Law School Discussion

Moderates v. Liberals

Re: Moderates v. Liberals
« Reply #30 on: January 31, 2006, 11:46:58 PM »
Quote
You are truly living in a dream world.  The fact is that while the current administration continues to protect it's cronies in big business by not raising minimum wage, the majority of states either have, or plan to raise minimum wage on their own.  The argument that raising the wage will decrease jobs is a fallacy argument that is constantly raised by neocons.  For every study stating it reduces jobs, the is another that says it doesn't.  The mere fact that states are pressing forward with it is proof enough.  Washington state has raised its minimum wage to over $7/hour and it has not hurt the small business enterprise.  And to believe that 70% of workers are employed by small business is ridiculous.  

If the states are raising minimum wage on their own federal minimum wage controls are quite irrelevant aren't they?

As for the rest of the minimum wage points, paran0id is correct.  Raising minimum wages presents a disincentive for employers to hire new workers and create jobs.  Raising minimum wage raises prices.  Raising minimum wage gets workers fired. Etc.

Paikea

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Re: Moderates v. Liberals
« Reply #31 on: January 31, 2006, 11:55:19 PM »
Quote
You are truly living in a dream world.  The fact is that while the current administration continues to protect it's cronies in big business by not raising minimum wage, the majority of states either have, or plan to raise minimum wage on their own.  The argument that raising the wage will decrease jobs is a fallacy argument that is constantly raised by neocons.  For every study stating it reduces jobs, the is another that says it doesn't.  The mere fact that states are pressing forward with it is proof enough.  Washington state has raised its minimum wage to over $7/hour and it has not hurt the small business enterprise.  And to believe that 70% of workers are employed by small business is ridiculous.  

If the states are raising minimum wage on their own federal minimum wage controls are quite irrelevant aren't they?

As for the rest of the minimum wage points, paran0id is correct.  Raising minimum wages presents a disincentive for employers to hire new workers and create jobs.  Raising minimum wage raises prices.  Raising minimum wage gets workers fired. Etc.


If states are successfully raising minimum wage without it affecting the livelihood of small business, as states are doing, then the republican position that it will hurt small business is irrelevant.  The bottom line is that while the republican party continues with the "theory" that raising minimum wage hurts small business, the majority of states continue to do it will no ill effects.  Of course, not raising minimum wage protects large corporations like Wal-Mart.  Go figure.

florentino ariza

Re: Moderates v. Liberals
« Reply #32 on: January 31, 2006, 11:59:38 PM »
i don't feel the need to debate with people who are as far below me as you are, maggot.

Paikea

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Re: Moderates v. Liberals
« Reply #33 on: February 01, 2006, 12:02:32 AM »
The fact is that the neocon agenda goes to promote the well being of 1) Big business and/or 2)fundamental christianity.  That's it.  End of story
ROFL :D




Name me any issue the current administation has championed since it took office.

Re: Moderates v. Liberals
« Reply #34 on: February 01, 2006, 12:07:38 AM »
Tax Reform
Social Security Reform
Democratization of the Middle East
No Child Left Behind
Medicare Reform
Health Savings Accounts
Tax Cuts

Did you even watch the State of the Union tonight?

nate

Re: Moderates v. Liberals
« Reply #35 on: February 01, 2006, 12:13:27 AM »
just wanted to post this on the minimum wage. i'm not hugely partisan, and don't really understand the whole "bush rocks" v. "bush is the devil" argument. but i do apologize for posting this in the middle of one of those debates.

nonetheless, i am fairly liberal when it comes to economic issues. when it comes to social issues i suppose i prefer a more moderate stance. i guess that part of the midwest just never left me.

whether this is entirely right or wrong, i can't really say, but it does contain decent reasoning and arguments. and i do also know that there is quite a bit of evidence to back up the idea that an increased minimum wage does not necessarily increase unemployment. unfortunately the debate arena on the issue seems to be dominated by the somewhat oversimplified formulas that explain why an increased minimum wage automatically --> increased unemployment.

so take it for what it's worth. i apologize for it taking up so much space.

and also, enjoy your partisan politics. ;)


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"How Minimum Wage Increases Employment", by Nathan Newman

Here's the problem with the simplistic argument that minimum wage laws automatically cut jobs. It's based on Economics 101 for commodity markets that says if prices rise, demand falls. But labor markets are not like commodity markets for a number of reasons:

1) When demand falls for one item, the demand shifts to other items, which in commodity markets inevitably hurts the item where demand falls. Not necessarily so for labor markets. If apples get too expensive, you can't convert them into more appealing oranges. Workers can shift into different jobs, so a fall in demand for one kind of work can still lead to the workers getting jobs in a new venue.

2) More importantly, labor is not a static commodity-- it's human beings whose skills on the job improve over time, so substituting new workers for old has far more serious costs. There is a real tension betweeen looking for the cheapest labor and paying a premium price to reduce turnover and maintain skills.

3) Since the minimum wage applies across the labor market, there is by definition no alternative low-wage labor to substitute for the now more expensive labor. To assume lost employment, you have to assume an overall drop in consumption across the whole population or the substitution of capital for labor costs in that particular industry -- which in turn drives new employment in other sectors to produce the needed capital goods.

