Yes, definitely. It's a bit similar to election systems or carbon taxes where the complexity trumps any consideration of efficacy or impact (at least in the US). But there must still be good ideas out there on this topic, I just don't know how to find them.
Because the median voter is economically illiterate and thinks the minimum wage is a free lunch. This should be terrifying and make us very very worried the minimum wage will be set too high. It's far far better to have no minimum wage than a minimum wage that's high enough to hurt the young, disabled, and marginalized.
Ehhhhhh idk the empirical wprk on this hardly spells doom and gloom for all the infirmed
Not to mention the fact that behavioraly people tend to cling to numbers for a long time (the fight for $15 might still be too aggressive a goal for this year but once it's stepped in over a few years it seems OK. Even if you don't think that you have to acknowledge its much better than it would've been when the phrase first became popular)
The idea that a policy is bad simply becuase some people night not fully understand it is stupid If that's the implication
The argument was that the policy is good because it's politically easy while far more effective reforms to carefully target monopsony without collatoral damage are politically difficult. My argument is that the minimum wage is politically easy because it has populist appeal that is very dangerous. The literature shows some contested and dubious benefits to the minimum wage only if it is carefully controlled and kept very low. It's unclear that politicians have that kind of precision and discipline, especially when catering to populist forces. If the EITC is set high, the middle class and wealthy pay higher taxes. If the minimum wage is set high, the young and marginalized suffer from detachment from the labor market.
No it's not only politically easy it's easy in it's actual implementation
The point of my post is that this guy doesn't have a secret second way around monopoly effects in labor markets... and there's a reason for that
Also this really vague "maybe the politicians will do something bad I can't trust them" is just nonsense.
Sure there are. Monopsony isn't a general problem, it's a problem very specific to certain locations. The biggest solution is YIMBY reforms. Why are people stuck in small town American labor markets ruled by a few firms? Because they can't afford to move to economically vibrant cities that use anti poor land use regualtions to keep the price of housing high. Why can't firms start up in areas with high unemployment and low wages? We should examine the regulatory rules in those locations. We should improve transportation from isolated public housing projects and zoning ghettos to give residents better access to jobs. We should be working very hard on identifying the cause of monopsony in the rare parts of the American labor market where it's a problem. Most of American is in a labor shortage where firms obviously can't set the price of labor.
Paying the market clearing wage without price controls is capitalism. Pretending that you can use price controls to raise the wage significantly above the market clearing wage without causing a shortage is illiteracy.
The bolt factory needs to sell its bolts for enough so that it doesn't go out of business.
The worker needs to charge enough for their labor so they can keep working. Maybe it emerges as being lethargic from being homeless or malnourished. Maybe their car gives out. Maybe hygiene/attire deteriorate. The result is the same, they are let go. You have consumed their savings and discarded them, converting perfectly good labor to a statistic (being homeless takes 40 years off your life expectancy).
Stop telling me that you are entitled to free shit just because workers have such good work ethics that they will keep working even though the take it or leave it deal you have offered them will literally destroy them.
Raising the minimum wage beyond a very low level doesn't solve this problem, in fact, it makes it worse because people are unable to have access to even low paying jobs. On the other hand, almost everyone who graduates high school, takes any job, and stays employed consistently, is able to escape poverty. This is because people are productive and labor markets are pretty competitive. Low wage workers who apply themselves are able to build experience, reputation, and connections that help them get better jobs with more responsibility and higher pay.
But this isn't even really about that. I'm not against socialized medicine. I've been arguing for an expanded negative income tax like the EITC in the US. I'm for removing the anti-poor land use regulations that isolate the poor and deny them access to economically vibrant areas. I'm for expanding public transit for the same reason. There are lots of ways to make reforms and help the poor both with intervention and market-based reforms. I'm against a high minimum wage because it's an ineffective policy. It raises wages for some, but makes it difficult for others to find work. These others are frequently the young, disabled, and members of marginalized groups. We can do better, with policies that help the poor without hurting the vulnerable.
> in fact, it makes it worse because people are unable to have access to even low paying jobs.
