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On January 19 2012 08:14 Hider wrote:
No you have not written anything about statistic, but since your convinced that higher minimum wages doesn't decrease total production you must be misapplying statistics when you read them.
Something tells me you haven't read my posts. Just where have I unequivocably stated that higher minimum wages do not decrease total production? I have stated that the effects of a minimum wage are dependent on the structure of the market they're applied to. On the other hand...
On January 19 2012 08:14 Hider wrote:
I can only assume that some people think that higher wages increases total spending, and hence has made a statistical analysis "proving their point". This is nonsense, if wages are above the real value of the employeed total production is less and given equal money suply prices will rise. Hence real wages aren't the same.
I can only assume you have slept through the parts of your microeconomics class that didn't deal with perfect competition. There is absolutely no other explanation for statements like this:
+ Show Spoiler +On January 19 2012 07:22 Hider wrote:
Low minimum wage can never increase employment. Some times (if competition is really bad) it can increase wages as you say, but that doesn't change unemployment or make the socierty as a whole better of. That makes some ppl better off, some ppl worse of. Overall however minimum wage is harmfull for total wealth. On January 19 2012 07:29 Hider wrote:
This basic stuff is pure logic, and it doesn't rely on assumptions (except if there only was 1 company in the world that was allowed to produce, then unemplouyment wouldn't change). But minimum wages cant create more wealth, it can only destroy. Some times it will destroy more wealth than other time, but exact number isn't relevant, unless you try to to a cost-benefit analysis (cost is social "unjustice".).
On January 19 2012 08:14 Hider wrote:
The companies that decreases their profit/number of employeed will obivisouly hire less people to remain profitable (obv. assuming that minimum wages > real value).
I cant see how employment would rise in any case?
I don't think you understand what a "real value" is: a "real value" is the value adjusted for inflation, in comparison to a "nominal value" which is not adjusted for inflation. Saying that minimum wages>real value makes no sense whatsoever.
Just what do you mean by "real value"? Wages at equilibrium? Wages that minimize DWL?
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On January 19 2012 08:33 Hider wrote:Show nested quote +On January 19 2012 08:16 nihlon wrote:
You can also argue that people with better income also performs better at their job than those that have to slave for basically nothing. I'm sure there's a breaking point somewhere. Then your claim is that government is actually better at pricing the value of the employeed than private companies.
If you look at the interest of one individual possibly. If you look at the interest of a specific employment probably not. A Chinese company that pays their employees shit doesn't care if the employees produce more by paying them more as they can just replace the employee when he jumps off a bridge.
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On January 19 2012 08:38 ikl2 wrote:Show nested quote +On January 19 2012 08:30 Hider wrote:On January 19 2012 08:05 ikl2 wrote:On January 19 2012 08:01 Hider wrote:On January 19 2012 07:49 ikl2 wrote:On January 19 2012 07:39 Hider wrote:On January 19 2012 07:36 Eppa! wrote:On January 19 2012 07:34 Hider wrote:On January 19 2012 07:31 Eppa! wrote:On January 19 2012 07:25 Hider wrote:
[quote]
Oh, yeh thats now how i define production. Obv. services count to my definition of "total production". Dont understand your last sentence. Profits aren't relevant. Total production (obv. onl production of what people demand creates wealth). You don't seem to understand that less regulations increase the income gap which leads to a lot of other things. There is no basic economics especially in todays economies. Well: Increased production of what people demand = more wealth. Thats a sentence that is true no matter what. It isn't depending on time or income gap or regulations or whatever. There is no conclusive proof that minimum wage decreases production or wealth. Sure there is. Through deductive logic. There may be no empirical proof or whatever (there probably "is), but i dont really care as you cant prove anything through empircal observations. You understand how deductive logic works, right? You need a certain number of starting claims about empirical reality in order for you to deduce anything. You actually cannot just dismiss empirical observation as you need it to start your argument. Further, if empirical reality seems to be in conflict with what you're saying - and I'm not taking sides here, that's for people who know what they're talking about to decide - then it may be all the worse for your starting assumptions, not for empirical reality. No you dont need empirical observations. You need true claims. Like obv. From true claims we know that companies loses money if they pay out more than what they receive. Hence paying higher wages for the same producing lowers their profit. Since this decreases profit for each product they produce, they cant hire as many people and still be profitable --> hence total production decreases. You're proving my point. You're ignoring a lot of external assumptions you're making (about empirical reality!) that I do not know the truth value of, but I do know you're not stating. For example, it's not logically impossible that if company x