/sci/ - Science & Math

Everyone knows that. I can't think of anyone who says otherwise.

>economists can do nothing but write as advocates for ideological interests

ayup

Sorely in need of context:

http://en.wikipedia.org/wiki/Minimum_wage

$7.50 an hour here.

I agree, but this isn't science.

Troll.

economics is the only real science

op is a faggot

http://americancity.org/magazine/article/labor-making-low-wage-work-pay-to/

>Until recently, most economists strongly believed that minimum and living wages hurt the low-paid, since employers could be expected to respond to the increased cost of labor by employing fewer workers. A recent study by two well-known economists, however, David Card and Alan Krueger, has called this conventional wisdom into question. Card and Krueger looked at data on variations in the minimum wage from state to state to analyze the effects of a higher minimum wage on employment. They found, surprisingly, that the 1992 increase in New Jersey’s minimum wage had a negligible impact on employment, and if anything, may have actually caused a small increase in employment in the fast-food industry.

>This finding was initially met with great skepticism. Nobel Laureate economist James Buchanan lashed out at Card and Krueger in the Wall Street Journal shortly after the study:

>“…no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimum scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.”

>Nevertheless, other recent research by a number of authors leads to the same overall conclusion—moderate increases in the minimum wage have had negligible (or even positive) effects on employment—and the economics profession is now more equivocal about the effect of instituting minimum wages.

>>3014872
> >...no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimum scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.

tl;dr: anyone who believes X is a moron.

Seriously, I would've thought nobel prize winners would be above using the "my opponent is a moron" style of debate.

>>3014886
agreed.

>>3014891
Hurr of course they aren't a nobel prize in economics doesn't even mean anything because it's given by a bank! Derp.

>>3014887
To be fair Card's study did have some serious flaws... like just collecting their data by calling up fast food restaurants and asking how many people were working.

>>3014902
Or that the previous minimum wages were set at below the equilibrium point.

>>3014872
agreed with whoever said that. If you think that a minimum wage doesn't increase unemployment you might as well throw out everything in economics that has to do with supply and demand.

if people were forced to work for $2/hour, I think it's safe to say they'd deliberately fuck their workplace as well as the rest of society out of frustration. Just look at all the shit current minimum wage employees do: they spit on your burgers and throw beer bottles into your roads because they're pissed off for being forced into such a lousy deal.

I think this.

>>3014921
moar of these pl0x kthx

>>3014921
>>3014929
Get the fuck out of here, this isn't /new/. We're trying to have a serious discussion about a controversy in Economics.

>>3014921
nice strawmen.

>>3014914
I believe you're referring to an externality when the PMB of the workers is below SMB, creating a deadweight loss and making society as a whole worse off. Not really what the study was about.

>>3014932
you sure showed me who's boss

>>3014910
>you might as well throw out everything in economics
not just might as well. We should throw out economics

http://www.youtube.com/watch?v=u6XAPnuFjJc&feature=related

Why should I trust what either side of the aisle says? they all have an agenda to push.

>>3014947
congratulations on being the most boring kind of cynic

>>3014936
>suggests we "throw out economics"
>provides link to youtube video
>demonstrates inability to actually make an argument and likely doesn't even understand the video
GJ brah

>>3014947
False dichotomy. And so wrong.

An artificial increase in a wage for millions of jobs is a job killer. This is not hard to understand. Raising the cost of making a good, raises the cost of the good, and then lowers the amount of buyers.

>>3014929
>>3014935
Wow, cool reaction images. You should totally screencap this so you can show how you owned me.

>>3014955
>Thinks that anything on 4chan counts as an argument
thanks I could help bro

This, OP, is how true trolls roll:

http://www.adbusters.org/magazine/75/Economic_Indoctrination.html

>>3014929

>>3014969
tl;dr

>>3014975
oh god you're making my body so ready

True but increasing minimum wage increases the general well being of society and allows distribution of income to be more equal.

In short it's trading off some economic efficiency for social wellbeing.

>>3015013
Why do it with a minimum wage instead of a negative income tax or such, then?

>>3015013

We should make the minimum wage 1 million dollars an hour then.

Socialism or any ideology that will attempt to make people's income more "equal" is always based on an IGNORANCE of economics.

>>3014975
He saved billions of lives with Gorbachev, but he was senile.

>>3015001

cool strawman bro

>>3015013
Actually, when you achieve efficiency you also maximize social wellbeing, as the workers are part of society.

>>3014932

and what controversy would that be? Whether there should or should not be a minimum wage? Because that controversy was settled more than 100 years ago.

>>3015036
>Actually, when you achieve efficiency you also maximize social wellbeing, as the workers are part of society.

Protip: For a realistic system, there are /many/ points of pareto efficiency, including a single dictatorship where one man owns everything.

Please stop speaking out of your ass.

>>3015028
>>3015036
Let's just reinstate slave economy of Classical Greece and have 100% economic efficiency then.

>>3015028
I don't see how ignorance of a fake science leads to socialism

Does ignorance of Christian theology lead to atheism?

Minimum wage is a good way to put teens and minorities out of work.

/thread

>>3015043
Camp-following whore detected.

>>3015028

1) This has nothing to do with Socialism. You don't know what that word means.
2) There are negative and positive outcomes to almost any economic act. The relationship between these is not necessarily linear. Increasing something up to a point will have a greater increase in welfare than increasing it further.

More importantly, a respectable argument can be made for minimum wages increasing economic growth and job numbers (at the risk of inflation). Increased wages within the population generate increased aggregate demand, thereby generating an incentive for firms to produce more (standard supply and demand) to supply this new demand. As a result, more workers must be hired in order to produce higher quantities of goods.

>>3015049
Huh? That's not the assumption in this case, an individual market and as such does not require GE analysis.

>>3015063
>Increased wages within the population generate increased aggregate demand

Isn't that only true if the quantity of labor remains the same before and after the minimum wage increase? Which is the entire debate to begin with?

>>3015054

minimum wage is a good way to motivate people to get work instead of living off welfare

full employment ftw

>>3015062

go fuck yourself, I don't even care if you're trolling, the fact that there are people who genuinely don't believe in the minimum wage is fucking revolting.

>>3015063

1. equality of wealth is only socialism/communism/etc. You do not know what the word means.
2. There is no benefit to raising the minimum wage. It is simply just like the broken window fallacy. This is because business will not stay the same in sales per capita at a raised minimum wage. The overall level will increase but per capita will decrease.

>>3015079
>believe
Camp-following whore detected~

>>3015073
I have no clue what you're talking about. I do know that efficiency is a shitty stupid measure of societal well being. As you have not yet retracted this claim, that makes you an asshat.

>>3015076

No, because the increased demand creates new jobs anyway. Thats how economic booms start.

>>3015079

The real minimum wage is 0 dollars.

>>3015086

so much the better for socialism, then

>>3015063
So if there is inflation, won't the real minimum wage likely end up back where it was before? Sneaky invisible hand.

>>3015076

provide a single piece of evidence that increases in the minimum wage decrease employment. Becuase all studies show that it doesn't have a real impact one way or the other.

>>3015114

example: every single manufacturing job that no longer exists here

>>3015091
In economics, Pareto optimality is used in analysing the behavior of all individual economic agents and markets. It is acheived when the social welfare function meets the utility possibility curve. We are only talking about one market, where there is a wage increase. In this case, this is how efficiency is often defined.

>>3015135
So, are you still trying to say efficiency is a good indicator of societal well being? Really? It's not too late to admit you were mistaken, so we can continue a reasonable conversation.

>>3015129

uh, so? our normal rate of unemployment isn't any higher now than it was before minimum wage was implemented. we just transitioned to a post-industrial economy. unless you WANT to go back to the way things were at the turn of the century, what's so bad about the evolution of the American job market?

>>3015086

>equality of wealth is only socialism/communism/etc.

Firstly, minimum wages are in no sense equality.
Secondly, socialism and communism are not necessarily anything to do with equality of incomes, nor have they ever been. There's a myriad of different beliefs in that regard within the far-left. Rather than living off cold-war straw mans, you could try, I don't know, learning something?

>There is no benefit to raising the minimum wage.

I just showed you a benefit.

>It is simply just like the broken window fallacy.

No, actually, it's nothing like that whatsoever. Would you rather use terms you don't understand or make a point?

>This is because business will not stay the same in sales per capita at a raised minimum wage.

No, they will increase.

>>3015076

It's a chicken and egg problem, really. Will the increase in employment resulting from increased aggregate demand take effect, or will companies lay off workers in response to the increase and therefore distort it?
It depends on the industry, I would say, and therefore the overall effect will depend upon the structure of the economy. The 'stickiness' of jobs varies greatly from industry to industry.
But generally speaking, in such a situation and so long as the firm in question is sustainable, they will not reduce their workforce in response to a minimum wage because, while it may be in the best interests of profitability, this is not necessarily a managerial concern. Their own concerns, such as the benefits they receive from individually managing large wings of corporations and what not, are their chief concern. Why would they ruin their own well-being for the good of an abstract company? They are the rational agent, not it.

Ah. So /sci/ is where /newsfront/ lives now? How sad.

>>3015129
>manufacturing jobs
Problem: even without a minimum wage the difference in cost of living and the currency exchange rates would have caused the off-shoring of manufacturing jobs anyway because you literally cannot live in America on 2 USD/wk.

>>3015149
Yes. At that equilibrium price and level of output, societal well-being is maximised. That's all there is to it.

>>3015165
Pretty much.

>>3015171
You're a retard. Die in a fire along with the rest of your Ayn Rand groupies please.

