Every $ x billion in PPP could be attributed to .y% of inflation but we don’t talk about capital the way we talk about workers.
On a practical level a minimum wage is either not effective (so broadly set to what the market is paying already o just above that) or it will inevitably decrease job offer.
On a philosophical level, adults should be free to choose what to do with their body and mind - as long as it has no negative effect on third parties.
That's the negative externality.
AFAIK most jobs that would pay under what's enough to live on are entry level jobs usually carried out part-time by students. Denying them such job is removing them that source of income - and in case of jobs that require experience denying them a chance to gain that experience. This means you are not reducing any social externality. You are just shifting those externalities to a different set of people.
I'm also wary of "daling with" this kind of social externalities even if it was possible. If we apply your argument to drugs than the conclusions would be that alcohol and any other drug should be made illegal because it has a social cost. But I believe people still have the right to do whatever they want with their body and mind as long as there is no direct externality, and I'd rather live with any indirect externality that is the result of that.
This is a rosy view of things, but I don't believe its true. Walk into plenty of markets in poorer or even middle class areas and you will find older people doing these jobs out of necessity. I've seen 'entry level job' used very often as a way to exploit people with not much choice.
The situation is diametrically opposite - minimum wage forces businesses to engage in welfare. Those who have enough margins to engage in welfare might do it; the others may disappear with the jobs, or cut the jobs by reducing service/automating/outsourcing (again leading to the same "social burden" existing).
Yes, turn your country into the likes of Bangladesh. Brillo!
The labor market is not a magical entity. It's comprised of companies doing the hiring and people doing the working.
If you look at sectors where unskilled work prevails and corporations treat workers as fungible resources then the labour market lies firmly in the supply side, and workers have no alternative other than getting exploited. This means paying the least possible amount, which means less than minimum wage.
Think about it for a second: why do you think so many companies pay minimum wage, and not a single cent more? Is is because the workers' negotiating power magically breaks even at the minimum wage level, or is it because labor laws make it illegal to pay less than that?
Also the alternative is having some of those people have zero income and no opportunity to develop skills.
Joshua D. Angrist and Guido W. Imbens “for their methodological contributions to the analysis of causal relationships”
They have done real world studies on the issues discussed here and arrive at a different conclusion from you.
Counterpoint: Bangladesh. The labour market does not choose to work 60hr 7day weeks for $75/mo performing skilled sewing of your clothing because they like it: it is because they are left no choice. Given the opportunity, corporations will just as happily enslave Americans as it does third world citizens. Already does, in fact: slavery is still legal via imprisonment.
Corporations could choose to pay their Bangladeshi labour significantly more, and it would cost you only pennies more for your shirts … but they don’t. They pay as absolutely little as possible. They will inevitably do the same to you.
I don't understand. How is the rest paid?
I believe you might be referring to 2021 Nobel Prize winner David Card’s paper A Re-analysis of the Effect of New Jersey Minimum Wage with Representative Payroll Data (with Alan Krueger) written over 20 years ago. See [1]. This paper compared New Jersey with neighboring Pennsylvania that didn’t raise its minimum wage.
Ironically, Joshua Angrist (and a third Economist) shared the 2021 prize with Card, and Angrist had this to say about the research by Card (and Krueger):
“[the] data show a slight decline in the employment from February to November 1992 in Pennsylvania, and little change in New Jersey over the same time period. However, the data also reveals substantial year to year employment variations in other periods. These swings often seem to differ substantially in the two states… So Pennsylvania may not provide a very good measure of counterfactual employment rates in New Jersey in the absence of a minimum wage change.” See [2].
[1] https://davidcard.berkeley.edu/papers/reanal-ff-nj.pdf
[2] Joshua Angrist and Jörn-Steffen Pischke, Mostly Harmless Econometrics, page 293, https://press.princeton.edu/books/paperback/9780691120355/mo...
> However it is also true that some people will never accept it as being true.
I suspect it is because of the philosophical point I made, but maybe some people are not able to articulate it? E.g. I could accept my practical point to be invalid but that would not invalidate the second point - I just give freedom of choice value in itself. Hence I can tolerate costs that arise because of that.
About freedom of choice, for me the line is whenever your freedom directly impacts the freedom of someone else. You can't have slaves for this reason. But for the same reason you shouldn't have others pay for your education. Of course you have more choices if someone pays for your education. But that's not the point. Society has no say on what type of education you choose to have, so it should pay no cost. As I mention in another comment I only believe negative rights should be a thing - and I think I have strong reasons to believe this.
Nukes are only good for war, hence you probably shouldn't have them. On the other hand private companies or individuals with the right clearance should be able to own and manage nuclear power plants - as they do.
I don’t think there is anything that only the government can provide. Look at countries around the world and there are examples where governments doesn’t provide public roads, police, laws, health care etc. so people hire their own security, pay for their own education/health etc. Bribe judges to get the ruling they want etc. Even the military used to be private in Europe. With governments hiring private armies to commit war. I personally would not want to live in those countries (they are often called “failed states” for a reason) but they do exist.