paid its workers more, and this was widely publicised as an ethical thing to do, company x's profits would actually increase because of an increase in public goodwill that leads to better brand image. Your argument relies on the premise, among others, that wages have no complicated interactions with anything else, which is an empirical one, not one that's analytically true. Edit: Another logically possible example that you would need empirical data to falsify: Company y is a very large company that manufactures a useful and attractive consumer good that is moderately expensive, called the Widgetmaster 3000. Its lowest-wage workers spend a great deal of time with the Widgetmaster and get to know it well, and because it's a good product they want it. However, they're paid at such a rate that they cannot afford to buy said product. A marginal pay increase, as it happens, would bump a large number of those people up enough that they could justify to themselves buying a Widgetmaster, but that marginal amount happens to be a number such that their effective wages after purchasing a Widgetmaster from the company are actually lower; the company receives more money from the workers as a result of giving them more money. This too is possible. No actually not. If brand value of company X increases through increasing wages, the employeed real value increases as well. Here is an example Year 0.Assuming that total money suply in that world = 100.000. Company A has turnover of 50.000 and pays wages of 45.000 (which is their only cost, hence profit = 5.000). Company B, turnover = 50.000. Wages = 45000, profit = 5.000. Shareholder wages is the residual = 10.000. From year 0 to year 1 the below happens.Assuming that wages = real value (not realistic assumption but it doesn't change my point). Inflation = 0. Workers are just as efficiently as previsouly, and works same amount of hours. Same product is sold. Both companies are going-concern. Company A decides increasing wages for some reason, and then decide to increase prices, which increases turnover (cus of the above reason). Turnover = 75.000. Wages = 60.000. Profit = 15.000 Company B: Turnover: 25.000. Wages = 45.000. Profit = -20.000. Conclusion: So what has happened here is just a redestribution of wealth. THis is the best case scenario of higher wages for company A. And it benefits their shareholders and their employees. However it fucks up the shareholders of company B. But it cant create wealth. Only increased production can. A increased production given unchanged inflation (=money suply) average prices decreases, hence real buying power has increased = wealth created. I don't know if that's how you use the term 'value' in economics, so I won't argue and assume you're right that an increase in employee wages that results in increased goodwill counts as increased employee value. That seems like a weird way to talk about it, but sure. And yes, if you look at it in the simplified context of (a) two companies and (b) stable accessible money supply over two years (is this really an assumption that helps us model how the world works? That would surprise me, given birth/death, people leaving/entering the market, immigration/emigration, money being printed...), then indeed, wealth is simply distributed. But isn't that a decent objection to almost everything that would make one company more profitable than another, and at the expense of another? This seems like how competition works. I'm genuinely curious about both the viability of assumption (b) (which again strikes me as an assumption about empirical reality...) and the implications of the position.
I only used that assumption to make the model more easy. But inflation(though having other bieffects) just changes numbers, not the principle. WHy does immigration matter? If we include every company in the world the effect would be the same. More people being born might change total production, though not average production/citizens which is probably a more reliable number.
Well yeh thats how competetiion works. In the long run the above scenario is absolutely fine as the companies will keep readjusting.
Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well.
What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created.
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I also love the talk about how redistribution of wealth is inherently evil. Do you have any idea just how unequal wealth stratification in the states is right now? I'm not necessarily a fan of plain taking money from person A and giving it to B, but the system as it stands right now is fuckin' broken.
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Two more questions:
(1) Is the phrase 'benefit society as a whole' expressly restricted to 'increase national GDP'? It seems to me that $10 is, when it comes to its impact on my quality of life, substantially more valuable to me than to Bill Gates. Thus, national GDP stays the same, and Bill Gates suffers a substantially smaller loss than I experience a gain.
(2) Immi/emigration matters in a national context because it seems, under my naive assumptions, that that would change the number of people available in a national market to spend money, just as birth/death would, or other factors that have an effect on consumer spending. It just seems like the simplifying assumption simplifies it such that it no longer predicts the real world. And again, it seems like your choices are to make the kind of assumptions that seem to make your arguments not apply to the real world, or to make assumptions about empirical reality (which I note you're no longer denying making, so I guess my part of the argument is over!)
