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383 points imartin2k | 15 comments | | HN request time: 0.745s | source | bottom
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arekkas ◴[] No.14330355[source]
Time and time again, Uber has shown that undercutting their competitors in pricing is not done through smart technology or better business models, but by avoiding regulations and getting away with inhumane wages.
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patrickaljord ◴[] No.14330402[source]
The alternative for many unskilled people would be to be unemployed and having even less income, would that be more or less inhumane?
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argonaut ◴[] No.14330431[source]
This is essentially an argument against having a minimum wage in general (and more broadly, certain labor regulations). It's a complex issue that we could argue about for pages and pages of comments, but suffice to say the vast majority of the population in the US, let alone Sweden, disagree with you.

Which is that in some cases it is better to have some unemployed people and some (ideally a lot more) people earning a good wage, versus both groups earning a crappy wage. Combined with a welfare system.

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1. eru ◴[] No.14330544[source]
And most economists agree with the grandfather comment..
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2. jellicle ◴[] No.14330665[source]
Not at all, no. Throughout the world, unemployment is correlated with the local minimum wage - as the minimum wage increases, unemployment decreases. Somalia (no minimum wage) has an unemployment rate of over 60%. Increasing the minimum wage in US states produces no negative employment effects.

There are, of course, paid professional conservative economists who will tell you whatever their bosses want them to in support of pro-billionaire economic policies.

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3. patrickaljord ◴[] No.14330679[source]
> Increasing the minimum wage in US states produces no negative employment effects.

Why not increase it to $500 an hour then? When you increase the price of cigarettes, people buy less cigarettes, when you increase the price of cars, people buy less of it. What do you think happens when you increase the price of labor and why do you think it has magic powers that makes it avoid these basic laws of economics?

What about people who prefer to work for Uber for $4 per hour rather than stay unemployed? Would you tell them "Sorry but this is inhumane, I can't let you do that to yourself and I'm ready to vote laws to forbid you to do as you please with your free time and send people like you to jail if they persist"? Do you know better than they do what's best for them and how they can use their own body? Doesn't that make you an authoritarian?

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4. ryanwaggoner ◴[] No.14330685[source]
Wow. And there aren't any other conditions in Somalia beyond their lack of minimum wage that might be influencing that unemployment rate?

Lots of respected economists are on both sides of this issue, whether you want to be honest about that or not.

5. brownbat ◴[] No.14330741[source]
> There are, of course, paid professional conservative economists...

Accusing the other side of bad motives without evidence is the refuge of people who divide the world up into "good" people who think like them and "evil" people who have different opinions that aren't worth studying.

It's intellectually lazy and kills intelligent discourse.

Consider the golden rule here. Are you a paid shill by unions? Are you an agent provocateur spreading socialist propaganda? Is this something the other side should accuse you of without evidence to dismiss your opinions wholecloth?

Should we all adopt this tactic and assume everyone else's motives are suspect unless they tow our preferred party line?

How would that ever produce useful conversations in any way?

If people adopt a certain position and you can't conceive of them adopting it without something sinister going on, then maybe you haven't sufficiently studied their perspective.

6. mattmanser ◴[] No.14330826[source]
So how come the studies find that by introducing minimum wage no jobs were lost, it just increased prices by a very small amount?

A 2004 study of available literature, “The Effect of Minimum Wage on Prices,” analyzed a wide variety of research on the impact of changes in the minimum wage. The paper, from the University of Leicester, found that firms tend to respond to minimum wage increases not by reducing production or employment, but by raising prices. Overall, price increases are modest: For example, a 10 percent increase in the minimum wage would increase food prices by no more than 4 percent and overall prices by no more than 0.4 percent, significantly less than the minimum-wage increase.

In a 2010 study published in Review of Economics and Statistics, scholars Arindrajit Dube, T. William Lester and Michael Reich also looked at low-wage sectors in states that raised the minimum wage and compared them with those in bordering areas where there were no mandated wage changes. They found “strong earnings effects and no employment effects of minimum-wage increases.”

