Social Question

Walgt's avatar

Why is minimum wage more important than ample employment?

Asked by Walgt (102points) July 13th, 2016

I have been checking out some of the latest studies on the impact minimum wage policy has on the economy which can be found here and here2. The results of the studies were that minimum wage policy comes with the consequence of higher unemployment and decreased income of those workers that are eliminated. Teens are the most severely impacted and more significantly among black teens.

With this in mind, I’m curious to know why is minimum wage more important than ample employment? Why is a higher paying job more important than the issue of higher unemployment?

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52 Answers

ARE_you_kidding_me's avatar

It’s certainly not but it is a centerpiece in left wing thinking that there is a feel good pill for every social ill.
There are all kinds of workers needed but the jobs require a lot of skill and training. As that bar is raised, education costs keep rising and traditional middle class disappears people tend to try to get by with jobs appropriate for teenagers. These free trade agreements are not helping much either. Minimum wage increases are a kind of circular logic. We can’t have a booming economy serving each other coffee. There are only so many ways the shrinking pie can get sliced up.

Rarebear's avatar

It’s a legitimate debate whether that’s a real effect, actually. I think that the impact for large businesses will be minimal, but the impact for small business could be substantial.

Here is the CBO report on it.
https://www.cbo.gov/publication/44995

Walgt's avatar

@Rarebear

You linked me the same study I already referenced in my question details under “here2”,

stanleybmanly's avatar

Minimum wage laws attempt to address the facts about that shrinking pie mentioned above. The either or argument around a living wage driving down job numbers diverts the spotlight from focus on the REAL and growing issue that must and will be addressed one way or another. That issue is about the division of the pie and the fact that the shrinkage isn’t so much in pie, but rather the size of the slices allotted those actually baking it. The ruse in the job killing argument is quickly dismissed with the recognition that a job is meaningless if you can’t earn enough to feed yourself. And of course, the black population in our country could claim “full employment” under slavery. It’s time to stop fighting over whether we’re better off paying workers an “unaffordable” wage as opposed to providing each worker 2 to 3 starvation wage jobs. Better to address the reason the dispute is now before us. Once again, where is the money going?

Seek's avatar

Would you rather work 50 hours a week for $300, or 20 hours a week for $300?

I’ll wait.

stanleybmanly's avatar

I’d rather live on dividends, interest and my ample inheritance. In other words, let others do the work and let their money work for me.

Rarebear's avatar

@Walgt My bad, sorry. I only looked at here. I didn’t see here2

SmartAZ's avatar

A minimum wage bill always ALWAYS makes a politician look like he is “doing something”. A politician doesn’t need to do something, he only needs to LOOK like he is doing something. And that is true even if it would be better to do nothing. In politics, “do nothing” is an insult.

Walgt's avatar

@stanleybmanly

I’m of the opinion that a view of a fixed pie is a fallacy. The Nobel Laureate Dr. Milton Friedman once said, if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.

Quick explanation of this and From Milton Himself

@Rarebear

No problem.

Walgt's avatar

@Seek

Your question is a no brainer when asked to a low wage worker. That is the only way to make sense of it. The person who lost his job, has decreased income, and can’t find new employment would prefer to work 20 hours a week for $300 rather than have nothing and do nothing. As a policy, it doesn’t strike me as efficient if some win while others lose.

Seek's avatar

I wouldn’t call 50 hours a week for $300 “winning”. I know. I’ve lived it. Still do.

Walgt's avatar

@Seek

I was referring to the latest $15 an hour policy push, but regarding your answer, I would call it a win if you had something over nothing.

Darth_Algar's avatar

Is it better to employ 150 people, but at a wage so low they cannot live off it, or to employ only 75, but at a livable wage?

