Tesla files a petition against U.S. labor board order
reuters.com
reuters.com
[1] https://www.freep.com/story/money/cars/2021/03/25/elon-musk-...
The National Labor Relations Act has survived court challenges since 1935. I doubt it'll go down here.
If policies like the war on drugs and asset forfeiture are (as I suspect) not actually supported by the people, then my route is to convince my fellow voters that we should get rid of those laws/policies. Perhaps we should elect representatives who will do a better job of doing what we want; perhaps we should let our existing representatives know how we stand. My route is definitely not to support leaving those laws on the books as I cheer on the government failing to enforce those laws. That doesn't question the laws I don't like, that questions the entire notion of the rule of law. (In particular, one moral issue I have with both the war on drugs and asset forfeiture is the way that those laws lend themselves to selective enforcement - so it certainly does not help my cause for the government to happen not to enforce them today but to retain the option in the future!)
If they are supported by the people, but they're not constitutional, then I do not, in fact, support the government spending my tax revenues defending unconstitutional laws, and I attempt to vote for executives (presidents who appoint attorneys, district attorneys that I can vote for directly, etc.) who know better than to defend unconstitutional laws. And I do also monetarily support organizations that sue the government in court. In this particular case, as a sibling comment noted, it seems hard to believe that the NLRA violates the First Amendment and nobody's noticed in almost a century.
If a law is supported by the people and constitutional, then my only legitimate avenue is to try to change the people's minds - it's not legitimate for me to sidestep debate on the merits of the law and say "Oh, my poor tax dollars! How expensive enforcing this law would be!" (And asset forfeiture pays for itself, so it's not like that argument would even work.)
I mean, if that's your position, that's your position.
If it's an "immoral" but constitutional law, then I'm in a harder place. As a leftist Christian I'm pretty aware that my personal views on morality are not particularly widely shared by my fellow citizens (even though I happen to agree about DOMA being immoral), and part of the deal of living in a constitutional democracy (as opposed to an absolute monarchy or a theocracy) is that I don't get to impose the entirety of my morality on others and they don't get to impose theirs on me. And that's a great deal for me, knowing just how many Christians think merely being left-leaning is immoral and just how many left-leaning folks think merely being Christian is immoral. Our society has decided to enshrine a subset of widely-agreed morality into the Constitution - that certain laws are so unjust that they may not be made - and then we agree that the rest of it is up to the mechanisms of democracy.
So if it's constitutional, I'll certainly do my best to argue that the law should be repealed, through the legislative process, and I'll try to convince others to convince their representatives in turn to repeal the law.
But if it's constitutional, and it's popular - what exactly should I advocate when I say the government shouldn't enforce it?
Should I say that the government should spontaneously decide not to enforce this one law? Besides the obvious problem of it remaining on the books unchallenged, which would have made the process of overturning it even longer, it seems directly contrary to the rule of law to support laws going unenforced because of one person's view of morality. What happens when someone convinces the SEC it's immoral to go after ICOs because the growth of cryptocurrency is important to humanity, or whatever? What happens when someone convinces the IRS it's immoral to enforce tax laws against business owners, based on the morality described in Atlas Shrugged? Were I to support the principle of not enforcing laws that someone calls immoral, I suspect it would not actually achieve my political goals.
Should I say that the government should get out of the business of enforcing all laws about a certain subject? That also would go poorly - in the case of DOMA, I'd be saying that the government should not regulate marriage at all and should refrain from enforcing laws that ban child marriages, non-consensual marriages of adults, polygamy, immigration fraud, and so forth. I won't say that.
Should I say that the Constitution should be amended to enshrine my view of morality? Sure, but I think that's an extremely arduous process, and I think it's great that it requires so much of the country to agree on it, because, again, I don't want to be subject to other people's view of morality. I'll happily try to convince enough people that we should amend the Constitution, but it's easier - by design - to convince enough people that we should just repeal the law.
