(08-11-2019 05:23 PM)tanqtonic Wrote:  And actually OO's comments on the time effect of such benefits is spot on. Yet you decide to do the millennial 'whateeeevvvvvveeerrr' to that.

And funny thing is that OO describes the Laffer Curve, and you in a hugely condescending manner say "There is this thing called a Laffer Curve'. Either you didnt read or understand OO's post, or are being a condescending ******* to his post. Neither one really adds to your snide response, especially when it starts out with the coffee jigamathingy.

If OO was illustrating the Laffer curve, he would know that trying to use an extreme to discuss a relatively small change is pointless.

That would be like saying that, on the Laffer curve, you gain information about raising marginal taxes to 90% when discussing raising marginal taxes to 50%.

I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. Customers will pay that, once they have gotten the compensatory raises from their employers. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

(08-11-2019 06:20 PM)OptimisticOwl Wrote:  I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

If you think the Laffer curve only exists to explain why taxes should be lower, you either need to revisit the Laffer curve or what the word "curve" denotes. The Laffer curve is meant to illustrate that there is a level of taxation that is optimal and produces maximum tax revenues.

I'm not suggesting that raising the minimum wage doesn't create a ripple effect, despite your repeated attempts to say that I am. My stance is that there is a difference between raising the MW incrementally and raising it by an order of magnitude, and that the Laffer curve is a good example of how one can increase the cost of something incrementally (to a point) without generating overly negative consequences.

I agree with you that raising the MW to $100 an hour would create a situation that is untenable given our current MW. I disagree that raising the MW to $15 would, without a doubt, create a similar situation. Yes, it will create ripples, but it is reasonable to debate what those ripples would be, what their overall impact would be, and if the pros would outweigh the cons.

On my area, I see signs in windows advertising jobs at fast food places starting at $8.50.

An increase to $15 is a 76.47% increase. For businesses that use a lot of MW workers that is not an incremental effect. That is much more. That is a tsunami. If direct labor constitutes 40% of costs, a 76% increase in labor cost means that now the labor is 70%,. If the other costs remain at 60%, now cost is at $130% of what it used to be. If revenues were 125% of cost, giving a 25% profit, now they are at 130%, giving a 5% loss.

The owners have to either cut costs or increase revenue. The only way to increase revenue is to raise prices. The only way to cut costs is to reduce the payroll. Your choice.

Most libs think you just raise the MW, and everybody is happy. If you see that it is not so, then you are an exception.

Decades of setting prices and salaries lead me to this. Practical experience is better than book learning.

A 76% jump is too much.

Plus, if you have a bunch of grown ups coming in to make the easy money, where are the kids supposed to work? No money for college, no experience in working with the public, just a bunch of 22 year olds with no experience and a load of debt being churned out.

(08-11-2019 06:34 PM)RiceLad15 Wrote:  

(08-11-2019 06:20 PM)OptimisticOwl Wrote:  I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

If you think the Laffer curve only exists to explain why taxes should be lower, you either need to revisit the Laffer curve or what the word "curve" denotes. The Laffer curve is meant to illustrate that there is a level of taxation that is optimal and produces maximum tax revenues.

I'm not suggesting that raising the minimum wage doesn't create a ripple effect, despite your repeated attempts to say that I am. My stance is that there is a difference between raising the MW incrementally and raising it by an order of magnitude, and that the Laffer curve is a good example of how one can increase the cost of something incrementally (to a point) without generating overly negative consequences.

I agree with you that raising the MW to $100 an hour would create a situation that is untenable given our current MW. I disagree that raising the MW to $15 would, without a doubt, create a similar situation. Yes, it will create ripples, but it is reasonable to debate what those ripples would be, what their overall impact would be, and if the pros would outweigh the cons.

And you still ignore the 70 years of true understanding that any price floor or price ceiling requires a sub-optimal equilibrium in the market it is mandated.

All your bouncing around and about on the Laffer Curve studiously ignores that fact.

(08-12-2019 07:02 AM)tanqtonic Wrote:  

(08-11-2019 06:34 PM)RiceLad15 Wrote:  

(08-11-2019 06:20 PM)OptimisticOwl Wrote:  I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

If you think the Laffer curve only exists to explain why taxes should be lower, you either need to revisit the Laffer curve or what the word "curve" denotes. The Laffer curve is meant to illustrate that there is a level of taxation that is optimal and produces maximum tax revenues.

I'm not suggesting that raising the minimum wage doesn't create a ripple effect, despite your repeated attempts to say that I am. My stance is that there is a difference between raising the MW incrementally and raising it by an order of magnitude, and that the Laffer curve is a good example of how one can increase the cost of something incrementally (to a point) without generating overly negative consequences.