I hate debates like these. They're like debating the garnish on a shit sandwich.

The real problem is capitalism.

>>3015158

They are an attempt to increase equality, silly. The fact that they fail hardcore is the problem of socialists.

There is no benefit to lowering per capita gdp. 100 dollars is worth more to 5 people than 6.

They will decrease per capita.

Artificial increase in demand is not helpful. A correction will come.

There is no distortion when a company fires workers because the cost of the good or service they make or provide has gone up based upon artificial factors (regulation).

>>3015186
>The real problem is capitalism.
In the future, please post with a secure tripcode so I can ignore everything you say.

>>3015186
It's like debating the garnish on a shit sandwich with a bunch of scat fetishists.

They'll really excited about it but you'll never know why

>>3015179
Seriously? I've explained to you why Pareto optimality is not considered in this case, there being a difference between general equilibrium and partial equilibrium theory. You can't just misconstrue a post because you happended to see something you disagreed with, bringing up a concept that doesn't apply in this case, then insulting the poster when he gives you an explanation and all the while wanting him to admit that he was "wrong". And really, calling me an "Ayn Rand groupie"? How insulting. I think I would've at least warranted being labeled an Austrian.

>>3015208
Ok. The Ayn Rand thing might have been uncalled for, but it seems to fit. Either way, god damn I have no words for someone who wants his (only) measure of a good society to be efficiency.

Perhaps I've misconstrued your position with the implied only. I hope so.

>>3015196

>babyman who watches cartoons for babies and has never experienced the horrors of capitalism defends capitalism

shocking

ITT tripfag fight!
Everyone get in here!

>>3015214
Ok. That didn't come out well. Let me try again.

Presumably there are many points of local maxima in efficiency. If this is not the case, then you're really misusing the word.

Next, it is my humble estimation that a slave owning culture can easily have a higher efficiency than a non-slave owning culture. Thus your measure is bunk for anything we might consider to be a "good" society.

Don't get me wrong. Efficiency is a useful metric. But you went so far as to say that good efficiency implies a moral and desirable economy, which is insane.

>increasing the minimum wage to closer to a living wage
>doesn't hurt unemployment

No shit, sherlocks. Pretty sure you have to be forcing the minimum wage to a point beyond "oh man I don't even need to work a 40 hour work week to live" before employment drops. The idea is that you raise the minimum wage moderately enough so that people working those jobs don't need to work two of them in order to create a living wage.

The effect of such a policy is that because people suddenly don't need to work two jobs to get the same wage, there appears to be a rise in employment. I'm not even sure you can call it job creation because it's just job recycling and it's only because Congress and the House are full of incompetents who couldn't add two and two without a subcommittee hearing on the matter.

>>3015254

Something like 3 percent of the u.s. actually works for minimum wage. The vast majority of those people are part time. They usually are in school

They are not going for a living wage.

>>3015214
Randians don't even have a economic theory. Austrians do, however untethered to the scientific method it may be.
And since when did I say that it was the "only" measure of efficiency? Given the lack of information available to us, it is the most reasonable measure. And I suspect that you interpret efficient to have a different meaning than what it means in an economic context. Efficiency is also when the marginal social benefit is equal to the marginal social cost.

>>3015278
What I'm trying to say is that it's probably a required condition, but not a sufficient condition. Earlier, you tried to make it sound as though efficiency is a sufficient condition, and that's what I was taking issue with.

Hey Mickey, hey Scientist,

How are you guys?

Its true that by making a minimum wage you are increasing the costs of labor and forcing businesses to inevitably hire less people.

In this thread, I've seen people work on thought experiments based on a series of assumptions.

If the assumptions are wrong, then the outcomes for the thought experiments will also be wrong.


It is quite intuitive to assume that raising a minimum wage will cause costs of production to rise. However, how companies decide to deal with those increased costs is not a given. For example, some companies lower quality of output and maintain price. Some companies raise prices. Some companies hire less. The best ones become more efficient at making the same output and are able to maintain profitability.

>this is the step that the canned theories get wrong.

>>3015254
Supply side economics isn't any better, but you can't account for the impact of something like this without giving any consideration at all to the effect on the employers.

>>3015298
/wave

I may have been better. I'm still not sure if he's trying to say an efficient economy is a sufficient condition for a desirable economy. I'm pretty sure that's what he's saying, so I'm pissed.

>>3015299

You are assuming companies are not operating close to efficiency. That is a silly assumption.

>>3015312
it's silly to assume that they're not at 100% efficiency? as opposed to assuming that they are?

please tell me you're joking

>>3015320

Close to efficiency. Can you read?

>>3015311

Efficient... in what way?

I made that comment about minimum wage increasing the costs of labor. I want to say, I think the increase in costs are negligible.

I also want to say, that there is perhaps a benefit I cant remember or think of right now that is greater than the loss inflicted on businesses.

>>3015312
>>3015320
>>3015334

What do all you guys mean by efficiency? Do you mean cost efficient?

>>3015337
Let me fix this:
>I may have been better. I'm still not sure if he [m1c­key] is trying to say an efficient economy is a sufficient condition for a desirable economy. I'm pretty sure that's what he [m1c­key] is saying, so I'm pissed.

>>3015335
>>3015334

if they're not at 100% efficiency, then there is room for them to become more efficient. Can you think?


Also, agree with last post from resident economists. Someone else has already pointed out that virtually no one works for minimum wage, so it only affects a few companies disproprtionally (Walmart, Mcdonalds, etc). This is why raising minimum wage isn't bad when it's done in moderation

>>3015312
Companies succeed because they have assets. At one point, they earned those assets. That time is not always now. Not all companies are efficient.
So long as assets and wealth control the economy, we will never run close to efficiency. Capitalism is a way for the old to control the young and the wealthy the poor, not a way to reward a man for his labors.

>>3015254
That's fallacious on many levels. First, for a single earner with a full time job, the current minimum wage is 50% higher than the poverty level. For a two-earner household, it's double the poverty level.

Second, not all minimum wage workers are living on their wages or solely on their wages. Many are not supporting themselves, or have their incomes supplemented by social security.

Thirdly minimum wage hikes kill employment rates because they kill business that rely on minimum wage work. During the Clinton minimum wage hike, within a year two supermarkets near me went out of business, and the entire Roy Rogers fast food chain disappeared from my region of southeast PA, and some other regions as well. I'll never forgive Clinton from taking away my Roy Rogers.

>>3015337

>implying anyone in this thread knows what the buzzwords they use mean

OH NOES!

PEOPLE WHO MAKE SHIT PAY WANT A LITTLE BETTER SHIT PAY!

EVERYONE HIT THE DECK!

Dammit, internet ate my reply.

>>3015284
It isn't. I'm not making a value judgement as to whether efficiency is "good". That's beside the point. Efficiency is not always desirable in an economy.
For example, an import tax may raise prices, which are borne by the consumer. But the government may want to protect local businesses.

The other approach to gauging efficiency was the aforementioned social marginal benefits intersecting the costs. This takes into account social welfare, and is usually included with production efficiency, because at that point you are producing an efficient amount of a product at a certain price. Social well-being and efficiency share a very close relation with each other in economics.

>>3015343

>if they're not at 100% efficiency, then there is room for them to become more efficient. Can you think?

Im not sure what you guys are talking about, but if you are talking about cost efficiency, or a businesses efficiency at what it does in general then I dont think they are 100% efficient. Not because they dont want to be, but just because its physically impossible and difficult to create an efficient organization. With that said I think businesses have a huge incentive to be efficient. Its practically a top priority. Efficiency at what you do is basically synonymous with profitability.

>This is why raising minimum wage isn't bad when it's done in moderation

Well whats the good in it? Is it just the knowledge and sympathy we have for fellow human beings? That would be a good answer Im just curious. Because if almost everyone makes above minimum wage, it makes minimum wage seem even more pointless.

>>3015343

100 percent efficiency is not seen in the real world. Whatever can be squeezed out of production costs already has.

It is bad always to raise costs for any reason.

>>3015351

>Companies succeed because they have assets.

What about the companies that succeed because they dont have assets? Basically assets cost money, and tie you down to a commitment. Many of these mega corporations, like Nike, dont own any assets for that reason.

>So long as assets and wealth control the economy

And who said assets control the economy? What about liabilities? Dont they control the economy just as much?

>>3015356

Oh my god its so true. Some threads its just too much to handle.

Also I like the image title.

>>3015366
You're making a nontrivial moral stance, that it's better to sacrifice one person to make a thousand people live more comfortably.

Otherwise, I don't have any violent disagreements with that, now that you softened your stance some.

>>3015377

I would be flattered, but you're one of the biggest offenders here w/r/t that. You should drop the trip until you get to your sophomore year.

>>3015353
>implying that minimum wage hikes drove them out of business

We could just pay the same (inflation adjusted) $3.77 from 1938 (that I found on the wiki page) if we're really interested in helping business exploit people further. But seriously, why protect the profitability of a company at the expense of the workers?

>>3015389

I just finished my sophomore year. I am a big offender at using buzzwords?

Like, what buzzwords have I used?

>>3015298
sup. That's what we're discussing atm.

We could also consider the efficiency wages, which are always higher than the equilibrium wages. However, this requires the assumption that information in the markets is assymetric, and then our model gets complicated very quickly.

>>3015399
>But seriously, why protect the profitability of a company at the expense of the workers?

Probably because corporations pay for election campaigns.