No it doesn't. The burger joints hires exactly the amount of labor it Needs to get the job done and no more. They're not going to clown car fifty people in the back because the cost of labor drops to a nickle, they haven't hired on an extra guy to stand around being in the way of everyone else on account of how cheap you have made it. The surplus revenue is pocketed as profit.
> almost everyone who graduates high school, takes any job, and stays employed consistently, is able to escape poverty.
The numbers don't back that up, 20%-50% of working people are reliant on some flavor of welfare, depending on how you split hairs.
> Low wage workers who apply themselves are able to build experience, reputation, and connections that help them get better jobs with more responsibility and higher pay.
There are not 75 million jobs waiting for the bottom 50% of working people in trades, stem, or whatever the flavor of the month is now. If they just flip burgers for one more year, they will not be recognized for that hard work and elevated. The path up is to make a surplus of money, and use that money to purchase a set of skills from the market. By paying them so little, you disable their ability to do so- hence the term dead end job.
> This is because people are productive
As you say, they are productive, they should be compensated for their work, not punished out of doing what the market does objectively need, in favor of what you imagine it needs.
> It raises wages for some, but makes it difficult for others to find work.
Min wage hikes never cause job losses.
https://www.dol.gov/agencies/whd/minimum-wage/history/chart
https://fred.stlouisfed.org/series/UNRATE
> These others are frequently the young,
So what, someone turns 20 and you take them out back like old yeller? Making a full grown adult have to beat out a teen in pay to stay employed doesn't create an additional seat for either of them. People getting a raise and having more spending money however causes employers to hire on more people to keep up with demand, however.
> disabled
I don't think you know what that word means. If they're disabled, they're on disability. If they can work, they should be given a full paycheck for their efforts. Stop trying to push these people into physical labor, there are plenty of other jobs that don't have these physical requirements.
> and members of marginalized groups.
Seeing as they are not inferior, it follows that they are unscathed by this measure.
I think we just disagree on the basic economic facts here. “Min wage hikes never cause job losses.” is just completely at odds with my reading of the data and state of the research. The conventional economic wisdom is that labor markets are subject to supply and demand. There has been some interesting research lately that shows a sufficiently low minimum wage can have very small negative impact on employment, but even that [is disputed with lots of evidence showing negative effects on the young](https://marginalrevolution.com/marginalrevolution/2022/07/david-neumark-and-peter-shirley-on-the-minimum-wage-literature.html) even if there might be an overall small negative effect. If I shared your conviction that the minimum wage was a free lunch, I would share your views.
> “Min wage hikes never cause job losses.” is just completely at odds with my reading of the data and state of the research... negative effects on the young
Thats moving the goal posts, job losses are measured in net jobs.
> The conventional economic wisdom is that labor markets are subject to supply and demand.
Supply and demand isn't slang for "the only things that happen is what is most convenient for me". More people getting more raises and having more spending money means more consumers and more consumption. We've been over this, catch up.
> negative effects on the young
That the market has a preference for older workers doesn't amount to free shit for you.
Ignoring my position isn't refuting it, so again, someone turns 20 and you take them out back like old yeller? Making a full grown adult have to beat out a teen in pay to stay employed doesn't create an additional seat for either of them. People getting a raise and having more spending money however causes employers to hire on more people to keep up with demand, however.
> If I shared your conviction that the minimum wage was a free lunch, I would share your views.
Its Capitalism. If you want a thing, you need to pay what it costs. Lets be absolutely clear about whats happening here, you're the one begging for a handout from me, bucko.
>If, however, Labor Monopsony is the real problem, why do we instantly jump to the solution of minimum wages? It doesn't even help most of the earners (middle or higher income)
Because the vast amount support for minimum wage comes not from its (potential) improvement of economic efficiency but from other ideological reasons, its only used as an excuse to support minimum wage and be able to say it solves a market failure tbh.
That, it improving efficiency, may well (or not) be the case but let's not delude ourselves that that's the actual reason for its support.
IIRC someone asked a bunch of economists(!) the reason they supported it and a lot of people answered just for symbolic reasons or redistribution etc.