ARE_you_kidding_me's avatar

The pie is not fixed, it contracts and expands all the time. Little tweaks like raising minimum wage can have drastic and unexpected effects. Our economy is delicate. I’m certain it will not be good for small businesses and my guess is that the larger corporations like Walmart will cut back on employees or the number of full-time workers. I think it’s likely going to have a neutral effect overall. The people working will earn a little more but there will be less people who are employed. I honestly don’t see it doing much good until we can bring back real work for people. I feel like a lot of people who are for pro-minimum wage hikes need to take 20 min and read “who moved my cheese” for just a rudimentary understanding of the job market. Trying to turn a job intended for teenagers and bored retirees into a career is just not a plan for success regardless of making $15/hr or $8/hr A good number of these jobs are going to be automated shortly anyway.

Walgt's avatar

@Darth_Algar

There are 3 times more unemployed workers than job openings link

35% are out of the workforce entirely (not interested), plus the 5.5% that are unemployed.

It isn’t uncommon for folks who earn too little to work multiple jobs and longer hours.

Seek's avatar

@Walgt – I am one of the 35%.

That’s because wages are so low that by the time I am done paying for child care and increased transportation costs, it’s not worth my time to work.

Wages are too low. End of.

Seek's avatar

Not all jobs that pay too little are “intended for teens and bored retirees”. This receptionist position? $8.25 an hour. No benefits.

Who can live on that?

Why should a person have to have two or three jobs, never see their own family, just to keep a roof over their heads? And then people want to vilify parents when the kids make bad choices or aren’t being raised ” right ”.

Things need to change.

SmartAZ's avatar

If you consider the period from 1795 to 1913, the period of coins but no paper money, you conclude that when the money is honest there is no unemployment and no inflation. Nada zip zero goose egg. All of the current badness is due to the Federal Reserve creating counterfeit money to destroy the value of the dollar. That is the Fed’s only job: to inflate the money supply.

Remember the stories from Argentina when it collapsed a few years ago? HERE is a book written by a survivor of that period.

Seek's avatar

^whaaa?

ARE_you_kidding_me's avatar

@Seek But someone probably took that job for $8.25 and that set a precedent. When I got out of technical school as a 20 year old I was offered many jobs at $8/hr and I told them all to fuck right off. I’m really glad I did too, eventually found one for $16/hr. I had to live like a pauper for a while but I knew the market rate for entry level in my field at the time. We still have the power to say no to an inappropriate wage. We can’t really get Gov’t to mandate a fix for this and I’m not so sure it is their job. Last I checked we still have the right to organize bargaining units and labor unions. I feel like this is really our job as workers.

Walgt's avatar

@Darth_Algar

You asked me if I think the former is better than the latter and my answer is that it can’t be viewed as better when you take into account the amount of people that are no longer interested in work coupled with the unemployed looking for work that doesn’t exist for them.

@Seek

Entirely different topic as to why the wage is too low to live off of, or why the price of goods and services are much higher (@SmartAZ touches upon it with the mentioning of the Fed’s role in decreasing the standard-of-living for people with their own policies).

At the same time, @ARE_you_kidding_me brings up a couple of good points. In fact, the massive teen unemployment is proof that these low paying jobs were not meant to be living wages for grown adults with families. Even FDR’s understanding of a living wage was intended to be something that a married person could live off. The demand today is that a family of three can live off that one wage, which is rather an expansion of what a living wage means really, isn’t it?

Why do you think automation is becoming such a lucrative avenue now for businesses as new efforts are made to push the minimum wage to $15 and beyond? Owners are starting to see that if the wages are going to go that high, then investing in technology is worth the initial expense to save money in the long run.

JLeslie's avatar

@Seek made the point I was going to make that who wants to work more hours when they can make the same working less hours?

I want the minimum to go up, but not way high up. Ice said $12 in the past, I’d even say $9 is a big improvement than the $7.25 (is that right?) we have now. I don’t see anything wrong with some jobs paying only $9. The business we just bought I want to pay the employees more, but I can’t right now. My husband and I are making less than them. Lol. We are considering raising prices minimally, and then we will hopefully be able to have bonuses for them. If the minimum was $15 I would have to raise prices on my customers. I would not be letting staff though go. I would not push them harder. I have a real problem with pushing people to a breaking point. The question is, will the market pay the prices? I think it would. I think all my competitors would raise prices also, and that would be the price if you need our services.

