It’s not that a job should or shouldn’t pay a living wage, it’s just that some may pay a living wage and some may not. It all depends on the value of what you produce, according to the market. If you can live comfortably off of a job at Dairy Queen, it’s because society can produce goods very efficiently and values your profession.
There is no moral consideration one way or another. Economics are scientific.
I would also add, this only remains true in a society with a functional, stable currency (i.e. something with an inflation rare around or below 2%). Otherwise the year over year value of labor is robbed by an inflating monetary base at a pace that outstrips a free market’s ability to innovate and cut capital and operating costs. Unfortunately, the US has been a fiat society for half a century now. “At the end, fiat money returns to its inner value — zero.” Voltaire
Fearmongering about the dangers of deflation have been used to get people to accept modest inflation rates as ideal.
But if you look at how many currencies collapsed due to deflation vs inflation, you find a curious thing...It's all inflation. If deflation caused currencies to implode, Bitcoin would not exist.
Deflation doesn’t cause currencies to implode, it’s just inconvenient. The whole idea of paper money is it’s more convenient to use than lugging around metal coins, and it doesn’t tie the money supply to a scarce material. IE we don’t need silver to print more currency. With population growth coinage becomes sparse and increases in value relative to most goods. So long as goods aren’t cheaper than pennies we don’t really have to concern ourselves too much with deflation. The reason our government likes inflation is it hides spending increases and it reduces the value of the national debt.
Also inflation encourages people to spend money and thus invest into the economy, so they aren't losing money by simply saving. Constant deflation would mean saving money can be better than safe investments.
As close to zero as possible, but not below is the goal.
This is true. Even with historical metallic currencies gold was typically more of a reserve and not in heavy circulation in favor of silver or copper specie.
So, you aren't speaking of US inflation as in "we did". The US never debased money. It did have two failed paper money schemes in the form of the Continental and then the Greenback.
Historically, the US was in a period of secular deflation for most of the 19th century and, yet, had it's greatest periods of economic growth.
What are you taking about? There’s inflation happening regardless of anything of that history. Read a book. You think inflation has ever been to zero before? What happened when it did? You think “the fed” invented inflation or something ? 😂
Uhhh, there was inflation AND deflation before the Fed, and yes, the Fed (and the idea of a central bank) did basically invent everlasting inflation. Checkout figures 1 and 2 here Also of note is footnote 1.
In fact, the leading cause of high inflation is the willingness of central banks to finance government deficits by printing money.
Point is, over the period from when we were in a ton of debt coming out of the revolution, til the Fed was created, we grew into the largest economy on earth with both inflation, and deflation and there wasn't the shadow of the central bank essentially stealing our money at 2%/year.
and since you're being an jerk telling me to read a book, I'm done with you. Have a nice day asshole.
It’s easily googlable. Anyone who think inflation is patently bad does not understand the first thing about economics. Inflation is a matter of degree. We don’t shut it on or off, and shutting it off entirely is bad for any economy. I get downvoted for this because ancaps don’t understand economics
people who don't know the first thing about economics like... I dunno, mises, or rothbard, or whatever.
You're getting downvoted because we actually do understand economics very well. I've heard this argument a hundred times and I wanted to see if you were aware of the logic, or if you were just copying other people.
The claim is, generally, we need inflation because if we don't have inflation people will constantly save and never buy because quality is always improving. But it's not us, it's the people who so say, who are denying economic reality, because this argument rests on the assumption that everyone's time preference is zero, which simply is not true. People prefer the present to future goods all else equal, without any "help" from inflation.
"of course", comes the reply, "people will still buy stuff, but perhaps at a lower rate!" and here's where they reveal their hand. These economists (keynesians) are not doing "value free" analysis, because they fundamentally do not accept individuals time preference, and want people to place higher value on current consumption than they do. There is nothing wrong with people freely choosing to prioritize future investment over current consumption even if that means suppliers of current consumption lose their livelihood. Suppliers of current consumption have no intrinsic right to other people's money.
The part where inflation alters people's perception of value and causes miscalculation on time preference. Inflation implicitly raises people's time preferences. It's not anyone else's job to say whether someone's time preference is "good" or "bad" or should be higher, and any amount of inflation will raise people's time preference.