>>3015400
Every word I do not know is a buzzword
Stop using big words you elitist

>>3014936
interesting video
although your video does not follow from your argument. the video is suggesting a modification of traditional monetary reward systems into this more purpose driven type thing in addition to monetary rewards

granted that kind of setup would probably work best in high science and engineering fields almost exclusively

>>3015400

I don't memorize your posts, man. But everything I've read by you smacks of "dude who thinks he's hot shit but doesn't really understand his field of expertise."

The fact that you just finished sophomore year is telling. I'm a sophomore in chemical engineering, but I would NEVER go around calling myself a chemical engineer. I've barely gotten into my core major classes. You've taken a few of the most basic classes on theory and math. Congrats.

Why is it that economists/politicians/businessmen are so focused around growth and efficiency?

Constant growth is not sustainable in a finite system and efficiency isn't always a positive as increasing efficiency means that there don't need to be as many laborers working towards producing a product, and thus creating unemployment.

>>3015186
>white upper middle class white kid speaks from ignorance
nothing to see here folks, move along

>>3015399

Consent eliminates this notion of "exploitation." You cannot exploit a person by offering them a job they can leave at anytime and where not forced by the owner to take.

>>3015420
cuz romer published a paper ~40 years ago

its how econ works

>>3015420
>in a finite system
...and what finite system is that? The universe?

>>3015427
Consent does not. What if your options are to die from starvation, or be exploited? Of course you would consent. Consent means nothing if there are not plausible alternatives.

Not that I'm trying to make any particular point beyond that. Just saying.

>>3015425

I'm white, but I live in poverty. Try again.

>>3015427
Um...

Work for 3.77 or starve


doesn't sound coersive to me

>>3015433
I was talking about Earth. I'm not saying that its a problem just yet, but it might be in the long-term. We'll eventually run out of resources/space for development.

>>3015419

First of all, I admit I dont know something a lot. I get the help of people like Mickey a lot. With that said, Ive helped a lot of people with questions about economics, and homework on economics.

Second of all, why do you have to give me shit about my name "economist"? Like any name on the internet is 100% for real and serious. Besides, economist just means "someone who studies economics" unlike engineer, or doctor which requires cerification.

But yeah, I dont know everything, I face that truth a lot. But then again, I never claimed to know everything.

Why do you got to give me so much shit? I am like, /sci/ biggest target.

>>3015439

False dichotomy. Again, you cannot exploit a person by offering them a job they can leave at anytime and were not forced by the owner to take.

You are simply making a few mistakes.

1. You seem to define consent as something other than actual consent.
2. You seem to think business is exploitation.
3. You seem to think that you have to starve or work for another that "exploits" you.
4. There are more but why go on.

>>3015384
I don't think I've done that. I've simply clarified what efficiency means in economics, and how it's neither always desirable or "good".

And I'm just showing what the data indicates. While it's true that at the expense of some people, others would be better off, but that isn't what I say should happen. That is for policymakers to decide.

>>3015455
>I am like, /sci/ biggest target.
I thought that was me. Anyway, I don't recall seeing bullshitty at all from you, ever, making you and Max my favorite /sci/ tripfags.

>>3015444

False. Dichotomy.

>>3015464
I will repeat the quote that made me quite irritated from else-thread:

>Actually, when you achieve efficiency you also maximize social wellbeing, as the workers are part of society.

So yes, you backed off that point, and as such, I no longer have a problem. I agree that efficiency is very related to social well being, but I violently disagree that it's a sufficient condition.

>>3015477

Efficiency is ridiculous without clarification.

>>3015468

Awwww.. thanks. I love you too scientist.


>>3015464
>>3015477

But can we agree that economic growth and "efficiency" can come at a great cost to social welfare?

>>3015454
Of course it isn't a problem yet. Neither is the heat-death of the universe. The question is whether we can grow faster than our resources dwindle. There is a very large impending hurdle of the earth running out of usable resources, but the question is: if, at exponential consumption rates, we run out of stuff in 500 years, then will we have advanced enough that that we can reach other sources?

I am of the belief that we will.

>>3015455
yeah usually i'm tearing you down, but you're usually spouting the same neo-classical nonsense as every other economist.


Look, the charge of economics is to study how money works, and specifically how it relates to human behaviour. If you've assumed a model that doesn't capture human behaviour, you've failed.

Same with raising the minimum wage rate: it doesn't cause unemployment like the models sugggest. It's not because raising the minimum wage doesn't raise the cost of production (for walmart/mcdonalds/etc), it's because they aren't really operating close to 100% process efficiency (producing output at the lowest possible cost). When you get past that assumption, you realize that it could be beneficial to the technology level in a society to apply this prod to the extent that it doesn't severely damage the businesses.

just make sure you don't buy the assumptions as true just because they make the models work out nicely

>>3015489
Jesus will save us, technology will save us. Lets not worry about anything

>>3015489

and we know that the poor people breed more and are thereby hurting the finite resources the earth has.

Any true utilitarian would kill all poor people.

>>3015492
...what are you on about now?

>>3015486
>But can we agree that economic growth and "efficiency" can come at a great cost to social welfare?
Yeah. That's my fundamental point, that efficiency is not a sufficient condition for social well being.

>>3015491

Either you think that profit (the reason the product is produced) means no efficiency, or that companies do not operate as close to efficiency as they can.

Both are silly.

>>3015463
>>3015463
>>3015463

giving consent doesn't mean that the individual is not being exploited. Working for a company is great for the individual. The exploitation comes where companies have undue influence in holding wage rates down, especially for unskilled labor.

Besides your errors in interpretation, I tend to agree, at least in general, that business hiring labor (and paying less than the theoretical Marginal Product of Labour) is not exploitative.

>>3015494
Now hold on, someone's gotta be on the bottom. If I were in any sort of authority position, I'd rather reign over poor, dumb, expendable breeders than educated, valuable people who can see through my bullshit and pool their resources against me.

>>3015494
Which is why I'm not a true utilitarian. Next?

>>3015503
poor Ren
can't relax because he's on crack

>>3015477
That was the assumption that we're looking at one, individual market. In this case it would hold quite true.
However, if we were analysing the general equilibrium, I would have to make a value judgement. You have to compare individual utility functions in order to construct a social welfare function. This curve indicates a tradeoff between individuals' well-being as you move along it.

It's still not what we're doing though.

>>3015491

>you're usually spouting the same neo-classical nonsense as every other economist.

I stand by neoclassical economics, and I recognize its faults.

>the charge of economics is to study how money works, and specifically how it relates to human behaviour

Uh, well, I wouldnt quite agree.... but whatever...

>Same with raising the minimum wage rate: it doesn't cause unemployment like the models sugggest. It's not because raising the minimum wage doesn't raise the cost of production (for walmart/mcdonalds/etc), it's because they aren't really operating close to 100% process efficiency (producing output at the lowest possible cost).

Raising the costs off labor absolutely raise the costs of production. Which absolutely raises the price to consumers. I dont see how the fact that companeis arent operating at 100% efficiency matters. Not being efficient is in a way a cost that also gets factored into price.

>>3015518
The employee and the employer both agree to the wage. Either can walk away from the bargain if they don't like it. You can live under a bridge and beg change of strangers if you don't agree to any wage that anyone is willing to pay for your work. Or you can life in the woods and trap squirrels.

>>3015518

Again, you cannot exploit a person by offering a job that they do not have to take. You are basing it on some hilarious positive right idea. There is no right to a job. There is no right to a job that pays a living wage. There is no right to a job that pays a living wage where you currently live. There is no right to not have businesses move near where you live and undersell other companies by lowering their wages. And this can go on forever.

>>3015505

Yeah.

I guess morally/economically speaking, I feel there are vague and near infinite costs to a loss of individual rights in some circumstances.

>>3015541
>The employee and the employer both agree to the wage. Either can walk away from the bargain if they don't like it. You can live under a bridge and beg change of strangers if you don't agree to any wage that anyone is willing to pay for your work. Or you can life in the woods and trap squirrels.
Luckily, I disagree with this moral stance. I think this is at the heart of several decisions I disagree with, too. Having a job is not an option in a functional society for a member of the society. In American life, neither is having a car. It's not a privilege granted by the state. It's a right.

But I digress.

>>3015528

There does not have to be a bottom, that is just silly.

I would rather there not be rulers. But I am silly and prefer absolute Liberty for ALL people.

>>3015541
>>3015554

Fortunately its not often the reality that one firm has a monopoly on the labor market and can dictate wages.

>>3015548
I assume that questions of efficiency don't count "happiness factor", because otherwise you're making a very ambiguous claim. We can all agree to questions of efficiency for resources used, amount of stuff produced, and so on, but as for the moral questions? There is no agreement upon standard, so attempting to state after the fact that efficiency includes moral costs I think is a bit disingenuous.

There's 2 questions that need to be answered. How bad is something for the individual, and 2- the aggregation function.

>>3015548
>>3015536
well what do you think economics is?

I dunno if you should stand by something that you've studied for a year. Perhaps you should, at the very minimum, make sure that what you're learning has something to do with reality.


>>3015543
>>3015541

It is exploitative when the person has no other options. It would be exploitative for me to find a stranded person and charge them $50 per gallon of gasoline. It would be exploitative for me to 'offer' someone water at $10 per litre.

You're defending a point that you do not believe in general, and do not seem to fully conceptualise in specific.

>>3015518
>>The exploitation comes where companies have undue influence in holding wage rates down, especially for unskilled labor.

It's actually quite the opposite. 3rd world countries, for example, have tons of unskilled labor. In many of them, you get paid a $1 a day. What do you think the difference is between them and unskilled laborers in the US who make 100 times as much money. Do you think they're just subhumans who can't do anything right?

