Help me understand the impact of a $15 minimum wage?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm curious if those who are against the increase feel there shouldn't be a minimum wage at all? And why or why not?

There should not be a minimum wage because it is not the proper way to address the underlying problem of someone not being productive enough to earn a living wage. If someone is unable, temporarily or permanently, to increase their productivity, society may decide that this person needs help and provide a safety net. Such a safety net can be provided through welfare programs. A minimum wage is a broad economic distortion that causes people and businesses to make economically inefficient choices. Welfare and direct payments have far fewer of these problems.

NP here. You (or maybe a couple of people) keep saying that low-skilled jobs aren't "productive enough", and I'm thinking maybe you don't understand what productive means. A low-skilled job can absolutely be productive. Productivity has to do with the value created. And a lot of low-skilled jobs can still be productive. I don't know how many burgers a person can flip in an hour, but I bet it's a lot. Their work produces a lot of value-added food products that grease the economy.

Yes, it's true that if the labor pool is larger than the number of jobs, you aren't going to be paid as much as if the situation is the other way around. But being a high-skilled employee is only tangentially related to being productive. Many people who work at quantitative hedge funds are extremely high-skilled, but if you question whether more market liquidity is always good (as I do), you could even argue that what they are doing has negative productivity.

If you want to create a caste system where low-skilled people doing "menial" jobs are treated like literal garbage (like in India before they enacted the 1947 Constitution), say so. But stop bringing the economic terms if you don't understand them.

I think you have reading comprehension problems. Of course, low-skilled jobs can be productive, I never said otherwise. Clearly, they are productive because the workers are earning a wage.

I am also astounded by your claim that employee skill is only tangentially related to productivity. WOW! WOW!!!

Hedge funds provide financial services to clients who want to earn returns on capital. Regardless of your personal feelings on the matter, this work has tremendous value and the hedge funds are paid handsomely to retain the best and brightest people to work for them.

Yeah, I stand by my claim that you don't really understand what productivity or economic value is.

And to be clear, I think I would be considered extremely high-skilled (quantitative PhD) and am paid very well. I've been offered a lot more to do lower value work, and I did make a lot less doing higher value work...as measured by incremental economic output, assuming you aren't so deluded to think that the only measure of economic output is a stock market index. The simple fact that the financial services industry is so much more lucrative for worker bees than even tech work should tell you everything you need to know about how well compensation maps to economic value.

LOL, you were able to determine what your incremental economic output is? This should be fun, tell me, how did you determine this?

How much value your labor delivers is not determined by how much value you think it has, it's what a competitive market decides the labor is worth. Your lack of understanding of this basic economic principle demonstrates the worthlessness of your views on productivity or economic value. This is further betrayed by your continued insistence that the financial services industry somehow provides less value than what they are being paid for.

Look, as an engineer, I respect your PhD. I don't have one. However, it's obvious that economics is not where your expertise lies. Nor is it mine, but at least I have had some education on the matter and have been running businesses for the past 10+ years. I strongly recommend that you read some basic economics books before engaging with others on the topic.

I'm not the one that was arguing that hedge-funds are productive because they help the rentier class get higher rents. Even hedge funders don't argue that!

I'm not an economist either, but, as you mention, this is about Econ 101 type stuff. If I'm so wrong in my understanding of all of this, why haven't you addressed my point that productivity gains over the last few decades have *not* accrued to the lowest skilled workers, which means a simplistic understanding of why wage increases will drive inflation might not be correct? If the idea that people will use the extra money to pay down debt is wrong, tell me why?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm curious if those who are against the increase feel there shouldn't be a minimum wage at all? And why or why not?

There should not be a minimum wage because it is not the proper way to address the underlying problem of someone not being productive enough to earn a living wage. If someone is unable, temporarily or permanently, to increase their productivity, society may decide that this person needs help and provide a safety net. Such a safety net can be provided through welfare programs. A minimum wage is a broad economic distortion that causes people and businesses to make economically inefficient choices. Welfare and direct payments have far fewer of these problems.

