Employers who create full time positions that don't pay enough for people to live on create a social burden that the rest of society has to deal with.

That's the negative externality.

Hum, I see your point, but I disagree for two reasons.

AFAIK most jobs that would pay under what's enough to live on are entry level jobs usually carried out part-time by students. Denying them such job is removing them that source of income - and in case of jobs that require experience denying them a chance to gain that experience. This means you are not reducing any social externality. You are just shifting those externalities to a different set of people.

I'm also wary of "daling with" this kind of social externalities even if it was possible. If we apply your argument to drugs than the conclusions would be that alcohol and any other drug should be made illegal because it has a social cost. But I believe people still have the right to do whatever they want with their body and mind as long as there is no direct externality, and I'd rather live with any indirect externality that is the result of that.

> AFAIK most jobs that would pay under what's enough to live on are entry level jobs usually carried out part-time by students.

This is a rosy view of things, but I don't believe its true. Walk into plenty of markets in poorer or even middle class areas and you will find older people doing these jobs out of necessity. I've seen 'entry level job' used very often as a way to exploit people with not much choice.

Statistical evidence is better than anecdotal evidence. https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm Also, so you'd rather have some of those people have no income as long as some luckier ones get more income?

Quite the moral dilemma, it seems.

They don't really create this externality, though. A person taking this job apparently cannot get a better paying job. With a higher minimum wage in otherwise free market, no jobs for that person would exist, so the social burden would exist just the same.

The situation is diametrically opposite - minimum wage forces businesses to engage in welfare. Those who have enough margins to engage in welfare might do it; the others may disappear with the jobs, or cut the jobs by reducing service/automating/outsourcing (again leading to the same "social burden" existing).

> people should have no right to a government imposed minimum wage

Yes, turn your country into the likes of Bangladesh. Brillo!

Not sure how to take this. Are you saying that Bangladesh is poor just because they didn't think about raising the minimum wage?

I’m saying that without minimum wage laws, you’ll soon enough see corporations depressing wages to the point where a great many workers will be as desperately impoverished as the Bangladeshi, working 60+ hours a week in dangerous environments for wages that leave them literally starving.

I think that's not going to happen because single corporations have no power in choosing wages. The labor market does. In the labor market the wage will reflect the market value of the job. Almost all current jobs already have market value above minimum wage (only ~2% doesn't). For the ones that don't, it's because well either the job is not valuable/the person is not skilled enough. https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm

> I think that's not going to happen because single corporations have no power in choosing wages. The labor market does.

The labor market is not a magical entity. It's comprised of companies doing the hiring and people doing the working.

If you look at sectors where unskilled work prevails and corporations treat workers as fungible resources then the labour market lies firmly in the supply side, and workers have no alternative other than getting exploited. This means paying the least possible amount, which means less than minimum wage.

Think about it for a second: why do you think so many companies pay minimum wage, and not a single cent more? Is is because the workers' negotiating power magically breaks even at the minimum wage level, or is it because labor laws make it illegal to pay less than that?

Did you miss the evidence I provided? It's less than ~2% of the hourly paid workers. I know how the market works. That's why I also provided evidence that's not the case.

Also the alternative is having some of those people have zero income and no opportunity to develop skills.

Perhaps read what the latest Nobel price winners in Economics have to say:

Joshua D. Angrist and Guido W. Imbens “for their methodological contributions to the analysis of causal relationships”

They have done real world studies on the issues discussed here and arrive at a different conclusion from you.

I will, but keep in mind that economists are very divided on the subject - and many other subjects. I do listen to economists, but eventually I have to chose to which economist to believe in these cases, and to do that I try to asses how honest they are and if something they say in their reasoning seems flawed.

I agree with you in general. Economics is not a science. It is almost impossible to verify a theory and most Economists are simply advocating theories that confirm their personal politics/morals/values. However what is interesting about the economists I mentioned is that they have found clever ways to use real world data to “run” experiments. It is truly great work.

> single corporations have no power in choosing wages. The labor market does.