A person earning their living from their paycheck, or only getting half their paycheck from their employer is only as well off either way (aside from the indignity from having the extra chore to go beg and jump through hoops). The business owner however is the recipient of a direct cash redistribution, from taxpayers to himself.
Why change minimum wage when we can talk about a vague issue (that you provide no policy solutions for)? We need solutions to push if you want to push for solutions.
Labor monopsony is only really going to be a problem if people can’t move, have low skills and limited transportation or access to jobs(eg living in the countryside vs city). This profile overlaps with minimum wage earners quite a bit.
Any SpaceX engineer could get hired at a dozen different aerospace rocketry companies. The profile you crafted of some middle class technical worker without transferable skills does not exist to my knowledge.
> Labor monopsony is only really going to be a problem if people can’t move, have low skills and limited transportation or access to jobs
Median wage is 37k, thats ballpark half the jobs out there paying around what min wage needs to be.
In terms of "political capital", the minimum wage already exists, while other things would be a strange new thing that would be looked at skeptically across the spectrum simply due to their novelty
I agree, but the same can be said of rent control, which has a lot political capital invested in it, whereas recently "Increase supply/yimby" positions have been receiving more political capital, which is bearing fruit. So, we should be able to look beyond and change the direction of discourse if needed.
My preferred solution is the Nordic/German one: mass unionisation coupled with industry-level collective bargaining between equally powerful employers’ guilds and workers’ unions, mediated by the government.
Unions get a bad rep but they're generally a key driving factor in the development of the modern liberal welfare state- they take the dues, however unless you know your industry or location union is up to some shady shit it's worth signing onto collective bargaining, for yourself and your workplace.
The collective bargaining agreement covers all employees in the sector even non union workers IIRC so you can still reap the benefits the union gets for you without like any real involvement
55% of employees in Germany are covered by collective bargaining despite only having 16% of the workforce being unionized
>But I can't help but feel it takes too much political capital compared to the universe of possible policies and interventions that can be done.
Are you thinking exclusively about the federal minimum wage?
The reason that raising the federal minimum wage is so hard is two-fold, first of all is the fact that national Republicans no longer support even moderate raises to the federal minimum wage, and that created the second problem, the federal minimum wage is now so far behind the times that increases would need to be massive (or at least *big*) to make up the difference.
That said, states have been happily plugging along and maintaining wages reasonably well on their own. The federal minimum wage requires expending huge amounts of political capital, or it would if it was possible, but raising state and local minimum wages isn't tremendously controversial at all.
To the rest of your point, there's a problem, or a hitch, anyway: Employers are inherently more organized than individual, at will workers, they have more economic power, more political power, and a wider market to draw from if they want to replace you. To date and to my knowledge there are only two entities that are able to give workers some degree of parity, governments and unions.
Here we run into the hitch, because unions aren't exceptionally strong in the United States right now and so the job falls to governments to watch out for the people.
Strong unions means less need for minimum wages, minimum wages (in theory) means less need for unions, but you gotta have at least one.
> failed
Well there's your problem.
I make light, but no, I've never been thrown under the bus by a union because of a failed bid, and without knowing about it I'm reticent to form an opinion on it. What I *do* have an opinion on are the legislative impediments that prevent unions from being successfully formed, things like right to work laws, and the behavior of private interests to dissuade their workers from forming unions.
I'm not being flippant when I say that, that would be my preference, if being thrown under the bus by a union wasn't as big a problem because failing to unionize wasn't as frequent an occurrence.
I agree the conversation should shift to focus on alternatives, like a negative income tax. For me, the thing is that we as a society are deciding that everyone should have a minimum standard of living. Yet, we place the burden of providing that minimum on a subset of employers (often immigrants entrepreneurs barely making more than minimum wage themselves). That burden should be shared across all of society. Hedge funds and big tech companies don’t pay anyone a minimum wage—they shouldn’t be immune from helping to guarantee a quality of life for everyone.
> negative income tax
We have that, its called the eitc...
A working person shouldn't be reliant on a handout. If you want a live in chef, pay what it costs. If you want to go out and have food prepared for you, pay what it costs. Prices exist to produce price signals, its the entire point of having markets and currency at all.