NP here. You (or maybe a couple of people) keep saying that low-skilled jobs aren't "productive enough", and I'm thinking maybe you don't understand what productive means. A low-skilled job can absolutely be productive. Productivity has to do with the value created. And a lot of low-skilled jobs can still be productive. I don't know how many burgers a person can flip in an hour, but I bet it's a lot. Their work produces a lot of value-added food products that grease the economy.

Yes, it's true that if the labor pool is larger than the number of jobs, you aren't going to be paid as much as if the situation is the other way around. But being a high-skilled employee is only tangentially related to being productive. Many people who work at quantitative hedge funds are extremely high-skilled, but if you question whether more market liquidity is always good (as I do), you could even argue that what they are doing has negative productivity.

If you want to create a caste system where low-skilled people doing "menial" jobs are treated like literal garbage (like in India before they enacted the 1947 Constitution), say so. But stop bringing the economic terms if you don't understand them.

I think you have reading comprehension problems. Of course, low-skilled jobs can be productive, I never said otherwise. Clearly, they are productive because the workers are earning a wage.

I am also astounded by your claim that employee skill is only tangentially related to productivity. WOW! WOW!!!

Hedge funds provide financial services to clients who want to earn returns on capital. Regardless of your personal feelings on the matter, this work has tremendous value and the hedge funds are paid handsomely to retain the best and brightest people to work for them.

Yeah, I stand by my claim that you don't really understand what productivity or economic value is.

And to be clear, I think I would be considered extremely high-skilled (quantitative PhD) and am paid very well. I've been offered a lot more to do lower value work, and I did make a lot less doing higher value work...as measured by incremental economic output, assuming you aren't so deluded to think that the only measure of economic output is a stock market index. The simple fact that the financial services industry is so much more lucrative for worker bees than even tech work should tell you everything you need to know about how well compensation maps to economic value.

LOL, you were able to determine what your incremental economic output is? This should be fun, tell me, how did you determine this?

How much value your labor delivers is not determined by how much value you think it has, it's what a competitive market decides the labor is worth. Your lack of understanding of this basic economic principle demonstrates the worthlessness of your views on productivity or economic value. This is further betrayed by your continued insistence that the financial services industry somehow provides less value than what they are being paid for.

Look, as an engineer, I respect your PhD. I don't have one. However, it's obvious that economics is not where your expertise lies. Nor is it mine, but at least I have had some education on the matter and have been running businesses for the past 10+ years. I strongly recommend that you read some basic economics books before engaging with others on the topic.

I'm not the one that was arguing that hedge-funds are productive because they help the rentier class get higher rents. Even hedge funders don't argue that!

I'm not an economist either, but, as you mention, this is about Econ 101 type stuff. If I'm so wrong in my understanding of all of this, why haven't you addressed my point that productivity gains over the last few decades have *not* accrued to the lowest skilled workers, which means a simplistic understanding of why wage increases will drive inflation might not be correct? If the idea that people will use the extra money to pay down debt is wrong, tell me why?

Differnt poster here.

There's been a massive expansion of the labour force that has occurred at the same time as productivity gains. You will see a broad correlation between increased female workforce participation in the 70's which more or less plateaued until COVID and wage stagnation. Likewise the large increase of immigration as after effects of Hart Kellar and large influx of skilled labour on the higher end, and unskilled labour on the lower end has drastically effected wages suppressing them to a large degree among large swaths of society.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm curious if those who are against the increase feel there shouldn't be a minimum wage at all? And why or why not?

There should not be a minimum wage because it is not the proper way to address the underlying problem of someone not being productive enough to earn a living wage. If someone is unable, temporarily or permanently, to increase their productivity, society may decide that this person needs help and provide a safety net. Such a safety net can be provided through welfare programs. A minimum wage is a broad economic distortion that causes people and businesses to make economically inefficient choices. Welfare and direct payments have far fewer of these problems.

NP here. You (or maybe a couple of people) keep saying that low-skilled jobs aren't "productive enough", and I'm thinking maybe you don't understand what productive means. A low-skilled job can absolutely be productive. Productivity has to do with the value created. And a lot of low-skilled jobs can still be productive. I don't know how many burgers a person can flip in an hour, but I bet it's a lot. Their work produces a lot of value-added food products that grease the economy.