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On January 19 2012 08:45 Hider wrote:Show nested quote +On January 19 2012 08:38 ikl2 wrote:On January 19 2012 08:30 Hider wrote:On January 19 2012 08:05 ikl2 wrote:On January 19 2012 08:01 Hider wrote:On January 19 2012 07:49 ikl2 wrote:On January 19 2012 07:39 Hider wrote:On January 19 2012 07:36 Eppa! wrote:On January 19 2012 07:34 Hider wrote:On January 19 2012 07:31 Eppa! wrote:
[quote]
You don't seem to understand that less regulations increase the income gap which leads to a lot of other things. There is no basic economics especially in todays economies. Well: Increased production of what people demand = more wealth. Thats a sentence that is true no matter what. It isn't depending on time or income gap or regulations or whatever. There is no conclusive proof that minimum wage decreases production or wealth. Sure there is. Through deductive logic. There may be no empirical proof or whatever (there probably "is), but i dont really care as you cant prove anything through empircal observations. You understand how deductive logic works, right? You need a certain number of starting claims about empirical reality in order for you to deduce anything. You actually cannot just dismiss empirical observation as you need it to start your argument. Further, if empirical reality seems to be in conflict with what you're saying - and I'm not taking sides here, that's for people who know what they're talking about to decide - then it may be all the worse for your starting assumptions, not for empirical reality. No you dont need empirical observations. You need true claims. Like obv. From true claims we know that companies loses money if they pay out more than what they receive. Hence paying higher wages for the same producing lowers their profit. Since this decreases profit for each product they produce, they cant hire as many people and still be profitable --> hence total production decreases. You're proving my point. You're ignoring a lot of external assumptions you're making (about empirical reality!) that I do not know the truth value of, but I do know you're not stating. For example, it's not logically impossible that if company x paid its workers more, and this was widely publicised as an ethical thing to do, company x's profits would actually increase because of an increase in public goodwill that leads to better brand image. Your argument relies on the premise, among others, that wages have no complicated interactions with anything else, which is an empirical one, not one that's analytically true. Edit: Another logically possible example that you would need empirical data to falsify: Company y is a very large company that manufactures a useful and attractive consumer good that is moderately expensive, called the Widgetmaster 3000. Its lowest-wage workers spend a great deal of time with the Widgetmaster and get to know it well, and because it's a good product they want it. However, they're paid at such a rate that they cannot afford to buy said product. A marginal pay increase, as it happens, would bump a large number of those people up enough that they could justify to themselves buying a Widgetmaster, but that marginal amount happens to be a number such that their effective wages after purchasing a Widgetmaster from the company are actually lower; the company receives more money from the workers as a result of giving them more money. This too is possible. No actually not. If brand value of company X increases through increasing wages, the employeed real value increases as well. Here is an example Year 0.Assuming that total money suply in that world = 100.000. Company A has turnover of 50.000 and pays wages of 45.000 (which is their only cost, hence profit = 5.000). Company B, turnover = 50.000. Wages = 45000, profit = 5.000. Shareholder wages is the residual = 10.000. From year 0 to year 1 the below happens.Assuming that wages = real value (not realistic assumption but it doesn't change my point). Inflation = 0. Workers are just as efficiently as previsouly, and works same amount of hours. Same product is sold. Both companies are going-concern. Company A decides increasing wages for some reason, and then decide to increase prices, which increases turnover (cus of the above reason). Turnover = 75.000. Wages = 60.000. Profit = 15.000 Company B: Turnover: 25.000. Wages = 45.000. Profit = -20.000. Conclusion: So what has happened here is just a redestribution of wealth. THis is the best case scenario of higher wages for company A. And it benefits their shareholders and their employees. However it fucks up the shareholders of company B. But it cant create wealth. Only increased production can. A increased production given unchanged inflation (=money suply) average prices decreases, hence real buying power has increased = wealth created. I don't know if that's how you use the term 'value' in economics, so I won't argue and assume you're right that an increase in employee wages that results in increased goodwill counts as increased employee value. That seems like a weird way to talk about it, but sure. And yes, if you look at it in the simplified context of (a) two companies and (b) stable accessible money supply over two years (is this really an assumption that helps us model how the world works? That would surprise me, given birth/death, people leaving/entering the market, immigration/emigration, money being printed...), then indeed, wealth is simply distributed. But isn't that a decent objection to almost everything that would make one company more profitable than another, and at the expense of another? This seems like how competition works. I'm genuinely curious about both the viability of assumption (b) (which again strikes me as an assumption about empirical reality...) and the implications of the position. I only used that assumption to make the model more easy. But inflation(though having other bieffects) just changes numbers, not the principle. WHy does immigration matter? If we include every company in the world the effect would be the same. More people being born might change total production, though not average production/citizens which is probably a more reliable number. Well yeh thats how competetiion works. In the long run the above scenario is absolutely fine as the companies will keep readjusting. Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well. What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created.
Dude, try a scenario with a market that's not perfectly competitive...
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On January 18 2012 23:21 Hider wrote:Show nested quote +On January 18 2012 23:16 darthfoley wrote:On January 18 2012 23:12 Hider wrote:On January 18 2012 22:07 Doublemint wrote:On January 18 2012 19:25 Hider wrote:On January 18 2012 19:19 Velr wrote:
If i would have been born in 1930 i would have been ~10 around the time that the holocaust actually happened.
Therefore i would probably have believed what my parents told me.
Are you really that bad at making absolutely retarded examples?
Oh, and in 1930 a big part of all the german grown ups actually beleived that or at least did not opposed it.. I guess they were alle just stupid morons that believe everythign the goverment told them.
SERIOUSLY? Government is kinda creating the culture (unfortunately), which impact your raising. What your hear in school or from your parents is just an end product of heavy manipulation through centuries. When you think your not supposed to defend your self its almost as bad as thinking jews deserve to die. Of course your allowed to defend your self. If you optimize your probablity of surviving by having a gun, then its a good idea, and your allowed to do it. Sure if you have the possiblity of calling the police and letting them defend you would be a good option if there was time for that. But some times that is not an option. The reason you ahve been getting this manipulated is probably that you have been taugh through the years that governemnt is supposed to take care of all your needs. you sure are terrible at making sound comparisons... That wasn't even a comparasion (what you just highlighted). It was a claim. Regarding my 1930 comparasion, it was a fine example. Some people (obv. those wh ohave been manipulated) will probably dont get it, as it is very extreme. But just becasue I use an extreme comparsion doesn't mean it isn't sound. The pricniple is still there: "People who think your not allowed to use self defense (that governemnt is supposed to do it) have been brain washed." No, i think it's just plain stupid to let everyone and anyone own a gun. Guns kill people. Robes kill people? (robs should not be allowed). Hands kill people (hands not allowed). Big muscles...... Whats your point. WHat kind of universal rule can you apply that disallow private persons to be allowed to own guns, but still be allowed by own knifes and other stuff. An pointing out the specific stuff that is allowed is not a an unisveral rule.