I don’t agree minimum wage has to be a living wage. I do philosophically think people should be able to live safely and be able to pay their bills for shelter and food on their full time wage. It can be a little bit of a conflict I know.

Walgt's avatar

@Seek

@SmartAZ is talking about this link

The monetary policies of the fed cause an increase in prices, a decrease of your purchasing power, and unemployment. How exactly is beyond the scope of this thread.

Seek's avatar

@Walgt – The monetary policies of the Fed are completely irrelevant to me and to my landlord. This thread is about wages vs. more work hours, no?

In the case of the OP of this thread, from the perspective of the workers who presumably like to see the home they pay rent on occasionally, higher wages are more useful to them than longer working hours at the same wage rate.

Walgt's avatar

Monetary policies from the Fed is part of the reason why you feel you can’t live off a low wage. Your purchasing power has severely declined. link However, relative to other countries, our purchasing power is still incredibly strong. Although, I repeat, even if the purchasing power was higher, low wage jobs are not catering to adults with families or even single adults. They’re for high school and college students. Adults can do these jobs, but they have to expect to do 2–3 of them to make ends meet. Job killing policies will destroy those options as job openings will be scarce.

The thread isn’t about wages vs. more work hours. The thread is about minimum wages vs no jobs. Yes, you prefer your $15 an hour and lower working hours, and if that was indeed a policy, you might end up being part of the group who gets no job at all, and are no longer interested. Just look at the situation now at $8 an hour minimum. If you have 3 times more unemployment workers than job openings, coupled with the 35% who are not even interested in working, what do you expect at $15 an hour? At $15 an hour in might incentivize those who are no longer interested in working again, but what good is the incentivization if there will be no jobs available for them?

Indeed, the person who lands the job will the considered the lucky one. Assuming they don’t dump the extra workload on you to pick up the lack of employees and don’t increase the price of their goods (you may end up paying more at the store as a consequence for making more).

Seek's avatar

I don’t pay “more at the store”. I just don’t buy things. Because I don’t have the luxury of affording them.

We can talk all day about economic theory until we’re blue in the face. It doesn’t matter to me, because I can’t negotiate that point at the check-out counter when I’m simultaneously trying to determine whether the increased price-per-ounce of low-fat beef is worth it when you consider how much fat the regular beef is going to drain off.

I don’t care why my money is worthless, I just need enough money to compensate for its worthlessness.

If I’m selling my life for a paycheck, I expect that paycheck to be worth the time I’ve given.

Walgt's avatar

Relative to what the prices of foods were 8 years ago, you certainly are paying more at the store even if buying less items. The prices are higher.

Indeed, you have to work more hours and more jobs to compensate for the weak purchasing power. That was my point. You will feel it the most potently at the low wage job.

I inquired to satiate a curiosity for knowing the reasons for why some support proven bad policies that cause economic turmoil.

Seek's avatar

“The prices are higher.”

Obviously. And eventually the ratio of low wages vs. rising prices will hit a point where the majority of people cannot afford to sustain themselves with the money they work for, so they will simply stop working – like I did.

For that matter, higher prices and lower relative wages means I can buy fewer things, which means my money is helping fewer companies at a time.

People want to talk all day long about the “incentive” of “job makers” to continue “creating jobs”... what about the incentive of workers?

If you’re spending over ⅓ of your life working for not enough money to house and feed your family, where’s the incentive?

If every CEO died tomorrow, nothing would change. If garbagemen and line cooks and secretaries and hospital porters and laundry workers went away, the entire country would come to a standstill.

Walgt's avatar

That has to do with bad economic policies, not entrepreneurship.

What kind of incentive do you expect if your job productivity doesn’t generate enough for your employer to pay you more? Wendy’s recently announced it is replacing its work staff with self-serve kiosks. Machines that can make 400 burgers an hour are already available and being implemented to replace kitchen staff. Machines have no wage demands of $15 an hour once one is purchased. It will work with 100% efficiency for years, and it never goes on strike. That should show you how little these employees generate for their employers if they can be replaced by machines. They expected $15 an hour for their service. Now they’re out of work.

It is the same idea when you buy a product. You want to make sure that your money is going towards a good product and that the value reflects the asking price. You won’t pay for something more if you think it isn’t worth the price. The value isn’t there.