Counterpoint: Bangladesh. The labour market does not choose to work 60hr 7day weeks for $75/mo performing skilled sewing of your clothing because they like it: it is because they are left no choice. Given the opportunity, corporations will just as happily enslave Americans as it does third world citizens. Already does, in fact: slavery is still legal via imprisonment.

Corporations could choose to pay their Bangladeshi labour significantly more, and it would cost you only pennies more for your shirts … but they don’t. They pay as absolutely little as possible. They will inevitably do the same to you.

Every company try to pay as little as possible. The only reason they can pay less in Bangladesh is because the economy there is much less developed. Raise the minimum wage in Bangladesh and companies will move to somewhere else leaving those people with subsistence jobs and no way up for the economy. Leave enough companies free to move there and eventually wages will raise as more companies will have to bid higher for the same labor.

Companies can expend resources to push the government to implement policies (or ignore existing policies) that flood the labor market with labor from outside of the existing market. This isn't even theoretical, it's something that's been going on almost since the country was founded and continues to distort the labor market on a colossal scale.

Yes, and I'm in favor of allowing people form other countries to "flood" the labor market. I'm not a protectionist. I think people have a right to work no matter their nationality. (BTW I don't even live in the US).

> In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers.

I don't understand. How is the rest paid?

No Idea. Bonuses? I have extrapolated to all workers, but the actual number might be a bit different because of this.

I recommend reading up on the work done by the latest Nobel price winners in Economics. But fair warning: they disagree with your assumptions/conclusions and have found clever ways to verify their assertions using real world data.

Interesting, but I see it differently.

I believe you might be referring to 2021 Nobel Prize winner David Card’s paper A Re-analysis of the Effect of New Jersey Minimum Wage with Representative Payroll Data (with Alan Krueger) written over 20 years ago. See [1]. This paper compared New Jersey with neighboring Pennsylvania that didn’t raise its minimum wage.

Ironically, Joshua Angrist (and a third Economist) shared the 2021 prize with Card, and Angrist had this to say about the research by Card (and Krueger):

“[the] data show a slight decline in the employment from February to November 1992 in Pennsylvania, and little change in New Jersey over the same time period. However, the data also reveals substantial year to year employment variations in other periods. These swings often seem to differ substantially in the two states… So Pennsylvania may not provide a very good measure of counterfactual employment rates in New Jersey in the absence of a minimum wage change.” See [2].

[1] https://davidcard.berkeley.edu/papers/reanal-ff-nj.pdf

[2] Joshua Angrist and Jörn-Steffen Pischke, Mostly Harmless Econometrics, page 293, https://press.princeton.edu/books/paperback/9780691120355/mo...

Yep that’s the problem with Economics. It isn’t a science like physics. And it is easy to find Economists that disagree with each other. The New Jersey experiment needs to be repeated many times in different settings before we can be more confident in its truth value. The same way it is done in sciences. However it is also true that some people will never accept it as being true no matter the evidence. People are a lot less rational than they think they are.

I can believe it to be true but so far no evidence has convinced me of that.

> However it is also true that some people will never accept it as being true.

I suspect it is because of the philosophical point I made, but maybe some people are not able to articulate it? E.g. I could accept my practical point to be invalid but that would not invalidate the second point - I just give freedom of choice value in itself. Hence I can tolerate costs that arise because of that.

Freedom of choice is an interesting thing to think about. Most people will agree that freedom of choice is a good thing. However the devil is in the details. How about giving people the freedom of choice to own nuclear weapons? Most people would probably disagree with that one. How about having the freedom to own slaves? Again people would probably disagree. But why? Isn’t freedom of choice always good? How about free education and free healthcare? I personally think that it gives people more freedom to choose the kind of life they want. But I have heard “pro freedom” people argue against it because they think it will make people lazy. I myself received a MSc in Computer Science from a top university and it cost me nothing. It didn’t make me or anybody else I knew at University lazy. So I don’t think it is true. However some “pro freedom” people still want to take that freedom away from other people. And the same goes for minimum wage. I have lived in a number of countries with a high minimum wage. And the economies were strong and people worked hard. So a lot of the claims about minimum wage sounds false to me. So perhaps it all comes down to personal experience. If you have seen or been part of something that works well then you obviously know that it works well. And people who haven’t will disagree.