rofl your arguments are so stupid. I don't even know how "robes" kill people. Hands only kill people if they mean to kill people. Guns were MADE to kill things, there is a big difference that your "argument" fails to cover. All it takes is a clever kid and a parent forgetting to put safety on and say goodbye to your 5 year old.
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On January 19 2012 08:45 Hider wrote:Show nested quote +On January 19 2012 08:38 ikl2 wrote:On January 19 2012 08:30 Hider wrote:On January 19 2012 08:05 ikl2 wrote:On January 19 2012 08:01 Hider wrote:On January 19 2012 07:49 ikl2 wrote:On January 19 2012 07:39 Hider wrote:On January 19 2012 07:36 Eppa! wrote:On January 19 2012 07:34 Hider wrote:On January 19 2012 07:31 Eppa! wrote:
[quote]
You don't seem to understand that less regulations increase the income gap which leads to a lot of other things. There is no basic economics especially in todays economies. Well: Increased production of what people demand = more wealth. Thats a sentence that is true no matter what. It isn't depending on time or income gap or regulations or whatever. There is no conclusive proof that minimum wage decreases production or wealth. Sure there is. Through deductive logic. There may be no empirical proof or whatever (there probably "is), but i dont really care as you cant prove anything through empircal observations. You understand how deductive logic works, right? You need a certain number of starting claims about empirical reality in order for you to deduce anything. You actually cannot just dismiss empirical observation as you need it to start your argument. Further, if empirical reality seems to be in conflict with what you're saying - and I'm not taking sides here, that's for people who know what they're talking about to decide - then it may be all the worse for your starting assumptions, not for empirical reality. No you dont need empirical observations. You need true claims. Like obv. From true claims we know that companies loses money if they pay out more than what they receive. Hence paying higher wages for the same producing lowers their profit. Since this decreases profit for each product they produce, they cant hire as many people and still be profitable --> hence total production decreases. You're proving my point. You're ignoring a lot of external assumptions you're making (about empirical reality!) that I do not know the truth value of, but I do know you're not stating. For example, it's not logically impossible that if company x paid its workers more, and this was widely publicised as an ethical thing to do, company x's profits would actually increase because of an increase in public goodwill that leads to better brand image. Your argument relies on the premise, among others, that wages have no complicated interactions with anything else, which is an empirical one, not one that's analytically true. Edit: Another logically possible example that you would need empirical data to falsify: Company y is a very large company that manufactures a useful and attractive consumer good that is moderately expensive, called the Widgetmaster 3000. Its lowest-wage workers spend a great deal of time with the Widgetmaster and get to know it well, and because it's a good product they want it. However, they're paid at such a rate that they cannot afford to buy said product. A marginal pay increase, as it happens, would bump a large number of those people up enough that they could justify to themselves buying a Widgetmaster, but that marginal amount happens to be a number such that their effective wages after purchasing a Widgetmaster from the company are actually lower; the company receives more money from the workers as a result of giving them more money. This too is possible. No actually not. If brand value of company X increases through increasing wages, the employeed real value increases as well. Here is an example Year 0.Assuming that total money suply in that world = 100.000. Company A has turnover of 50.000 and pays wages of 45.000 (which is their only cost, hence profit = 5.000). Company B, turnover = 50.000. Wages = 45000, profit = 5.000. Shareholder wages is the residual = 10.000. From year 0 to year 1 the below happens.Assuming that wages = real value (not realistic assumption but it doesn't change my point). Inflation = 0. Workers are just as efficiently as previsouly, and works same amount of hours. Same product is sold. Both companies are going-concern. Company A decides increasing wages for some reason, and then decide to increase prices, which increases turnover (cus of the above reason). Turnover = 75.000. Wages = 60.000. Profit = 15.000 Company B: Turnover: 25.000. Wages = 45.000. Profit = -20.000. Conclusion: So what has happened here is just a redestribution of wealth. THis is the best case scenario of higher wages for company A. And it benefits their shareholders and their employees. However it fucks up the shareholders of company B. But it cant create wealth. Only increased production can. A increased production given unchanged inflation (=money suply) average prices decreases, hence real buying power has increased = wealth created. I don't know if that's how you use the term 'value' in economics, so I won't argue and assume you're right that an increase in employee wages that results in increased goodwill counts as increased employee value. That seems like a weird way to talk about it, but sure. And yes, if you look at it in the simplified context of (a) two companies and (b) stable accessible money supply over two years (is this really an assumption that helps us model how the world works? That would surprise me, given birth/death, people leaving/entering the market, immigration/emigration, money being printed...), then indeed, wealth is simply distributed. But isn't that a decent objection to almost everything that would make one company more profitable than another, and at the expense of another? This seems like how competition works. I'm genuinely curious about both the viability of assumption (b) (which again strikes me as an assumption about empirical reality...) and the implications of the position. I only used that assumption to make the model more easy. But inflation(though having other bieffects) just changes numbers, not the principle. WHy does immigration matter? If we include every company in the world the effect would be the same. More people being born might change total production, though not average production/citizens which is probably a more reliable number. Well yeh thats how competetiion works. In the long run the above scenario is absolutely fine as the companies will keep readjusting. Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well. What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created.