Another misunderstanding here is about the living wage. It is a function not simply of the wage, but of the cost of housing, food, healthcare, transportation, and a myriad of other factors. Where housing costs are low, for example, the living wage will be lower than it would be in a place where housing costs are high. What matters is not the nominal wage paid by the employer, but the real wage as determined by the cost of everything that a wage is used to purchase.

If it’s the real wage that matters, why is there a fixation on the nominal wage itself paid by the employer? After all, wages, in real terms, could be increased greatly by forcing down food costs, cars, gas, and rents. All these private owners can put a huge dent in family budgets when they allow their “greed” to impel them to charge the highest prices they can get away with in the market place. The reasons for no government force on price control are obvious. The vast majority of policymakers recognize that government-dictated prices on food and housing lead to shortages. Setting a price ceiling on rents or home prices simply means that fewer housing units will be built, while setting a price ceiling on eggs, or milk or bread will simply mean that fewer of those staples will be brought to market. Here we see that placing some moral responsibility on the employer for wages is done for arbitrary reasons. Food prices go up 10% in the neighborhood? Blame the employer.

What is not being realized here is that the same historic failures of price control on food and rents are the same failures we see now on wages through minimum wage policy. Yes, living wages in food, energy, and housing sectors will squeeze profits and bring higher wages for those who luckily keep their jobs, but the mandates will also tend to raise prices for consumers. This in turn means that real wages in the overall economy have actually gone down, thanks to a rising cost of living. You raise the prices of consumer goods via increasing labor costs. Real wages then go down, and, at the same time, many workers lose their jobs to automation as capital is made relatively less expensive by a rising cost-of-labor.

These workers are working only because there is a CEO. If everyone was so clever, they would all be working for themselves. No CEO = no management = no business = no job.

Seek's avatar

Machines need engineers, maintenance workers, auditors, etc. I’m not afraid of machines. Bring them on. No one can argue that the development of the automobile was a net loss to the job market because the number of saddlemakers went down.

Costs are doing a fine job of rising without an increase in wages, so that’s a moot point as well.

Walgt's avatar

Engineers, technicians and auditors are classified under skilled labor – college grads. I am not sure why exactly did you bring up this point if we’re talking about unskilled, low wage laborers and minimum wage laws. It is an entirely different class and isn’t a political/economic issue. If anything, it just illustrates the point that unskilled laborers are on average, out of the picture, possibly forever, depending on the industry.

Wages have increased. States mandated their own minimum wages above the federal level.

Rarebear's avatar

This is a great discussion.

Seek's avatar

@Walgt

There is ample evidence that having a college degree (that is, being skilled) will not necessarily keep you out of low-wage work, and that some high-paying industries are leaning toward hiring uneducated (unskilled) workers.

Source

People who are forced to work for inadequate wages should not be serfs doomed to a life of struggle and mediocrity solely because we’ve chosen not to do anything about it.

Walgt's avatar

@Seek

I don’t consider every college graduate as a skilled laborer. Engineers, techs and auditors are stem fields. Those are the most challenging of all available fields. The skill sets of those fields are high. Stem majors is what today’s market demands. Majoring in a career like feminism is a very weak skill set comparatively to other competing skill sets such as the stems. It is not as challenging, it is not considered an advanced form of education unless you’re going for your Ph.d, and it has a very low demand by the market.

Stem majors and law are the least likely to be in positions of low wage or unemployment. Most non-stem fields aside from law, have very high unemployment rates. You can major in history, and call yourself skilled because you know your history, but at the end of the day, the skill set is uncompetitive, incomparable, and not in demand.

My main point here is that the solutions that are being offered and applied to fix what you see as a problem for unskilled workers are inadvertently causing more harm to them and others. I only wanted to understand the reasoning from the proponents.

Solutions have to be viable. Minimum wage is not. It is actually harmful. So what viable anti-serf solutions do you have to combat what you see as forced serf lifestyles?

