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$15 Minimum
Cuomo Moves to Destroy Upstate New York Economy
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  • alanstorm

    “When the effects start to be felt, New York Democrats will complain
    about the sudden run of bad luck, and campaign for tax increases to pay
    for the state’s growing welfare and unemployment costs.”

    You’ve seen this movie before!

    • Gene

      Oh, but don’t you know? This time it will be different! After all, Top Men are in charge.

      • Dan

        TOP. MEN.

  • Anthony

    An unmentioned assumption in WRM’s post is idea that a worker’s wage is equal to his/her marginal productivity as well as the worker’s productivity depends on his/her skill relative to supply and demand for that skill in the American (New York) context. For me, a most relevant question is what wage ought to be paid that permits dignified labor a living return on worker’s efforts at entry level – “the price of civilization” as well as organized use of labor time.

    “After decades of global economic leadership, America began in the 1980s to forget the basic lessons of economics, parroting slogans (typically about the wonders of the free market) while neglecting the art of economic policy” – not necessarily a Democratic only thrust.

    • Blackbeard

      So we should have some sort of government bureaucracy that decides what everyone’s “living wage” is the way the Church determined the “just wage” in medieval times. Four a family of four in say New York City that might easily be $100,000 a year. And suppose no business wants to or can afford to pay a low skilled worker that and therefore closes down, relocates or automates?

      The true minimum wage is zero.

      • Boritz

        If elected I will raise the living wage on day one!

      • Anthony

        There are limits on a true theoretical model i.e., the true minimum wage is zero. But realistically (as you allude to Adam Smith’s market equilibrium), America has always had a mixed economy – despite free-market ideology. The modern mixed economy has certainly gone astray if one imbibed Paul Samuelson’s synthesis of market allocation – redistributing income to protect the poor and the unlucky; providing public goods such as infrastructure and scientific research; and stabilizing the macroeconomy. And, for the record, this is no advocacy for “some sort of government bureaucracy….”

        • Blackbeard

          If I understood your original post you were advocating a living wage but now you are saying there is no government bureaucracy involved. How then is the living wage to be set?

          • Anthony

            My original post posed a counter to WRM’s theme. I advocated nothing; I raised a question. We are part of a mixed economy and government has (in spite of our predilections) and continues to play role. For all intents and purposes, living wage (in this instance minimum wage) is fait accompli. Now, one may argue its usefulness or arbitrary imposition but my response remains how does labor effectively balance wage/capital distribution in current economic terms.

          • bannedforselfcensorship

            The first problem with a “living wage” is that some people don’t need a living wage. Teenagers live at home. They do not require a full living wage. Retired people looking for some extra money don’t need a full living wage. Students are in the same position. My son lives in a dorm with meals paid for…why does he need a living wage? Also, some workers would like side jobs: again, no need for a living wage if you’re just doing side jobs.

            Secondly, work does not exist regardless of wages. If the labor required for that work exceeds the value of the work, then the work ceases to be worthwhile and is not done. Example: I have some customer returns that could be sold if they were re-worked. But if the worker is paid $15/hour, that is not viable, so we would throw away the returns. Note that you cannot just “pass on” the costs of everything, and often if you do, again, less work will be needed at the margins. So, indeed, if you artificially raise the price of labor, you will find less work available. Sure, the super busy McDonald’s location will be fine, but its the marginal one that closes. These marginal effects add up, though. (Its also how some people will be able to say that “nothing changed” when its just they don’t notice the marginal restaurant closing or the restaurant that never opened.)

            Finally, people are able to make their own decisions about their own life. If someone wants to sell their labor for $7/hour, and I agree to pay, why is it any business of yours or the governments? The claim that businesses are all monopsony’s is wrong – businesses in fact compete with each other to hire people. Minimum wage laws are really laws telling you that its illegal for you to sell your own labor for less than that wage. Gee, thanks government!

            If you are concerned about the poor, the EITC is the best way to top up their money rather than monkeying around with labor markets and banning low wage work opportunities. Of course, the EITC is on the books of the government and costs taxpayer money, while being generous with the minimum wage is a stealthy way to do this – appearing generous with someone else’s money.

            and the real kicker?

            Different parts of America have different costs of living. A national or even state “living wage” by minimum wage is stupid as it ignores that. The EITC even has issues here. Its simply much cheaper to live in Arkansas than in California, for example.

          • Anthony

            Yes, your examples are appealing to common sense but presume to deal with all relevant facts without actually doing so. Original question premised on fact of minimum wage and an organized society (U.S.) balancing ratio of wage (labor) to capital outcome despite establishment (in this instance) of minimum (livable wage). That is, inequality at bottom of the U.S. wage distribution has closely followed the evolution of the minimum wage – officially introduced in United States in 1933. I maintain issue warrants public policy discussion on its merits void of arguments inviting us to presume that facts are as they have been stated in response to question – especially when facts are quite otherwise. Thanks for your time.

    • Boritz

      “the basic lessons of economics”

      For a long time the country followed John Maynard Keynes when we would have been just as well off following Maynard G. Krebs.

      • Fred

        Don’t worry Anthony; I got this:

        Obviously need cognitive reassurance of confirmation bias. Not interested in right/left or your psychological issues. Keep. . .to yourself. I’m done here.

      • Anthony

        The idea “inequality of labor income” (which is my implied point) warrants a serious public policy discussion with less partisanship where possible – and a most important lesson of economics, sans a preferable economist, is in the long run the best way to address labor wage inequality (while investing in the growth of the economy) is surely to invest in education.

  • Blackbeard

    If you think progressive policies are actually about helping the poor then a huge minimum wage increase would indeed be a mistake. But if the real point is about moral preening and helping Democrats get and stay elected then it all makes perfect sense. A minimum wage increase this big will increase unemployment, increase poverty and increase inequality. Those are all excellent campaign issues for a liberal to run on. Of course if they thought they might get blamed for those negative effects the calculus would be different but they can trust their friends in the media to make sure that that conclusion is never drawn.

  • jeburke

    Don’t forget, they’ll also demand more of various kinds of federal aid and bailouts.

  • Cromulent

    The wreckage is gonna be *awesome*.

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