Yes, it's true that if the labor pool is larger than the number of jobs, you aren't going to be paid as much as if the situation is the other way around. But being a high-skilled employee is only tangentially related to being productive. Many people who work at quantitative hedge funds are extremely high-skilled, but if you question whether more market liquidity is always good (as I do), you could even argue that what they are doing has negative productivity.

If you want to create a caste system where low-skilled people doing "menial" jobs are treated like literal garbage (like in India before they enacted the 1947 Constitution), say so. But stop bringing the economic terms if you don't understand them.

I think you have reading comprehension problems. Of course, low-skilled jobs can be productive, I never said otherwise. Clearly, they are productive because the workers are earning a wage.

I am also astounded by your claim that employee skill is only tangentially related to productivity. WOW! WOW!!!

Hedge funds provide financial services to clients who want to earn returns on capital. Regardless of your personal feelings on the matter, this work has tremendous value and the hedge funds are paid handsomely to retain the best and brightest people to work for them.

Yeah, I stand by my claim that you don't really understand what productivity or economic value is.

And to be clear, I think I would be considered extremely high-skilled (quantitative PhD) and am paid very well. I've been offered a lot more to do lower value work, and I did make a lot less doing higher value work...as measured by incremental economic output, assuming you aren't so deluded to think that the only measure of economic output is a stock market index. The simple fact that the financial services industry is so much more lucrative for worker bees than even tech work should tell you everything you need to know about how well compensation maps to economic value.

LOL, you were able to determine what your incremental economic output is? This should be fun, tell me, how did you determine this?

How much value your labor delivers is not determined by how much value you think it has, it's what a competitive market decides the labor is worth. Your lack of understanding of this basic economic principle demonstrates the worthlessness of your views on productivity or economic value. This is further betrayed by your continued insistence that the financial services industry somehow provides less value than what they are being paid for.

Look, as an engineer, I respect your PhD. I don't have one. However, it's obvious that economics is not where your expertise lies. Nor is it mine, but at least I have had some education on the matter and have been running businesses for the past 10+ years. I strongly recommend that you read some basic economics books before engaging with others on the topic.

I'm not the one that was arguing that hedge-funds are productive because they help the rentier class get higher rents. Even hedge funders don't argue that!

I'm not an economist either, but, as you mention, this is about Econ 101 type stuff. If I'm so wrong in my understanding of all of this, why haven't you addressed my point that productivity gains over the last few decades have *not* accrued to the lowest skilled workers, which means a simplistic understanding of why wage increases will drive inflation might not be correct? If the idea that people will use the extra money to pay down debt is wrong, tell me why?

Differnt poster here.

There's been a massive expansion of the labour force that has occurred at the same time as productivity gains. You will see a broad correlation between increased female workforce participation in the 70's which more or less plateaued until COVID and wage stagnation. Likewise the large increase of immigration as after effects of Hart Kellar and large influx of skilled labour on the higher end, and unskilled labour on the lower end has drastically effected wages suppressing them to a large degree among large swaths of society.

I agree. But none of this has anything to do with whether the establishment of a rentier class is market-distorting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm curious if those who are against the increase feel there shouldn't be a minimum wage at all? And why or why not?

My personal opinion: it should be left to the states and local areas. WV and NYC are two very different economies and cost of living. What is necessary for survival in NYC is quite different than WV.

However, a few Senators have a proposal to raise it slowly--and, I don't think it is to $15.
It would not start until after the pandemic is over--which is very wise. You don't put people out of jobs when jobs are scarce.
It would be tied to inflation.

That’s the status quo. The federal minimum is a floor. Most states have a higher wage. Raising the floor is what we are talking about. And the jobs that pay it right now, may nor even be coming back anyway. It’s an interesting time to think outside of the box on wages and the workforce. Raising the federal minimu to 15 covers the half of the low-wage work force that makes more than federal minimu but less than 15. Those jobs are probably not as easily cut as the lowest wage jobs anyway. But paying those workers more may offset some of the losses experienced at the lowest end.

Raising the minimum wage is not thinking outside of the box. There is nothing new about minimum wage. Increasing wages without increasing productivity will simply lead to inflation. This is simple economics. The federal minimum wage did not impact inflation in the past precisely because it affected only a very small number of people. But if you now suddenly apply it to 30% of the workforce, its impacts on unemployment and inflation will be substantial.