A 2012 paper published in the Journal of Public Economics, “Optimal Minimum Wage Policy in Competitive Labor Markets,” furnishes a theoretical model that lends some support to the empirical insights of Krueger/Card. The paper, from David Lee at Princeton and Emmanuel Saez at UC-Berkeley, concludes: “The minimum wage is a useful tool if the government values redistribution toward low wage workers, and this remains true in the presence of optimal nonlinear taxes/transfers.” However, under certain labor market conditions, it may be better for the government to subsidize low-wage workers and keep the minimum wage relatively low.

https://journalistsresource.org/studies/economics/inequality...

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7. ponow ◴[] No.14330964[source]
Correlation is not causation.
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8. gnaritas ◴[] No.14330982{3}[source]
Whenever someone trots out the "basic laws of economics" it usually means they're trying really hard to ignore the complexities of reality and force the world to fit into a simplistic and wrong model in their head. Study after study supports his position while yours is purely ideological and not in alignment with the facts. Rather than even discuss the facts, you've flipped to accusing him of being an authoritarian, and you think you're being the rational one here... really?

Try and understand that not everyone thinks employment is the end goal, rather being able to live a decent life is and that requires a livable wage and most of the western world has decided it's better to have a decent safety net that defines that floor than to let people be forced by circumstances to work for less than a livable wage. Try and understand what the words "wage slavery" mean to those who find meaning in that term, regardless of how you feel about it.

All democracies are authoritarian in the sense that you use the word; the minority will always feel wronged in some way by the majority forcing them to do things they're ideologically against. Using the word in that way makes it meaningless and makes your argument look weak.

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9. gnaritas ◴[] No.14331070{3}[source]
Unless it is, which it sometimes is.
10. paulddraper ◴[] No.14332125{3}[source]
You can find just as many studies that say the opposite

https://mises.org/library/yes-minimum-wages-still-increase-u...

http://clas.berkeley.edu/research/brazil-progress-and-pessim...

http://www.frbsf.org/economic-research/publications/economic...

Regardless, there are two possible outcomes from minimum wage:

(1) inflation

(2) unemployment

Your cited articles support the former; others think it will be the latter. In either case, I doubt the market manipulation helps overall.

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11. Noos ◴[] No.14332359{3}[source]
Do your budget sometime with an effective wage equal to $4 an hour. What does it cover? What can a person do effectively with that $4 an hour? Will it lift them out of poverty? Can they live on an effective wage of $4 an hour working 40 hours a week and even afford shelter and food?

I mean, do people not get how little money this is?

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12. eru ◴[] No.14353370{4}[source]
$0 is even less than $4. So why forbid them from making even those paltry $4?
13. eru ◴[] No.14353378{4}[source]
A minimum wage still sets the floor to zero. It just outlaws values between $0 and somelike like $8.
14. eru ◴[] No.14353411{3}[source]
Walmart and McDonald's employ a big portion of their employers at minimum wage (and would perhaps pay less, if that was legal). Alas, the customers of Walmart and McDonald's are mostly poor people, too. If the price rises are real, those poor people are footing the bill.

Whereas rich people tend to shop at more upscale places where the minimum wage is not a binding constraint (ie people make more).

Instead of effectively taxing poor people to pay for other poor people via induced price rises; why not tax rich people with eg an income tax and distribute the proceed via a social safety net or a basic income to the poor?

15. eru ◴[] No.14353505{4}[source]
There's at least one other possible outcome:

Workers take their compensation in a variety of ways. On the high end, Google famously offers perks like food and nap pods.

But even on the low end, people are interested in things other than immediate cash on hand. For example, learning and mentoring to grow their skillset and move up in life.

Some of these opportunities come for free, and even immediately bring benefits. Other costs the business money.

Without a minimum wage, employees and employers are free to choose different trade-offs. And especially young people early in their career might be willing to put quite a premium on mentoring.

With a minimum wage, a big part of the space of possible trade-offs is unavailable.

Now---this isn't just idle talk: there's a bunch of studies about how one effect of (increasing) minimum wage is decreased social mobility and people getting stuck at the bottom. (Sorry, not enough time to look them up now. But can do, if there's demand.)