I agree with you that raising the MW to $100 an hour would create a situation that is untenable given our current MW. I disagree that raising the MW to $15 would, without a doubt, create a similar situation. Yes, it will create ripples, but it is reasonable to debate what those ripples would be, what their overall impact would be, and if the pros would outweigh the cons.

And you still ignore the 70 years of true understanding that any price floor or price ceiling requires a sub-optimal equilibrium in the market it is mandated.

All your bouncing around and about on the Laffer Curve studiously ignores that fact.

Still ignore? Maybe I missed that point, but this sounds like the first time someone has brought up the effect that a floor has on the location of an optimal minimum wage. A bit of an odd comment given that you’re arguing that the implementation of a floor negatively affects the optimal location of that floor...

My “bouncing around” doesn’t ignore the point you’re trying to make, it was meant to provide an example of an economic theory that illustrates how there are optimal levels of regulation, and because of that, using an extreme as an example as to why doing something incrementally, isn’t a good argument.

(08-12-2019 08:03 AM)RiceLad15 Wrote:  

(08-12-2019 07:02 AM)tanqtonic Wrote:  

(08-11-2019 06:34 PM)RiceLad15 Wrote:  

(08-11-2019 06:20 PM)OptimisticOwl Wrote:  I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

If you think the Laffer curve only exists to explain why taxes should be lower, you either need to revisit the Laffer curve or what the word "curve" denotes. The Laffer curve is meant to illustrate that there is a level of taxation that is optimal and produces maximum tax revenues.

I'm not suggesting that raising the minimum wage doesn't create a ripple effect, despite your repeated attempts to say that I am. My stance is that there is a difference between raising the MW incrementally and raising it by an order of magnitude, and that the Laffer curve is a good example of how one can increase the cost of something incrementally (to a point) without generating overly negative consequences.

I agree with you that raising the MW to $100 an hour would create a situation that is untenable given our current MW. I disagree that raising the MW to $15 would, without a doubt, create a similar situation. Yes, it will create ripples, but it is reasonable to debate what those ripples would be, what their overall impact would be, and if the pros would outweigh the cons.

And you still ignore the 70 years of true understanding that any price floor or price ceiling requires a sub-optimal equilibrium in the market it is mandated.

All your bouncing around and about on the Laffer Curve studiously ignores that fact.

Still ignore? Maybe I missed that point, but this sounds like the first time someone has brought up the effect that a floor has on the location of an optimal minimum wage. A bit of an odd comment given that you’re arguing that the implementation of a floor negatively affects the optimal location of that floor...

My “bouncing around” doesn’t ignore the point you’re trying to make, it was meant to provide an example of an economic theory that illustrates how there are optimal levels of regulation, and because of that, using an extreme as an example as to why doing something incrementally, isn’t a good argument.

The jump to $15 is extreme, not incremental. The jump to $100 is just more of the same.

What is your argument that $15 is not already on the high side of the optimal level? It's just a number picked by left wing activists, not economists.

So give us the proof that it is incremental, not extreme.

To me, incremental is .50/year for 10 years, not a 76% jump nationwide all at once. Maybe you have been reading the incrementalism vs. transformationism thread on the parliament.

Tell me, what would change at your business if everybody got a 76% raise over the next two years? Would prices change? Or would some people lose their jobs? Or both?

And why would your business be different from all the others?

Because the increased wages would trickle up. Not uniformly in either rate or speed, but they would trickle up, and on the way this massively extreme increase will cause massive pain to many people. Democrats are openly in the business of bringing relief to some while causing pain to others they don't care about, but this will be a loose cannon. I live on a fixed income. I cannot afford the inflation this will bring about. But you don't care, do you? I am one of the people Democrats don't care about. They only care about robbing Peter to pay Paul.

(08-12-2019 08:03 AM)RiceLad15 Wrote:  

(08-12-2019 07:02 AM)tanqtonic Wrote:  

(08-11-2019 06:34 PM)RiceLad15 Wrote:  

(08-11-2019 06:20 PM)OptimisticOwl Wrote:  I think Lad has told us - he ignored me.

Generally speaking, if you ignore enough of what other people say, you can make an argument against the remnants.

So I will take it micro, to that micro people can understand.

Raisng the MW does not occur in a vacuum. There are effects. One of the most immediate is on the cost to the provider of goods and services. Giving one's workforce a 25%-50% increase does that. The owner/manager will have to find a way to respond - less workers, higher prices, both - but they will have to do something. And they will. It may take time, but after a while, we will have settled into a new reality. As a person who once worked for minimum wage ($1.25/hr.) I can tell you that years later, there are people still doing those jobs for MW. Higher wage, yes, but not so much higher in terms of buying power.