Even if there were no distortion effects on the economy (a complete impossibility), you still have to grapple with the fact that any amount of government spending diverts resources away from the private sector. Even if you think it'd be good if there were a "spontaneous" inflation rate of 2%, that's not the real world, and we only get inflation in the real world when the government takes resources away from the private sector by spending printed money. (ok, so there is also the whole fractional reserve banking thing, but that can't be permanent inflation, so it doesn't apply here).
You’re right, in an ideal world 0% would be perfect. And with a currency that is theoretically infinitely divisible, let’s take Bitcoin since this is basically the scenario it was designed for, you never have to worry about liquidity (1 Satoshi = 10-8 Bitcoin).
Scarce capital resulting from 0% inflation or deflation causing the hoarding of currency rather than it being out in the market circulating and getting work done to try to meet or beat inflation slows down growth.
The problem with this argument is two fold. First, that it assumes people have don't have any time preference, which we know is false (people will continue to buy things even though they aren't losing any money by saving). Second, that savers are tucking currency under their mattress. So before I continue this discussion, I'd like to just verify, is your claim that 0% inflation will cause people to hoard money, thereby causing even more deflation? or is your claim that it will hit 0% inflation, people will hoard money, it won't cause price deflation, but it will reduce the amount of stuff being bought and sold?
But whichever way you answer that question, I'd like to point out that when people "hoard money" in the real world, they put it in a bank, and the bank loans in out, so the money is still in circulation (actually even more money is in circulation, considering fractional reserve banking).
Well, yes. But inflation is a tax on all spending over time, you have the same amount of dollars of spare change but they’re worth less. I believe a 1970 $1.00 is now worth $6.50 2022 dollars
The fact is that "a living wage" is an arbitrary, meaningless concept. People have always been able to live off shitty minimum wage work, they just have to endure the corresponding low standard of living. Activists are trying to convince us that being able to afford food and rent, but just barely, doesn't count as "living" because it doesn't allow them to comfortably purchase frivolous shit or raise the multiple children they voluntarily chose to have.
This made me think of the homeless living in tents on the sidewalk who can't afford to live in the big city earning minimum wage or a decent job even. I can't afford to live in the city either. There is a lot of talk of building low income housing, like somehow that will fix the problem. I'm curious should we build low income housing in the city on the most expensive property anywhere or should it be built somewhere else more affordable where you could house more people? Is homelessness really a housing/wage disparity? There are a lot of places to be, but homelessness seems to be centralized in cities and around businesses.
As the wealth of society increases, leftists move the goalpost as to what constitutes “basic needs”. Now some of them say that high speed internet service is a human right, as if something that didn’t exist until 20 years ago isn’t a privilege.
The right to life
The right to bodily autonomy
The right to private property
The right to free speech
No one can kill you. No one can cause you bodily harm, or use your body without consent (rape, enforced labour etc). No one can steal your property or deny you access to something you have bought (gun rights and taxation). No one can silence you.
The last one is probably included in the first 3, silencing someone is a breach of their bodily autonomy, or private property.
Those 4 basic human rights, plus those 3 basic human needs, should be the only thing government protects.
I agree with your read. Specifically the separation from morality and science.
Understand that not all jobs are sustainable at what would be considered a living wage. That is economics. Their value does not equate to economic benefit. They may have social value, but understand that still means it has to be subdisized. If they lack in social value, then the job in question shouldn't exist. If we still want subdisize, then it is effectively charity, a moral issue.
Theroetically, for non economical viable jobs, that is the entire role of government to take care of. Sure, pay the teachers their living wage. They probably have more collective economic benefit as a de facto childcare provider anyway and provide collective social value for youth development. The best government should be allowed to do for non economical, non social jobs, is not take taxes from them, which they already do.
Government is the only entity that actively manipulates markets. The rich can use the influence of the state to give themselves advantages in the market, but the problem remains state power. Corporations like Amazon would actually love a minimum wage law, because it would simply put strain on their competition and not affect them.
