanging goods and services.

Total pay for all teachers is far in excess of total pay for all entertainers. Measured that way, we clearly do value the teachers more.

It's just that an individual teacher is not very productive.

Some entertainers are not productive. Being a clown at small birthday parties is seldom lucrative.

When I was working solo, I could not bill out remotely close to what I can as part of a firm. Not to mention that I had to find a cheap accountant, pay for office space myself, etc.

However, the middle class has shrunk quite a bit as the upper middle class has seen tremendous growth while lower middle and poverty classes have seen a good deal of shrinkage.

37% today are lower-middle or poverty class compared with 50 years ago where 48% were. In particular, the poor have shrunk from 24% to 20% today.

So the middle and upper-middle have grown over the last 50 years with the upper-middle in particular growing and lower-middle and poverty has shrunk. However, middle class people may feel left behind as they see more people becoming upper-middle.

[1] https://www.urban.org/sites/default/files/publication/81581/...

But that's not completely true, because a person who only knows how to dig with their hands still only digs one hole a day, even if there's a shovel just lying there. Knowing how to use the tools does in fact make you a more productive worker.

It seems to me, then, that part of the gain from the productivity from better tools should go to the worker who knows how to use the tools. And part should go to the person who bought the tools.

This is why Adam Smith, for example, cites labour as the primary factor of production, followed by land with capital as the last. In modern parlance you might hear that said as "human capital is the most important", but human capital really is a politically correct way of saying "labour potential".

> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces.

You may disagree with my reasoning, but you yourself are making the case that workers are not paid for the value of what they produce.

What does capital produce?

Even assuming everything else you've said is true, that's quite the leap to make. And also quite the oversimplification. There are lots of regulations and subsidies that have been tried where the unintended consequences end up negating most of the benefits, and just turn out to make the entrenched powers even more entrenched and wealthy. Plus there are ideas like UBI that don't fit neatly into the traditional buckets of "regulations and subsidies" and could be another (better?) way to give workers more leverage.

I’m not here to argue about whether that is the right choice. Or debate about what the target inflation rate should be etc. But if the US government is going to intentionally maintain a minimum scarcity level of employment options for low skilled workers, it is only reasonable that the US government enact policies that protect these low skilled workers on the other side.

But ultimately pointless when there are insufficient jobs - which there always are since "inflation targeting" ensures there always will be.

The actual problem is that there are 20 dogs and 19 bones. What we need is a Federal Job Guarantee. An alternative job that everybody has a right to access paying the living wage. Then simple competition sorts the rest out.

The task of the private sector is to eliminate all jobs and replace them with automated capital. Once there is a job alternative in place, we can let the private sector get on with that task.

How high a basic income would have to be for this to happen, I don't know. But I think with sufficient BI, crappy jobs will have to pay a lot more to attract people, whereas fun, interesting jobs might have more employees competing for them. That would be the sign of a healthy free market at work, I think.

The baseline wage is determined by how much a person with such characteristics is being paid in the industry for similar work in a given country, state, city. Usually, such characteristics should be limited to things like education and prior experience. In practice, they can include immigration status, nationality, current physical location, and other things that can be perceived as unfair.

By how much employees' income will diverge from this baseline is determined by the bargaining power and bargaining skills. This includes anything that can convince the employer to pay more. For example, if you currently have a job you may be less desperate to get a new job, meaning you can refuse a bad job offer more easily. If your status in the country is uncertain and you can't work legally in the country, regardless of how educated or skilled you are, you don't have as much bargaining power and you can be paid four to five times less than a citizen.

What I'm getting at is that in reality, employee's income is not determined by the product of labor he produces. It is determined by what similar others are being paid for similar work and bargaining. Usually, the lower bound is minimum wage and the upper bound is the company's income.

Given that corporations have been happy to work people to death, that baseline is zero.

If a normal workday cannot pay for a baseline life, the system is simply wrong.

and

>Workers can't usually live too much without finding a job.

Conversely, most workers can go to a different job, and hiring is expensive, so companies cannot simply keep spending on hiring and get no workers, so companies must offer enough value to attract workers.

Workers also have information companies do not - they know where else they might or are looking, they sometimes have competing offers in hand, and they can always not take a job based on these things.

>Companies will always push for lower wages wherever they can, without a care for the actual wealth created by the worker.

Conversely, workers will always push for more wages wherever they can, without a care for the actual value they produce for their employer.

And it's much easier for a worker to go elsewhere than it is for a company to replace all workers. Both sides have interest in getting a good balance on wages.