But what do you think lawyers arguing cases before the courts do? They don't simply say "Please, O smart judge, tell me if this is constitutional." They come up with their own argument for or against it, as strong as they can make it, and they try to persuade the court. You can do that same analysis and just not argue before any court.
The DOJ memo I linked has them doing exactly that: the president (who was a trained lawyer) concluded that DOMA was unconstitutional and told the DOJ, and the lawyers there looked at it and agreed. There's an interesting distinction made there between "professionally responsible" arguments and "reasonable" ones.
Before it ever gets to court, how would you know a law is unconstitutional? Or are you willing to make that call yourself?
If you’re willing to make that call yourself, what happens when the courts disagree? Do you then change your mind? Or do you continue to hold your belief?
I’m trying to understand how your approach works in the real world.
Frankly, I don't often have a strong opinion on whether something is constitutional or not, because I'm not a constitutional law scholar, and both the judges and the lawyers are more qualified than I am. If you asked me in 2015 whether Obergefell had a constitutional right to get married, I probably would have looked at the circuit split and shrugged. Who am I to have the right answer when a bunch of experts can't agree? You may as well ask a Supreme Court justice to code-review a kernel patch I wrote - on what basis should they have an opinion on it?
But there are rare times when an obviously unconstitutional law gets passed. I did believe that the "heartbeat bills" that were recently proposed and passed were unconstitutional, because of Roe v. Wade, and it seems like the courts have generally reached that conclusion too. Those are great examples of laws where I'd be supportive of the state attorneys not wasting resources on defending them, because I think it would pretty clearly be a waste. (But if the courts were to say there's some reason that these laws don't run afoul of Roe, then I would suspect they understand the Constitution better than I do and I would try to understand their reasoning. That likely wouldn't change my mind on whether the law is moral, but I would feel like I should hear them out on whether it's constitutional.)
Sometimes I continue to believe that the courts made a mistake, but I understand that my opinion isn't the one that counts, the courts' opinion is, unless I can change who's on the courts (by voting for them or for the people who appoint them, or by supporting those election campaigns).
If it ever happens that I see something where it seems like the courts are so obviously wrong about some law's constitutionality, to the point where I can no longer trust the courts to enact justice in their conclusions about anything, then I would be obligated to oppose the whole system of government. But that's a very high bar. Even after Dred Scott v. Sandford, the primary conclusion in terms of the constitutional merits of the decision (as opposed to the moral merits) seems to have been that the Constitution needed amending, not to that the system reached the wrong conclusion with the Constitution as it existed.
(To be clear, there is an argument that Dred Scott was wrong given the Constitution at the time for trying to interpret Sanford's right to property in the way it did. That argument was used by Scalia to dissent in Planned Parenthood v. Casey and by Roberts to dissent in Obergefell v. Hodges. If my goal is morally-good decisions aligned with my morality, it would be counterproductive to agree with Scalia and Roberts' argument that Dred Scott was bad because it was invalid.)
So far, I have not seen anything from our present government - not DOMA, not asset forfeiture, not the immoral restrictions on medical care that certain states are passing lately, not the deaths of innocents both by domestic police and overseas soldiers, not our treatment of people trying to cross the border, much as I hate all of those things - that is bad enough to compel me to question the whole system of government. Every year I decide to pay my taxes (or, more practically, to keep my high-paying tech job that results in more tax revenue from me than the government spends on me), I decide I don't have a moral objection to the system of government, and I can satisfy my moral obligations by using the levers that system gives me as a voter.
And there are big regulations about not doing anti union things.
I, for one, can’t see anything particularly wrong with this tweet and don’t really care what the law says, I’m opposed to unions and labor boards having the power to silence somebody saying this.
you really don't see the difference between just anyone saying this and the employer saying this? what you personally feel about unions is irrelevant; there is a very clear imposition of power over the employee here and manifestly why the laws are as strict as they are. just so no one willfully misconstrues what i'm saying: what's at issue here is that the employee's continued employment is contingent on their employer's opinion of them hence this is tantamount to an overt threat. saying you don't see anything wrong with what he said is like saying you see anything wrong with a teacher implying quid pro quo for sexual favors from students.