I find it ironic that you think it's a good idea for the federal government to set a "floor" that is higher or equal to all existing state minimum wage levels. That's some floor.

You are oversimplifying by a lot. We've got an almost feudalistic economy going right now, where workers are not actually reaping the benefits of increases in productivity over the past several decades. Almost all of that wealth has accrued to the top fraction of the 1%. Our economy is so balkanized, that I don't really think that you can easily apply economic theories that assume a different economic structure. A substantial increase in the minimum wage may not, in fact, lead to the level of inflation that Econ 101 might have suggested, because it might just readjust a situation where people are getting goods from charities or buying on credit to buying those goods for themselves (i.e. it may not lead to as large of a demand increase as you might expect).

I don't really know what the right answer is, but paying people a living wage seems like a good start. If there are economic consequences to that policy, then we can deal with them when they come along. But arguing for the status quo, where the majority of Americans are living hand-to-mouth and also dying in debt at the same time that the two richest men to ever have lived (and that includes one guy who almost halved his net worth in a divorce) are also Americans seems pretty f'ed up and also not good for the economy.

You use this word, feudalistic, do you know what it means? Income inequality was a symptom of feudalism but there are a wide variety of factors that can cause income inequality. Anyone who has studied the global economy in the past century knows that the present income inequality within the US is caused by dual factors of increased low-wage labor supply and globalization. Before you burst a blood vessel, I am not here to tell you what is good or bad, just what is. Globalization has been a net positive for the US as our broad economy has been able to shift significantly towards activities that have higher productivity. As a result, we see significant growth in the income levels of the top two income quintiles. As a result, the present decrease in the number of people in the middle class is largely due to a migration to the upper-middle class. I say largely because there is also a smaller portion that went to the lower-income class. The cause for this is due to the divergence of wages to per-capita GDP that occurred in the early 70s. This was in turn caused by significant growth in the supply of low/lower-skilled labor as a result of new immigration policies and increased women's participation in the labor market. Again, I'm not here to tell you what is good or bad, just what is. The immigration act of 1965 significantly tilted the US immigration policy away from western countries in Europe, towards less developed parts of the world, in order to encourage diversity. The result of this is that immigration into the US exploded since the act and the immigrants tend to be lower-skilled on average. These immigrants compete with existing low-skilled workers in the US, driving wages lower. Women entering the workforce also tend to be in lower-skilled positions, further discouraging wage growth. The combination of globalism and oversupply of lower-skill labor resulted in the present situation where the US has effectively two different economic systems: one for high-skilled workers, and one for low-skilled workers, resulting in significant income inequalities.

I just realized I wrote a much simplifier version of this comment after you did.

It is interesting that these points typically don't come up much in general economic discussions, presumably because they raise points that most don't want to hear because they challenge a number of common assumptions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

You use this word, feudalistic, do you know what it means? Income inequality was a symptom of feudalism but there are a wide variety of factors that can cause income inequality. Anyone who has studied the global economy in the past century knows that the present income inequality within the US is caused by dual factors of increased low-wage labor supply and globalization. Before you burst a blood vessel, I am not here to tell you what is good or bad, just what is. Globalization has been a net positive for the US as our broad economy has been able to shift significantly towards activities that have higher productivity. As a result, we see significant growth in the income levels of the top two income quintiles. As a result, the present decrease in the number of people in the middle class is largely due to a migration to the upper-middle class. I say largely because there is also a smaller portion that went to the lower-income class. The cause for this is due to the divergence of wages to per-capita GDP that occurred in the early 70s. This was in turn caused by significant growth in the supply of low/lower-skilled labor as a result of new immigration policies and increased women's participation in the labor market. Again, I'm not here to tell you what is good or bad, just what is. The immigration act of 1965 significantly tilted the US immigration policy away from western countries in Europe, towards less developed parts of the world, in order to encourage diversity. The result of this is that immigration into the US exploded since the act and the immigrants tend to be lower-skilled on average. These immigrants compete with existing low-skilled workers in the US, driving wages lower. Women entering the workforce also tend to be in lower-skilled positions, further discouraging wage growth. The combination of globalism and oversupply of lower-skill labor resulted in the present situation where the US has effectively two different economic systems: one for high-skilled workers, and one for low-skilled workers, resulting in significant income inequalities.