Is this true? Do you agree that reducing the minimum wage would open up more jobs that couldn't previously exist, and increasing it would close existing jobs?

For example, if I want to start a lemonade stand that serves my entire neighborhood, I'm gonna need help. If I have to pay the help $50/hr at minimum, then I will probably not open the lemonade stand. I think in this case it is obvious that too high of a minimum wage can result in a suboptimal outcome. The next best solution is to enter an informal agreement with my worker, which is an even worse outcome because now no one is protected.

Minimum wage removes the choice. Minimum wage infringes on your freedom of contract.

Increasing income inequality should be very alarming to everyone. The bottom 90% because they're getting screwed, and the top 10% because the perfection of conservative talking points and scapegoating of minorities and immigrants will not address the truth on the ground: nostalgia for post-war prosperity will not bring the jobs back. Policy in today's interconnected world is complex and almost entirely driven by expert lobbyists representing special interests who donate to both political parties to guarantee their influence. It's going to get worse and worse until either the 1% see their own danger or the pitchforks come out.

A country general success does not equal the success of its poor people. There are not many income inequality stats of Singapore, but the ones I've seen [1] actually put Singapore with a similar income inequality to the US.

Furthermore, it is a small country (5M people) with a pretty high GDP per capita (8th in the world). I don't think you can extract too many conclusions that would be applicable to other, bigger countries.

> The question to ask is do the rules of the game allow anybody to succeed. Minimum wage is a rule that says some people just don't get to play.

And without a livable minimum wage, you'll get people that are working full time for peanuts. They won't be able to save, get healthcare, provide their kids with good education, etc. Are those people succeeding?

1: https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...

There is no requirement that everybody succeed at the same level. The measure of a country's success is improvement of society over time. Has the general quality of life improved for the people of Singapore over the last 55 years? I think that is a resounding yes.

It's not. You'll see that a lot of the top companies in Singapore are operating at global level while headquartered in Singapore. It's a little bit like looking only at the economy of the main US cities.

> There is no requirement that everybody succeed at the same level. The measure of a country's success is improvement of society over time.

Inequality is a pretty important measure. What society is better, one where everybody earns two times a livable wage or another where 25% earn eight times a livable wage and the 75% remaining are in poverty?

Upon independence, "Singapore faced a small domestic market, and high levels of unemployment and poverty. 70 percent of Singapore's households lived in badly overcrowded conditions, and a third of its people squatted in slums on the city fringes. Unemployment averaged 14 percent, GDP per capita was US$516, and half of the population was illiterate." [https://en.wikipedia.org/wiki/Economy_of_Singapore#Independe...]

Compared to today, Singapore has about 1000 homeless, 3.16 persons per household, a literacy rate of 97.3%, GDP per capita of $602 billion, an unemployment rate of 4.11% and a median household income of $9,293. The income distribution isn't bad either. From what I could find the cost of living (minus rent) for an individual is $575 a month.

https://blog.seedly.sg/average-singaporean-household-income-...

The better society is the one where everyone has an opportunity to improve their lot in life by satisfying a need of others.

By that same link, the bottom 10% of the population have less average income than your cost of living.

But I read a little bit more, and it looks like that they are indeed tackling the income inequality problem [1]. Which is where country size and GDP per capita comes into play: a richer country has more money to implement inequality-reducing measures, and implementing them for a 5M people country is far easier than for bigger countries.

> The better society is the one where everyone has an opportunity to improve their lot in life by satisfying a need of others.

Well, that's why inequality is important as a metric. If you're born in a poor household, statistically you'll have far less opportunities than if you're born in a better situation. Want everybody to have an opportunity to improve and succeed? Fight poverty.

1: https://www.straitstimes.com/politics/parliament-inequality-...

Other than my opinion that the needs of the people would have been better met with a free housing market. I don't have much to say on it.

You start somewhere. Minimum wage laws just reduce the amount of opportunities low skill workers can choose from.

What if multiple companies in an area do that? What incentive does a entering company have to increase wages if employees will take jobs at lower wages nevertheless because they need to eat?

> But, that is the result of people willingly entering a contract for the lower pay.

This viewpoint ignores that people need to work in order to eat. It's not exactly willing if your alternatives are "accept this contract or starve".

Without price fixing and collusion the employers have to compete for labor. Competition that would as a result improve the compensation for employees.

