Re: Economic Lysenkoism



Jeffrey Turner wrote:

Bill Bonde ( 'Hi ho' ) wrote:


Jeffrey Turner wrote:

Bill Bonde ( 'Hi ho' ) wrote:

Jeffrey Turner wrote:

Bill Bonde ( 'Hi ho' ) wrote:

Jeffrey Turner wrote:



http://www.thenation.com/doc/20070611/hayes

[David] Card, a highly esteemed economist at the University of
California, Berkeley, caught flak for his heresy not on trade but on the
minimum wage. In 1994 he conducted a study to see whether an increase in
the minimum wage in New Jersey had the negative effect on employment
that basic neoclassical theory would predict. He found it didn't. In
fact, his regression analysis showed that, controlling for other
factors, New Jersey gained fast-food jobs after increasing its minimum
wage, compared with Pennsylvania, which hadn't raised wages.

Controlling for what other factors? If the minimum wage is so low that
people won't work fast food for that wage, raising it might mean forcing
fast food joints to raise wages and making more employees available.

If fast food joints can't find workers at the minimum wage, they will
pay more than that, regardless of the law.

It's more complicated than that, but yes, that's not an argument for
raising the minimum wage. Consider that they can't find enough
employees, or bare enough say, and then they are forced to pay more and
suddenly they have plenty of workers so they choose to expand and that's
just what they needed and they make more profits.

Close. Businesses don't expand because there are more workers
available, they expand because there's more demand.

It's simplistic to assume that expansion is only due to one dynamic. A
business might not expand, clearly, if it doesn't believe it can find
enough workers. The demand might in fact be there.

You're not really clear on how fast food joints work. If there's excess
demand then lines get long and the place gets busy. No manager who
isn't sleeping in her office can miss that. The manager often ends up
working a cash register and hires someone as quickly as possible if
this is a regular thing.

I think you'll have plenty of workers who are given light shifts ending
up working longer hours, as they tend to over-hire people in case they
need them, in case people quit. But this doesn't mean that your ideas
aren't simplistic. Demand can be there but the lack of labour makes it
difficult to go out and get it.




And putting more
money into the pockets of minimum wage workers increases demand for
fast food. Which IS an argument for raising the minimum wage.

That's an argument, if you want to increase consumption, to put more
money in the pockets of the poor. Whether or not that is done by
increasing the minimum wage is open for debate.

It's easy and effective, without calling for a huge bureaucracy.

It's highly intrusive.



This might spur growth. Raising wages can reduce turn over in employees
because they are happier working that specific job. This can mean higher
average overall employment. I'm sure further speculation is possible. I
wonder, however, if any of it is justification for the infringement on
freedoms that are required to implement a minimum wage.

Why have laws at all if you're so worried about infringing on "freedom"?

Because laws should be about protecting rights that are closer to you
than than the rights of others who are abridged by those laws.

I'm glad the boss's freedom is more important than the employee's
welfare and the overall economy.

I don't see that the overall economy is hurt by not having a minimum
wage. I also believe strongly that the employee's rights are abridged by
minimum wage laws because he might choose to work for less than whatever
that predefined rate of pay happens to be. Far more powerful means exist
to empower the poor and they are usually just ignored by the likes of
your side.

Lower wages mean lower demand, which leads to lower employment and then
less demand in a downward spiral.

Then why not make the minimum wage 20 dollars per hour? You can't answer
that.


Maybe you could explain what those
more powerful means of empowering the poor are.

One way is to find means by which lower income people can reduce their
expenses. Why is it so inexpensive to live in the third world? Because
so many people are living in squatter slums.
.

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