The difference is that all those evil corporations in 1st world countries provide unskilled laborers with computers and machines and equipment that lets even an idiot be worth $8/hour.

>>3015560
every single firm has pricing power on the wage rate because there is no such thing as perfect competition

>>3015555

1st off, nice get...

2nd off, I'm fine with that. The only concern I have is how do you enforce liberty for all? If I go around raping random woment, I am in effect depriving them of their liberty by forcing my seed, and potentially my spawn upon a woman. However, to stop me, you'd have to deprive me of my liberty to rape. If everyone is free, then no one is.

>>3015564

>How bad is something for the individual, and 2- the aggregation function

Those questions I think are impossible to answer. And it would be inappropriate to assign numerical values to them.

But, in my opinion, that doesnt mean we cant make people better off by making estimates, and then using the government to enforce these costs, and negate the negative effects.

Which I think is the case for minimum wage

>>3015555
>There does not have to be a bottom, that is just silly.
No, the assertion that in any sizable population which contains variations between individual members of that population will not have objective differences between persons which can be used to establish a hierarchy is silly.

Or are we referring to theoryville where everyone is a genderless clone which can reproduce asexually in an infinite space containing perfect equality of resources?

>>3015582
No disagreement here.

>>3015575

I completely agree. The reason that poor people in other countries are so poor is that companies are discouraged from using sweatshops.

But please note, Walmart/kroger/Mcdonalds are still quite profitable despite the last two minimum wage increases. This would indicate that the companies aren't actually 'helping' anyone, but are actually just hiring labor for as cheap as possible. They will use the fact that they're many times the 'only game in town' to maintain the downward pressure on wage rates.

They can't hire foreigners to stock shelves because they're thousands of miles away from the stores.

>>3015572

A market cannot exploit. Offering water in the desert for 50 dollars is because of supply and demand. You are basing your arguments on silly notions of positive rights, or it is evil to save. Sill things like that. Every single transaction where the two individuals are not forced by the other is a win win transaction.

I would never trade for something of equal value. I buy things because I feel I am getting the better deal based upon my personal wants. This is all transactions.

>>3015572

>well what do you think economics is?

Well, It definitely has to do with human behavior, but human behavior is singular. Economic often studied the sum of behaviors in a whole market.

And money... well kind of. Money can really be anything, even the goods the money was supposed to be buying.

I just dont think it was a clear definition. I dont mean to make a big issue about this.

>Perhaps you should, at the very minimum, make sure that what you're learning has something to do with reality.

I definitely think it has SOMETHING to do with reality.

>>3015577

Sure sure, I acknowledge this. But that doesnt mean the reality is anywhere close to a single, absolutely powerful firm, dictating wages.

>>3015599
>You are basing your arguments on silly notions of positive rights
Wait what?

>>3015585

You seem to think equality is natural or that it can ever happen. Take away money and we will all be equal. NOPE. Take away property and we will all be equal. NOPE. There will always be something that is picked by society as better or more ideal. The hierarchy will then be based upon race, or looks, or height, etc.

>>3015599

In the event there is a disaster where the supply of water goes down, and people want water. I think its great when people show up and sell water at expensive prices

In the event there is a man dying of thirst, and you have water, I think its totally evil to try and sell the water at "market price"

>>3015572
>It would be exploitative for me to find a stranded person and charge them $50 per gallon of gasoline.

I think this is a wonderful example of why you are wrong. Let's say there's a law that you can only sell gasoline for the "normal" price of $4. Well, at that price you could give someone gasoline and not lose any money. But if you're getting paid only $4 for your trouble, you have no incentive to carry around fucking gasoline with you on the off chance to find a stranger who needs it. Sure *some* people will carry it around anyway, but less people than if you rewarded them more for their effort. I don't carry around gas but might if I could get paid $100 for finding a stranded motorist.

The thing you describe as "exploitation" isn't that at all. And if you ban it, you don't save the poor motorist from having to pay too much, you prevent there from being anyone to sell him gasoline at all.

>>3015605

Did you read some pf the examples of positive rights that I followed that statement with?

>>3015581

You are confusing freedom with Liberty. There is no Liberty to take Liberty.

>>3015612

Evil has nothing to do with a market, and is hilariously subjective.

>>3015617
>Did you read some pf the examples of positive rights that I followed that statement with?

No. i missed that. I just read "Positive rights should not alter laissez faire market economics", which I read as classic Ayn Rand, stupid, and evil.

>>3015614
Or he can call AAA.

>>3015620

So? So what? Whats economics if not a tool for human beings, who have feelings about what is "evil"?

I would never ever ever say some factual statement about economics using the word "evil." That doesnt mean I cant use the word "evil"

>>3015606
So you didn't read or comprehend my statements? Because you seem to be countering as though the statement you read said the opposite of what I wrote.

>>3015624

rand = not important to me

I said nothing of should.

>>3015599
and you are a full retard. You do not understand the idea of exploitation. It is not defined in neoclassical supply/demand because that would be inconvenient to the models.

But let's ask the interwebs for an answer. (Googled definition exploitation): 2nd definition:
an act that exploits or victimizes someone (treats them unfairly). Was also synonymous with victimization.

If you want to say all price gouging is ok, then you're not discussing fairness. Thus, my statement about exploitation has not yet been discussed.

>>3015630

Odd, you did that to my first post.

I am jumping past your whole line of arguing and ending it quickly.

I'm feeling quite ignored here :(

>>3015535

>>3015564
> How bad is something for the individual, and 2- the aggregation function.

The first could be defined in the social welfare function, and the second pops up surprisingly often.

http://en.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%E2%80%93Debreu_theorem

This essentially means that individuals' demand functions are restricted by rationality.

>>3015637
>I said nothing of should.
Earlier, you wrote:

>A market cannot exploit.
I read that as a moral assertion, which is a "should" statement.

Ergo, my problem.

>>3015614
Seriously? I was obviously talking about price gouging, not high costs of production.

You were assuming that all price increases are a function of production costs

laughingwhores.jpg

>>3015638

Good thing we know that "fair" is so subjective that is varies from room to room in a house. You cannot base anything logical on something so subjective.

I don't care about "ok."

>>3015641
I'm not quite following your claims, and you're doing a very bad job of differentiating between your scientific, falsifiable claims and your moral claims.

>>3015298

I don't know much about this, I admit, so I'd like to ask resident economists a few questions: Doesn't the company hiring less people make some bold assumptions? I mean many of the companies we're considering here aren't operating at the margin - they're making significant profits aren't they? For those that aren't: why not exclude them from the wage hike. Companies making X dollars of profit get the deal or they agree to give away a portion of profits after a particular level if they reach it? The level could be set high enough to motivate most businesses to continue.

I also want to bring up the point of necessary labor. Companies will not continue hiring workers again and again as they have less costs, why should we expect them to fire workers when costs rise? I mean at a certain point this will occur I suppose, but it seems to have no bearing on the business that runs itself with the minimum number of employees for proper functioning. If these businesses were to fire more people they would not be in business. The restaurant industry for example rarely hires more servers than it needs.

>>3015642

There is nothing moral about that statement.

>>3015649

You are that other silly guy. Profit has nothing to do with efficiency. More profit does not correlate to less efficiency, nor does less profit correlate to more efficiency.

>>3015640
>my first post
Which post would that be? It's hard to tell you apart.

>>3015625
Apparently he cannot otherwise he would just call AAA and reject the offer of gasoline at any price.

Anytime someone is "exploited" by paying too much, they are still better off than if the offer did not exist to begin with.

>>3015648
Basically, if I were to make a value judgement, it would be in a general equilibrium analysis. But I'm doing a partial equilibrium analysis.

>>3015601

What do you think of behavioral economics and Dan Ariely then? I believe he's shown that wage doesn't always correlate to increased motivation and that this whole wage business really needs to be thrown out in some cases for a more stimulating environment.

>>3015650
>A market cannot exploit.

Exploit carries a negative connotation, something which /ought/ to be avoided. Just like the words murder, rape, and steal. As such, you are making a moral claim when you say markets cannot exploit because you have to choose a particular falsifiable definition of exploit, which thereby legitimizes some sort of consensual trades, and makes morally unacceptable other sorts of consensual trades.

>>3015658

The post you responded to which in turn i responded to.

>>3015663

The transactions in a market are consensual.

Exploitation is not consensual.

Therefore exploitation is not a transaction in a market.

>>3015649
Yep, those are the questions that are assumed away by the neoclassical models. Most companies aren't significantly affected by minimum wage rate laws though, so the effects are much more localised than models would suggest (walmart/mcdonals care a ton about minimum wage rates, google doesn't give a shit).

In reality, companies will not fall below your necessary labor point. They may, however, go out of business if there's no way to be profitable.

>>3015676
And that is a moral claim. You just made the moral claim that anything which is consensual is morally allowed. I as a matter of fact disagree with that blanket moral claim.

>>3015657

That was my first post in this thread, so I can't have been another guy. I don't get what you mean by efficiency - that's not what the post was addressing. It's just that if you increase the wage in these businesses it hardly seems like they're going to decide to drop some workers either a) they're already running at the minimum number of workers, or b) they're making enough profit that they may or may not decide to keep with how many workers they have - weighing the costs and benefits of the added labor obviously. It's not like this is going to magically make all businesses drop labor (minimum wage that is) - it's going to vary from business to business and I think the argument has some merit in that I see no reason to assume the labor change will go one way or another without more specific analysis.