Look at this example: a number of companies in an area are paying a livable wage at time T for low-skilled workers. Now, time goes on and inflation kicks in. Those wages, which did not grow, are not livable now. Workers, however, can't complain too much because they will be fired, and bad income is better than no income (not to mention healthcare tied to the jobs). There are also more workers than job positions, and new young workers are constantly entering the market, so companies will always find someone that needs to work even at that low wage.

What incentives do those companies have to increase wages? Absolutely none. In fact, this is what is happening right now.

> Without price fixing and collusion the employers have to compete for labor.

If employees actually had to compete for labor in all cases, we wouldn't be having this debate and people wouldn't be complaining that their wages are not enough to live.

The company has no say in the money supply. Their money is worth less as well. Do you expect a company to pay more when they are earning the same amount and employee production stays the same?

The Fed is the only entity that controls money supply and the purchasing power of a dollar. Upset that what you are earning doesn't buy the same amount of stuff? Blame for that is entirely on us for asking the government for more while demanding lower taxes. Their only alternative to raising taxes is printing more money.

Anyways, the point is that companies will tend to push for lower wages, always. It's just how capitalism works, it pushes for maximizing profits. If there are more workers than jobs (which is the case almost everywhere) you can't say that competition will push companies to increase wages, because there will be no competition, and workers can't just stay home if there are no satisfying jobs.

A free market allows a farmer to trade barley with a buyer from another nation - an unfree market sees the government(s) disallow this due to protectionist policies lobbied for by unrelated farmers who benefit from decreased competition.

If you want to meaningfully create leverage for laborers, you need to ensure their livelihood is not dependent on being employed. A negative income tax or some other form of UBI would serve better to accomplish this goal.

On the flipside, providing all the basic needs of living to someone can potentially lead to a large drop in labor supply and create its own problems.

If it is as you say the employer has all the power, then nobody would have a job at more than minimum wage.

The only way? You don't think unions can give more power to the worker?

Minimum wage jobs should not be expected to be a long term viable career choice. Minimum wage jobs are a way for people to get their first experience, and then move one once they have gained valuable skills.

People like to twist reality by imposing arbitrary constraints e.g. workers need to be able to get paid 15 dollars an hour without needing to relocate or learn new skills. The world isn't a charity, and anyone disputing that price floors don't result in shortages is frankly uneducated.

One of the most common ways people move on to higher-paying jobs in the workforce is by skills (not necessarily in “skilled labor” sense, but even just basic work habits) earned and/or demonstrated through work in lower-paying (even unpaid, though less that since the crackdown on unpaid internships) jobs. Minimum wage jobs, even when minimum wage does not meet any criteria for “living wage”, are absolutely part of that.

Of course, restricting employability at the bottom end proportionately reduces the number of supervisory/management positions needed.

That theory is good if there's a surplus of job offers, something that doesn't happen outside of very specific sectors.

Moreover, your argument assumes that changing jobs is easy and risk-free, when in reality it's not, specially for unskilled workers.

> Minimum wage jobs should not be expected to be a long term viable career choice.

Why not? Of course it's not the optimal career choice, but why wouldn't one be able to live off a full-time job?

> Minimum wage jobs are a way for people to get their first experience, and then move one once they have gained valuable skills.

Yeah, the "serving fast food" skill that is so demanded in the current job market.

> workers need to be able to get paid 15 dollars an hour without needing to relocate or learn new skills

If you don't get paid a livable wage, you can't save for moving and/or changing jobs, and it will be far harder to pay and/or have time for further education.

Non-livable wages just lock people into poverty. When the alternative is losing your house, or your healthcare, or starving, people will be forced to make non-optimal long-term decisions because it's their only option.

No, non-livable income does that. Relying on wages to solve that relegates people to a permanent underclass if they ever experience more than brief unemployment.

Some of these minimum wage jobs even require degrees. Preschool teachers, for example, often pay minimum wage or just above it - but this somehow shouldn't be a career choice. Many other jobs pay just a little above this - which, realistically, is what you'd get working late at a burger place. They get paid more than preschool teachers many times.

There is a limit to the ability to relocate with these jobs as it costs money: Same for learning new skills.

Denying folks a living wage when you know that low-paying jobs is reality for a large band of people (regardless of what you think it should be) is just cruel. The world "isn't a charity" because folks look down on folks.

If this was the justification for the minimum wage (it almost never is), it’s a pretty ham-fisted solution.