Is change payment schedule after unionization legal?
> The acronym TIPS can help remind employers not to:
> * Threaten—never threaten to retaliate against employees by terminating them or reducing pay or benefits.
> * Interrogate—do not interrogate employees about their activities or activities of co-workers.
> * Promise—do not promise anything to employees, such as promotio ns or benefits, in exchange for not supporting the union.
> * Surveillance/Spying—never spy on union activities.
Hm, where is this imposition of power? I see what could be clearly called bargaining.
Btw, my apologies if this sounds too harsh, but comparing it to "sexual favors" not only absolutely meaningless, but probably qualifies as a dirty emotional trick aimed at ungrounded shaming of those who disagree with you.
Isn't this ironic? The whole point of a union is collective bargaining power; individual employees do not have any bargaining power so how exactly is musk engaging in bargaining? With whom is he bargaining?
>but comparing it to "sexual favors" not only absolutely meaningless,
They're both examples of coercion by someone with power over a subordinate, they both involve trading your body (in the form of labor or sex) for money (or some sort of compensation), and they're both generally recognized as exploitative. These are three obvious features that make them analogous propositions.
No, the teacher is (indirectly) your employee and it doesn't matter. If they threaten to withhold a grade you've earned it's clearly criminal, regardless of the threat used.
> they both involve trading your body (in the form of labor or sex) for money (or some sort of compensation)
If prostitution and a job are the same then it means prostitution isn't bad. But maybe your equivalency is wrong.
> they're both generally recognized as exploitative
I bet you'd say that letting your starve by not hiring you would be exploitative too.
It's incorrect statement. I bargained with my employers multiple times in individual capacity. There are some points which are easier to bargain about collectively, and some which are better done individually, btw
https://www.mtsu.edu/first-amendment/article/495/associated-...
> In addressing the First Amendment issue, Roberts observed that although the AP claimed to have discharged the employee for biased reporting, the record revealed the actual reason to be his union activity, which had no bearing on First Amendment issues: “The business of the Associated Press is not immune from regulation because it is an agency of the press. The publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others.”
https://www.law.cornell.edu/uscode/text/29/158
Musk would similarly find himself in trouble if he said, say, "OHSA rules are bullshit and you don't have to follow them", despite it being First Amendment speech.
Doing it in this case would be retaliation for a protected action. The National Labor Relations Act ensures the right to organize unions, and changing pay as a result of union-related activity would be illegal retaliation.
This is similar to how an at-will employee can be fired for any reason _except_ for a protected class, like their race / gender / religion, etc.
I’ll take my downvotes, but think about it. It’s a startup, they didn’t have huge profits at that time. People should be allowed to state facts, or opinions for that matter.
See https://apps.nlrb.gov/link/document.aspx/09031d45833ef7a1 for the actual language. A snippet:
"The General Counsel argues that to remedy fully CEO Musk’s unlawful May 20, 2018 tweet, which coercively threatened that employees would lose their stock options if they selected the Union as their representative, the Board should order the Respondent to have Musk delete that tweet and to post a notice addressing that violation at its facilities nationwide. Consistent with our recent decision in FDRLST Media, LLC, we shall order the Respondent to direct Musk to delete the unlawful tweet from the @elonmusk Twitter account and to take appropriate steps to ensure that Musk complies with the directive."
What he meant isn't what's at issue. It's what it appears to be to employees.
I don't think first amendment rights mean you have the right to literally say or write whatever you want, such as a threat, without consequence. And Musk did make a threat, it was just a milder one than to send in the Pinkertons.
Also, which constitutional rights are in conflict here? Labor law is just enacted law, not constitutional in nature. If labor law conflicts with the Constitution, the Constitution wins.