Part of the reason that immigration matters is the fact that there have been unintended consequences of the more strict immigration laws, at least in the USA. A lot of illegal immigrants in the USA do extremely harsh work in farming. They work in extremely hot weather out in the fields for hours on end. When these super strict laws kicked in, farmers had to fire a ton of these workers. This was all done because of the notion that illegal immigrants are taking legal people's jobs. As it turns out, many of these jobs are still available. Why? Legal people have a hard time lasting even a week. Is it EXTREMELY tough work and most people get heat sickness and really can't take it. Illegal immigrants do just fine. So who suffers in this situation? Everyone. The farmers can't get the work done, the illegals are out of jobs, and the legals still aren't doing it.
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On January 19 2012 08:42 acker wrote:Show nested quote +On January 19 2012 08:14 Hider wrote:
No you have not written anything about statistic, but since your convinced that higher minimum wages doesn't decrease total production you must be misapplying statistics when you read them. Something tells me you haven't read my posts. Just where have I unequivocably stated that higher minimum wages do not decrease total production? I have stated that the effects of a minimum wage are dependent on the structure of the market they're applied to. On the other hand... Show nested quote +On January 19 2012 08:14 Hider wrote:
I can only assume that some people think that higher wages increases total spending, and hence has made a statistical analysis "proving their point". This is nonsense, if wages are above the real value of the employeed total production is less and given equal money suply prices will rise. Hence real wages aren't the same. I can only assume you have slept through the parts of your microeconomics class that didn't deal with perfect competition. There is absolutely no other explanation for statements like this: + Show Spoiler +On January 19 2012 07:22 Hider wrote:
Low minimum wage can never increase employment. Some times (if competition is really bad) it can increase wages as you say, but that doesn't change unemployment or make the socierty as a whole better of. That makes some ppl better off, some ppl worse of. Overall however minimum wage is harmfull for total wealth. On January 19 2012 07:29 Hider wrote:
This basic stuff is pure logic, and it doesn't rely on assumptions (except if there only was 1 company in the world that was allowed to produce, then unemplouyment wouldn't change). But minimum wages cant create more wealth, it can only destroy. Some times it will destroy more wealth than other time, but exact number isn't relevant, unless you try to to a cost-benefit analysis (cost is social "unjustice".). Show nested quote +On January 19 2012 08:14 Hider wrote:
The companies that decreases their profit/number of employeed will obivisouly hire less people to remain profitable (obv. assuming that minimum wages > real value).
I cant see how employment would rise in any case? I don't think you understand what a "real value" is: a "real value" is the value adjusted for inflation, in comparison to a "nominal value" which is not adjusted for inflation. Saying that minimum wages>real value makes no sense whatsoever. Just what do you mean by "real value"? Wages at equilibrium? Wages that minimize DWL?
Acker I didn't deny that the effect of minimum wages dependended on the market situation. I guess we just misunderstood each other then.
Think your kinda misunderstanding as well my definition of real value. Real value of employee = What he is worth from the employeer.
If he the employeer can buy his materials to 5$, and sell it for 20$. And this change in value is only due to the value of the employee then his value is 15$.
Obivously this may differ from his paid wages, though the more above 15$ in wages paid we get --> higher unemployment.
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On January 19 2012 08:45 Hider wrote:
Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well.
What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created.
It's like the only thing he knows about it perfect competition...
On January 19 2012 08:51 Hider wrote:
Think your kinda misunderstanding as well my definition of real value. Real value of employee = What he is worth from the employeer.
I'm sorry, but did you just define "real value" as the "equilibrium wage"? Because that's what the equilibrium wage is, just what a company is willing to pay for an employee to maximize its profit.
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I think I might be asking the same question other people, who seem to know what they're talking about, are asking when they say things about 'perfect competition'. It looks as if in your arguments, you're making assumptions about the world (that it's 'perfectly competitive' in their words) that necessarily can be made true or false by the state of affairs in empirical reality. Thus, empirical data clearly matters to your arguments.
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On January 19 2012 08:50 allecto wrote:Show nested quote +On January 19 2012 08:45 Hider wrote:On January 19 2012 08:38 ikl2 wrote:On January 19 2012 08:30 Hider wrote:On January 19 2012 08:05 ikl2 wrote:On January 19 2012 08:01 Hider wrote:On January 19 2012 07:49 ikl2 wrote:On January 19 2012 07:39 Hider wrote:On January 19 2012 07:36 Eppa! wrote:On January 19 2012 07:34 Hider wrote:
[quote]
Well: Increased production of what people demand = more wealth.