But the MW is just the first domino. Surrounding jobs will also need boosts above and beyond MW to keep relative pace. Let's say right now fast food workers in my area make $8.50 (that what the sign in the window says) and roofers make $15. Now raise the the MW to $15, who the hell is going to climb on a roof in 100 degree weather when they can make the the same money in a ACed McD's? So to entice workers to put on roofs, they will need to make $25. Now a new roof costs the insurance company more, and how will they respond? By raising rates!!! So my homeowners goes up. Your rent goes up as your landlord tries to cover extra costs.

Throw a rock in a pond, and the ripples spread out. I will say again, this does not happen in a vacuum. Libs seem to think all it does is make MW workers better off. It raises prices. It raises COL. And after we have raised COL, the MW worker is right back where he started - unable to support a middle class lifestyle on a MW job.

$15 is an extreme raise. But any amount over $15 is more extreme. Whether $16 or $116, it doesn't matter. The burger joint can pay $100 easy - if it raises the price of a #1 combo to $50. The absolute numbers do not matter so much.

At $100 MW, a fast food worker would make $208K. Do you think they are all going to buy new cars and big houses with their new wealth? No, they will still be at the bottom.

I have tried to discuss this with you as plainly as I can, but if you are just going to smugly ignore it all, I guess I have failed.

I first heard of the Laffer curve more than three decades past. Always thought of it as representing a good reason to lower taxes. Glad you concur. Sorry you think I am ignorant and stupid. You would think 40 years of running businesses and an MBA would not have left me as stupid as you think I am.

"If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue."

If you think the Laffer curve only exists to explain why taxes should be lower, you either need to revisit the Laffer curve or what the word "curve" denotes. The Laffer curve is meant to illustrate that there is a level of taxation that is optimal and produces maximum tax revenues.

I'm not suggesting that raising the minimum wage doesn't create a ripple effect, despite your repeated attempts to say that I am. My stance is that there is a difference between raising the MW incrementally and raising it by an order of magnitude, and that the Laffer curve is a good example of how one can increase the cost of something incrementally (to a point) without generating overly negative consequences.

I agree with you that raising the MW to $100 an hour would create a situation that is untenable given our current MW. I disagree that raising the MW to $15 would, without a doubt, create a similar situation. Yes, it will create ripples, but it is reasonable to debate what those ripples would be, what their overall impact would be, and if the pros would outweigh the cons.

And you still ignore the 70 years of true understanding that any price floor or price ceiling requires a sub-optimal equilibrium in the market it is mandated.

All your bouncing around and about on the Laffer Curve studiously ignores that fact.

Still ignore? Maybe I missed that point, but this sounds like the first time someone has brought up the effect that a floor has on the location of an optimal minimum wage.

I brought it up yesterday afternoon. Along with reasons why the Laffer Curve doesnt necessarily affect issue at hand.

Quote:My “bouncing around” doesn’t ignore the point you’re trying to make, it was meant to provide an example of an economic theory that illustrates how there are optimal levels of regulation,

I think we all know the effect of the Laffer Curve in the realm of tax revenues. And agree that it exists. I seriously doubt its efficacy in applying it fully to the MW. Again, for reasons brought up yesterday.

The idea that there is a Laffer like effect is simply pure speculation on your part.

Secondly, if there is any effect, it would only have the effect in the regions of curves where there is theoretically a ‘clearing wage’ in an economy and the current MW is well below that clearing wage. Raising the minimum wage to the unskilled clearing wage will do little damage to unemployment if that area is what is in play.

But true to form, the other real problem is that the clearing wage isnt at all the same at any two places in our economy. Just ask California about that and the effect the MW hikes had there in the lower economic output regions (i.e. the pacific north and the central valley).

Quote:and because of that, using an extreme as an example as to why doing something incrementally, isn’t a good argument.

The Laffer Curve is not intended to apply to the MW argument, but it is rather easy to identify an analog. Take all persons with a particular skillset or lack of skills. There are two wage levels at which they will earn zero income. One obviously is zero, the other almost equally obviously is some wage that is so far beyond the value that they are capable of producing that no same person would hire anyone with those skills at that rate. Obviously, the wage level that will maximize the total amount paid to that group is somewhere between those two. Below that level, the increasing wage level is the dominant factor. Above that level, the dominant factor becomes the decreasing number of employers willing to pay that amount, until you reach the level that nobody is willing to pay. Somewhat below that maximum pay level is a maximum employment level, before the wage starts pricing anyone out of the market. I would postulate that the sweet spot is somewhere between those two. The current minimum wage might be somewhat below the sweet spot for some members of that group, but anything in the $15 range would almost certainly be above the sweet spot.

