SoylentNews is people
SoylentNews
"In what has become a running joke amongst those skeptical of the claim that minimum wage increases have no effect on unemployment, a recent report by the Employment Policies Institute showed that 174 of the 184 co-sponsors of a bill to raise the federal minimum wage to $15 an hour hired unpaid interns."
"In a review of over 100 studies, economists David Neumark and William Wascher found that,A sizable majority of the studies surveyed ... give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries." http://www.nber.org/papers/w12663.pdf
"Yes, minimum wages still do increase unemployment."
https://mises.org/blog/seattles-minimum-wage-supporters-ignore-facts
(Score: 0) by Anonymous Coward on Monday July 31 2017, @03:44PM (3 children)
The market failure here is that companies can bring in labor from other markets, or can send the work overseas to people that can afford to work for less. The result is that an increasing number of people are in a position where they have no bargaining power at all because all of the jobs available are paying the same kind of money.
That's a major market failure. I'm really not surprised that you don't get it though. It's abundantly clear that you failed econ 101.
As for my fairytale, that's not even remotely true. There's more than enough money to make it happen, where do you think all those trillions of dollars that are held by the richest came from? Here's a hint, most of it is money that traditionally would be paid out to people actually producing the products and services that are being sold.
Yes, the jobs may have disappeared, but because of the problems associated with high unemployment, I see no reason to believe that the scenario you're outlining would ever happen. Places with high unemployment and little hope of improvement invariably become cesspools with high crime and terrorism before too long.
(Score: 0) by Anonymous Coward on Monday July 31 2017, @04:18PM (2 children)
You keep using the term "market failure" for something that is actually a market function. Firms seeking out affordable labour and friendly tax regimes are normal functions.
Now, if you were to say that a desirable outcome would be the devaluation of the dollar to the point that midwestern american labour were justifiable again, that would at least be an open question in international finance. Arguably the dollar is overvalued for a number of reasons - but within that context, firms going overseas in search of affordable labour is a simple consequence of supply and demand.
Actual market failures are not simply supply and demand at work, but situations where perverse incentives lead to destructive outcomes, such as pollution, or people eating seed corn or whatever. The fact that some guy somewhere can't get a job isn't a market failure.
Now, if you're trying to make the case that an imbalance in labour rates and outcomes is a market failure, you have quite a hill to climb. For example, you'd need to illustrate that it's not just a temporary imbalance in a high friction market (which labour is well known to be).
But maybe you have that proof on hand. The floor is yours.
(Score: 0) by Anonymous Coward on Monday July 31 2017, @10:01PM (1 child)
This isn't simply a case of supply and demand, this is a case of the virtual cartelization of employment by companies that have no incentive at all to negotiate over the wages offered as for many of them it's cheaper just to buy politicians that can change the rules for them. You see it all over the place with the spread of anti-worker language being required to be employed. Things like those non-disclosure and non-compete clauses that have been proliferating as well as the requirement that disputes be settled via binding arbitration rather than in the courts.
They're probably not literally taking up these terms after talking with each other, but the people that write these contracts know each other and they see what the courts do with them. Everytime there's a new court ruling that says it's OK, those terms magically start to pop up elsewhere.
A lot of this is because there's an inadequate supply of jobs being offered to allow the workers to participate in the market. You can't really negotiate if there isn't another job offer from somebody with different terms. It's basically, take it or leave it and the government itself isn't getting involved on behalf of the employees.
Now, if the government weren't owned by corporations, I'd be more inclined to believe that this isn't a market failure, but it takes a herculean effort to come to any other conclusion. The system nearly ate itself in a literal sense only 6 years ago.
(Score: 1) by khallow on Monday July 31 2017, @11:31PM
No, it's not. There's a vast sea of employers out there.
This is a perverse outcome of defending against litigation. Mere inappropriate language can cost a business tens to hundreds of thousands of dollars in the US (with similar consequences in many EU countries as well). So now there's a business case for policing language at work.
Well, there's a solution. Either decrease the supply of labor or increase the demand for it. The latter is nicer and more beneficial.