Obviously extreme examples, but making a point that first amendment has many things it does not protect.
I wasn't asking about whether terroristic threats were legitimate exceptions to First Amendment protections; I asked whether labor law was.
My personal feelings are that if a company needs to resort to threats and retaliation to prevent unionization, then the workers do deserve to unionize, because the company clearly is willing to trample on any worker who dares threaten its authority, and only collective action on the workers' part is likely to counter that.
The "just a prank, bro" defense?
He could have said that he/Tesla have been trying to get those included but UAW refuses. Instead, he just says, "Well they usually don't, so I mean it's your call if you want to lose them or not, /shrug."
If he cared, he'd put in the effort. Instead, he's just citing precedent in the form of a vague threat instead of being the "cool CEO" people make him out to be and trying to do some good.
Removing stock options just means that many fewer communionists have a say over other matters in the company because they won't buy stock.
The issue is the way unions work (or at least my understanding, correct me if wrong) is that in many places once a union has taken hold, they actually get the right to prevent a non-unionized worker for working. That's absolutely crazy to me (and evil, and inefficient).
---
Note: The above doesn't mean that Elon doesn't treat his workers like shit - he does. I wish people would see through the cult of personality with him, because so many workers have sustained injuries on the job or just burnt themselves out for someone who really doesn't care about them.
The thing with trying to save humanity from existential threats, is ethically speaking you can justify sacrificing as many actual humans for the cause as necessary.
But yeah, unions aren't the mechanism to fix that.
Lots of states don't work that way (with "right to work" joining a union is always purely optional). The problem is that it empirically results in far worse outcomes for workers. With right to work unions are weaker because individuals can freeload off of the improvements in pay / working conditions achieved by a union without contributing back.
* interrogated workers over suspected unionization efforts
* threatened workers with the loss of their stock options if they unionized
* fired one worker and disciplined another over protected union-related activity
* had a policy prohibiting employees from communicating with the media, in violation of their right to speak “concerning labor disputes and terms and conditions of employment”
Elon's tweet is a side-show.
Imo the value of the UAW should be to provide a lower bound for worker pay/treatment. Tesla seems above that (at least for factory workers).
So because Tesla’s stock price is high he doesn’t have to follow labor laws?
It doesn't lead to the poor suddenly being able to afford fish fillet and steak. It leads to the poor going hungry. There is absolutely no public welfare benefit in creating statutory minimums on wages, benefits and working conditions.
The arguments that rationalize the granting of extra-contractual rights to labor unions, and labor regulations in general, are basically just economic fallacies that rent-seeking unions popularized.
-Thomas Sowell
> The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case....
> [discussion of economic research that shows no consensus if increasing minimum wage empirically leads to greater unemployment]
> Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers. A study by the Congressional Budget Office (CBO) estimated that a $10.10 minimum would reduce employment by 500,000 jobs but would increase incomes for most poor families, moving 900,000 people above the poverty line. Similarly, a recent paper by the economist Arindrajit Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent. The economists polled in the 2013 Chicago Booth study thought that increasing the minimum wage would be a good idea because its potential impact on employment would be outweighed by the benefits to people who were still able to find jobs. Raising the minimum wage would also reduce inequality by narrowing the pay gap between low-income and higher-income workers.
> In short, whether the minimum wage should be increased (or eliminated) is a complicated question. The economic research is difficult to parse, and arguments often turn on sophisticated econometric details. Any change in the minimum wage would have different effects on different groups of people, and should also be compared with other policies that could help the working poor—such as the negative income tax (a cash grant to low-income households, similar to today’s Earned Income Tax Credit) favored by Milton Friedman, or the guaranteed minimum income that Friedrich Hayek assumed would exist.
But what has been demonstrated suggests that minimum wage decreases job growth:
https://web.archive.org/web/20160410035745/http://economics....
And this is exactly what economic theory would suggest.