>>3015676

Exploitation is not consensual

fair enough

uncoerced consent is implied by engaging in a transation

not true.

>>3015649

> Doesn't the company hiring less people make some bold assumptions? I mean many of the companies we're considering here aren't operating at the margin - they're making significant profits aren't they?

Thats a great point. I knew I was forgetting something.

I dont think we should assume all companies are making signifcatn profits. Thats not reality. Even the biggest of big corporations can periodically suffer losses.

And like someone else said, not many people actually work at minimum wage.

Regardless of whether or not a firm is making positive profits, and assuming it hires minimum wage labor, minimum wage laws eat away a little bit at the profits of that company.

>For those that aren't: why not exclude them from the wage hike.

I think thats going to complicate things, and you could definitely cheat. For instance, for what duration are you going to measure profitability? Because if I was just measuring a week, I could say, I bought all my inventory for the year, and I am running at negative 4 million dollars profit, so, Im going to pay all my workers nothing.

Even if we are looking at the long term, accountants can swap numbers around to meet government standards. Making the wage laws profitability dependent just complicates everything, and means its going to cost the government even more money to check each and every business.

>Companies will not continue hiring workers again and again as they have less costs

Not really, there are some severe diminishing returns.

>why should we expect them to fire workers when costs rise?

Because companies have to face going out of business, or extremely tight or inefficient times, or firing someone. If you have a firm that suddenly can only afford to pay $400 a day in wages, and you have too many employees. You have to lay someone off.

Does that answer what you are talking about? Im a bit confused by what you were asking. I kind of felt like I was rambling

>>3015684

There was no mention of allowed in my post. Not at all.

Jesus fuck, who really cares how 'pure' you do science? Oh right, science fans who sit around all day and bitch about it.

>>3015698
You're redefining the word "exploit" in a way as to make all consensual trades non-exploitative. That's not how the word is used in common English, which led me to the above conclusion. I'm pretty sure there's a moral claim in there somewhere, though perhaps it's too obscure in your own mind to recognize it. Because I would argue that some consensual trades /are/ exploitative.

>>3015687

You seem to think high profit means they can "handle" the extra costs or will accept them. Profit is why he company exists. Lowering profit will only encourage them to require more work for less money to make up the losses.

>>3015662

I had to look up Dan Ariely just now. I saw him give a lecture once on the internet. It was something about errors in value judgements or something. I dont remember it well, but I was thinking about it recently.

> I believe he's shown that wage doesn't always correlate to increased motivation and that this whole wage business really needs to be thrown out in some cases for a more stimulating environment.

If its anything like the claims Ive heard coming out of Kahn academy, I am skeptical.

I feel like these behavioral economists are taking data from short term, "do X and I pay you Y" experiements, and then applying that to real life jobs. Which are very different.

>>3015693

You jumped, buddy.

Nothing of coercion was said by me. Use only the language I use when trying to prove me wrong.

>>3015714

It is your problem to think that exploitation is chosen (consensual).

There is nothing moral at all.

>>3015695
if the company wasn't profitable before the wage hike, it would be ready to go out of business regardless of a rate change. There's no need to consider these businesses.

It is important to think of the businesses on the margin (hiring minimum wage workers but low profits). I think current minimum wage rates only apply to businesses with a certain number of employees (9 if i remember right).

Also, I think it's best to lay out all assumptions and factors of the thought experiment before it's discussed. It just makes discussing the theoretical outcomes easier.

Neoclassical: Companies at 100% efficiency, usually assume perfect competition, assume 100% freedom of movement for labor, assume every firm hires equal amounts of the minimum wage labor, assume that the current rate being paid to labor is the marginal product of labor.

well, we see that some of these are ridiculous without any further discussion. But should we hold these assumptions, then raising the minimum wage IS VERY harmful.


but since those assumptions are not true (most importantly that wage rate=MPL and even dispersion of Minimum wage workers), we see that minimum wage rates will not have the effect that the neoclassical model would have predicted.

Which fits the data presented earlier in the thread

>>3015599
So, lets carry this a bit further.

You're in a desert. You have a pack full of water, and you sell $50 water bottles. Some people buy, some people don't. Win/win

You stumble across a man who is clearly dying of thirst, he asks for some of your water. Do you give it to him for free, or do you ask for $50?

If he can't pay, do you just continue on without helping him?

>>3015695

I agree we shouldn't assume all businesses are making tons of profit, but why not make a model based on the amount of profit each business is making in a given area? Or, if more businesses are making profit above a level L out of a given amount why not increase the wage so that the increase diminishes the profits by an amount that would keep each business above the shut down price or what not?

Regarding the firing of workers I just think the models assume that businesses are running with extra workers they can reluctantly fire in order to save their business, but I'm contending that this isn't true in many industries, such as the restaurant industries (I base this on having worked in the restaurant industries so I admit it's anecdotal - I don't see us being able to show facts about it one way or the other but it seems stupid for businesses, being rational entities, to over-hire and bleed off money.) And so the difference here come to think of it is that the minimum wage is I guess forcing them to bleed off money, still into the economy,n level of profit.

Also I concede the profit system is problematic but I think some kind of system could be put in place. That's just my opinion though, I could easily be wrong.

>>3015733

The problem is you start the story in the middle. The man did not appear in the desert waterless. Unless someone forced him there he made bad choices to be there without water.

>>3015733
Or do stuff like demand his house, all his money in his bank accounts, his stocks, his first born child, etc.

>>3015737
Sorry. People are not perfectly rational, and even if they're not perfectly rational they're not omniscient. Also implying that crime never happens, that someone couldn't be kidnapped and dumped somewhere. Next please.

>>3015726

>if the company wasn't profitable before the wage hike, it would be ready to go out of business regardless of a rate change

You dont have to be profitable to stay in business. You could make 0 or even negative profits and remain in business. Obviously you cant be negative forever. But, like amazon.com was negative for like 9 years or something absurd.

>Neoclassical: Companies at 100% efficiency, usually assume perfect competition, assume 100% freedom of movement for labor, assume every firm hires equal amounts of the minimum wage labor, assume that the current rate being paid to labor is the marginal product of labor.

I dont think neoclassical economics assumes any of those things.

>>3015739

Actual moral argument. Although I don't know if you are trying to not make them. So, eh.

>>3015649
>I mean at a certain point this will occur I suppose, but it seems to have no bearing on the business that runs itself with the minimum number of employees for proper functioning.

That "minimum number" doesn't come from god: it's chosen by the firm. If you need 10 people for a McDonalds, they can reduce (increase) the number of people by closing down (opening new) McDonalds': you just have them service a larger(smaller) area.

>>3015687
There is not such a thing as "minimum number of workers."

Imagine a restaurant. This restaurant gets 100 million potential customers a day but can only seat 50 million at a time. All of its employees are paid minimum wage. Now, the number of people which can be sat is contingent on a couple of things - how many people, size of tables, how long to cook/eat, and how long to clean the tables and prepare for the next customer.

We'll focus on the last part: how long does it take to clean off a table? This number is contingent on the number of employees responsible for doing that, and it correlates with revenue because when the tables are prepared faster new groups can be sat which otherwise would not have been. Now, when we are determining whether it is profitable to hire a new table-preparer, we must consider both 1) their wages and 2) their revenue, i.e. how much faster they make tables clean. As we add our first few workers, the rate of increase of tables cleaned is linear, because each person can clean one table at a time. However, at a certain point, a peculiar thing happens: we have enough table-preparers hired that two are cleaning the same table at the same time. We'll assume that this does not double the rate of table-cleaning (this assumption is not crucial to the argument, as it is inevitable at a certain point). What this means is that the revenue a worker produces can change based on how many workers there are.

This is called marginal utility. Each worker we hire (at certain intervals of numbers in our example) is worth a little less than the last. When the cost of wages is low compared to the revenue gained from faster table-cleaning, we will find that businesses hire a relatively high amount of table-cleaners. If wages go up, we'll find that table-cleaners suddenly cost more for the restaurant than they earn (to a certain point), and some of them will be fired.

>>3015744

I mentioned the fact that he could have been forced there, silly.

Again, positive rights argument. You do not have a right to my property if you really want or need it.

>>3015747
It assumes each one of those things; thats who it gets to the answers that it does.

I know you're second year, but I was in master's when I made the switch to statistics. Please don't bother saying "i don't think these are assumed" just because you haven't learned it yet.

>>3015747
>I dont think neoclassical economics assumes any of those things.

Perfect competition?

>>3015755
>Again, positive rights argument. You do not have a right to my property if you really want or need it.

And I disagree. Sure you're not an Ayn Rand fanatic? Sounding more and more similar all the time.

>>3015687
They may not drop workers. They may just go out of business because their business model cannot work regardless of the number of workers with the new wage. Either way, the number of jobs goes down, along with the domestic product.

Why aren't we trying to make it so that nobody has to work to survive?

Humanity should be free to create and play, not slave away in a 9 to 5 job entering numbers into computers and enriching a select 1% so they can piss away all that money in useless stocks and "investments".

>>3015762

Then your moral argument is that property should go to those that want or need it? Jesus, for someone who claims to point out moral/ought/should arguments you sure use them exclusively.

>>3015736

>I agree we shouldn't assume all businesses are making tons of profit, but why not make a model based on the amount of profit each business is making in a given area? Or, if more businesses are making profit above a level L out of a given amount why not increase the wage so that the increase diminishes the profits by an amount that would keep each business above the shut down price or what not?