1. You need to learn to use paragraphs. (But I still read this.)
2. I never disputed any of these trends, but I think they oversimplify. Why, because they don't really account for the growing capitalistic "rentier" class, which distorts the economy in many, many ways.

There are actually three systems in the US: high-skilled workers, low-skilled workers, and asset-holders (i.e. rentier capitalists). The biggest problem I see in our economy is a failure to be honest about that third group. To use a timely example, Ivanka Trump and Jared Kushner have demonstrated themselves to be more or less incapable of doing anything useful or productive (not sure whether to characterize them as high- or low-skilled...they have fancy degrees but don't appear to have learned anything in school), yet they have a high income, much of which comes rents off of assets that they own (in Kushner's case, literal rents). Their income and wealth is completely divorced from their productivity or their skills.

I think that the disparity in wealth between high-skilled and low-skilled workers is a problem, but I think a far bigger problem is the wealth accumulation at the very top...which, among other things, has given capitalists the ability (through political influence among other things) to hoard all of the benefits of increase productivity for themselves. Yes, increasing the minimum wage will likely lead jobs to be automated away and/or shipped overseas. But that can't be done for every job. And corporations are notoriously short-term. Paying people a living wage will also lead to a more stable and reliable low-skilled workforce, reducing turnover...thereby lowering the overall cost of low-skilled labor. By how much remains to be seen.

The bolded part is an oxymoron. Capitalistic, by definition, is something that is based on voluntary exchange, which is exactly the opposite of economic distortion.

Regardless of your views on assets and those that own them, assets are a resource that has economic value. When an asset owner sells the asset, he is transferring ownership of the asset to someone who can achieve higher economic gain from it. When he buys an asset, he is providing liquidity for someone who can derive less economic value from the asset. When he rents out an asset, he is providing temporary use of the asset to someone who does not want to or can incur the cost of owning the asset outright, again to engage in some economic activity that provides greater returns than the cost of renting the asset. All of these scenarios has value even if you don't like it, and whether you harbor distates for the people engaging in these activities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm curious if those who are against the increase feel there shouldn't be a minimum wage at all? And why or why not?

My personal opinion: it should be left to the states and local areas. WV and NYC are two very different economies and cost of living. What is necessary for survival in NYC is quite different than WV.

However, a few Senators have a proposal to raise it slowly--and, I don't think it is to $15.
It would not start until after the pandemic is over--which is very wise. You don't put people out of jobs when jobs are scarce.
It would be tied to inflation.

That’s the status quo. The federal minimum is a floor. Most states have a higher wage. Raising the floor is what we are talking about. And the jobs that pay it right now, may nor even be coming back anyway. It’s an interesting time to think outside of the box on wages and the workforce. Raising the federal minimu to 15 covers the half of the low-wage work force that makes more than federal minimu but less than 15. Those jobs are probably not as easily cut as the lowest wage jobs anyway. But paying those workers more may offset some of the losses experienced at the lowest end.

Raising the minimum wage is not thinking outside of the box. There is nothing new about minimum wage. Increasing wages without increasing productivity will simply lead to inflation. This is simple economics. The federal minimum wage did not impact inflation in the past precisely because it affected only a very small number of people. But if you now suddenly apply it to 30% of the workforce, its impacts on unemployment and inflation will be substantial.

I find it ironic that you think it's a good idea for the federal government to set a "floor" that is higher or equal to all existing state minimum wage levels. That's some floor.

You are oversimplifying by a lot. We've got an almost feudalistic economy going right now, where workers are not actually reaping the benefits of increases in productivity over the past several decades. Almost all of that wealth has accrued to the top fraction of the 1%. Our economy is so balkanized, that I don't really think that you can easily apply economic theories that assume a different economic structure. A substantial increase in the minimum wage may not, in fact, lead to the level of inflation that Econ 101 might have suggested, because it might just readjust a situation where people are getting goods from charities or buying on credit to buying those goods for themselves (i.e. it may not lead to as large of a demand increase as you might expect).