> Companies will always push for lower wages wherever they can

but it's not just megacorp tho.

minimum wage will lower employment from small business significantly; i.e. small shop owner will get by with one less garcon to pay the other one more.

and if you think that can be resolved just by ample unemployment benefits, look no further than the Dublin heroin epidemic.

maybe two tier of minimum hourly wage + progressive hour cap could work: x$/month minimum wage for part time capped at 20 hour/week, x+50%/month for full time workers.

but it's a thorny issue where in the fight between drones and megacorp it's easy to incur in collateral damage around the middle.

Can you show some data that demonstrates this? Because, despite all of the wailing and gnashing of teeth (and flawed economic theory), in my country this has never been shown to be an actual effect after minimum wages go up.

If you're running a business with <5 people, hiring an 'unnecessary' person could just be a luxury so that the business owner can take a vacation or get an extra hour of sleep... and when times are tough, they forego that luxury.

These are probably not a significant part of the overarching discussion here, though.

And it is relevant, because there's a lot of data that there is no negative effect on employment elasticity, but there is significant publication bias in the field. And what always gets brought out is the argument that "businesses will start letting extra people go". They already do that even without minimum wage increases.

As a counterpoint, where do we put the threshold then? I could argue that if I could pay employees in breadcrumbs, I could create a new company that would be profitable and I would increase employment!

In this issue, either you're driven by empirical data of the exact effect of minimum wage on social welfare (which is impossible to achieve without actually doing those changes) or you're driven by ideology. Mine is that someone with a full time job should at least be able to live a decent life, specially in our current society where we clearly have the capacity to do so.

Except for executive compensation. There they very often actively push for more compensation.

It seems like a viable tactic, though I will admit I have not looked into it much myself.

https://universalbasicservices.org/

The theory is that surplus value (which can become profit, or be reinvested, etc) exists only through paying the worker less (on aggregate) than the aggregate amount that the worker provides through their labour.

The mainstream economics answer to this is to say that the labour theory of value is bunk and that prices are defined purely by market forces. But this kind of misses the bigger picture of what Marx was getting at rather by getting lost in the weeds about price definitions and really is a critique of Ricardo more than Marx.

Despite using the term "exploitation" which has moral overtones in English, Marx really isn't casting a moral judgement here. It's a technical description. But he does believe that this phenomenon leads to structural inequality and injustice and that the only resolution is some other kind of property ownership or method of production. Though he was famously vague on what that alternative would be, and people far less intelligent than him were left to fill in the blanks with some rather awful alternatives.

This is very true, and cannot be overstated. Often, the criticisms of one theory are actually much better direceted at a predecessor theory. Students in a history of economics course, or a regular economics course, may learn of the "labour theory of value", but they may learn either Smith's, Ricardo's, or Marx's, and assume that the theories are the same, or that the same criticisms apply to all of them.

There are good and serious criticisms of the "labour theory of value" from those unsympathetic (and even those sympathetic) to its apparent normative conclusions. It's a shame that many people seem to confuse one thinker for another, especially when each boasted of their improvements (Marx, for example, writes "I was the first to point out and examine this [...]" when writing on the "LTV" and discussed the law of the tendency for the rate of profit to fall again in his original understanding, despite being extremely well read on - and critical of - his predecessors).

Crucially the value wasn't created by the worker, but rather the worker played a part in the creation of that value. In a capitalist society, that worker's wage is determined based on the value of their contribution and the supply of workers with the requisite skill. In a Marxist society, it is set by the state, and it seems to be very hard for states to determine a price that is sustainable.

In my humble opinion, Marxism seems like a denial of basic economic realities--namely that the state can set the price of anything to whichever value they prefer and it won't have disastrous economic ramifications ("price is just an arbitrary number"). Maybe I'm creating a straw man, but I do notice a lot of Marxists who make arguments about what is fair and not what is economically sustainable as though economic sustainability is an invented problem that we can disregard. Perhaps this view isn't uniformly shared among Marxists, in which case my criticism is "too many Marxists are making these kinds of unconvincing arguments, and more convincing arguments would be centered around economic feasibility--we all agree that we want poor people to have more money, the question is 'how?'".

I think we need to define "value of their contribution".

If a friend of mine has an idea for an app, but he has zero programming knowledge and so he pays me $1,000 to develop it, and he ends up making $1,000,000 from selling it, what is the value of my contribution?

Is it only $1,000 because that was the agreed price for my labor? Or is it $1,000,000 because that's how much money he made from it? Or something in between?

Obviously, in this hypothetical, I should be negotiating a share of the revenue instead of just a flat fee, but generally most workers don't get to do this.

So...what was the value of my contribution?