Like I said, cheaters. A business is going to factor in the costs of "being profitable" which is going to alter the profitability calculation to begin with. Companies will start going "We could run the machines another 2 hours, but then we would have to pay each of you significantly more"

Besides, do you consider the hours of labor it took to become profitable. Say after 40 hours of labor the company couldnt be profitable, but at hour 41 is becomes profitable. Do you count 1 hour, or 41? Its just too complicated. Cheaters. Cheaters everywhere. Cheaters and poorly defined rules and regulations.

> but I'm contending that this isn't true in many industries, such as the restaurant industries

There are costs and benefits to every hiring firing decision. For a restaurant, maybe it would be extremely costly to staff even just 1 more employee above or below that certain ideal amount. Which means the costs of labor arent going to alter their hiring decisions that much.

Does that help? Im still a bit confused about our discusion. The utility function (or cost minimization function or whatever) is going to vary from firm to firm. Its just maybe your restaurants dictates never hire or fire away from a certain amount of servers.

>Also I concede the profit system is problematic but I think some kind of system could be put in place.

Well what is "the profit system"? Im not sure what that means.

>>3015770

haha

Positive right have a cost, silly. This is why free healthcare is not possible. Someone pays for that healthcare with labor. So you basically support slave labor.

>>3015770
Get out. Now.

>>3015771
>Then your moral argument is that property should go to those that want or need it?

Nothing that clear cut. I believe there's a happy middle ground between absolute private property rights and no private property rights. You're trying to draw a false dichotomy.

>Jesus, for someone who claims to point out moral/ought/should arguments you sure use them exclusively.

I think you're confused. I never said one shouldn't make moral arguments.

>>3015726
>but since those assumptions are not true (most importantly that wage rate=MPL and even dispersion of Minimum wage workers), we see that minimum wage rates will not have the effect that the neoclassical model would have predicted.

This is the worse false dichotomy fallacy I have seen in my entire life. Neoclassical doesn't assume any of that. I mean, "assumes perfect competition"? Are you insane? Do you think there's no neoclassical theory of monopoly? And even if it did, your false dichotomy is that every theory in the universe except neoclassical implies minimum wage rates don't have a negative affect. Which is both trivial AND untrue.

>>3015780
>Positive right have a cost, silly. This is why free healthcare is not possible. Someone pays for that healthcare with labor. So you basically support slave labor.
Wait what? Talk about bad generalizations. Freedom of speech rights don't carry a money cost on society like free health care does, dude.

>>3015785

Can you explain it without using subjective words? If not it is a utopia.

Like I said earlier, I am silly. I support absolute Liberty for ALL people.

>>3015781
seconded

>>3015792
>silly semantics

>>3015758

Maybe I dont know what neoclassical is. I just felt my intermediate micro class sounded very neoclassical, so thats what I assume neoclassical is.

Maybe I will learn in the future. But I still feel like those arent assumptions of neoclassical economics.

>>3015790

The notion of free speech is a negative right. The state cannot punish you for speech.

>>3015781
>>3015780
>>3015796
>people seriously arguing against bettering humanity

It's no wonder we don't go anywhere with people like you around

>>3015790
You are a fucking idiot. You are a fucking idiot. You are a fucking idiot.

Freedom of speech is a negative right. Freedom of speech is not a positive right. A positive right is a claim to some action from other human beings. This is obviously something which costs money.

>>3015786
no, neoclassical economists assume perfect competiton when describing the effects of minimum wage rate increases on businesses.

obviously there's other neoclassical theory (oligopoly, monopsony , monopoly), but those are not consulted for answers. Simply sit down and work out the wage rate increase using these models with the standard calculus based approach used in most advanced undergrad/graduate classes.

But of course, that doesn't give the answer that you want. You want minimum wage hikes are bad because they're bad in your perfect knowledge, perfect competition models.


I'm sorry if you guys aren't so well versed to know any of these results beforehand, but feel free to ask,

>>3015802
It's what this thread is about.
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics

>>3015759

It doesnt. Right? I havent had any classes use the term "neoclassical" so my notion of neoclassical, is what I have read off the internet, and applying it to my education. And in my intermediate micro class, which I assume is mostly neoclassical, we have modeled monopolies and many other markets that arent perfectly competitive.

>>3015811

better is too subjective to be used for a basis of logic

>>3015753

You misunderstand I think. I'm assuming that restaurants already operate at the point BEFORE there are two table-preparers doing one table. The restaurant I worked at for example, would have it so that they were working fast and as soon as the pace of the restaurant died down they cut one and then two etc. until everything was done. For them to cut workers from this system would leave them with too few to bus the tables and so on properly. I suggest that most restaurants operate like this, as I would expect them to.

>>3015780
>Positive right have a cost, silly. This is why free healthcare is not possible. Someone pays for that healthcare with labor. So you basically support slave labor.

What if we had these things... lets call them "machines" and "computers".

What if we had these "machines" and "computers" and they did all our work for us? That would free up people to do whatever they wanted instead of working in order to survive!

>>3015792
>Can you explain it without using subjective words? If not it is a utopia.

It's hard to do in this post, but I'll try. For starters, I like Adam Smith capitalism. it's important to remember that "free markets" signifies a very particular kind of market. "Free markets" are not free because they lack government interface. That's a common misunderstanding. They're free because there are a bunch of independent buyers and sellers in the market.

Next, I would want my economic policies to be mostly capitalistic, with some allowances for when capitalism fails. Here's my short list: laissez faire is not stable in practice, absolute private property rights are not morally justifiable, externalities, tragedy of the commons, natural monopolies, people are not rational, people's time horizons differ, acquiring information is not free, cost barriers to entry are usually not insignificant, small numbers of buyers and/or sellers.

In this particular case, I want to emphasize that private property rights can be viewed as a means to an end. Alternatively, one can view them as positive rights, but not absolute. As such, someone's right to inconvenience someone else, such as by "taking" some water from some dude's tap to avoid death by thirst until he gets his shit together from a short term problem, is A-Ok and totally morally justified in my world view.

>Like I said earlier, I am silly. I support absolute Liberty for ALL people.

That sounds very much like Utopia, and you're doing exactly what you don't want me to do. You're being excessively unclear about your economic policies.

>>3015816

just read
>>3015812

if you haven't looked over the Varian microeconomics textbook, you're probably not doing the stuff that I was referring to.

>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics
>silly semantics>silly semantics
>silly semantics
>silly semantics
>silly semantics

>>3015829

Robot utopia? haha

>>3015814
>mfw economists replaced invention with innovation

>THE THEORY STILL HOLDS

>>3015821
Yes, obviously you can argue that minimum wage hikes won't increase unemployment if you're talking about businesses where each employee produces the exact same amount which is just barely profitable. But that's not how things fucking are. There is not some kind of amount of workers where "things get done properly." Workers create variable amounts of value for a business. Wage hikes mean workers who used to be profitable might no longer be profitable. Assuming that this is not the case for most businesses is entirely unbacked by any empirical information.

>>3015834

Hey I happen to own the varian one!

I was making fun of you. Then I deleted that post.

What does that mean "the monopolistic ones arent consulted for answers"

>mfw

>>3015836
I never said it would be a utopia.

>>3015833

jesus christ, you're certainly cocky for an undergrad in your first econ class.

I think I told you already that I finished a master's, but maybe you didn't notice behind that ridiculous arrogance.


and yes, most of economics is determined by that mindset, just in the form of intellectually inbred papers in economics journals.

>>3015808
Meh. It appears that by the usual definitions, I am wrong. So sue me. Positive vs negative rights is just a matter of perspective.

Compare and contrast: I have a right to say things despite possible effects on my neighbors. My neighbors have the obligation to not restrict my speech.

>>3015860

Im sorry, I deleted that post because I thought I was rude.

I reconsidered what I said when I realized I didnt know if I was talking to the guy who had his masters in economics or not.

>>3015779

I guess what I'm suggesting is, say you have one business that has 30 employees, and one floor of an office building - no other branches or anything. I suggest that the business will be running with the lowest possible amount of labor to make the place run smoothly - so that marginal utility is maximized. That is, most businesses run, and attempt to run at least, at that level. But if we decide to increase the minimum wage for this firm IF it's profitable, and IF the increase is less than the profit + 1 then I think that they simply will have no choice but to keep what they have. There's no reason for them to do anything else. On the other hand unless this busness reaches a certain profit threshold and makes another branch, it will not decide to hire or fire workers even though it might be making more profits, lets say. So within certain liminal periods we've got businesses that are not affected by the wage at all. It's only when we pass over one of these speed bumps that it matters. If it were possible to adjust wages between these speed bumps I feel like it could be economically advantageous. I hope I was more clear about it there, so now feel free to tell me what's wrong with my idea lol.

>>3015836
>singularity

Oh boy, another frictionless Economy discussion.

>>3015875
I have already said that it is perfectly possible to imagine a business which is unaffected by minimum wage hikes. I was explaining the mechanism which causes layoffs because it is a very very common one. What is relevant at this point in the argument is not hypothesizing (imagine if I just told you about a business that WAS affected by marginal utility), but empirical data.

Scientist and Anon: well done.
>I know it's not a fair fight, of course. But it's good of you both to continue.

>>3015832

First off, Adam Smith morally likes labor. What I mean is that he lets logic be ignored by his moral love of hand work in his ideas. In fact, the LTV of Marx is actually almost 100 percent Adam Smith. Marx just leaves off the fact that markets can create value (non-labor creating value really fucks up the ideas of Marx, so he left that part out). A free market is a market free from regulation not consented to. Any state eliminates a free market.