I don't really know what the right answer is, but paying people a living wage seems like a good start. If there are economic consequences to that policy, then we can deal with them when they come along. But arguing for the status quo, where the majority of Americans are living hand-to-mouth and also dying in debt at the same time that the two richest men to ever have lived (and that includes one guy who almost halved his net worth in a divorce) are also Americans seems pretty f'ed up and also not good for the economy.

You use this word, feudalistic, do you know what it means? Income inequality was a symptom of feudalism but there are a wide variety of factors that can cause income inequality. Anyone who has studied the global economy in the past century knows that the present income inequality within the US is caused by dual factors of increased low-wage labor supply and globalization. Before you burst a blood vessel, I am not here to tell you what is good or bad, just what is. Globalization has been a net positive for the US as our broad economy has been able to shift significantly towards activities that have higher productivity. As a result, we see significant growth in the income levels of the top two income quintiles. As a result, the present decrease in the number of people in the middle class is largely due to a migration to the upper-middle class. I say largely because there is also a smaller portion that went to the lower-income class. The cause for this is due to the divergence of wages to per-capita GDP that occurred in the early 70s. This was in turn caused by significant growth in the supply of low/lower-skilled labor as a result of new immigration policies and increased women's participation in the labor market. Again, I'm not here to tell you what is good or bad, just what is. The immigration act of 1965 significantly tilted the US immigration policy away from western countries in Europe, towards less developed parts of the world, in order to encourage diversity. The result of this is that immigration into the US exploded since the act and the immigrants tend to be lower-skilled on average. These immigrants compete with existing low-skilled workers in the US, driving wages lower. Women entering the workforce also tend to be in lower-skilled positions, further discouraging wage growth. The combination of globalism and oversupply of lower-skill labor resulted in the present situation where the US has effectively two different economic systems: one for high-skilled workers, and one for low-skilled workers, resulting in significant income inequalities.

I just realized I wrote a much simplifier version of this comment after you did.

It is interesting that these points typically don't come up much in general economic discussions, presumably because they raise points that most don't want to hear because they challenge a number of common assumptions.

Yes, because it's de rigueur to blame greed and capitalism for the ills of society. Economists that suggest that standard well-understood economic forces are at play are doomed to be ostracized by their peers and others in "polite society".

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

You use this word, feudalistic, do you know what it means? Income inequality was a symptom of feudalism but there are a wide variety of factors that can cause income inequality. Anyone who has studied the global economy in the past century knows that the present income inequality within the US is caused by dual factors of increased low-wage labor supply and globalization. Before you burst a blood vessel, I am not here to tell you what is good or bad, just what is. Globalization has been a net positive for the US as our broad economy has been able to shift significantly towards activities that have higher productivity. As a result, we see significant growth in the income levels of the top two income quintiles. As a result, the present decrease in the number of people in the middle class is largely due to a migration to the upper-middle class. I say largely because there is also a smaller portion that went to the lower-income class. The cause for this is due to the divergence of wages to per-capita GDP that occurred in the early 70s. This was in turn caused by significant growth in the supply of low/lower-skilled labor as a result of new immigration policies and increased women's participation in the labor market. Again, I'm not here to tell you what is good or bad, just what is. The immigration act of 1965 significantly tilted the US immigration policy away from western countries in Europe, towards less developed parts of the world, in order to encourage diversity. The result of this is that immigration into the US exploded since the act and the immigrants tend to be lower-skilled on average. These immigrants compete with existing low-skilled workers in the US, driving wages lower. Women entering the workforce also tend to be in lower-skilled positions, further discouraging wage growth. The combination of globalism and oversupply of lower-skill labor resulted in the present situation where the US has effectively two different economic systems: one for high-skilled workers, and one for low-skilled workers, resulting in significant income inequalities.

1. You need to learn to use paragraphs. (But I still read this.)
2. I never disputed any of these trends, but I think they oversimplify. Why, because they don't really account for the growing capitalistic "rentier" class, which distorts the economy in many, many ways.