I got my MSc in Computer Engineering in a country where university is highly subsidized, so it cost me very little. Now I live, work and pay taxes in another country. People that paid for my education are getting nothing in return.

About freedom of choice, for me the line is whenever your freedom directly impacts the freedom of someone else. You can't have slaves for this reason. But for the same reason you shouldn't have others pay for your education. Of course you have more choices if someone pays for your education. But that's not the point. Society has no say on what type of education you choose to have, so it should pay no cost. As I mention in another comment I only believe negative rights should be a thing - and I think I have strong reasons to believe this.

Nukes are only good for war, hence you probably shouldn't have them. On the other hand private companies or individuals with the right clearance should be able to own and manage nuclear power plants - as they do.

So what about public roads, the police, the military, and the system of laws? You grew up taking advantage of those without having paid for them. So following your logic you should not have been allowed to use a public road or go to a public park without paying for it. And moving to another country, again following your logic, you have no right to walk on public roads you haven’t paid for, or take advantage of the military protection that the country provides. I hope you can see that following that way of thinking is very impractical? And according to your logic all of us are lazy freeloaders?

Except for public roads I believe those are functions that can only be carried out by the government and are exactly what and only what the government should do. As I said, for reasons I didn't mention, I only believe in negative rights, and those rights should only be violated if it necessary to protect someone's else negative rights. Because we need the police, the military and a law system to protect those rights I'm OK with having those things socialized.

> those are functions that can only be carried out by the government

I don’t think there is anything that only the government can provide. Look at countries around the world and there are examples where governments doesn’t provide public roads, police, laws, health care etc. so people hire their own security, pay for their own education/health etc. Bribe judges to get the ruling they want etc. Even the military used to be private in Europe. With governments hiring private armies to commit war. I personally would not want to live in those countries (they are often called “failed states” for a reason) but they do exist.

So I think the argument that there are things only governments can provide is incorrect. There might be things you happen to want the government to pay for but there doesn’t seem to be an underlying logical argument for why you choose those and not others?

I meant that they can only be provided by the state in an effective way to protect the negative rights. That is what you need precisely to avoid becoming a failed state, where negative rights are not protected.

So it seems to me that you only want the government to protect people against harm from other people. You don’t want the government to protect people against harm from non-people. If that is correct then you don’t want the government to provide sea rescue services, weather reports, rules for wearing seat belts, weather emergency services, scientific research etc?

> So it seems to me that you only want the government to protect people against harm from other people.

Mostly, with some exceptions. If there is a market failure or natural catastrophe that is going to kill us all and only the government can fix it then I'm OK with that. So, if only the government can prevent a disease to spread or fix pollution, or redirect asteroids, I'm fine with that. But the bar is very high.

> If that is correct then you don’t want the government to provide sea rescue services, weather reports, rules for wearing seat belts, weather emergency services, scientific research

I think some of these can be provided at least to great level by insurance companies but I'm not convinced they can entirely be provided on voluntary basis, so I don't know. But other are clearly of of the scope of my ideal government like rules to wear a seat belt or not.

> scientific research

This is an interesting one. I see lots of people saying that only the government can do valuable research because a lot of recent inventions were initially funded or subsidized by the government - like the internet. I think that private research could work as good if not better. I also think though, why would a private company invest in research if the government is going to tax them and do that research regardless? I think it is an overcrowding issue. Also a lot of technologies that started in government labs are almost unrecognizable after all the private research and development that went into them after.

I'm not saying that negative rights can be achieved perfectly. But positive rights are too problematic IMO, and the further we can shy away from them the better.