Walgt's avatar

I’m still not certain why you brought up the careers to begin with. If I had to guess, it is to make the point that jobs are still going to be around? In that case I agree, but the point I was driving home with automation was the unskilled labor will be eliminated. The same thing occurred when transitioning to the industrial revolution.

ARE_you_kidding_me's avatar

Auditors are not stem. They’re closer to business.
I can’t help but see how many jobs can be automated in my head, so easy and enevitable. That’s the engineer in me though.
The “global econonmy” is killing us here. The fact that we have to compete with slave labor in asia and we can’t really afford to buy more expensive american made products is an issue. Amazing how these free trade agreements are working for us huh?

Walgt's avatar

@ARE_you_kidding_me

I lump it with math along with actuaries, statisticians, financial analysts. Auditors take the same courses as accountants and accountants usually receive their master’s of science in accounting, but can also be masters of business administration with a specialization in accounting.

I read an interesting thought on the free trade topic. It was from Ben Shapiro giving 4 reasons why economic protectionism is stupid. This is the part that relates to what you were touching on. These are 2 out of 4 reasons.

Tariffs Are An Unfair Tax. Trade has two sides. Always. It is a bargain among consenting individuals. Trump complains about us importing cars. That’s because there are Americans who want to purchase those cars and are willing to do so. Depriving them of their free choice is tyranny. Beyond that, you are sucking money out of those Americans’ pocket by forcing them to pay more money for products just because they’re made in America; you’re just redistributing wealth. And you’re doing it regressively – rich people can usually afford marginally more for a product, but poor people can’t. There is no difference between the government forcing me to pay a farmer more for a product by placing restrictions on imported goods, and the government taking money directly from me and handing subsidies to others. Trade redirects money to the most efficient industries across the world. That makes everyone more efficient, and redirects American resources to industries that are ever more sophisticated.

Tariffs Destroy Jobs. Removing money from profitable industriespeople who don’t need tariffs and subsidiesto give to those who are inefficient merely keeps jobs in industries that will collapse as soon as competition is allowed. And if competition is never allowed, product quality declines while price rises, and the economy stagnates, sucking jobs away from industries that could be producing them. Take, for example, Detroit. Bernie Sanders acts as though Detroit collapsed because of evil foreign trade. Here’s what he said in the last Democratic debate: “Do you know that in 1960, Detroit, Michigan was one of the wealthiest cities in America? Flint, Michigan was a prosperous city. Corporate America said why do I want to pay someone in Michigan a living wage when I can pay slave wages in Mexico or China. We are going to shut down and move abroad and bring the products back.”

This is not what happened in Detroit. Detroit collapsed because unions and regulations made Detroit uncompetitive in the global market while other countries recovered from World War II. Subsidies and tariffs made Detroit uncompetitive; when we went free trade, Detroit died. The eroding tax base led to the city’s collapse as politicians tried desperately to grab as much cash as possible amidst the flight. The city emptied out of all capital.

Tariffs create zombie industries, just waiting for the head shot. We can complain all we want about the demise of manufacturing jobs – but how many service and information sector jobs are you willing to sacrifice for one manufacturing jobs? And why? In the 1930s, the government thought agricultural jobs were worth the sacrifice, and pushed forward the Smoot-Hawley Tariff. The result: a decade-long depression.

Rarebear's avatar

Looking up Smoot-Hawley tariff.

Aethelwine's avatar

Minimum-wage workers are older than they used to be. Their average age is 35, and 88 percent are at least 20 years old.

tldr- has the above been mentioned?

ARE_you_kidding_me's avatar

I have very mixed emotions about tariffs but I don’t completely agree with that assesment. Many foreign auto makers have set up shop here and are providing US workers gainfull employment yet some american makers have moved to mexico. I don’t really believe in protectionism but without some regulation it’s a free for all.
China heavily subsidizes shipping and because of some of the trade agreements we have to accept a flood of cheap items where we subsizie the shipping also. It’s why you can get items like a knife for .65 cents on ebay. Nobody can compete with that.

ARE_you_kidding_me's avatar

Here is a healthy debate on this, especially the resulting comments. I favor the fair trade side of things. One thing Ross Perot got right back in the day was “that big sucking sound” It’s again, not just about tarrifs and protectionism but more about keeping our economy safe from many different forms of economic mischief.