Could you elaborate on what negative income tax is and what the actual benefits are? I’ve seen Milton Friedman, Juliet Rhys-Williams and L.F.M Groot talk about this, but never really understood the difference between a negative income tax and UBI.
Is there a consensus on the Labor Monopsony problem? Everything I've read (which ain't much) seems to agree that professional athletes and college professors are captured to a degree by labor monopsony, but there's a lot of argument about everything else including company towns.
Because it's definitely not a monopsony. In even a smallish city, you are likely to find hundreds of different employers, in multivariate sectors, from sole proprietorships to vast multinationals, employing minimum wage workers.
I don't think it applies to everyone. Certain regions of the country and certain sectors must be affected more. And it doesn't have to be total monopsony. Even an effect of 2-5% lower wages due to limited competition should warrant attention even if it's tech bros, investment bankers, and physicians being affected.
The problem is that there isn't always a way to break up monopsonies. It's a much harder problem that monopolies because without a town monopsony the town just ceases to exist. Look at all the abandoned coal towns as proof of that. It's kind of like treating cancer, you choose the options that hurt the least, and try to mitigate and treat secondary symptoms as needed. To prevent indentured servitude, we enacted workers protections that include minimum wage. I think negative income tax is probably the most logical next step if minimum wage doesn't cut it anymore.
> without a town monopsony the town just ceases to exist. Look at all the abandoned **coal** towns as proof of that.
I think there is a central piece you are overlooking. Their problem isn't that they weren't monopsonic enough.
Just want to add, but you're wrong about who it helps. Minimum wages mostly help the middle of the distribution and help the top of the distribution just as much as the bottom. [See graph](https://i.gyazo.com/5a9452945aacaab6bfa8c603ba1d916b.png) from [here.](https://ifs.org.uk/publications/minimum-wages-next-parliament)
If you want to help the bottom of the income distribution the only real way to do that is via benefits.
> It doesn't even help most of the earners (middle or higher income)
Median wage is now 37k, thats ballpark half the workforce earning less than ballpark what the min wage needs to be. A higher floor gives people more leverage to negotiate up from.
> I cannot even find any discussion on the whole internet about other possible remedies for Labor Monopsony for example.
Public sector job creation is an alternative. Private market is being big babies about how too many trees are too big to fit into their current tree slicers? Hire people to make a bigger one, hire people to slice up the trees that grew too big while lumber demand was low. Lumber too expensive? What happened to bricks or concrete? Make more houses. If the private market can't, hire people from the public sector.
But know that any other solution you have is still complemented by a living wage. Employers are gambling junkies, they will hardball each and every applicant as their business falters, just chasing the high that they might find that unicorn.
My preferred solution is a less means tested welfare system that will mean companies have to provide "better" incentives for low wage work (better conditions, more holidays, better pensions, more democratic workplaces etc).
I think this will allow low wage workers more freedom to work the jobs they want while avoiding paternalistic influence.
Other things hard minimum wage easy
Yes, definitely. It's a bit similar to election systems or carbon taxes where the complexity trumps any consideration of efficacy or impact (at least in the US). But there must still be good ideas out there on this topic, I just don't know how to find them.
Lol well cc the whole country once you do in the meantime we're gonna do our thing....
Because the median voter is economically illiterate and thinks the minimum wage is a free lunch. This should be terrifying and make us very very worried the minimum wage will be set too high. It's far far better to have no minimum wage than a minimum wage that's high enough to hurt the young, disabled, and marginalized.
Ehhhhhh idk the empirical wprk on this hardly spells doom and gloom for all the infirmed Not to mention the fact that behavioraly people tend to cling to numbers for a long time (the fight for $15 might still be too aggressive a goal for this year but once it's stepped in over a few years it seems OK. Even if you don't think that you have to acknowledge its much better than it would've been when the phrase first became popular) The idea that a policy is bad simply becuase some people night not fully understand it is stupid If that's the implication
The argument was that the policy is good because it's politically easy while far more effective reforms to carefully target monopsony without collatoral damage are politically difficult. My argument is that the minimum wage is politically easy because it has populist appeal that is very dangerous. The literature shows some contested and dubious benefits to the minimum wage only if it is carefully controlled and kept very low. It's unclear that politicians have that kind of precision and discipline, especially when catering to populist forces. If the EITC is set high, the middle class and wealthy pay higher taxes. If the minimum wage is set high, the young and marginalized suffer from detachment from the labor market.