Basic supply and demand theory tells us that the minimum wage, to the extent that it has an effect, harms wage growth. In the absence of the ability to conduct controlled experiments to prove definitively its effect one way or another, we should opt to trust basic economy theory.
>>Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent.
He hasn't shown anything. These studies are at best suggestive, and based on some amount of conjecture by the study authors. They also have difficulty measuring long-term effects, which in any case of any anti-market intervention that redirects profit for investors, to give workers above market wages, while redirecting private sector income to the larger roll of welfare recipients, will be negative for wage growth.
I am not going to believe that a centrally imposed price floor, that is universally considered harmful, and a source of deadweight losses, in economics, just happens to be beneficial in its one application that has been most heavily politicized.
So trust the 101-level dogma, even though it's not been validated empirically, and it's also quite clear that actual economic and sociological systems are far more complicated than its models?
The problem with econ 101 is that it's oversimplified yet so seductively simple that you can give a group of people a 400 page persuasive econ book, a good chunk of them will be confusing the map for the territory by the end of it.
It's not dogma. It's a very strongly supported economic principle. In the absence of definitive proof either way, we ought to trust well-tested and supported economic principles.
Price controls == bad
>>it's also quite clear that actual economic and sociological systems are far more complicated than its models?
This is a strawman. Economists are fully aware of the imprecision of predictions made based on theories relating to generalizations and simplifications of the economy, and also that this doesn't change the fact that these theories do a good job of approximating the effects of government interevention on real world economies, and that it is far better to legislate in accordance with them than in conflict with them.
The idea that some cookie-cutter price floor, recklessly imposed on a diverse landscape of economic actors, based on utopianist left-wing drivel pushed to the public by rent-seeking labor unions and left-wing demagogues, is going to do more good than harm, is very very misguided.
We're talking about economics here, the social science where it's notoriously difficult to conduct controlled experiments?
> This is a strawman. Economists are fully aware of the imprecision of predictions made based on theories relating to generalizations and simplifications of the economy, and also that this doesn't change the fact that these theories do a good job of approximating the effects of government interevention on real world economies, and that it is far better to legislate in accordance with them than in conflict with them.
You really should read the whole article I linked above: https://www.theatlantic.com/business/archive/2017/01/economi...
> [A repetition of anti-minimum wage dogma from popular persuasive economics books and places like the WSJ and AEI.]
> The real impact of the minimum wage, however, is much less clear than these talking points might indicate. Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level. When economists try to tackle this question, they come up with all sorts of results. In 1994, David Card and Alan Krueger evaluated an increase in New Jersey’s minimum wage by comparing fast-food restaurants on both sides of the New Jersey-Pennsylvania border. They concluded, “Contrary to the central prediction of the textbook model ... we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”
> Card and Krueger’s findings have been vigorously contested across dozens of empirical studies. Today, people on both sides of the debate can cite papers supporting their position, and reviews of the academic research disagree on what conclusions to draw. David Neumark and William Wascher, economists who have long argued against the minimum wage, reviewed more than one hundred empirical papers in 2006. Although the studies had a wide range of results, they concluded that the “preponderance of the evidence” indicated that a higher minimum wage does increase unemployment. On the other hand, two recent meta-studies (which pool together the results of multiple analyses) have found that increasing the minimum wage does not have a significant impact on employment. In the past several years, a new round of sophisticated analyses comparing changes in employment levels between neighboring counties also found “strong earnings effects and no employment effects of minimum wage increases.” (That is, the number of jobs stays the same and workers make more money.) Not surprisingly, Neumark and Wascher have contested this approach. The profession as a whole is divided on the topic: When the University of Chicago Booth School of Business asked a panel of prominent economists in 2013 whether increasing the minimum wage to $9 would “make it noticeably harder for low-skilled workers to find employment,” the responses were split down the middle....
> ...Nevertheless, when the topic reaches the national stage, it is economism’s facile punch line that gets delivered, along with its all-purpose dismissal: people who want a higher minimum wage just don’t understand economics (although, by that standard, several Nobel Prize winners don’t understand economics). Many leading political figures largely repeat the central theses of economism, claiming that they have only the best interests of the poor at heart....