If your friend insists on paying you a low flat fee for doing highly lucrative work, your rational choice is to turn down the offer and find another employer, or even go at it on your own. Your friend's rational choice is to negotiate because the lost profits from you (and others) declining the offer is worth more than the profits he loses by paying you more.

Regardless of that, a single transaction like this is often not sufficient to accurately determine the market value of your contribution. Market valuation happens in aggregate for this reason. A single irrational transaction like the one you described just represents a market inefficiency.

He did feel that some other model of ownership & management could lead to some other form of remuneration, but he definitely left it unclear.

Read the other discussions on this thread, there's far more nuance here than I think you're understanding.

If a Marxist is one who says "Capitalism is imperfect; I've got a gut feeling that there is a better system out there, but no idea what it looks like concretely", then that may be correct but it's close to worthless.

If a Marxist is someone who says "Capitalism is imperfect; the state needs to fix the price of $X (labor, etc)" with no mention of the economic feasibility of said price-fixing, then that's better but still far from persuasive.

My criticism was directed at the latter. There are perhaps many good Marxists who make convincing economic arguments; I'm asking for more of this.

The marginal value of what he produces. Which means that if there is a minimum wage in effect, the employer might be forced to pay the worker more than the marginal value of what he produces. Which in practice means that employer starts looking for ways to eliminate that job, since it costs more than it is worth. If employers do not do that in the presence of minimum wage laws, it simply means the laws are having zero effect because the minimum wage is below the free market equilibrium wage for that job anyway.

> The labor market is not a free market

It is if there are no laws fixing prices, i.e., no minimum wage laws.

None of the things you list prevent a market from being a free market. A free market is not a market where everyone has equal negotiating power, equal information, or equal ability to deal with some good or service not being available. A free market is a market in which all transactions are voluntary--i.e., a transaction happens only if both parties believe that that transaction, at that price, will make them better off. Any third party dictating the terms of transactions--of which minimum wage laws are just one of many examples--makes the market a non-free market. The fact that the third party believes that it is "improving" something doesn't change the economic fact that it is forcing the market to not be free, and therefore making the market less efficient.

> Companies will always push for lower wages wherever they can, without a care for the actual wealth created by the worker

In a free market, they can't, because their competitors will be willing to pay more for workers that are worth more in terms of productivity. Tech companies are good examples: they are willing to pay a high premium for workers that can create a lot of value by writing good code and more generally doing good, reliable software engineering. Companies that try to pay less for such workers simply don't get them.

> The only way to counter that push is by giving more power to the worker

No, that doesn't counter anything, because "the worker" is not one person and does not have one interest. The best way to help workers is to raise their productivity, so that the work they do is worth more and can command higher wages. But really, even that misstates it, because it treats the workers as though they weren't capable of raising their own productivity if given the opportunity, and need "help" in doing so. Which is the big problem with all the grand schemes to "help the worker": it's people with no skin in the game themselves trying to dictate to everyone else how they should play.

If you're ever interested in taking a more removed perspective view of that particular magazine, take a look at their old articles. 1850s-60s (e.g., slavery). Late 1800s and early 1900s (labor rights). Nazi-related stuff.

It depends if "the value of what they produce" means marginal output or average output. Due to the law of diminishing returns, typically average output is greater than marginal output. The theory predicts that wages = marginal output: if wages are less, you can increase profits by hiring more workers, if they are more, you can increase profits by laying people off. So it comes to an equilibrium where the marginal output matches market wages. Since this is less than average output, it is still possible to make a profit.

I agree though that the article is being misleading here since "the value of what they produce" is an ambiguous term that should probably refer to average output rather than marginal output.

> Nazi-related stuff

I think today's Economist does not correspond to your caricature.

FWIW, they've endorsed the Democrat candidate in 5 of the last 7 US presidential elections, and I'm confident that soon it'll be 6 out of 8.

They're doing the same things they've always done, just with modern issues. They'll be just as disgusting in hindsight for most people. A critical reading of them now will make it so that one doesn't have to wait.

PS, you heard it there first: buy slave-made sugar.

Just looking at your first point. Companies wield an extreme asymmetric information advantage about 'your' specific hiring cohort. They know who has applied to the job, the size, relative experience, and in many cases they know the expected salary range of those individuals. They know the explicit and implicit cost of their benefits on an actuarial scale - costs potential-employee will never know. They have a firm understanding of their actual needs and a higher degree of flexibility. Like other comments have concluded - it's easier for an organization to fold tasks into other jobs. Employees, especially when you consider health insurance (and that of a family) is tied into these decisions.