There are actually three systems in the US: high-skilled workers, low-skilled workers, and asset-holders (i.e. rentier capitalists). The biggest problem I see in our economy is a failure to be honest about that third group. To use a timely example, Ivanka Trump and Jared Kushner have demonstrated themselves to be more or less incapable of doing anything useful or productive (not sure whether to characterize them as high- or low-skilled...they have fancy degrees but don't appear to have learned anything in school), yet they have a high income, much of which comes rents off of assets that they own (in Kushner's case, literal rents). Their income and wealth is completely divorced from their productivity or their skills.

I think that the disparity in wealth between high-skilled and low-skilled workers is a problem, but I think a far bigger problem is the wealth accumulation at the very top...which, among other things, has given capitalists the ability (through political influence among other things) to hoard all of the benefits of increase productivity for themselves. Yes, increasing the minimum wage will likely lead jobs to be automated away and/or shipped overseas. But that can't be done for every job. And corporations are notoriously short-term. Paying people a living wage will also lead to a more stable and reliable low-skilled workforce, reducing turnover...thereby lowering the overall cost of low-skilled labor. By how much remains to be seen.

The bolded part is an oxymoron. Capitalistic, by definition, is something that is based on voluntary exchange, which is exactly the opposite of economic distortion.

Regardless of your views on assets and those that own them, assets are a resource that has economic value. When an asset owner sells the asset, he is transferring ownership of the asset to someone who can achieve higher economic gain from it. When he buys an asset, he is providing liquidity for someone who can derive less economic value from the asset. When he rents out an asset, he is providing temporary use of the asset to someone who does not want to or can incur the cost of owning the asset outright, again to engage in some economic activity that provides greater returns than the cost of renting the asset. All of these scenarios has value even if you don't like it, and whether you harbor distates for the people engaging in these activities.

You seem wholly unwilling to engage with my points. Considering that I'm on the cusp earning more off of my assets than through my work, I feel like I have a decent understanding of the fact that income from high-skilled work is different from rents from assets...and that neither of them is directly tied to economic productivity.

[Anonymous]

Anonymous wrote:
I'm not the one that was arguing that hedge-funds are productive because they help the rentier class get higher rents. Even hedge funders don't argue that!

I'm not an economist either, but, as you mention, this is about Econ 101 type stuff. If I'm so wrong in my understanding of all of this, why haven't you addressed my point that productivity gains over the last few decades have *not* accrued to the lowest skilled workers, which means a simplistic understanding of why wage increases will drive inflation might not be correct? If the idea that people will use the extra money to pay down debt is wrong, tell me why?

Isn't that the very definition of improving market efficiency by getting higher rent for an asset by finding the right renter that can derive the most economic value out of an asset? Such an improvement in efficiency improves productivity and whoever can make that happen is rightfully rewarded for that contribution.

I have addressed the divergence between productivity gains and wages. Look for the keywords "immigration" and "workforce participation".

Wage increase alone does not drive inflation. Wage increase without productivity drives inflation. Whether additional income is used to pay down debt or used for additional spending is only meaningful at an anecdotal level since looking at broad consumer behavior, debt levels are positively correlated with income levels: people who make more money also take on more debt. So at least broadly speaking, it's irrational to posit that raising the minimum wage will lead to a broad behavior of debt repayment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

You use this word, feudalistic, do you know what it means? Income inequality was a symptom of feudalism but there are a wide variety of factors that can cause income inequality. Anyone who has studied the global economy in the past century knows that the present income inequality within the US is caused by dual factors of increased low-wage labor supply and globalization. Before you burst a blood vessel, I am not here to tell you what is good or bad, just what is. Globalization has been a net positive for the US as our broad economy has been able to shift significantly towards activities that have higher productivity. As a result, we see significant growth in the income levels of the top two income quintiles. As a result, the present decrease in the number of people in the middle class is largely due to a migration to the upper-middle class. I say largely because there is also a smaller portion that went to the lower-income class. The cause for this is due to the divergence of wages to per-capita GDP that occurred in the early 70s. This was in turn caused by significant growth in the supply of low/lower-skilled labor as a result of new immigration policies and increased women's participation in the labor market. Again, I'm not here to tell you what is good or bad, just what is. The immigration act of 1965 significantly tilted the US immigration policy away from western countries in Europe, towards less developed parts of the world, in order to encourage diversity. The result of this is that immigration into the US exploded since the act and the immigrants tend to be lower-skilled on average. These immigrants compete with existing low-skilled workers in the US, driving wages lower. Women entering the workforce also tend to be in lower-skilled positions, further discouraging wage growth. The combination of globalism and oversupply of lower-skill labor resulted in the present situation where the US has effectively two different economic systems: one for high-skilled workers, and one for low-skilled workers, resulting in significant income inequalities.