> ...This conviction that the minimum wage hurts the poor is an example of economism in action. Economists have many different opinions on the subject, based on different theories and research studies, but when it comes to public debate, one particular result of one particular model is presented as an unassailable economic theorem. (Politicians advocating for a higher minimum wage, by contrast, tend to avoid economic models altogether, instead arguing in terms of fairness or helping the poor.) This happens partly because the competitive market model taught in introductory economics classes is simple, clear, and memorable....
Yes. All sciences besides physics, chemistry and biology cannot test theories with controlled experiments. This extends to epidemiology and climatology too.
It doesn't mean we dismiss the scientific consensus on vaccines, climate change or price controls.
>>A repetition of anti-minimum wage dogma from popular persuasive economics books and places like the WSJ and AEI
If you want to keep calling widely accepted scientific principles, like price controls creating economic deadweight losses, a "dogma", we can just end the discussion.
>>Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level.
Because minimum wage almost always is extremely mild in its application, in only affecting something on the order of 4% of jobs. Combined with the challenges to measuring impact that come from labor mobility, minimum wage restrictions don't create easily observable effects.
Any significant application would have effects that couldn't be ignored or obscured by left-wing ideologues.
In any case, my point is that the principle of price controls being harmful is widely accepted in economics, due to a century of empirical observations. It's unsound to create legislation that conflicts with the principle.
You've provided some study-based arguments that low-skilled market participation hasn't been harmed by historical changes - my question for you is, do you think this is an absolute rule, or just a happenstance due to the regions under study not making minimum wage high enough to be really detectable? i.e. that few workers are actually being paid minimum wages, so changes don't hit large parts of the population.
To clarify this, I'm curious about your opinion on a thought experiment - and I'm not setting this up to trap you - I also favor some type of living wage and a fair society, and don't support absolute free market capitalism by any means. But the question - with a 50$ minimum wage, can you see how someone would think that a lot of low-skilled workers would be out of a job? I can make the number as high as necessary; the point is to check whether you think that this change, given employers freedom to hire or not hire, would result in lower skilled workers losing jobs preferentially.
To me, at high minimum wages, this is obvious - but at lower wages, this wouldn't be a prominent effect, and the net life quality gain of the minimum wage law may be positive.
Just trying to get us on the same page here finding a balance between the gains from ensuring living wages, but admitting that minimum wages also have a disproportionate effect on lower skilled workers, which becomes more prominent as you set the minimum wage higher; if you're willing to admit that a 50$ minimum conceptually hits lower skilled workers harder, just on the face of it, this applies even lacking empirical studies of an actual implementation of it.
Given that, we just need to balance the tradeoffs on the top and bottom here; personally, I think solutions like EITC can dodge most of the skill-based discrimination high minimum wages might generate, and also put the onus on the population to pay taxes to support this. I think the opponents of minimum wages, regardless of their ideological rationale, would be persuaded more easily by an admission that there are costs as well as gains of high minimum wages; attempts (like EITC) to reduce distortion would undercut a lot of their objections, and might allow improved systems to actually be implemented (since businesses have much less reason to oppose EITC than direct minimum wages); this would actually improve the general quality of life.
https://web.archive.org/web/20160410035745/http://economics....
In the absence of definitive evidence either way, it would be prudent to err on the side of basic economic theory, that says mandatory price floors create economic deadweight losses.
Obligatory reminder: compared to that of capital, labor's mobility is non-existent.
Pay minimum living wage
Don't hire someone
Free hiring at the market price for employers, so they can hire very unskilled people at low wages, for them to gain experience (i.e. hiring homeless guys to pick up cans, which is currently so unprofitable that nobody does it)
The government makes up the living wage gap with effectively a "negative income tax" for low wage workers.