In today’s model potential employees are required to negotiate with themselves (as a result of being unaware of the qualifications, expected incoming, etc. of the pool). We wonder why salaries remain stagnant...

If you look at CEO pay as a counterexample it becomes obvious. It's not about adding or demonstrating value, it's about extracting value and an understanding of your ability to extract value. CEO compensation is a published number in public companies. "High CEO pay reflects economic rents—concessions CEOs can draw from the economy not by virtue of their contribution to economic output but by virtue of their position." https://www.epi.org/publication/ceo-compensation-2018/

To be clear, you have no actual basis to believe that asymmetric bargaining power (as you defined it) is the reason for stagnant wages. This is just something you reasoned through and it feels right to you.. correct?

And you just say things ... what do you mean employees are unaware of the market - from other job seekers, to competitive? That is completely untrue. When you're looking for a job, you are very aware of the range of salaries you are expected to be offered for positions you seek. I literally just had someone decline a position because our offer was lower than what they were offered by other local company. Where was this asymmetric advantage you speak of?

I have no idea what CEO pay has to do with anything except that this is a kitchen sink approach to argumentation where you just throw anything against the wall and hope something sticks.

It looks like in this thread people have different definitions of free market. For me, the fundamental property is that supply and demand respond elastically to price changes, and a quick test (necessary, not sufficient) is the following: if the price asked by buyers is too low, does supply stop? For example (and simplifying), if people wanted to pay just $1 for consoles, the supply of consoles would drop because it's not profitable, so it could be a free market. Now, for jobs, if companies wanted to pay just $1 an hour, would people stop working? Given that their alternative is starving, they probably wouldn't. So the job market can't be a free market.

> And I don't know how you can say companies have more power in negotiation. They post their rates, and people apply or they don't. There are millions of alternative jobs. If I sell my car, I post the price and if I don't like the offer, I don't take it. Are you claiming that this is not an aspect of the free market?

A car and a job are very, very different things. You can live without a car, you can't live without a job. If the available offer of cars is too bad, you won't get a car (well, maybe you need to because you need a means of transport). If the available offer of jobs is too bad, you will still get a job because you need income to live.

> A friend of mine is a shift supervisor at a food supplier...

I don't know how this is related to the debate at hand. Do you know the situations and motivations of those people?

> There are wages that people will just not work for. Even if minimum wage laws were lifted, people aren't going to go work at MacDonald's for $1/hr.

IIRC, current minimum wage puts people below the poverty line. Why do people go to work on that? Maybe because they have no alternative?

> And you also see this will undocumented labour (i.e. where minimum wage regulations are ignored)

Which is a separate problem. Any regulation of any kind will push incentives towards undocumented labor. That's not an argument against regulation, it's an argument for better oversight.

> Sure they can. What are you talking about? Tens of millions of people, for all kinds of reasons, either choose not to work, or choose to work part-time.

Working part-time is working. And if you've found the formula to live without income, please share it.

No. Words have meaning. You made up a definition for 'free market'.

>For me ...

Well how about we use the general understanding free market? It just makes it easier when you don't redefine common terms. But OK ...

>Now, for jobs, if companies wanted to pay just $1 an hour, would people stop working?

Yes. They would indeed not bother working.

But try it. I can guarantee you that even poor migrant workers would laugh at you if you offered them that kind of wage.

>Given that their alternative is starving, they probably wouldn't

That is not an alternative. I'm not even sure if there was a single case of starvation in the last few decades that was a result of lack of income or lack of a job. On the other hand, plenty of starvation in Soviet Russia ... with full employment!

>You can live without a car, you can't live without a job.

This is just pure gaslighiting. Unemployed people do not die. What are you talking about?

>Which is a separate problem.

No. It's not. It is an unregulated market where minimum wage laws are ignored, and yet, you don't see a race to the bottom. The wage settles at some equilibrium. And yes, skilled labour even in that type of environment will be much much higher than minimum wage. It kills your argument because clearly minimum wage laws are not the thing that prevent a race to the bottom, but rather, you know ... market forces.

Do you also realize there are countries with modern economies that either do not have minimum wage laws, or have one that is much lower.

>And if you've found the formula to live without income, please share it.

That's not what you said. You wrote: "Workers can't usually live too much without finding a job."

But even with this, let me throw it back at you. There are tens of millions of people without income or a job - how do they survive?