Ideally, we pay what the economic production of the worker is worth. For a lot of minimum wage workers, that number is capped by the cost of having their tasks performed by alternative means. Suppose I can install automated kiosks to take hamburger orders at my fast food restaurant for a cost equivalent to labor at $9-10/hour. Then obviously $9-10/hour caps what I am willing to pay for order-takers.

One problem I have with Keynesian economic theory is that macro doesn't tie to micro. The only economic approach that I've ever seen that ties macro effectively to micro is the Austrian--Crusoe and his coconuts. I'm not saying that I buy every part of Austrian, just identifying one area where their rigor is noteworthy.

Fair enough --- I see the rough analogy. Thanks.

(08-12-2019 01:31 PM)Owl 69/70/75 Wrote:  The Laffer Curve is not intended to apply to the MW argument, but it is rather easy to identify an analog. Take all persons with a particular skillset or lack of skills. There are two wage levels at which they will earn zero income. One obviously is zero, the other almost equally obviously is some wage that is so far beyond the value that they are capable of producing that no same person would hire anyone with those skills at that rate. Obviously, the wage level that will maximize the total amount paid to that group is somewhere between those two. Below that level, the increasing wage level is the dominant factor. Above that level, the dominant factor becomes the decreasing number of employers willing to pay that amount, until you reach the level that nobody is willing to pay. Somewhat below that maximum pay level is a maximum employment level, before the wage starts pricing anyone out of the market. I would postulate that the sweet spot is somewhere between those two. The current minimum wage might be somewhat below the sweet spot for some members of that group, but anything in the $15 range would almost certainly be above the sweet spot.

Ideally, we pay what the economic production of the worker is worth. For a lot of minimum wage workers, that number is capped by the cost of having their tasks performed by alternative means. Suppose I can install automated kiosks to take hamburger orders at my fast food restaurant for a cost equivalent to labor at $9-10/hour. Then obviously $9-10/hour caps what I am willing to pay for order-takers.

One problem I have with Keynesian economic theory is that macro doesn't tie to micro. The only economic approach that I've ever seen that ties macro effectively to micro is the Austrian--Crusoe and his coconuts. I'm not saying that I buy every part of Austrian, just identifying one area where their rigor is noteworthy.

I appreciate you taking the effort to explain the general idea I was attempting to discuss.

(08-12-2019 02:21 PM)tanqtonic Wrote:  Fair enough --- I see the rough analogy. Thanks.

And, for the record, I fully agree with your statement above, "70 years of true understanding that any price floor or price ceiling requires a sub-optimal equilibrium in the market it is mandated."

The challenge of trying to apply the laffer curve to a minimum wage is that there are breakpoints in the tax code that establish the various levels of taxation.

No such breakpoints exist in wages.

Said differently, there is nothing to stop companies from deciding that jobs that previously paid $15/hr with a $10 min wage would continue to get paid $15 with a $15 min wage.... or perhaps only push them to $15.50.

(08-12-2019 03:29 PM)Hambone10 Wrote:  The challenge of trying to apply the laffer curve to a minimum wage is that there are breakpoints in the tax code that establish the various levels of taxation.

No such breakpoints exist in wages.

Said differently, there is nothing to stop companies from deciding that jobs that previously paid $15/hr with a $10 min wage would continue to get paid $15 with a $15 min wage.... or perhaps only push them to $15.50.

I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.

edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

(08-12-2019 03:52 PM)RiceLad15 Wrote:  I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.
edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

And I would argue that, for purposes of an analogue to the Laffer curve, there may not be much of a substantive difference between $15 and $100. If workers can be replaced for less than $15, then $15 is above the level where employers will pay anyone. That is really what determines the Laffer ceiling, just as tax rates in other jurisdictions go a long way toward determining the Laffer ceiling on tax rates.

(08-12-2019 03:59 PM)Owl 69/70/75 Wrote:  

(08-12-2019 03:52 PM)RiceLad15 Wrote:  I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.
edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

And I would argue that, for purposes of an analogue to the Laffer curve, there may not be much of a substantive difference between $15 and $100. If workers can be replaced for less than $15, then $15 is above the level where employers will pay anyone. That is really what determines the Laffer ceiling, just as tax rates in other jurisdictions go a long way toward determining the Laffer ceiling on tax rates.