At the same time avoiding making everyone a gig worker, as would be so seductive and disastrous due to lack of personal stability?
Show me the money (i.e. not a blog post. Something peer-reviewed)
Also, how does lowering someone's tax burden help if they aren't being paid a living wage? Plus they have to file for it at the end of the tax year, instead of just having the money to pay bills.
Otherwise arguments for a minimum wage don't have to take into account the costs, which are things like "person with no experience can't be hired to get more experience" for N$/hour, N<minimum wage.
And since the arguments naturally sound more "caring" than "no minimum wage", the natural bias will be to favor them, and proposing minimum wages will be a popular action (which is what we observe).
There must be some upper limit below 50$/hour, right? What are the limiting factors that come into play there, and why don't they come into play at 15$/hour?
Big corporations can always undercut small companies on costs by investing into capital expensive technologies. Does it mean the smaller companies should be allowed to run wage slavery? No, because then we run into arbitrary wage differentiation.
The proper way to evaluate the minimum wage is to compute local Purchasing Power Parity, check how many PPP-dollars are required for life, then set the minimum wage at slightly higher level to compensate for how rarely it is adjusted. These numbers will be a bit different per state in plain US dollars.
Anything else is not a living wage, and a living wage is the only reasonable way of approaching it.
From capitalist point of view, a business that cannot supply a minimum wage is insufficiently competitive and should fail. It is trying to run feudal by creating wage slaves.
Alternative approach would be interventions to lower PPP-adjusted cost of living, such as building cheap or free housing, not means tested food stamps, free healthcare, free education etc. But these are much less predictable, and put the onus on government, while at the same time allowing bigger corporations to undercut their salaries, so it is at best a part of a combined approach.
The existence of regulatory restrictions on free market exchange, that distort the free market, will rarely justify further regulatory infringements on contract rights, like the minimum wage. The additional regulatory restriction will generally add to, and not counter-act, the existing market distortions.
>>The proper way to evaluate the minimum wage is to compute local Purchasing Power Parity, check how many PPP-dollars are required for life, then set the minimum wage at slightly higher level to compensate for how rarely it is adjusted. These numbers will be a bit different per state in plain US dollars.
That in no way determines if a price floor of labor will do harm to public welfare and the economy.
>>From capitalist point of view, a business that cannot supply a minimum wage is insufficiently competitive and should fail.
That is not a "capitalist point of view". It's just a pure economic fallacy that harms all those who are priced out of work, and capital that is less efficiently utilized as a result.
I recommend you read the Wikipedia article on price floors:
https://en.wikipedia.org/wiki/Price_floor
And then consider how a price floor would affect available labor.
You guessed it right, serfdom. The ultimate "capitalist" system.
Labor is not a typical price elastic product, when it is required to live, its price is relatively inelastic. The capitalist always has a way to drive the cost of labor down, whether it is by overloading workers or not. The workers do not have the means to negotiate hiring price in most instances, so equilibrium analysis does not apply either way. One side has a smooth choice, the other has barely a binary choice, and ofte not even that.
Setting a price floor on a price inelastic good will not increase the price because people will not buy/sell less of it. Demand and supply is unchanged.
Additionally, employers are not buying people's labor off a market. There's not a "list of all employees where they set the price they want to work for" which would be required for employment to be an actual market. When an employee cannot set the price, market price discovery just does not work by definition. The "job market" is a glib lie. Only the employers compete, but employees do not. And employers do everything to prevent price discovery or make their option the only possible one.
Ever heard of work rules to not share your wage with coworkers? Is that compatible with free market?
>> The capitalist always has a way to drive the cost of labor down, whether it is by overloading workers or not. The workers do not have the means to negotiate hiring price in most instances, so equilibrium analysis does not apply either way. One side has a smooth choice, the other has barely a binary choice, and ofte not even that.
This is simply not true. Wages tripled in China over the last 20 years:
https://www.ineteconomics.org/perspectives/blog/chinas-wage-...