If there was a market for basic research then thousands of companies would be doing it. But pretty much all private basic research companies (including universities) are today funded by governments. And if you look at the history of any advanced nation, the governments created most of the markets that private companies could then take advantage of. Even the technology of the most basic private companies (pesticides etc. for farming) was researched and paid for by governments. Until it was mature enough for private companies to take over and run with. Most people recognise that it is a good thing for governments to create markets via research because it benefits everybody. New markets are created which means jobs and benefits/products. What is puzzling to me is that the same people who think it is OK for private companies to take advantage of research funded by tax money for feee is not OK with tax paying people taking advantage of the same research by getting a University education in return that they have already paid for or will pay for in the future via taxes.

Almost all basic research is funded by governments. Even private universities in the US get almost all of their research paid for by the government via grants. And the private universities then turn around and use their research expertise, funded by the government, to attract paying students. So they are private organisations, heavily funded by the government, not benefitting the public by providing a University education for free. The European approach is more honest. People pay taxes, the taxes fund Universities, and the Universities do research and education that benefits the tax paying people. That seems to be a less harm approach compared with the US model of private universities. Agree?

I agree that that's how things are. The fact that they are like this doesn't mean they must be. I believe there is a huge market for private research. Imagine the company getting to nuclear fusion first. They will be extremely profitable, and investor don't even have to pick a company. They can diversify. So I disagree with the conclusion. I believe this is a big case of Crowding-out. https://en.wikipedia.org/wiki/Crowding_out_(economics).

If there was a huge market for basic research then private companies would be all over it. The reason why there isn’t, and never will be, is because investors would rather invest in companies with a clear ROI than in no goal blue sky research. Kinda obvious when you think about it. Investors want to maximise their chance to make money. So they invest accordingly.

I think we can agree to disagree on many things. But I want to tell you something before I move on. I come from a country where positive rights are hinted in the constitution and applied in practice. The constitution states that "the government has to remove economic and societal obstacles preventing equality among citizens".

My country of origin has subsidized higher education, high redistribution, minimum guaranteed income, a public health system, strong union rights, minimum wage and many regulations of what you can on cannot do with your property.

I left that country, maybe forever. And many many others that got higher education (either in the country or abroad) left and are never going to come back.

The net wage differential of highly skilled jobs with respect to the average income is not enough to justify the long studies if you are going to stay. They even had to create a law that allows people that come back to pay much less taxes if they stay for a given amount of years to try lure some highly skilled people back to the country.

I believe it's because of all these government policies that the economy grows very little in that country. As a result everyone in that country is poorer that other more "negative rights" based countries.

My subjective experience is also that people feel much more entitled in that country and are less able to take personal responsibility. Everything is blamed on the Government (more than in the country I live in now).

I think my country or origin as a social democracy although it's never mentioned because people only talks about the "successful" ones.

I fear that all countries could become like that.

No, you missed the point about Crowding-out. The phenomena is exactly this, there is a market but because the Government does it, it crowds out investments.

> Nukes are only good for war, hence you probably shouldn't have them.

Hold on. I thought you said that freedom was the ability to do whatever you want as long as it doesn't hurt anybody else. Now you added rule #2: You only have the freedom pick from things somebody else (the government?) have decided that you can pick from. That sounds exactly like the system we have in most countries. So if the government decides to make education and health freely available then you should be happy with that right? It follows your rules perfectly.

> So if the government decides to make education and health freely available then you should be happy with that right? It follows your rules perfectly

The government doesn't produce any of those. It has to take from someone else. You can't make any of those things free. You can only make them socialized.

> Nukes are only good for war, hence you probably shouldn't have them.

If they are planning to kill people then that are planning to violate negative rights of others. You lose your rights in that case.

> You can't make any of those things free. You can only make them socialized.

If something is socialised then it is free to choose from. So it is free as in $ and free as in freedom.

> If they are planning to kill people then that are planning to violate negative rights of others. You lose your rights in that case.

Makes sense in principle but impossible to do in practical. Nobody has a mind reader. Nobody can accurately predict the future behaviour of other people. Do you agree that your thinking is impossible to actually implement?

> If something is socialised then it is free to choose from. So it is free as in $ and free as in freedom.

Yes, and that's positive rights. As I said, I only believe in negative rights.