4) Crucially in thinking about the minimum wage, work is not done in a single system of production, even when producing the same goods, so raising the price of labor may cut production in a low-wage version of production but increase it in a higher skill, higher-wage version of production for that same commodity.

5) Labor is the one commodity that in turn consumes itself-- ie. workers go home and buy other goods which in turns drives demand for more labor. So raising the minimum wage puts money in the pockets of consumers living in low-wage communities, thereby driving employment through worker consumption, a kind of localized Keynesian expansion of jobs in the low-wage sector.

The Debate: The empirical case for the minimum wage is best argued in David Card and Alan Krueger's Myth and Measurement: The New Economics of the Minimum Wage. The classic response is by Neumark and Wascher who argue for the more classic effects of decreased employment. Folks should wade through the literature to be convinced one way or the other on the empirical results, but the key is to understand why the Econ 101 simplistic model does not necessarily hold or why other factors partly or fully counterbalance the effects of classical models.

The key here is to understand that the minimum wage very well may at times decrease employment IN PARTICULAR FIRMS using PARTICULAR SKILL MODELS-- but don't mistake the loss of jobs in particular firms for loss across the economy. Further, because of incomplete information, search costs and other imperfections in the labor market, even individual firms won't always follow classic responses to rise in costs of labor.

Card & Krueger model: Card & Krueger illustrate a more complex understanding of labor markets that I can only roughly describe here (read the last chapter of their book), but the key is based on the heterogenity of labor in the market indicated above. Rather than decreasing employment, a rise in the minimum wage encourages the substitution of higher-skilled labor for lower-skilled labor.

Further, even many particular firms have large "sunk costs" of capital that will be wasted if employment is reduced. For such firms, it is irrational to cut employment since they would lose more profits by cutting production than they lose from increasing the wages.

Card & Krueger also discuss the problem of turnover in low-wage labor markets, which prevents employers from being assured of being able to buy labor in the marketplace on demand in the same way as other commodities. The implication of this, counterintuitively, is that a modest increase in the minimum wage will INCREASE overall employment because employers will be able to fill vacancies that had been left open due to the churn of turnover.

Other models: Other models look at workers' willingness to take jobs from a bargaining viewpoint which implied that most workers are more productive than their initial wage, so an increase in the minimum wage will not lead to cuts in employment but in fact will often lead to some increase in employment because of better matching of employee productivity to wage, thereby reducing turnover.

All of these alternative models imply a better job situation for moderate minimum wage increases, although the employment losses do start to occur with large increases in the minimum wage.

So the point is not that some debate on the proper level of the minimum wage is not warranted. However, the simple equation that raising the minimum wage inevitably leads to some loss in employment is disputed both empirically and theoretically.

Increases in demand: It's also worth noting that these models look at particular industries, so the overall effects of the minimum wage on the larger economy may be even more positive. While particular low-wage industries might lose out from a rise in the minimum wage, the boost in worker income may drive expansion of other low-wage sectors. If wages increase more than any wages lost to unemployment, then this will often feed expansion of jobs that service those low-wage workers, often themselves staffed by low-wage employees. So again, the effects of the minimum wage need to account for more than the classic microeconomic models but recognize that employees are not typical commodities but integral parts of a more complex set of economic relationships.

And my bottom-line is this-- as long as the evidence is ambiguous, I go with raising the minimum wage, since the obvious empirical benefits for the workers effected are clear while the supposed downside is unproven and disputed theoretically.

Re: Moderates v. Liberals
« Reply #36 on: February 01, 2006, 12:18:08 AM »
thx for the article Nate.

Flame forum here we come!

ROFL :D

That's all I got left in me. I have an argument with my shower curtain that promisses to be more enlightening. G'night all.

BTW verbal: I'll send you a free t-shirt from the T25 that offers me a full ride. "TTT moron." ROFL  :D

Paikea

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Re: Moderates v. Liberals
« Reply #37 on: February 01, 2006, 12:21:36 AM »
Tax Reform
Social Security Reform
Democratization of the Middle East
No Child Left Behind
Medicare Reform
Health Savings Accounts
Tax Cuts

Did you even watch the State of the Union tonight?

Tax reform - Making tax cuts for the wealthiest 1% of americans permament.  And who are these wealthy 1%?  I'll let you figure that out.
Democratization of the Middle East - Vested interest in contolling oil and giving out no-bid contracts to US contractors.
No Child Left Behind - Public Schools that do not pass muster get their federal funding cut off.  This money is then redirected to the voucher program.
Health Savings Accounts - AKA privatizing health care.
Tax Cuts - see tax reform.

Like I said - big business and fundamental christianity.

Re: Moderates v. Liberals
« Reply #38 on: February 01, 2006, 12:40:29 AM »
You aren't a very considerate person.
If you refer back I wasn't the one that began tossing about insults.

verbal

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Re: Moderates v. Liberals
« Reply #39 on: February 01, 2006, 12:43:32 AM »
um mugatu i think u have me confused with someone else. i will check back later and see if u r man enough to admit your mistake and give me an apology. i have never called someone or a school for that matter a ttt.  i would love the t shirt anyway though