Another example is the so-called Gilded Age US. During the late 19th century in the US, there was no income tax, personal or corporate, little-to-no labor regulations, and very weak unions (largely because of the lack of labor regulations granting them extra-contractual rights at the expense of the free market).
Wages grew at records in the US during the late 19th century, and this was amidst massive immigration of low-income laborers from Europe, who increase the supply of low-skilled labor and thus apply downward pressure on wages.
In neither of these cases was this because of regulations. It was because of investment of surplus output into new capital by profit-motivated individuals, that increased productivity and thereby allowed even larger surplus outputs. All these additional economic resources led to labor being bid up. We see a microcosm of that in Silicon Valley amongst tech workers.
So productivity growth, derived from the [ investment -> productivity-boost -> greater investment ] cycle is the primary source of wage growth, and the reason wages are 20X higher today in the US (after adjusting for inflation) than they were 200 years ago. We're nowhere near the limits of what levels of productivity this fundamental market process can attain.
Adam Smith:
"As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."
1) No minimum wage would lead to higher employment.
Nice assertion, care to back it with any data? Any actual experiment?
2) Chinese wages increased.
Yes, however that is not related to minimum wage. This is related to creating jobs with desirable outputs, for which people will pay more, and as the capital wants to exploit this demand, they will hire workers. Perhaps even pay them a bit more, but typically not even close to equilibrium price of the labor - they have to make profit, and preferably a lot of it, beyond even covering the initial investment. That because anyone not maximizing profit is thought to be less competitive for some reason. (Actually they might be just as competitive if not more but the exploiter will have more advertising funds or can hire more people, or can engage in price dumping. An unfair advantage not related to efficiency or quality. There may be other unfair advantages involved.)
Profit is a bait that may bring investment from some agents, you could have investment even without profit. So can productivity boost.
Somehow I'm not seeing capitalists paying the windfalls of production to workers, which would be required for equilibrium analysis to work.
Thinking that slavery is profit-maximizing is very zero-sum, and disproven by history. Actual profit maximization over time involves lots of freedom and choices for individuals participating in capitalism.
https://upload.wikimedia.org/wikipedia/commons/thumb/9/92/Sl...
The outliers (Saudi Arabia 1962, despite current wealth) are due to resource extraction, not truly positive sum freedom + capitalism.
Similar proposals like "Punish X crime more harshly" or the opposite "Let's let people out of jail early out of mercy", or "let's just make food free" also sound good initially, and are totally valid policies to consider - once we include all the hidden costs in the calculation of whether it would actually help!
The issue here is the law actually gives employers a choice: "pay living wage" or "pay nothing by not hiring someone" and I'm afraid they'll choose the latter too often. I'm worried that if you set the living wage too high, you'll push employers to take that choice more often; it'll be a nice-looking policy, but more people might be suffering.
A proposal which eliminated the "don't hire someone" choice would be more effective - either Earned-income tax credit (where employers truly compete economically, and the government fills in the salary gap up to a living wage), or direct employment by government. Both of those are less distortionary and I think achieve both of our goals - people having enough money to have good lives.
This is so flat wrong, have you ever bothered to read how theae laws came about? Maybe you should not assume that people who put them in place arw idiota.
http://www.bloomberg.com/news/articles/2011-11-25/chavez-pri...
>>“The law of supply and demand is a lie,” Karlin Granadillo, the head of a price control agency set up to enforce the new regulations, said yesterday on state television. “These are not arbitrary measures. They are necessary.”
Or the many rent control laws in place all across the US. Rent control is unequivocally a harmful law:
* Asking for a raise (they lose money after all)
* Supporting efforts to pass laws such as paid family and medical leave, pollution regulation, disability accommodations or anything else which puts obligations on the company.
* Suing your employer or otherwise responding to harm they do to you.
* Refusing to do profitable but unethical acts or whistleblowing illegal ones.
If we allowed employers to threaten employees for doing these things, society would be a lot worse off.