Thats a sentence that is true no matter what. It isn't depending on time or income gap or regulations or whatever.
There is no conclusive proof that minimum wage decreases production or wealth. Sure there is. Through deductive logic. There may be no empirical proof or whatever (there probably "is), but i dont really care as you cant prove anything through empircal observations. You understand how deductive logic works, right? You need a certain number of starting claims about empirical reality in order for you to deduce anything. You actually cannot just dismiss empirical observation as you need it to start your argument. Further, if empirical reality seems to be in conflict with what you're saying - and I'm not taking sides here, that's for people who know what they're talking about to decide - then it may be all the worse for your starting assumptions, not for empirical reality. No you dont need empirical observations. You need true claims. Like obv. From true claims we know that companies loses money if they pay out more than what they receive. Hence paying higher wages for the same producing lowers their profit. Since this decreases profit for each product they produce, they cant hire as many people and still be profitable --> hence total production decreases. You're proving my point. You're ignoring a lot of external assumptions you're making (about empirical reality!) that I do not know the truth value of, but I do know you're not stating. For example, it's not logically impossible that if company x paid its workers more, and this was widely publicised as an ethical thing to do, company x's profits would actually increase because of an increase in public goodwill that leads to better brand image. Your argument relies on the premise, among others, that wages have no complicated interactions with anything else, which is an empirical one, not one that's analytically true. Edit: Another logically possible example that you would need empirical data to falsify: Company y is a very large company that manufactures a useful and attractive consumer good that is moderately expensive, called the Widgetmaster 3000. Its lowest-wage workers spend a great deal of time with the Widgetmaster and get to know it well, and because it's a good product they want it. However, they're paid at such a rate that they cannot afford to buy said product. A marginal pay increase, as it happens, would bump a large number of those people up enough that they could justify to themselves buying a Widgetmaster, but that marginal amount happens to be a number such that their effective wages after purchasing a Widgetmaster from the company are actually lower; the company receives more money from the workers as a result of giving them more money. This too is possible. No actually not. If brand value of company X increases through increasing wages, the employeed real value increases as well. Here is an example Year 0.Assuming that total money suply in that world = 100.000. Company A has turnover of 50.000 and pays wages of 45.000 (which is their only cost, hence profit = 5.000). Company B, turnover = 50.000. Wages = 45000, profit = 5.000. Shareholder wages is the residual = 10.000. From year 0 to year 1 the below happens.Assuming that wages = real value (not realistic assumption but it doesn't change my point). Inflation = 0. Workers are just as efficiently as previsouly, and works same amount of hours. Same product is sold. Both companies are going-concern. Company A decides increasing wages for some reason, and then decide to increase prices, which increases turnover (cus of the above reason). Turnover = 75.000. Wages = 60.000. Profit = 15.000 Company B: Turnover: 25.000. Wages = 45.000. Profit = -20.000. Conclusion: So what has happened here is just a redestribution of wealth. THis is the best case scenario of higher wages for company A. And it benefits their shareholders and their employees. However it fucks up the shareholders of company B. But it cant create wealth. Only increased production can. A increased production given unchanged inflation (=money suply) average prices decreases, hence real buying power has increased = wealth created. I don't know if that's how you use the term 'value' in economics, so I won't argue and assume you're right that an increase in employee wages that results in increased goodwill counts as increased employee value. That seems like a weird way to talk about it, but sure. And yes, if you look at it in the simplified context of (a) two companies and (b) stable accessible money supply over two years (is this really an assumption that helps us model how the world works? That would surprise me, given birth/death, people leaving/entering the market, immigration/emigration, money being printed...), then indeed, wealth is simply distributed. But isn't that a decent objection to almost everything that would make one company more profitable than another, and at the expense of another? This seems like how competition works. I'm genuinely curious about both the viability of assumption (b) (which again strikes me as an assumption about empirical reality...) and the implications of the position. I only used that assumption to make the model more easy. But inflation(though having other bieffects) just changes numbers, not the principle. WHy does immigration matter? If we include every company in the world the effect would be the same. More people being born might change total production, though not average production/citizens which is probably a more reliable number. Well yeh thats how competetiion works. In the long run the above scenario is absolutely fine as the companies will keep readjusting. Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well. What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created. Dude, try a scenario with a market that's not perfectly competitive...
Eh markets arent even perfectly competitive in that scenario, lol. But as I said, you can relax any assumption. It doesn't rely matter. Best case = no changes in wealth. Normal case = Destryoing wealth.
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On January 19 2012 08:50 Mohdoo wrote:Show nested quote +On January 19 2012 08:45 Hider wrote:On January 19 2012 08:38 ikl2 wrote:On January 19 2012 08:30 Hider wrote:On January 19 2012 08:05 ikl2 wrote:On January 19 2012 08:01 Hider wrote:On January 19 2012 07:49 ikl2 wrote:On January 19 2012 07:39 Hider wrote:On January 19 2012 07:36 Eppa! wrote:On January 19 2012 07:34 Hider wrote:
[quote]
Well: Increased production of what people demand = more wealth.