1. You need to learn to use paragraphs. (But I still read this.)
2. I never disputed any of these trends, but I think they oversimplify. Why, because they don't really account for the growing capitalistic "rentier" class, which distorts the economy in many, many ways.

There are actually three systems in the US: high-skilled workers, low-skilled workers, and asset-holders (i.e. rentier capitalists). The biggest problem I see in our economy is a failure to be honest about that third group. To use a timely example, Ivanka Trump and Jared Kushner have demonstrated themselves to be more or less incapable of doing anything useful or productive (not sure whether to characterize them as high- or low-skilled...they have fancy degrees but don't appear to have learned anything in school), yet they have a high income, much of which comes rents off of assets that they own (in Kushner's case, literal rents). Their income and wealth is completely divorced from their productivity or their skills.

I think that the disparity in wealth between high-skilled and low-skilled workers is a problem, but I think a far bigger problem is the wealth accumulation at the very top...which, among other things, has given capitalists the ability (through political influence among other things) to hoard all of the benefits of increase productivity for themselves. Yes, increasing the minimum wage will likely lead jobs to be automated away and/or shipped overseas. But that can't be done for every job. And corporations are notoriously short-term. Paying people a living wage will also lead to a more stable and reliable low-skilled workforce, reducing turnover...thereby lowering the overall cost of low-skilled labor. By how much remains to be seen.

The bolded part is an oxymoron. Capitalistic, by definition, is something that is based on voluntary exchange, which is exactly the opposite of economic distortion.

Regardless of your views on assets and those that own them, assets are a resource that has economic value. When an asset owner sells the asset, he is transferring ownership of the asset to someone who can achieve higher economic gain from it. When he buys an asset, he is providing liquidity for someone who can derive less economic value from the asset. When he rents out an asset, he is providing temporary use of the asset to someone who does not want to or can incur the cost of owning the asset outright, again to engage in some economic activity that provides greater returns than the cost of renting the asset. All of these scenarios has value even if you don't like it, and whether you harbor distates for the people engaging in these activities.

You seem wholly unwilling to engage with my points. Considering that I'm on the cusp earning more off of my assets than through my work, I feel like I have a decent understanding of the fact that income from high-skilled work is different from rents from assets...and that neither of them is directly tied to economic productivity.

Sorry, I didn't really see any points other than the one I've already addressed. Can you bold any part that you think I didn't address? Just because you make money through assets and labor doesn't mean you understand productivity, any more than the degree to which an athlete understands Newtonian physics.

[Anonymous]

Given that the value of a dollar is less and less these days, since the Fed keeps printing money ... I'm not sure raising the MW to $15 really matters at all one way or the other.

https://www.statista.com/statistics/1032048/value-us-dollar-since-1640/

[Anonymous]

Anonymous wrote:Given that the value of a dollar is less and less these days, since the Fed keeps printing money ... I'm not sure raising the MW to $15 really matters at all one way or the other.

https://www.statista.com/statistics/1032048/value-us-dollar-since-1640/

*cough*

A 15 dollar minimum wage is LOW.

https://www.newsweek.com/sen-john-thune-opposing-15-min-wage-says-he-earned-6-kidthats-24-inflation-1571915

[Anonymous]

[Anonymous]

Doesn’t raising the minimum wage also disqualify people from getting federal and state handouts? Isn’t that the goal of the GOP- fiscal responsibility?

As for small store owners not being able to pay their employees- those employees are already clamoring to work at Costco, Walmart and Target. It’s been happening for decades now.

[Anonymous]

Centrist democrat here that supports the $15 minimum wage. However if I was going to make. a counter argument it would be that the majority of minimum wage workers in states that have not done it yet are not supporting it or not bothering to vote in candidates that would make it a state law. I don't see any reason to give up political capital to raise the minimum wage in states where their own voters do not care.

[Anonymous]

As predicted, not gonna happen.