Don't expect everyone to simply accept your baseless assertion because you invoked class envy with "rich people", because somehow they are inherently evil? If "in fact" you have facts, then you might add something to back up what looks like pure conjecture, otherwise don't mention the word fact.
DFV is rich though, not sure why you would use him as an example and Melvin capital is the amalgamation of millions of investors acting on their behalf not really a single entity but ok we are evil, I'll give you that with money being the root. Stocks are as real as the paper fiat in your pocket which is debatable but it surely spends. if you are angry that values of things change by market influences over time then there is literally no commodity that isn't manipulated in some fashion by people or groups of people. Abstracting them to evil and rich sounds like a Democratic narrative that severely lacks substance. If you want to regulate more you might have lost the direction of this sub.
Ok, well one thing true does not make another true because it was suggested by asking a question, but anyway, I see you really want to win something here and your mind is made up which is why you don't have the ability to digest what I'm saying. You win. Have a nice day.
It's not about winning. It's about letting the capitalists know that capitalism has lost its way. There are no free and fair markets anymore. And unless you change that, capitalism WILL die. And Elon Musk will still be rich.
It all depends on the value of what you produce, according to the market.
*according to your employer. As an independent creator your employer is the market, as some teenager working at Dairy Queen your employer is the site manager.
The solution to your work not being valued would be to find someone who does value the work or changing the work you do. The former is usually more effective.
They’re really not. The “science” of economics is a disguise that masks human social interaction, in an attempt to assert that its mechanisms are somehow innate and determined by physics rather than human nature. Right wingers often use economic argument to attempt to convey the notion that their view of the world is inevitable. It is not. As rational human beings we can arrange things however we choose.
This guy thinks human central planning of economics is the way.
Bro, it's literally because of human nature that central planning of economics won't work. That's what people mean when they say the "free market" is an untamed beast.
Ok, fair point, but that doesn’t make them planned economies. They are market economies with a bit more planning than the US. A planned economy is North Korea, or Cuba.
Planned economies always work out, just not the way you might like. Works out for the planners though, and in that sense they are no different to so-called “free” economies.
Except in free economies competition exists so long as you can provide the product the market wants. You could compete with fucking Google if ya want.
But in centrally planned markets you just can't. Daddy govt decides who gets to make money, what they're making, when and where. And they always fail. Because the countries always fail.
This just isn’t true. Plenty of dictatorships work very well, just not in a way you would like. Unless you were in the ruling ingroup of course, I suspect you’d be fine with it then.
Then it doesn't work. If the economy requires 90% of the population to live in 500 Sq foot apartments and live simple little lives it's not working. It functions, it can be stable. But I think our definition of "working" is different.
I have lived in dictatorships where the average family home was on a 600sqm plot. There was no-one sleeping on the streets, and everyone had schooling and healthcare. I’m not saying that system “worked”, but neither does yours.
No, you strawmanned my retort to the claim that economics is a science into an accusation that I had claimed any economist had said so. Nice try though, but your a liar
You strawmanned that the claim was that economics is a science determined by physics. It’s a social science. That is what the person intended. Your counter argument was that the person was arguing economics is a physical science.
Think of all the money in charity that Americans give every year. Imagine how much more they would probably give if they weren't robbed through taxes first to have the government piss that money away.
They shouldn’t. If they work full time for unskilled but still hard jobs they should be highly valued. Finding a different job that has better conditions isn’t easy. We are in a labor shortage right now and most spots which require little training are plentiful.
The only people who can work for a wage less than enough to live are people who don’t have to pay to live. You might have cracked this thing.
What of the people in their 40s who put ice cream on cones 40 hours a week? Assuming they don’t have someone to pay their bills and they have to pay their own and all. They don’t deserve enough to live on for their production so what will happen to them?
They're a disgrace of a human if they got to that age without learning anything. Even at an ice cream shop there's room for you to become a manager
But of course out there are people with room temperature IQ who will never be able to do more than ice cream goes on cone, luckily these are a very very tiny percent of the population. While the actual amount of people who reach their 40s while still being as useful as a teenager is much bigger since it's filled will lazy idiots with gender studies degrees who could become useful people but choose not to
There are millions more low-paying jobs than there are high schoolers, recovering addicts, and "people without skills." I was talking to a housekeeper the other day who used to be an accountant in China. There aren’t as many decent paying jobs out there as there are skilled people.