JLeslie's avatar

@Walgt So, how do you feel about wages so low people need food stamps and other government help to survive? I’m not asking for comments about how some people game the system, I’m talking about people who work full time, they do their best to do everything right and work hard. If the employer doesn’t pay a reasonable wage, then we pay the tax to support the employee. I have some mixed feelings about this game, but mostly I think it’s better for the employee on a psychological level to earn a better wage and not be on the dole. I would rather not have my taxes have to support other people so companies can make higher profits.

However, maybe the game is necessary, I don’t know, to have the luxuries and quantity of jobs we do have. If that’s the case, then people need to deal with the reality of paying taxes to support others. It’s basically subsidizing corporations through government.

I’d rather see higher wages at the bottom AND lower salaries at the top. I don’t mean create communist America with everyone making the same money. I only mean flattening it a little so it’s closer to what it was during the mid 20th century when America was proud of our strong, large, middle class. Remember that? We bragged about it.

@jonsblond That’s interesting. A separate topic that can be discussed about wages (for another Q) is that some countries have a lower minimum wage for younger people.

Seek's avatar

We already have a situation where adults with families to support have to compete for a limited job pool with “teenagers and bored retirees” looking for something to do. Let’s not stack the deck further against them by making the teenagers even cheaper to hire.

JLeslie's avatar

@Seek That’s always been my concern about the lower wage for young people.

Walgt's avatar

@jonsblond

I mentioned adults, I didn’t specify age. The massive teen unemployment gives it away that adults are doing the jobs instead of the teens. I don’t consider it a problem if 88% of the minimum wage employees are aged 20. It isn’t uncommon for college students to work at minimum wage jobs, part time, while attending college. It becomes an issue when they finished college and end up working at a minimum wage job because they chose majors that are not very skillful or marketable. Plus that massive college debt hangs over their head.

@JLeslie

I covered most of what you’re saying and asking in my response to Seek here

Walgt's avatar

@ARE_you_kidding_me

Since you brought up more points, I’ll give you the other 2 reasons that Ben Shapiro states on why economic protectionism is stupid.

America Is Not Damaged By “Unfair Trade Practices” Of Other Countries. Both Mitt Romney and Donald Trump have complained in the past about China’s “unfair” trade practices, particularly their devaluation of their currency. But devaluing your currency doesn’t give you any advantage, any more than pretending that Yao Ming is 5’9” gives Nate Robinson an advantage over him. Currency is merely an exchange unit. If China inflates its currency, the American dollar is worth more against it; that means we purchase more Chinese goods.

Well, good for us! That makes it cheaper for our consumers, supposedly. But not for long, since currency is a substitute for goods and labor, and government manipulation doesn’t change that. China’s consistent devaluation has led to economic crisis in the country, more poverty among the people who use their currency (namely, Chinese citizens) and multiple stock market collapses in the last year. Right now, the Chinese government is desperately attempting to stop a devaluation spiral. If devaluation were such a threat to the American economy, why wasn’t Weimar a world power when people were shoveling around cash in wheelbarrows?

How about China refusing to import American products? That’s obviously not good for either us or them, but that doesn’t mean that our attempts to stop their imports would help us. That would be cutting off our nose to spite our face. Jim Geraghty gives a good case example: our 2009 tariffs on Chinese tires, which resulted inat best$48 million in “additional worker income and purchasing power,” at the cost of $1.1 billion in American money spent on more expensive tires, plus another $1 billion in the poultry industry thanks to Chinese retaliatory tariffs.

Trade Is Not A Zero-Sum Game. Trump and others have constantly whined about America’s trade imbalance. This sort of economic silliness has a long history. Adam Smith pointed this out in The Wealth of Nations: “Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity.”