You seem to borrow a lot of you definitions from Marx, or Marx inspired people. Capitalism does not fail, but what you think capitalism is, does. Just remember welfare state capitalism =/= capitalism

You just morally dislike the idea of inefficiency. That is why you are silly. This is because you see hunger, lack of essentials, etc as inefficient. Whereas I see efficiency as pointless because of its subjective nature.

>>3015851
well since you know everything, why are you asking?

I explained it in the post in which the statement was made, but I'll repeat because it's apparently necessary:


wage rate hikes are only suboptimal w.r.t equilibrium in perfect competition models. Other models are not assumed to have this equilibrium, and therefore are not affected the same.

EX: monopoly model: 1 company in the labor market:

company maximized profit by minimizing costs, so pays a little as possible.

Thought experiment: whats the least amount that someone will work? barely above starving.


We see that wage minimums are good for society if there's a perfect monopoly in the labor market.


There is obviously not a perfect competition or a perfect monopoly, but the result should be somewhere in the middle. Unskilled labor does not usually have many labor choices. Furthermore, the small number of firms that hires tons of workers (walmart,mcdonald) have LOTS of power over the wage rates in their labor market.

>>3015897
I'm sorry. Your claims are quite vague and hard to parse the English, and as such I'm not sure if you are even expecting me to respond.

>>3015875

I think you are thinking clearly. That guy above me is right. A business could be plausibly directly unaffected by an increase in minimum wage.

I dont know what to say. I think you are on the right page.

But here is an idea I just thought: Business arent isolated from one another. And if you have business A that is completely unaffected by a minimum wage law, and business B that is greatly affects, and A and B cooperate with each other. Then A will inevitably be affected.

>>3015909

I appreciate you abandoning the debate.

Claims like you made in this post would need to be backed with hows.

>>3015918
I really have no clue what you're talking about.

An economist defending Adam Smith is like a physicist defending Aristotle. Yeah it was interesting that someone a long time ago put thought into it but the things they came up with were retarded by modern standards.

>>3015812
>You want minimum wage hikes are bad because they're bad in your perfect knowledge, perfect competition models.

Seriously, you just KEEP giving false dichotomies.
>A perfect information model says minimum wages increase unemployment
>the real world has imperfect information
>therefore minimum wages do not increase unemployment

You should just discuss the times economics has shown minimum wages not to cause unemployment: such as when firms have market power. For example, McDonald's employes 400,000 people *worldwide*. There are 60% of the US doesn't have any degree. That's 117 million people (in the labor force with a 65% labor force participation rate). Do you think McDonalds 0.3% share of unskilled laborers is a monopsony? Walmart is bigger with 1.4 million or a 1.2% share.

>>3015870
I also changed my name to 'Anon' so you could tell who I was

>3015890

I completely agree. Is there empirical data stating that most businesses do not operate in the way I suggest? Could you link some studies. I haven't done much research into economics so I don't know much about the field. But I am skeptical of some of the models I've heard about - for example comparative advantage assumes limits on capital mobility but now capital is entirely mobil so what happens to the whole idea?

>>3015912
Considering the economy at large is a different discussion but a fruitful one: a business might gain more business and thus be able to justify more workers if people are now using their higher minimum wage to buy more things. Theoretically this effect should balance out unemployment over vast periods of time, as increasing any particular portion of a fiat currency should eventually just balance out, given that there isn't any real meaning to "1 dollar."

>>3015906

Why am I asking what? Since when did I know everything?

I dont find anything disagreeable about what you said. I fully accept that something a labor monopoly can be unideal.

>>3015926

Which parts, silly? Do you know what LTV is? Have you actually read Smith? What is the problem?

>>3015927
I wasn't really defending Adam Smith, just trying to distinguish myself from other stupid schools of thought which might call themselves capitalist. My goal was merely to impart information using language, and I felt that was the most expedient means to that end.

>>3015923

This is the method in which economists evaluate models. Find one extreme, Find the other, evaluate the inbetweens.


I know that most of you have had no training, so I don't expect that you'll understand. But please try to follow. I changed my name to 'Anon' a dozen posts ago.

>>3015924

Alright, Ill keep that mind. I didnt notice.

We have talked on occations before tonight right? Were you the guy who said they had a masters in economics and thought it was all rubbish? And didnt advise OP to get into economics?

>>3015940
>Have you actually read Smith?
For once to this sort of question, yes, I have read Smith, including that tens of pages dedicated to describing his views on silver prices and corn and how they're related.

Also, as for LTV? I presume you mean the following?
http://en.wikipedia.org/wiki/Loan_to_value
Then no, I don't know what that is.

>>3015931
There are a lot of studies with conflicting results, and some of the studies are even inconclusive themselves (see this graph: http://waldo.jaquith.org/images/news/20060803_unemployment.gif)), but I don't know whether metaanalyses and shit of these studies have been fruitful. These studies also only examine what happens to the businesses and not what facet of their structure leads to these results, so we couldn't tell if they were unaffected by marginal utility or whether they didn't need to fire workers for a different reason.

>>3015933

Isnt this a broken window fallacy?

Whether or not the minimum wage laws existed, the money that would go to the workers under the minimum wage law would exist, and still get spent.

"Minimum wage should be $1000 an hour. Then everyone will have thousands of more dollars they can spend, in a market where everything costs thousands of dollars more, because it costed thousands of more dollars per hour in labor costs"

Its kind of like California.

>>3015935
You deleted your previous post, so there's no longer anything to refer to.


The point is simple: economists only present the effect of fixed labor rate changes on perfect competition models.


They do this because they'd like all markets to be perfectly competitive.

They like perfectly competitive markets because the math works out well and is intellectually appealing. However, they don't work. Power tends to concentrate, removing most of the elegant restrictions built in to the models by assumption.

>>3015952

That means no.

Labor theory of value.

>>3015952
god it was like 120 pages

it was painful and completely incorrect
better just to look up invisible hand, specialization of labor and save yourself ~900 pages of reading

>Were you the guy who said they had a masters in economics and thought it was all rubbish? And didnt advise OP to get into economics?
No, that was me. And I have an MBA, not an MS(econ).

>>3015961
Oh, then yes I do know it, but not by acronym. I think that value is derived by more things than labor. This has to do with the broken justification that Locke has given for private property rights, which AFAIK most people just run with instead of re-examining. The problem in Locke's justification of labor value of property rights is that he assumes, quite explicitly, that there is an infinite supply of resources in nature, unclaimed, ready to be claimed. In his day, he cited America as a new set of land, unowned by anyone. I felt even that that was a cheap copout as not everyone could just move to America. Nowadays it's totally bunk as all land is owned by someone.

>>3015955
This is assuming that the price the company charges is equally able to vary.

When walmart's labor costs increased, they couldn't very well move their prices up by the same amount. Their entire strategy is to keep costs low. They are forced to find more inventive ways to keep the stores operating while having higher labor costs.

This could mean laying off of people, but it could also mean the list of things that I presented 10 posts ago.

>>3015944
>Find one extreme, Find the other, evaluate the inbetweens.
>so I don't expect that you'll understand. But please try to follow
Are you trolling me? Presenting no evidence of your claim and then saying you don't expect us to understand is not very convincing. Please, just state under what conditions an "extreme" model shows that a minimum wage doesn't lead to unemployment? Monopsony? Market power? If we're looking at the "inbetweens" than between the extremes of monopsony and perfect competition, the actual market for unskilled labor is nothing like monopsony and very close to perfect competition, as shown by the statistics I have presented in my post you just quoted.

>>3015955
It's not a broken window fallacy. I don't think it's arguable that if people receive more money they're going to buy more shit (until inflation catches up). It might be a different kind of fallacy if I thought that this stimulated purchasing was good or something, but I'm just saying that's what minimum wage laws do directly aim to bring about, and it's a possible way they could "even out" on the business/consumer side. I'm not saying minimum wage hikes are a good thing, and I agree that your example is silly. Basically what I was saying was that if we define a minimum wage, it seems like the economy should eventually restructure itself around that, i.e. the minimum wage should always end up being one steak per hour or something.

>>3015957

>economists only present the effect of fixed labor rate changes on perfect competition models.

They do? Is it impossible to "present the effect of fixed labor rate changes" on monopolistic models?

It just seems perfectly modelable to me. And I think Ive looked at models in classes about monopolies and labor prices. And, it seems pretty lousy to not do it because" they'd like all markets to be competitive"

I find this hard to believe. But, you are the masters student...

>>3015969

Locke is a godfag.

And there is no observable finite amount. Nor is there a provable finite amount.

>>3015953

That's completely fair, but I think I can end this whole minimum wage debate right now then with some healthy skepticism: If we are not entirely sure about the effects of minimum wage, as the lack of meta-analysis and so on suggests, should we not consider making some decisions to increase the minimum wage on a case by case basis?

Also I do agree that the idea of two businesses A and B that do business together, one greatly affected and another not really is a good way to look at this in a broader scope that I should consider. (To: resident economist)

>>3015973

Yeah it could mean a lot of things besides laying off people. It doesnt mean it wont cost walmart money though. Right?

>>3015982
Locke's pretty cool, but he's dead wrong on in his core of his justification of private property rights and labor theory of value.

>>3015974
theoretical models

find the result from the theoretical models, compare them to the observed data.

at this point, economists make excuses about why they dont match and why the theoretical models are still valid.

I made my name so that you can tell who I am, so there shouldn't be any question as to which posts are mine.

>I has MS econ

>>3015977

You are assuming that inflation is not automatic.If wage increase is automatic in your idea, then so is inflation. There is nit more money to spend.