You're imagining a company offering low wages in world where the rest offer higher wages. In that example, I'm saying all companies offer low wages. It's an artificial example, of course, but shows how labor market is not elastic, and therefore cannot be a free market. I don't know which definition of free market you use, but I haven't seen anyone that accommodates that situation.

> That is not an alternative. I'm not even sure if there was a single case of starvation in the last few decades that was a result of lack of income or lack of a job.

Well, if you want to take things literally, replace "starve" by "stop having a decent life". Losing your house, for example.

> On the other hand, plenty of starvation in Soviet Russia ... with full employment!

Hey, if your argument against worker rights is going to boil down to "but Soviet Russia and communism bad!" we can stop right now.

> Unemployed people do not die.

Yeah, people without work just chill. Nobody needs to work to eat, or pay their house, or their car, or their bills.

> No. It's not. It is an unregulated market where minimum wage laws are ignored, and yet, you don't see a race to the bottom. The wage settles at some equilibrium.

One of the biggest collectives of undocumented workers in the US are farmworkers. Read on the conditions of those people (e.g., [1]) and tell me it's not a race to the bottom. I couldn't find stats regarding their wages, but I don't assume they're good. The only studies I've found say that undocumented workers will earn less than their documented counterparts even after adjusting for skills and education [2].

It's of course a complex issue and analyzing the causes of a certain wage level in a certain sector are pretty complex. But the incentives are clearly there for companies to push for wages way below a livable level.

1: https://www.pewtrusts.org/en/research-and-analysis/blogs/sta... 2: https://econofact.org/what-explains-the-wages-of-undocumente...

> That's not what you said. You wrote: "Workers can't usually live too much without finding a job."

Do you mean people living on subsidies? Well, that's precisely what I'm advocating for with that example. If you want, I can complete the sentence with "Workers can't usually live too much without finding a job and no income".

> There are tens of millions of people without income or a job - how do they survive?

Where and in what conditions? Because if you're arguing that minimum wage laws are not necessary because if you're jobless and homeless you won't die right away, well...

As for minimum wage, it is hurting the unskilled workers, like high school students, college students who are looking for experience. If you are stuck in a minimum wage job, then this is what the market is paying for your skill set. If you think you worth more, then proof it, don't blame the system.

When I was in high school, I was working in an unpaid internship to get some experiences. I don't know if there is any unpaid internship now or if it is even legal now.

The only reason you were able to work an unpaid internship is because your family not only didn't need you to work, but they also didn't need you to watch younger siblings in your free time. To top it all off, that was offered to you - this isn't a thing most folks can do. Not to mention that unpaid internships are often slavery under a different name. If someone wants to give someone experience or train someone, they should pay.

I wish people would quit acting like the market is fair by any means or like people have a real choice in working. Neither of these things are true with the labor market.

What I am saying is this, if I think I worth $50/hr and the only offer I got after 2 months of searching is $10/hour. If I desperately need some income, I will take the job and continue my job search. $10/hr is still better than $0. Next job offer may be $30/hr. Then the next one may be $50 or $60.

No one is forcing you to stop looking or improving yourself while you are at a job don't value your skill sets.

The game is rigged. You can be stuck somewhere simply because they have good insurance and your kid is sick. It doesn't matter how good you are. Not everyone can improve themselves in ways that will get them paid more. Even if everyone did this, there are only so many jobs out there and you should hope not to have the disadvantage of wanting free time, time with children, or a health issue that puts any limits on your work.

Not everyone has competitive skill sets. People who work at McDonald’s don’t have much of a choice of where they work. Burger King isn’t going to pay them much better.

> If you are stuck in a minimum wage job, then this is what the market is paying for your skill set. If you think you worth more, then proof it, don't blame the system.

I think what OP was saying is that employers of low-skill workers have a asymmetric power. Because low-skill workers have no where to turn, they are forced to accept low wages and poverty over living in the street, even when their employers can very well afford to pay them more. And because the live in poverty, they cannot afford the time or materials to build skills which lift them out of poverty.

We are going to need service workers for the foreseeable future, not everyone can be a fancy software engineer with marketable skills. Covid has certainly demonstrated this. Are we just going to say “tough shit you should have worked for free when you were a teenager” and let a large portion of the population live in poverty when they don’t have to?

> I don't know if there is any unpaid internship now or if it is even legal now.

They definitely are

What if there aren't better offers?

> As for minimum wage, it is hurting the unskilled workers, like high school students, college students who are looking for experience.

The article shows that there isn't conclusive evidence pointing to employment destruction with minimum wage increases.

> If you think you worth more, then proof it, don't blame the system.