As Thomas Sowell writes:

In general, international deficits and surpluses have had virtually no correlation with the performance of most nations’ economies. Germany and France have had international trade surpluses while their unemployment rates were in double digits. Japan’s postwar rise to economic prominence on the world stage included years when it ran deficits, as well as years when it ran surpluses. The United States was the biggest debtor nation in the world during its rise to industrial supremacy, became a creditor as a result of lending money to its European allies during the First World War, and has been both a debtor and a creditor at various times since. Through it all, the American standard of living has remained the highest in the world, unaffected by whether it was a creditor or a debtor nation.

Sowell points out that if the Japanese send us lots of cars and we send them lots of dollars, they will use those dollars to buy American assets. That’s exactly what they’ve done. As Scott Lincicome pointed out at The Federalist, “every dollar traveling overseas to buy imports (in excess of our exports) eventually comes back to the United States in the form of investment, and our “trade deficit” is matched by a “capital account surplus.” In other words, we buy goods and services from foreigners, and they buy an equal amount of our exports plus our financial assets (aka foreign investment in the United States).”

If trade were really about “beating” the other guy, as Trump seems to suggest, perhaps the best solution would be for us to sink all Chinese ships carrying imports. Wouldn’t that help the economy, after all? Countries that effectively do that with high tariffs invariably collapse economically and end up having to inflate their currencies. See, for example, Latin America. Nobody invests in countries with high tariffs; nobody trades with countries with high tariffs. If trade were a zero sum game, wouldn’t it be best to just keep everything in house?

But logic doesn’t matter in this conversation. All that matters is that tariffs and trade barriers represent yet another government policy with clear beneficiaries and diffuse victims. So they’ll be politically popular, even as they drive the American economy into the ground.)

Darth_Algar's avatar

@Walgt “It isn’t uncommon for folks who earn too little to work multiple jobs and longer hours.”

Yes. And how do you feel that abolishing the minimum wage, which you seem to be advocating for, going to relieve that?

ARE_you_kidding_me's avatar

@Walgt Walls of copy-paste text are not really going to be read and it’s better to word things yourself but be concise and to the point. That’s kind of an unspoken etiquette here (which you belong).

I think we can safely say though that leaving things with no regulation is a bad idea. Regardless of the views of Shapiro and Sowell you must understand that there will never be any one size fits all answer to trade. Case by case things need to be fair.

Walgt's avatar

@Darth_Algar

I never made the claim that abolishing the minimum wage is going to offer relief for that. Just the opposite. Those who are proponents of the minimum wage are trying to offer relief through such economic policies as the minimum wage. I’m just trying to understand why is there continued support for it after studies indicate it has drastic consequences that negate all positive efforts for improvement.

@ARE_you_kidding_me

Oh, I didn’t know that. Thanks for the heads up.

If regulations have positive outcomes, there is no issue. Unfortunately, a lot of today’s regulations, which are numerous, are responsible for the problems in the U.S economy and they’re not always pushed by an ignorant, impulsive/reactionary mass of people. They’re pushed and utilized as weapons by various industries and large establishments to inhibit competition and elevate their own success. It just happens that the will of the people is in sync with those that are doing the pushing, only it does not benefit the masses.

Darth_Algar's avatar

@Walgt

Likewise I’m sure plenty of studies can be dragged up that support the idea that a minimum wage has a net positive effect. That’s the thing with studies – they tend to support whatever the folks conducting the study want them to support.

Rarebear's avatar

@Darth_Algar That’s the thing. If you look at the nonpartisan CBO report that he links to in link2 in the OP, it says exactly that. It’s a mixed bag.

There are clearly anecdotes of stores closing and people getting laid off because of the minimum wage, particularly in margin-thin industries such as family owned restaurants and used book stores. The question that is unsettled is will the resultant increase in overall cash flow to the economy overcome the hit to unemployment, and will the people be able to get other jobs.

Here is a “fact” sheet put out by the libertarian Cato institute. If you can get past the “libertarian” and “Cato” part of it, it kind of summarizes the conservative point about it.
http://object.cato.org/sites/cato.org/files/four_reasons_not_to_raise_the_minimum_wage.pdf

And on the other side of the coin, here is some article from the centrist-left Center for American Progress. It’s not as neatly packaged as the Cato
https://www.americanprogress.org/tag/minimum-wage/view/

It will be an interesting economic experiment, to be sure.

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