> We present the first causal analysis of recent large minimum wage increases, focusing on 47 large U.S. counties that reached $15 or more by 2022q1. [...] We then find significant and larger positive employment effects, as the monopsony model predicts. We go on to document the presence of monopsony in the restau- rant industry. [...] The fast food industry’s monopsony power allowed it to accommodate large minimum wage increases and raise employment.
Source: https://irle.berkeley.edu/wp-content/uploads/2023/09/Minimum...
These places were great places for the poor. They are close to lots of people and that implies some of those people will be willing to hire you for a something cheap. It isn't a great life, but if you have very limited abilities you likely prefer to make your own choices in life vs whatever the shelters force on you. (some shelters/institutions have been very abusive in the past)
The "obvious" thing is to subsidize employment (by negative income tax for low-incomes to avoid discontinuities), and sectoral/collective bargaining (to avoid divide-and-conquer information asymmetry), and unemployment payments (to allow for the market to find new "healthy" equilibrium, so people don't have to take the first shitty job).
I appreciate your argument, and you knowlwdge of economics adds weight to it. I'm wary of putting the burden on workers to remove information asymmetry and power imbalances in bargaining. Just because it's necessary now doesn't mean it needs to be. It could create a cycle of permanent extra work for those most in need of regulatory help.
I don't know if I had the full language of economic inefficiencies ready to flow like you do if that argument would be more effective. Or if there are other blocks, you know?
Given all that, whatever labor or wage trick you do is rearranging the deck chairs on the Titanic. I know how to remediate the plastic issue, which is an engineering question. Until that’s addressed the union sq debt clock is counting the cargo ships docking to feed our money/energy/oil->landfill pipeline.
There's a tremendous amount of economic growth. And as long as there are places where we can put in some better technology, a more efficient process or organization, then growth will continue, and the money supply will have to grow, and it's currently done via bank-issued money, because it provides some risk management. (Which is the most important factor of money creation. This is why finance and insurance developed intertwined.)
Energy is one bottleneck, sure, but there's no serious slowdown of growth of electricity generation capacity for example. And GDP growth is decoupling from carbon intensity. (As it should as we started to invest a lot of our economic surplus to do so.)
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The important thing to remember is that there's a balance between how much money is needed now and how much is issued to be paid back later, and obviously if the growth would be almost zero the interest rate would be almost zero too.
If growth slows down (the fiscal multiplier goes down, there are no more public things to do, no more houses to insulate to get a smaller HVAC bill, no unemployed person to teach skills who would then work) then need for money also goes down, as no one will offer to pay it back with interest, so interest rate will go down, so whatever amount of money we have (as debt) we can keep rolling it over.
And of course the central bank can always exchange debt money to non-debt money. (And every time it wants to increase the interest rate it used to do something similar, it sold assets [US Treasury bonds] which removed debt money from the system. And back in the 90s there was talk about how the US central bank will adapt if the US government starts to run surpluses permanently.)
That’s an academic answer but it’s wrong. Price stability is derived from economic equilibrium, which means energy however you want to label it in and out must be stable. It’s not a philosophical debate nash models most of it. Our landfill pipeline is the source of our debt.
The classical hypothesis is that a swamp of credit is always going to buy some magic wand where the ends justify the means and there are infinite ways for society to store debt. What you get is fraud after a phase transition which is the society we live in now. Basically all I’m pointing out is no free lunch. There’s nothing to debate. I’m mapping no free lunch to the various materializations of energy in the economy. Food fuel labor oil power whatever you want to label it you have to pay for that oil. It’s potential energy whose current payment date is hundreds of years in the future. The whole global supply chain theology is laid bare a bunch of horrible trade offs which falsely claim credit for largely unrelated gains in raw human output and hidden costs.
So minimum wage helps less than 1% of workers, at the expense of people who don't have skills valued at the minimum wage? Why are you confident that's a net positive trade off?
> If someone cant land a job at minimum wage it is because the employers think they are a net negative.
That's why I think that people should be able to work for less, for employers who think they are a net positive at a lower wage. It's better than the true minimum wage of zero. It's not like the value of labor is discontinuous, such that it is worth zero if is worth less than a minimum.
No. If someone cant land a job at minimum wage it is because employers think they would be a net negative at a $0 wage. There are a couple counter examples like walmart no longer being open overnight, but even then thats more because of theft than paying the employees. It is not hard to find a minimum wage job in the vast majority of the country. If you cant its because employers think you will do an exceptionally bad job. Every single adult has skills valued at minimum wage in the US, the question is just if they have a drug problem or mental illness or something like that. Those people wouldnt be helpful at $0 wage either
Strong disagree, no foundation. There are lots of profits to be made at $10 per hour that can't be made at $15.
A minimum wage raises the bottom wrung of the economic ladder and declares victory for the workers.
Sure, if you have decent workers. But decent workers can make $15/hr so you cant get them. If youre stuck with the people who cant get a minimum wage job you dont have anyone you can trust and you cant build a business like that unless youre amazon tracking everyone's metrics with a billion dollar warehouse system. (amazon also pays well over minimum wage)
federal minimum wage, which is lower than many, many states, so stating this is a little misleading. It's also at or around 1% (for federal), not less - per this 2023 source: https://www.bls.gov/opub/reports/minimum-wage/2023/
In states like california, this number is much higher: https://lao.ca.gov/Publications/Report/4878/3