So I think the argument that there are things only governments can provide is incorrect. There might be things you happen to want the government to pay for but there doesn’t seem to be an underlying logical argument for why you choose those and not others?
Mostly, with some exceptions. If there is a market failure or natural catastrophe that is going to kill us all and only the government can fix it then I'm OK with that. So, if only the government can prevent a disease to spread or fix pollution, or redirect asteroids, I'm fine with that. But the bar is very high.
> If that is correct then you don’t want the government to provide sea rescue services, weather reports, rules for wearing seat belts, weather emergency services, scientific research
I think some of these can be provided at least to great level by insurance companies but I'm not convinced they can entirely be provided on voluntary basis, so I don't know. But other are clearly of of the scope of my ideal government like rules to wear a seat belt or not.
> scientific research
This is an interesting one. I see lots of people saying that only the government can do valuable research because a lot of recent inventions were initially funded or subsidized by the government - like the internet. I think that private research could work as good if not better. I also think though, why would a private company invest in research if the government is going to tax them and do that research regardless? I think it is an overcrowding issue. Also a lot of technologies that started in government labs are almost unrecognizable after all the private research and development that went into them after.
I'm not saying that negative rights can be achieved perfectly. But positive rights are too problematic IMO, and the further we can shy away from them the better.
My country of origin has subsidized higher education, high redistribution, minimum guaranteed income, a public health system, strong union rights, minimum wage and many regulations of what you can on cannot do with your property.
I left that country, maybe forever. And many many others that got higher education (either in the country or abroad) left and are never going to come back.
The net wage differential of highly skilled jobs with respect to the average income is not enough to justify the long studies if you are going to stay. They even had to create a law that allows people that come back to pay much less taxes if they stay for a given amount of years to try lure some highly skilled people back to the country.
I believe it's because of all these government policies that the economy grows very little in that country. As a result everyone in that country is poorer that other more "negative rights" based countries.
My subjective experience is also that people feel much more entitled in that country and are less able to take personal responsibility. Everything is blamed on the Government (more than in the country I live in now).
I think my country or origin as a social democracy although it's never mentioned because people only talks about the "successful" ones.
I fear that all countries could become like that.
Hold on. I thought you said that freedom was the ability to do whatever you want as long as it doesn't hurt anybody else. Now you added rule #2: You only have the freedom pick from things somebody else (the government?) have decided that you can pick from. That sounds exactly like the system we have in most countries. So if the government decides to make education and health freely available then you should be happy with that right? It follows your rules perfectly.
The government doesn't produce any of those. It has to take from someone else. You can't make any of those things free. You can only make them socialized.
> Nukes are only good for war, hence you probably shouldn't have them.
If they are planning to kill people then that are planning to violate negative rights of others. You lose your rights in that case.
If something is socialised then it is free to choose from. So it is free as in $ and free as in freedom.
> If they are planning to kill people then that are planning to violate negative rights of others. You lose your rights in that case.
Makes sense in principle but impossible to do in practical. Nobody has a mind reader. Nobody can accurately predict the future behaviour of other people. Do you agree that your thinking is impossible to actually implement?
Yes, and that's positive rights. As I said, I only believe in negative rights.
> Makes sense in principle but impossible to do in practical. Nobody has a mind reader. Nobody can accurately predict the future behaviour of other people. Do you agree that your thinking is impossible to actually implement?
Then we don't allow them. It's a price to pay in lost negative rights but only to protect other's negative rights.
So are you happy with that or are you going to pay back the government for your education? If your answer is no would it be fair to say that you want others to not get anything for free but you are perfectly happy to get free things yourself?
I'm happy if it's legal, even if I think it shouldn't be. As long as it's legal for everyone I'm not going to be the only person to pay.
Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.
Or we could rationally plan economies to meet everyone’s needs. Enough homes can be made and we already produce more food than necessary.
Positive rights and negative rights are in oppositions as you can't have positive rights without violating someone else's negative rights. We have a trade-off right now, but I personally only believe in negative rights for a variety of reasons.
> Why would some have no income if minimum wage was higher? The other possibility is that profits would be lower. Minimum wage has increased in the past in various countries, the effect is always pro-worker.
Economy 101. Increase the price of something and the quantity bought will be less. Companies will hire fewer people at that price.
> Or we could rationally plan economies to meet everyone’s needs.
History has proved over and over that's not possible (and there are theoretical well known reason why that is.
Planned economies do work, both historically and today. They are immune to the business cycle (as the USSR didn’t experience the Great Depression) and can be more efficient even within capitalist economies (witness Amazon, Apple and Walmart). I recommend “The People’s Republic of Walmart” on this topic.
In a capitalist system companies, trying to maximize profit, will try to expand until it is efficient to do so, but not more or smaller competitors will take over.
The USSR was basically constantly in a Great Depression. According to the US definition of poverty almost all its population was in extreme poverty.
The Great Depression was a Government failure, not a market failure. They didn't print enough money basically.
I'm not clear why there would be no musicians if it requires minimum wage, razor thin profit margins, etc.