> Makes sense in principle but impossible to do in practical. Nobody has a mind reader. Nobody can accurately predict the future behaviour of other people. Do you agree that your thinking is impossible to actually implement?

Then we don't allow them. It's a price to pay in lost negative rights but only to protect other's negative rights.

Ok so you want guns, kitchen knives, vehicles etc. to be illegal because we don’t know ahead of time if somebody will use it to harm somebody else? Very impractical.

Not what I said. I said Nukes. There is a huge difference. Nukes can only be used to blow up stuff. But the other things, while they can be used to do harm, their capacity to harm is orders of magnitude lower than the capacity of a Nuke, and, at the same time they have very practical uses that we depend on. So I can assume you will likely use a knife to cut bread or a gun in self defense, but I can't think of a common peaceful or legit use of Nuke.

So what you are really saying is that it comes down to a cost/benefit evaluation. You are OK with vehicles, alcohol, factories etc. harming and killing people as long as the perceived benefits to the public outweighs the cost. So nukes are not OK because clearly nobody benefits except the person who enjoys owning nukes, and the potential cost is high (millions dying when a nuke owner goes postal). The gun issue is really interesting. Obviously some people think that owning guns is worth sacrificing a few hundred school kids every year for. Others disagree. But almost everybody agrees that killing thousands of people every year using vehicles is unfortunate but acceptable. Perhaps you can argue that public roads and vehicles do benefit pretty much everybody. But guns only benefit people who likes guns and/or people who are more afraid of random violence than they are afraid of crazy people legally getting access to guns and shooting up schools.

> People that paid for my education are getting nothing in return.

So are you happy with that or are you going to pay back the government for your education? If your answer is no would it be fair to say that you want others to not get anything for free but you are perfectly happy to get free things yourself?

> it be fair to say that you want others to not get anything for free but you are perfectly happy to get free things yourself?

I'm happy if it's legal, even if I think it shouldn't be. As long as it's legal for everyone I'm not going to be the only person to pay.

Yep I think it shows the limitations of evidence in complex subjects like Economics. If somebody doesn’t want something to be true, they will simply demand more evidence, claim that the evidence has flaws, claim that the researchers are not rigorous enough and/or somehow corrupt etc. The tobacco industry wrote the book on how to do that.

Unlike companies, humans have a right to exist. Working full time should be sufficient for survival, as a bare minimum.

A right to exist for humans, to me, means a right not to have interference from others. But still, higher minimum wage means some people will have no income, and some other will have more income. How's that better?

Individualism emphasises negative rights, but positive rights are important too: life, health, air, food, etc.

Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.

Or we could rationally plan economies to meet everyone’s needs. Enough homes can be made and we already produce more food than necessary.

> Individualism emphasises negative rights, but positive rights are important too: life, health, air, food, etc.

Positive rights and negative rights are in oppositions as you can't have positive rights without violating someone else's negative rights. We have a trade-off right now, but I personally only believe in negative rights for a variety of reasons.

> Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.

Economy 101. Increase the price of something and the quantity bought will be less. Companies will hire fewer people at that price.

> Or we could rationally plan economies to meet everyone’s needs.

History has proved over and over that's not possible (and there are theoretical well known reason why that is.

The number of workplaces isn’t constant. The simplest solution would be to reduce the working week. Another is to use collective funds to improve infrastructure and provide essential services.

Planned economies do work, both historically and today. They are immune to the business cycle (as the USSR didn’t experience the Great Depression) and can be more efficient even within capitalist economies (witness Amazon, Apple and Walmart). I recommend “The People’s Republic of Walmart” on this topic.

They only work up to the point when they don't. Amazon only plans part of the economy of its workers. It doesn't have to plan for what they eat, where they live and how they spend their money in general.

In a capitalist system companies, trying to maximize profit, will try to expand until it is efficient to do so, but not more or smaller competitors will take over.

The USSR was basically constantly in a Great Depression. According to the US definition of poverty almost all its population was in extreme poverty.

The Great Depression was a Government failure, not a market failure. They didn't print enough money basically.