>>3015974

He is right, economists used extremes, and the resulting "in between" to look at stuff.

Thats all I want to say.

>>3015991

Locke is another person that morally likes labor.

>>3015989

This man deserves a prize. This is what I advocate: don't assume away the specifics of the situation so it fits a model. Just look over the situation and model is correctly

>>3015988

It certainly will cost Walmart more in labor costs (assuming they don't fire down to the same costs). However, if it forces walmart to find more efficient ways to produce, it could actually be good for walmart.

>>3015957
>The point is simple: economists only present the effect of fixed labor rate changes on perfect competition models.
>They like perfectly competitive markets because the math works out well and is intellectually appealing. However, they don't work. Power tends to concentrate, removing most of the elegant restrictions built in to the models by assumption.

1. Economist do create models with imperfect competition in labor markets: Here's a google scholar search of a few hundred papers on monospony:
http://scholar.google.com/scholar?hl=en&q=monopsony&btnG=Search&as_sdt=0%2C44&as_ylo
=&as_vis=0

2. The market for unskilled labor has a hundred million workers in the US. Walmart employees around 1% of them. Do you think that gives it market power?

>>3015997
It's "automatic" but not instantaneous. I don't think this is relevant to my main point at all, but there should pretty clearly be a (however short) period of increased spending from the people receiving the higher wages.

>>3015977

> don't think it's arguable that if people receive more money they're going to buy more shit (until inflation catches up)

The workers have more money to spend, but now, the company doesnt. There isnt a change in spending. Just a change in who is doing the spending. But neither group has to necassarily be spending.

I agree, the economy will reshape itself in the event of a minimum wage law.

I wish I got paid in apples per steps. Or kilowatt hours per cell division

>>3015994

Where did you get your masters anyway?

>>3015997
Nothing is automatic in an Economy with friction, only in your models.

Uncertainty, uncertainty, uncertainty. Understand it, accept it, and move on.

>>3016011
good luck with that

>three body problem

>>3016013

> implying the rate would take place and the companies would have no prior notice
> implying they would not change the price the very second the wages are forced to go up
> implying you understand economics at all

what is with you people?

>>3016011

>However, if it forces walmart to find more efficient ways to produce, it could actually be good for walmart.

I think it was very much in walmarts interests to be efficient to begin with.

Its sort of like, Wal Mart is continuously reimagining its operations, and its supply chain is like a river that is forever finding smoother and more efficient ways. Then the government makes some judgement about how Wal Mart should be efficient, and its like a boulder falling into that dream, which just fucks up everything about the flow that Wal Mart had going.

>>3016036

Exactly. Anyone who thinks that a company is not operating at as close to efficiency as they can now knows nothing of economics.

Also, there is no question that walmart has lots of pricing power in the labor markets. It is so much the case that walmart shuts down any store where labor tries to organize to negotiate better prices. Walmart dearly values their downward pressure on labor prices.

Obviously, 1% of the entire labor market doesn't look large. But, when you consider how much of the 'unskilled' labor is really thinking of working at a place like walmart, you see that those kinds of places have much more power in setting wages.

given the data you've presented, most unskilled workers cannot be working close to minimum wage, which implies that they're not working for companies that hire unskilled labor at the minimum wage.

>>3016034
What? Companies can't suddenly predict for price shifts, and why would they automatically raise the price to keep the same amount of sales?

>>3015994
>theoretical models

OK. I'm going to spell things out very slowly and against my better judgement assume you are not trolling. I asked " under what conditions do models show that minimum wages do to create unemployment". "theoretical" is not an answer. *What* theoretical models show that it doesn't create unemployment? What assumptions do they make?

You keep saying that you should compare the theoretical model to the real world to see if it's valid. Fair enough. I have presented statistics on why the labor market for unskilled labor is perfect competition, in which theoretical models show that minimum wages create unemployment. Please tell me what a theoretical model that shows no unemployment from it looks like so we can see how "valid" it is.

>>3016055

Why do you keep saying the company will not know the forced wage increase is not coming?
Why do you think the company will not raise at the same rate?
Why do you think the company will not spend a lot of time on predictions for new prices based upon new costs?

Raise costs to the same rate in reference to the new wage. Readjust if different. Seems logical.

>>3014872
Anyone who thinks economics is congruent to the laws of physics is a moron.

>>3016070

What about those physics formulas that are identical to those economics formulas?

>>3016069

I agree

>>3016034
>>3016036
>>3016042

look guys, im not telling you that companies are horribly inefficient innately. I am saying that companies will adjust to wage floors by some alternative means. Assuming that a company is 100% efficient is assuming that it has information that it doesn't have (marginal cost). Companies do no optimize by taking first derivatives of arbitrary cost functions, they analyze each decision on a case by case basis. So, if Walmart sees their labor costs go up, they may decide not to raise prices. I'm not saying they definitely wont raise prices/fire workers, I'm just saying the dogmatic answer related to the general modeling of the situation is not correct.

I'm really tired of explaining the same concept repeatedly. If you haven't understood the flaw in the canned response yet, then there's no hope.

But please understand, there a lots of underlying assumptions in these models that are never discussed/disclosed to the people using them. Most of the models would provide inconclusive/non-elegant answers if these assumptions were weakened/dropped.


you guys have fun hashing it out- I tried to help

>>3016074
What about trailer park wiggers identical to street niggas?

>>3016080

I completely agree.

>>3016042

But if it's operating at efficiency that means it has only as many workers as it needs, meaning if wal-mart dealt with a min. wage increase they'd have to a) shut down a branch or b) use some profits. Isn't this a case where minimum wage would redistribute wealth without too much harm, well, except to the profits which is a fair point I guess. In a place where the goal was such a redistribution wouldn't it be fine? I hear people aregue against this kind of stuff by saying that it will decrease business in the area but wal-mart is already there. I guess I see this as more of a political game. The businesses can start up in this town A, and if the municipal government wants to make the town prosper they could make the minimum wage go up municipally, in theory, to the point where it's still profitable for wal-mart, and more profitable for the workers and the town. Of course, there'd be a possible lack of future investments maybe but I just realized this is a clever idea for towns that prefer to keep their mom and pop shops or whatever. Although I doubt municipal wage laws can be made. Now I'm just tired and rambling.

>>3016070
Anyone who thinks they are not is a moron.

>>3016069
Businesses that use minimum wage labor are least able to raise prices. Fast food franchises often do not have the authority to change prices. Supermarkets are extremely price-competitive and can't stay in business if they have to overnight increase prices by 20%.

>>3016086

dey all jusus wack

>>3016059
basic perfect competition, perfect information, supply and demand for labor.

You have equilibrium at supply=demand (where the economy is assumed to be ex ante).

Now impose a minimum higher than equilibrium. There will be lower labor demand and higher labor supply (more people wanna work, less people wanna pay)


That is the skeleton of a theoretical labor market model.


I'm really done now, hope you guys get wise

>>3016080

Your want for forced regulation to create more efficiency is puke inducing. You know nothing of economics.

>>3014872

Except real capitalists don't give a fuck about employment.

>>3016069
Imagine I'm a dildo manufacturer and I just heard that every single woman got a wage increase. What would motivate me to raise my prices such that my sales stayed the same? What kind of fucking idiotic business owner would deliberately reduce sales?

If you want to argue that he raises it such that he receives the same amount of money as he would from more cheaper sales, then you are still agreeing with me: some businesses see a net gain after wage hikes occur. I have no fucking idea what you are trying to argue.

>>3016093

> implying they will not ask for more out of their workers for less money
> implying mom and pop shops will have a chance survive with wage increases
> implying the higher wages does not promote monoplies

>>3016080
> companies will adjust to wage floors by some alternative means
Like reducing workers, reducing services, reducing business hours, or going out of business.

>>3016104

Wage increase means cost increase. Easing the price to the new wage rate would not lower sales. If it is the same rate it would follow that the same amount of sales would happen. If the dildos cost 1 percent of the women's salary then raising it to match 1 percent of the new wage would not lower sales as they want to pay that amount already. This is not difficult to understand.

I dont want to criticize Anon. In every way I am inferior to him since he has a masters in my field, and I am an undergraduate.

I just find that so far all of his explanations for how economics is bullshit is stuff Ive heard, but didnt convince me that economics is bullshit.

>>3016048
>It is so much the case that walmart shuts down any store where labor tries to organize to negotiate better prices.

Here's a Wall Street Journal about unionized Walmart stores. Do you think they don't exist?
http://online.wsj.com/article/SB123992564986427357.html

>Obviously, 1% of the entire labor market doesn't look large. But, when you consider how much of the 'unskilled' labor is really thinking of working at a place like walmart, you see that those kinds of places have much more power in setting wages.

What? I can't believe you said that. That's a text book example of what a perfectly competitive labor market looks like: a large number of firms offering similar jobs with each firm having a small share of the market. Walmart, the biggest employer is fucking 1.3%. Fucking 1.3%.

>>3016099
>Now impose a minimum higher than equilibrium. There will be lower labor demand and higher labor supply (more people wanna work, less people wanna pay)

I asked you for a situation where a minimum wage DOESN'T create unemployment. This is a situation where it does. Which I thought you didn't believe! You have never mentioned any model where unemployment doesn't result from a minimum wage. Hell, *I'm* the one bringing up (and disproving) monopsony.

I feel like I'm taking crazy pills from arguing with you.

In conclusion Economics is really cool and correct all the time.

>>3016236
>In conclusion Economics is really cool
Sure.

>and correct all the time.
Wait what?

>>3016238

YOU HEARD ME.