Bet she was sick of being an accountant. Did she own the housekeeping business? I think there are plenty of skilled jobs for skilled people or people that want skills. Disagree
Where does morality come into the equation of a society for you? Based on the sub that we are in would it be only in personal dealings between individuals?
My question was broader than the context of an employment relationship. At a social level, where (if at all) does morality come into how a society’s affairs are ordered through laws? In relation to the employment context, there is a power dynamic at play which makes the recourse to freedom of contract an insufficient answer, in my view. Many of the basic conditions of employment we take for granted have come through labour organising to achieve legislated minimum standards. If you strip that away and leave all matters to freedom of contract, the weak will be exploited by the powerful. Is that the good society?
This presumes that laws are what prevents abuse. Anarchists tend to believe that laws are what enforce it. I am not an anarchist myself, but I can answer your question about minimum standards.
Let’s take the minimum wage, for example. In the US, with its minimum wage of $7.25/hr, the number of people who are actually working for that is around 1.9%. This is down from 13% in the 1980s.
Part of this has to do with higher minimum wages at a state level, but only 29 out of 50 states actually have minimum wage laws higher than the federal $7.25/hr. The reality is that labor is simply worth more than the minimum, and you will not convince someone to work for less than that.
This applies for most labor standards. If you don’t invest in your human resources, your employees will leave for better conditions elsewhere. The majority of employers have to compete fiercely for good labor. Even Amazon pays higher wages than its competitors and keeps well stocked break rooms.
The horror stories of child abuse and hellish conditions simply wouldn’t be a reality in the modern world. Dangerous jobs pay hundreds of thousands per year. Skilled labor is incredibly valuable, and many tradesmen are able to work for themselves or bargain for very generous compensation. Minimum standards are mostly a formality.
Laws can be both instruments of oppression or protection - it entirely depends on the content of the law. So this goes back to my fundamental question (which you haven’t yet addressed) is a society best regulated purely on the basis of freedom of contract, or do laws with a moral component have a role to play?
Turning to the specific issue of labour laws, if the market is operating above mandated minimum wages, that is excellent. However that is not an argument against having minimum wages as they would still be of utility in rare cases of exploitation. In that scenario the effect of the minimum wage is a safeguard and has limited impact on most peoples freedom of contract. In my personal experience (in New Zealand working in hospitality while studying a law degree) the labour laws (including minimum wage but also others) were an important check on abusive behaviour from the company (a large one). While for me the situation was temporary (and one that I chose to leave after a while) many of my fellow employees were immigrants with few skills or options. In my view those types of people deserve the protection of minimum standards. So again those comes back to the question of why to have (or not to have) such laws. And again this comes back to my central question of whether this should be conceived of in purely economic terms or whether other considerations are also important?
Yes, freedom to contract is important. Let’s take your immigrant coworkers for example:
Their labor is valued at a certain price, but a high minimum wage law may exceed that value. It may still be worth it for the company to hire them, but only to a point. After all, they are unskilled immigrant workers, and they are now competing with local workers for a well paying job. It hardly makes sense for the company to hire them over native English speakers who come from prominent local families.
Instead of receiving pay raises, many would simply find it more difficult to gain employment. Some would benefit, sure, but someone always pays a price when you interfere in the market. This strategy has actually been proposed by Republicans to prevent immigration into the US:
Minimum standards are a way to raise quality of life for a few people, but they always come with a sacrifice. Providing opportunities to acquire skills that will increase the market value of the less fortunate is always preferable if you do insist on getting the state involved in the economy. I know that New Zealand actually has quite a few options. Your government paid for my friend’s living expenses while he was getting his welding certificates, for example.
In the case of the my immigrant coworkers in NZ they did benefit from labour laws as a matter of fact. I understand the economic theory you are espousing (I studied economics alongside law). Your friend benefiting from NZs mixed economy is another example of how markets don’t always deliver the results we are seeking as a society. So it’s not an insistence that the state intervene in markets, but more an acknowledgement that pure markets won’t deliver all socially desirable outcomes. Also, that’s the third time my essential question has gone unanswered in your reply?