If the market can get away with paying less than your worth, it will. That's precisely the point of my argument: companies have more power than workers to negotiate wages.

> When I was in high school, I was working in an unpaid internship to get some experiences. I don't know if there is any unpaid internship now or if it is even legal now.

Don't you see how unpaid internships can be harmful? If you need experience to have a nice job and unpaid internships are a requirement, it means a "forced" period where you are working without income. People without savings won't be able to take those internships and have those better jobs, further locking them in poverty.

We must always understand the implication of Libertarian statements. They expect the poor to die when they can't afford shelter, food, or water. Or unless someone else besides them has mercy or compassion.

> The labor market is a free market. If you don't agree the employer offer is fair, you don't have to accept.

You disagreed with him while not actually addressing his point at all. Care to elaborate how you think he's wrong here?

Doesn't seem very free to me, sounds downright byzantine.

You're just asserting this without any argument or evidence.

> and, most important of all, they can deal with a job opening not being covered most of the time. Workers can't usually live too much without finding a job.

Workers don't specifically need a job at that company. Even if they need a job, they can go work somewhere else. And if that isn't the case, you have bigger problems than minimum wage.

> The only way to counter that push is by giving more power to the worker, and in low-skilled fields with lots of available workers, you need to do that through regulations and subsidies.

Even if you want to do this, it still makes minimum wage a ridiculous policy, because it harms the same workers it's purporting to help. The ones who work for companies that can absorb the cost get more, but the others lose their jobs. When there are policies that do only one and not the other (e.g. UBI), there can be no justification for the one that does the bad thing in exchange for no relative advantage.

This is ridiculous. If I assert that the sky is blue, I don't think I need to provide a list of sources. Under what possible circumstances does the average individual have more negotiating power or more information than a multinational organization with teams of lawyers, an HR department, and access to labour market research?

Edit: To add, when we talk about minimum wage jobs we're usually talking about low-skilled labor. Please explain how a ditch-digger can have negotiating leverage over the average road construction company?

You're assuming a level of competence for corporate HR departments that isn't in evidence. What do you think they have that you can't get from Glassdoor or similar? Not much, if anything.

> Please explain how a ditch-digger can have negotiating leverage over the average road construction company?

By taking a job at some other ditch-digging company, or Walmart, or Uber, or anywhere else, until one company offers a better wage than the other.

For commodity positions it's not even really a negotiation for either party -- everybody on both sides knows what ditch diggers get paid, the employers offer that much and the employees accept that much because anybody who offered less or demanded more wouldn't find any takers.

Which is also why there can't be any meaningful information asymmetry -- when everybody knows the prevailing wage for that category of work, there is nothing else you really need to know in terms of wage negotiations.

I don't think it's a controversial statement at all. Even then, my argument was just in the next sentence.

> Workers don't specifically need a job at that company.

Nor companies specifically need a job filled by a given worker. It's a statement about general needs. If a company finds no satisfying candidates, they can deal with leaving that post open. If a worker doesn't find a satisfying job, they will still take something because they need to eat.

> Even if they need a job, they can go work somewhere else.

Doesn't make a difference if "somewhere else" offers the same low wages. Which is what happens, because most companies have the same incentives and the same lack of limits to push wages below livable levels.

> Even if you want to do this, it still makes minimum wage a ridiculous policy, because it harms the same workers it's purporting to help

The OP linked article shows that there's no clear evidence on whether minimum wages destroy employment or not.

> When there are policies that do only one and not the other (e.g. UBI)

Of course UBI or UGI policies would be far better, and would remove the need for a minimum wage. However, they work in the same direction: give more power to workers to offset the power of negotiation that business have. And, being pragmatic, a minimum wage increase is far more likely to be accepted, at least in the short term, than UBI.

This works in a theoretical perfect competition in an economics textbook. In real life people have financial handcuffs (vesting periods, mandatory option execution/abandonment on job exit), school districts for children, underwater mortgages, 10% gross transaction fees on home sales/purchases.

We're talking about minimum wage jobs. None of that applies.

> school districts for children, underwater mortgages, 10% gross transaction fees on home sales/purchases.

Nobody says you have to move. Take a job from another employer in the same city.

Also, again, minimum wage employees? Typically not homeowners.

The article at hand does a decent job summarizing the different observations people have made.

But that's what I'm saying. Minimum wage is ridiculous because there are alternative policies that don't do the bad thing at all, not even sometimes.

UBI/NIT. Or more realistically, just expanding the EITC.