Thats a sentence that is true no matter what. It isn't depending on time or income gap or regulations or whatever.
There is no conclusive proof that minimum wage decreases production or wealth. Sure there is. Through deductive logic. There may be no empirical proof or whatever (there probably "is), but i dont really care as you cant prove anything through empircal observations. You understand how deductive logic works, right? You need a certain number of starting claims about empirical reality in order for you to deduce anything. You actually cannot just dismiss empirical observation as you need it to start your argument. Further, if empirical reality seems to be in conflict with what you're saying - and I'm not taking sides here, that's for people who know what they're talking about to decide - then it may be all the worse for your starting assumptions, not for empirical reality. No you dont need empirical observations. You need true claims. Like obv. From true claims we know that companies loses money if they pay out more than what they receive. Hence paying higher wages for the same producing lowers their profit. Since this decreases profit for each product they produce, they cant hire as many people and still be profitable --> hence total production decreases. You're proving my point. You're ignoring a lot of external assumptions you're making (about empirical reality!) that I do not know the truth value of, but I do know you're not stating. For example, it's not logically impossible that if company x paid its workers more, and this was widely publicised as an ethical thing to do, company x's profits would actually increase because of an increase in public goodwill that leads to better brand image. Your argument relies on the premise, among others, that wages have no complicated interactions with anything else, which is an empirical one, not one that's analytically true. Edit: Another logically possible example that you would need empirical data to falsify: Company y is a very large company that manufactures a useful and attractive consumer good that is moderately expensive, called the Widgetmaster 3000. Its lowest-wage workers spend a great deal of time with the Widgetmaster and get to know it well, and because it's a good product they want it. However, they're paid at such a rate that they cannot afford to buy said product. A marginal pay increase, as it happens, would bump a large number of those people up enough that they could justify to themselves buying a Widgetmaster, but that marginal amount happens to be a number such that their effective wages after purchasing a Widgetmaster from the company are actually lower; the company receives more money from the workers as a result of giving them more money. This too is possible. No actually not. If brand value of company X increases through increasing wages, the employeed real value increases as well. Here is an example Year 0.Assuming that total money suply in that world = 100.000. Company A has turnover of 50.000 and pays wages of 45.000 (which is their only cost, hence profit = 5.000). Company B, turnover = 50.000. Wages = 45000, profit = 5.000. Shareholder wages is the residual = 10.000. From year 0 to year 1 the below happens.Assuming that wages = real value (not realistic assumption but it doesn't change my point). Inflation = 0. Workers are just as efficiently as previsouly, and works same amount of hours. Same product is sold. Both companies are going-concern. Company A decides increasing wages for some reason, and then decide to increase prices, which increases turnover (cus of the above reason). Turnover = 75.000. Wages = 60.000. Profit = 15.000 Company B: Turnover: 25.000. Wages = 45.000. Profit = -20.000. Conclusion: So what has happened here is just a redestribution of wealth. THis is the best case scenario of higher wages for company A. And it benefits their shareholders and their employees. However it fucks up the shareholders of company B. But it cant create wealth. Only increased production can. A increased production given unchanged inflation (=money suply) average prices decreases, hence real buying power has increased = wealth created. I don't know if that's how you use the term 'value' in economics, so I won't argue and assume you're right that an increase in employee wages that results in increased goodwill counts as increased employee value. That seems like a weird way to talk about it, but sure. And yes, if you look at it in the simplified context of (a) two companies and (b) stable accessible money supply over two years (is this really an assumption that helps us model how the world works? That would surprise me, given birth/death, people leaving/entering the market, immigration/emigration, money being printed...), then indeed, wealth is simply distributed. But isn't that a decent objection to almost everything that would make one company more profitable than another, and at the expense of another? This seems like how competition works. I'm genuinely curious about both the viability of assumption (b) (which again strikes me as an assumption about empirical reality...) and the implications of the position. I only used that assumption to make the model more easy. But inflation(though having other bieffects) just changes numbers, not the principle. WHy does immigration matter? If we include every company in the world the effect would be the same. More people being born might change total production, though not average production/citizens which is probably a more reliable number. Well yeh thats how competetiion works. In the long run the above scenario is absolutely fine as the companies will keep readjusting. Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well. What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created. Part of the reason that immigration matters is the fact that there have been unintended consequences of the more strict immigration laws, at least in the USA. A lot of illegal immigrants in the USA do extremely harsh work in farming. They work in extremely hot weather out in the fields for hours on end. When these super strict laws kicked in, farmers had to fire a ton of these workers. This was all done because of the notion that illegal immigrants are taking legal people's jobs. As it turns out, many of these jobs are still available. Why? Legal people have a hard time lasting even a week. Is it EXTREMELY tough work and most people get heat sickness and really can't take it. Illegal immigrants do just fine. So who suffers in this situation? Everyone. The farmers can't get the work done, the illegals are out of jobs, and the legals still aren't doing it.