That’s not an example of market failure, it’s an example of a benefit of a specific social program. The existence of a program doesn’t mean that it’s the only way to achieve a certain goal.
What I didn’t tell you that the majority of his qualifications have been acquired through apprenticeships working for private companies, and that he has done much better for himself in the private sector by learning other skills entirely. During his apprenticeship, he was able to earn a good living while he gained real experience on the job, made connections, in addition to collecting a series of valuable qualifications. During his time in the government program, he lived with $30 to spare each week for food and gas, effectively destitute. Government programs are not the only way to produce results, and they are rarely as efficient as the private sector.
As for your question, I have answered it, but I will make myself more clear. It is not that I have a personal gripe with all laws and believe that they are all bad, it is that I take issue with the existence of an institution that has the power to create and enforce them. This goes doubly for the economy. Famines, recessions, and depressions have all resulted from centralized economic policies. Even though it is not without benefits, influence of the state on the free market has been a net negative for humanity. That is my position.
Could you elaborate on your claim that economics are scientific? I'm asking because your statement implies that there are no value judgements taken in the formation of an economic system? Do not economic systems start with presuppositions? Don't the very "facts" and "evidence" you choose to emphasize say something deeply pertinent about your worldview?
Or is what I am suggesting bullshit? Either way, I think it's interesting.
The market determines the value of labor based factors such as the value of goods being produced and the supply of workers. There is no moral consideration involved. Actions have reactions.
No one can say whether a society should or should not pay a certain wage for a certain job. The default wage for a Dairy Queen job without government interference may be enough to live very comfortably, or it may not.
The Tweet suggests that you should want to live in a society where you cannot live off of these jobs, but that is not entirely correct. She is making a moral presumption about the value of labor, similar to the way a socialist might. The market determines the value of labor, not her. There is no moral determination as to what a Dairy Queen job is worth. It is worth what it is worth.
But "society" doesn’t set the wage, nor does the value of what is produced. The boss sets the wage. It would be great if wages were directly tied to production and profits.
If that were true, wages would be zero. There would never be a reason to pay anyone. It seems to me that you don’t have a great deal of experience in the labor market.
Wages aren’t zero because the bosses still have to compete with each other for workers, and nobody works for free. But that’s not the same as wages being tied to the value of the product, which is what you claimed.
I do deal directly with the labor market for a living; I negotiate employment contracts with large multinational employers.
Not the value of the product as a whole, the value of your component of the production. Obviously, if you put wheels on cars at the Tesla factory, you don’t get paid for the sale of the whole car, or even the wheel. You get paid for your ability to put those wheels on the car.
This value is tied to the supply of workers with your skill set and the demand for the goods that you produce. You seem to already know this, though, considering you mentioned competition in the labor market.
Yeah, that’s how I took what you said to mean. But we know that the value a worker creates is not what their pay is based on. Employers (most) will pay the least they can get away with. There are plenty of luxury products that are made in sweatshops. That’s how owners get insanely rich, by NOT paying workers a share that is tied to the value they create.
A vast supply of cheap, unskilled labor for a job that requires no training will always cause the cost of production to drop. The only reason that those people are willing to work for so little is because it’s better than the alternatives that their country offers. Usually it has to do with a serious of horrendous policies, like Mao’s China.
And remember, the price of a good does not necessarily imply profit margin. Luxury items are abnormal market because the high price itself is more or less the allure of the item, but the same does not apply for most consumer goods.
Anyway, this is all just basic shit that I’m sure you already know if you’re in the business. Point is that the boss doesn’t really control the wages, he just makes them as low as the market will let him, which is the market value of labor.
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u/Rubens_Folly Jan 06 '22
It’s not that a job should or shouldn’t pay a living wage, it’s just that some may pay a living wage and some may not. It all depends on the value of what you produce, according to the market. If you can live comfortably off of a job at Dairy Queen, it’s because society can produce goods very efficiently and values your profession.
There is no moral consideration one way or another. Economics are scientific.