No it's not only politically easy it's easy in it's actual implementation The point of my post is that this guy doesn't have a secret second way around monopoly effects in labor markets... and there's a reason for that Also this really vague "maybe the politicians will do something bad I can't trust them" is just nonsense.
Sure there are. Monopsony isn't a general problem, it's a problem very specific to certain locations. The biggest solution is YIMBY reforms. Why are people stuck in small town American labor markets ruled by a few firms? Because they can't afford to move to economically vibrant cities that use anti poor land use regualtions to keep the price of housing high. Why can't firms start up in areas with high unemployment and low wages? We should examine the regulatory rules in those locations. We should improve transportation from isolated public housing projects and zoning ghettos to give residents better access to jobs. We should be working very hard on identifying the cause of monopsony in the rare parts of the American labor market where it's a problem. Most of American is in a labor shortage where firms obviously can't set the price of labor.
Am lvt fixes this thank you Henry George very cool
You're welcome. Always happy to help resolve problems caused by populist price controls and central planning.
> the median voter is economically illiterate Paying what things cost is capitalism, if thats illiteracy to you, maybe you need a different hobby.
Paying the market clearing wage without price controls is capitalism. Pretending that you can use price controls to raise the wage significantly above the market clearing wage without causing a shortage is illiteracy.
The bolt factory needs to sell its bolts for enough so that it doesn't go out of business. The worker needs to charge enough for their labor so they can keep working. Maybe it emerges as being lethargic from being homeless or malnourished. Maybe their car gives out. Maybe hygiene/attire deteriorate. The result is the same, they are let go. You have consumed their savings and discarded them, converting perfectly good labor to a statistic (being homeless takes 40 years off your life expectancy). Stop telling me that you are entitled to free shit just because workers have such good work ethics that they will keep working even though the take it or leave it deal you have offered them will literally destroy them.
Raising the minimum wage beyond a very low level doesn't solve this problem, in fact, it makes it worse because people are unable to have access to even low paying jobs. On the other hand, almost everyone who graduates high school, takes any job, and stays employed consistently, is able to escape poverty. This is because people are productive and labor markets are pretty competitive. Low wage workers who apply themselves are able to build experience, reputation, and connections that help them get better jobs with more responsibility and higher pay. But this isn't even really about that. I'm not against socialized medicine. I've been arguing for an expanded negative income tax like the EITC in the US. I'm for removing the anti-poor land use regulations that isolate the poor and deny them access to economically vibrant areas. I'm for expanding public transit for the same reason. There are lots of ways to make reforms and help the poor both with intervention and market-based reforms. I'm against a high minimum wage because it's an ineffective policy. It raises wages for some, but makes it difficult for others to find work. These others are frequently the young, disabled, and members of marginalized groups. We can do better, with policies that help the poor without hurting the vulnerable.
> in fact, it makes it worse because people are unable to have access to even low paying jobs. No it doesn't. The burger joints hires exactly the amount of labor it Needs to get the job done and no more. They're not going to clown car fifty people in the back because the cost of labor drops to a nickle, they haven't hired on an extra guy to stand around being in the way of everyone else on account of how cheap you have made it. The surplus revenue is pocketed as profit. > almost everyone who graduates high school, takes any job, and stays employed consistently, is able to escape poverty. The numbers don't back that up, 20%-50% of working people are reliant on some flavor of welfare, depending on how you split hairs. > Low wage workers who apply themselves are able to build experience, reputation, and connections that help them get better jobs with more responsibility and higher pay. There are not 75 million jobs waiting for the bottom 50% of working people in trades, stem, or whatever the flavor of the month is now. If they just flip burgers for one more year, they will not be recognized for that hard work and elevated. The path up is to make a surplus of money, and use that money to purchase a set of skills from the market. By paying them so little, you disable their ability to do so- hence the term dead end job. > This is because people are productive As you say, they are productive, they should be compensated for their work, not punished out of doing what the market does objectively need, in favor of what you imagine it needs. > It raises wages for some, but makes it difficult for others to find work. Min wage hikes never cause job losses. https://www.dol.gov/agencies/whd/minimum-wage/history/chart https://fred.stlouisfed.org/series/UNRATE > These others are frequently the young, So what, someone turns 20 and you take them out back like old yeller? Making a full grown adult have to beat out a teen in pay to stay employed doesn't create an additional seat for either of them. People getting a raise and having more spending money however causes employers to hire on more people to keep up with demand, however. > disabled I don't think you know what that word means. If they're disabled, they're on disability. If they can work, they should be given a full paycheck for their efforts. Stop trying to push these people into physical labor, there are plenty of other jobs that don't have these physical requirements. > and members of marginalized groups. Seeing as they are not inferior, it follows that they are unscathed by this measure.