It determines one of several Laffer ceilings. One is the breakeven point of the business itself regardless of tech changes -- the other is the downward cost of tech/efficiency type solutions.

One other thing that is different in the curve re: Laffer is time effects. Dealing with taxation, the axis is a percentage rate -- i.e. axis is time independent. With MW, the 15/hr now isnt the same as the 15/hr 2 years from now -- even more that the bump in the MW itself is long term self-correcting mechanism (i.e. the 8/hr == a fast food lunch in today's market WILL be the same. 15/hr WILL == a fast food lunch in the market no more than 1.5 years after the bump).

Laffer for tax doesnt have the time value self correction that a wage floor will have.

(08-12-2019 03:52 PM)RiceLad15 Wrote:  

(08-12-2019 03:29 PM)Hambone10 Wrote:  The challenge of trying to apply the laffer curve to a minimum wage is that there are breakpoints in the tax code that establish the various levels of taxation.

No such breakpoints exist in wages.

Said differently, there is nothing to stop companies from deciding that jobs that previously paid $15/hr with a $10 min wage would continue to get paid $15 with a $15 min wage.... or perhaps only push them to $15.50.

I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.

edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

OO was using the MW to 100 to denote the time sensitive nature of a MW bump. That was my reading of it.

(08-12-2019 05:21 PM)tanqtonic Wrote:  

(08-12-2019 03:52 PM)RiceLad15 Wrote:  

(08-12-2019 03:29 PM)Hambone10 Wrote:  The challenge of trying to apply the laffer curve to a minimum wage is that there are breakpoints in the tax code that establish the various levels of taxation.

No such breakpoints exist in wages.

Said differently, there is nothing to stop companies from deciding that jobs that previously paid $15/hr with a $10 min wage would continue to get paid $15 with a $15 min wage.... or perhaps only push them to $15.50.

I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.

edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

OO was using the MW to 100 to denote the time sensitive nature of a MW bump. That was my reading of it.

When you talk about time effects, are you talking about how MW is t normalized (in this case, to inflation) or that MW is a unit rate, that is dependent upon the amount of time someone works?

(08-12-2019 05:39 PM)RiceLad15 Wrote:  

(08-12-2019 05:21 PM)tanqtonic Wrote:  

(08-12-2019 03:52 PM)RiceLad15 Wrote:  

(08-12-2019 03:29 PM)Hambone10 Wrote:  The challenge of trying to apply the laffer curve to a minimum wage is that there are breakpoints in the tax code that establish the various levels of taxation.

No such breakpoints exist in wages.

Said differently, there is nothing to stop companies from deciding that jobs that previously paid $15/hr with a $10 min wage would continue to get paid $15 with a $15 min wage.... or perhaps only push them to $15.50.

I see no issue with trying to apply the general principle illustrated by the Laffer curve (and then explained by Owl#s) to wage theory. Moving away from equilibrium in either direction results in actual wages garnished or employment, to go to 0. That's because either people will not work for such a low wage, or employers will not hire for such a high wage.

edit: and remember, the only reason I brought up the Laffer curve was to explain why OO's hypothetical of pushing the MW to $100 per hour was not relevant to the discussion of moving the minimum wage to $15 per hour. Those numbers are far enough apart that you will glean little insight into what would happen with an increase to $15 by evaluating what would happen when increasing the wage to $100 per hour.

OO was using the MW to 100 to denote the time sensitive nature of a MW bump. That was my reading of it.

When you talk about time effects, are you talking about how MW is t normalized (in this case, to inflation) or that MW is a unit rate, that is dependent upon the amount of time someone works?

If you bump the MW to from 7 to 50 bucks an hour, you get the typical 'some people keep their jobs and make more and others simply lose the jobs'. And a fast food lunch costs, say 7 bucks at that first instant. In the fist day, the workers who are left will get the 1 hr == 7 meals instead of 1hr == 1 meal. This is the short term effect.

In the medium to long term, the cost of the fast food lunch will normalize because the owner simply passes the cost along to the diners; wash rinse and repeat for the rest of the economic ladder. In the long term, the fast food meal rises by same factor of 7, as does everything else. So in the long run everything reverts to 1hr == 1 meal, but that effect ripples all the way through the economic chain.

The MW isnt 'normalized to inflation', but in the long term is a large factor in the inflation to the higher nominal state, but an equal relative state.

OO has made this point time and time again; I read his "100 == wealthy" as a short hand sarcastic reference to that specific point he has made a rather large number of times.

In the medium and long run, any wage floor is useless. But by golly, it sure sounds like an awesome thing to do, and the really stupid people will think that there is some big benefit to it or them, when in reality everything renormalizes.