Yah. I was listening to a report on NPR about this the other day. They had an interview with a tomato farmer in Arizona I think it was. This guy had until recently employed 60 migrant workers. Then some anti-immigration policies were passed and every single one of them bailed and left the state for fear of deportation. So the farmer talked about how he tried to hire Americans to do the same work. A whopping 18 showed up to do the training thing, and only 1 came back the next day. That one guy quit after 4 hours. Farmer's crop rots in the field, and he said he'll probably end up losing his farm. Crazy shit T_T;
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On January 19 2012 08:53 ikl2 wrote:
I think I might be asking the same question other people, who seem to know what they're talking about, are asking when they say things about 'perfect competition'. It looks as if in your arguments, you're making assumptions about the world (that it's 'perfectly competitive' in their words) that necessarily can be made true or false by the state of affairs in empirical reality. Thus, empirical data clearly matters to your arguments.
yeh they dont know what they are talking about when saying "perfect competition." Look at the assumption for perfect competition, and my assumptions. Totally different. My assumptions aren't even needed, just remove them if you look too and work out the numbers your self.
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On January 19 2012 08:54 Hider wrote:
Eh markets arent even perfectly competitive in that scenario, lol. But as I said, you can relax any assumption. It doesn't rely matter. Best case = no changes in wealth. Normal case = Destryoing wealth.
Really? Really?
+ Show Spoiler +
I expect a straight answer to my previous post on real value and equilibrium wage.
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On January 19 2012 08:51 acker wrote:Show nested quote +On January 19 2012 08:45 Hider wrote:
Anyway imagine however that there is an artifical minimum wage. That can never benefit the socierty as whole. Some times it might just redistribute. But lets assume that company B in the above example has to pay 60.000 wages as well.
What would happen? Since they want at least 0 profit, they will have to fire a lot of employees (most likely they will go bankrupt), hence unemployment is created. It's like the only thing he knows about it perfect competition... Show nested quote +On January 19 2012 08:51 Hider wrote:
Think your kinda misunderstanding as well my definition of real value. Real value of employee = What he is worth from the employeer. I'm sorry, but did you just define "real value" as the "equilibrium wage"? Because that's what the equilibrium wage is, just what a company is willing to pay for an employee to maximize its profit.
Yes its the same. I jsut throught real value of the employee made more sense for people having not taking a economic class, but I might have been wrong. Equlitbrium wage is normally defined though as suply = demand.
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On January 19 2012 08:53 ikl2 wrote:
I think I might be asking the same question other people, who seem to know what they're talking about, are asking when they say things about 'perfect competition'. It looks as if in your arguments, you're making assumptions about the world (that it's 'perfectly competitive' in their words) that necessarily can be made true or false by the state of affairs in empirical reality. Thus, empirical data clearly matters to your arguments.
Models are created to simplify economics to something that can be understood and be affected by policy. These models by no means reflect the reality (ie we don't live in a world with perfect competition or complete monopolies or full of oligarchies, it's a complex mix); however, they are useful in understanding certain things. For example, if there is a monopoly in a certain industry, a minimum wage can be very beneficial. But, a blanket, significant minimum wage can be counterproductive to aiding lower class workers. The data is mixed, and thus a conclusion is hard to be drawn from it. What is certain is that making wide-reaching claims like "we absolutely need government to place nationwide minimum wages" or "minimum wages are never beneficial" is ignorant.
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On January 19 2012 09:01 allecto wrote:Show nested quote +On January 19 2012 08:53 ikl2 wrote:
I think I might be asking the same question other people, who seem to know what they're talking about, are asking when they say things about 'perfect competition'. It looks as if in your arguments, you're making assumptions about the world (that it's 'perfectly competitive' in their words) that necessarily can be made true or false by the state of affairs in empirical reality. Thus, empirical data clearly matters to your arguments. Models are created to simplify economics to something that can be understood and be affected by policy. These models by no means reflect the reality (ie we don't live in a world with perfect competition or complete monopolies or full of oligarchies, it's a complex mix); however, they are useful in understanding certain things. For example, if there is a monopoly in a certain industry, a minimum wage can be very beneficial. But, a blanket, significant minimum wage can be counterproductive to aiding lower class workers. The data is mixed, and thus a conclusion is hard to be drawn from it. What is certain is that making wide-reaching claims like "we absolutely need government to place nationwide minimum wages" or "minimum wages are never beneficial" is ignorant.
Oh, I probably totally agree with most of your statements about models. Seriously, my only bone to pick here is the claim that we can know things about reality simply via analytic truths and deductive logic, which, at the very least in this case, is pretty clearly not true.
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On January 19 2012 09:00 Hider wrote:
Yes its the same. I jsut throught real value of the employee made more sense for people having not taking a economic class, but I might have been wrong. Equlitbrium wage is normally defined though as suply = demand.
You do realize that if you're defining real value as the equilibrium wage...
Look, have you ever taken an introductory microecon class?
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Through monopsopny (cant read wikipedia) compeition between selling companies should be tougher hence they will sell to a lower price. If prices on their goods goes up the buying company can buy less and hence hire less people. I fail to see how this is not just another redestributing of wealth?
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EPT