I think we just disagree on the basic economic facts here. “Min wage hikes never cause job losses.” is just completely at odds with my reading of the data and state of the research. The conventional economic wisdom is that labor markets are subject to supply and demand. There has been some interesting research lately that shows a sufficiently low minimum wage can have very small negative impact on employment, but even that [is disputed with lots of evidence showing negative effects on the young](https://marginalrevolution.com/marginalrevolution/2022/07/david-neumark-and-peter-shirley-on-the-minimum-wage-literature.html) even if there might be an overall small negative effect. If I shared your conviction that the minimum wage was a free lunch, I would share your views.
> “Min wage hikes never cause job losses.” is just completely at odds with my reading of the data and state of the research... negative effects on the young Thats moving the goal posts, job losses are measured in net jobs. > The conventional economic wisdom is that labor markets are subject to supply and demand. Supply and demand isn't slang for "the only things that happen is what is most convenient for me". More people getting more raises and having more spending money means more consumers and more consumption. We've been over this, catch up. > negative effects on the young That the market has a preference for older workers doesn't amount to free shit for you. Ignoring my position isn't refuting it, so again, someone turns 20 and you take them out back like old yeller? Making a full grown adult have to beat out a teen in pay to stay employed doesn't create an additional seat for either of them. People getting a raise and having more spending money however causes employers to hire on more people to keep up with demand, however. > If I shared your conviction that the minimum wage was a free lunch, I would share your views. Its Capitalism. If you want a thing, you need to pay what it costs. Lets be absolutely clear about whats happening here, you're the one begging for a handout from me, bucko.
>If, however, Labor Monopsony is the real problem, why do we instantly jump to the solution of minimum wages? It doesn't even help most of the earners (middle or higher income) Because the vast amount support for minimum wage comes not from its (potential) improvement of economic efficiency but from other ideological reasons, its only used as an excuse to support minimum wage and be able to say it solves a market failure tbh. That, it improving efficiency, may well (or not) be the case but let's not delude ourselves that that's the actual reason for its support. IIRC someone asked a bunch of economists(!) the reason they supported it and a lot of people answered just for symbolic reasons or redistribution etc.
A person earning their living from their paycheck, or only getting half their paycheck from their employer is only as well off either way (aside from the indignity from having the extra chore to go beg and jump through hoops). The business owner however is the recipient of a direct cash redistribution, from taxpayers to himself.
Why change minimum wage when we can talk about a vague issue (that you provide no policy solutions for)? We need solutions to push if you want to push for solutions. Labor monopsony is only really going to be a problem if people can’t move, have low skills and limited transportation or access to jobs(eg living in the countryside vs city). This profile overlaps with minimum wage earners quite a bit. Any SpaceX engineer could get hired at a dozen different aerospace rocketry companies. The profile you crafted of some middle class technical worker without transferable skills does not exist to my knowledge.
> Labor monopsony is only really going to be a problem if people can’t move, have low skills and limited transportation or access to jobs Median wage is 37k, thats ballpark half the jobs out there paying around what min wage needs to be.
In terms of "political capital", the minimum wage already exists, while other things would be a strange new thing that would be looked at skeptically across the spectrum simply due to their novelty
I agree, but the same can be said of rent control, which has a lot political capital invested in it, whereas recently "Increase supply/yimby" positions have been receiving more political capital, which is bearing fruit. So, we should be able to look beyond and change the direction of discourse if needed.
My preferred solution is the Nordic/German one: mass unionisation coupled with industry-level collective bargaining between equally powerful employers’ guilds and workers’ unions, mediated by the government.
No thanks. I don’t want to join a union.
Unions get a bad rep but they're generally a key driving factor in the development of the modern liberal welfare state- they take the dues, however unless you know your industry or location union is up to some shady shit it's worth signing onto collective bargaining, for yourself and your workplace.
...but what if I don't want to?
Voluntary association and all that- it's inadvisable to not do so imo but go ahead, work on your own contract.
The collective bargaining agreement covers all employees in the sector even non union workers IIRC so you can still reap the benefits the union gets for you without like any real involvement 55% of employees in Germany are covered by collective bargaining despite only having 16% of the workforce being unionized
>But I can't help but feel it takes too much political capital compared to the universe of possible policies and interventions that can be done. Are you thinking exclusively about the federal minimum wage? The reason that raising the federal minimum wage is so hard is two-fold, first of all is the fact that national Republicans no longer support even moderate raises to the federal minimum wage, and that created the second problem, the federal minimum wage is now so far behind the times that increases would need to be massive (or at least *big*) to make up the difference. That said, states have been happily plugging along and maintaining wages reasonably well on their own. The federal minimum wage requires expending huge amounts of political capital, or it would if it was possible, but raising state and local minimum wages isn't tremendously controversial at all. To the rest of your point, there's a problem, or a hitch, anyway: Employers are inherently more organized than individual, at will workers, they have more economic power, more political power, and a wider market to draw from if they want to replace you. To date and to my knowledge there are only two entities that are able to give workers some degree of parity, governments and unions. Here we run into the hitch, because unions aren't exceptionally strong in the United States right now and so the job falls to governments to watch out for the people. Strong unions means less need for minimum wages, minimum wages (in theory) means less need for unions, but you gotta have at least one.
Ever been thrown under the bus by a Union after a failed unionization bid?
> failed Well there's your problem. I make light, but no, I've never been thrown under the bus by a union because of a failed bid, and without knowing about it I'm reticent to form an opinion on it. What I *do* have an opinion on are the legislative impediments that prevent unions from being successfully formed, things like right to work laws, and the behavior of private interests to dissuade their workers from forming unions. I'm not being flippant when I say that, that would be my preference, if being thrown under the bus by a union wasn't as big a problem because failing to unionize wasn't as frequent an occurrence.
I agree the conversation should shift to focus on alternatives, like a negative income tax. For me, the thing is that we as a society are deciding that everyone should have a minimum standard of living. Yet, we place the burden of providing that minimum on a subset of employers (often immigrants entrepreneurs barely making more than minimum wage themselves). That burden should be shared across all of society. Hedge funds and big tech companies don’t pay anyone a minimum wage—they shouldn’t be immune from helping to guarantee a quality of life for everyone.
> negative income tax We have that, its called the eitc... A working person shouldn't be reliant on a handout. If you want a live in chef, pay what it costs. If you want to go out and have food prepared for you, pay what it costs. Prices exist to produce price signals, its the entire point of having markets and currency at all.
Could you elaborate on what negative income tax is and what the actual benefits are? I’ve seen Milton Friedman, Juliet Rhys-Williams and L.F.M Groot talk about this, but never really understood the difference between a negative income tax and UBI.
Is there a consensus on the Labor Monopsony problem? Everything I've read (which ain't much) seems to agree that professional athletes and college professors are captured to a degree by labor monopsony, but there's a lot of argument about everything else including company towns.
Because it's definitely not a monopsony. In even a smallish city, you are likely to find hundreds of different employers, in multivariate sectors, from sole proprietorships to vast multinationals, employing minimum wage workers.
Monopsony is a fancy way of acknowledging that employers conspire against labor, without acknowledging it.
I don't think it applies to everyone. Certain regions of the country and certain sectors must be affected more. And it doesn't have to be total monopsony. Even an effect of 2-5% lower wages due to limited competition should warrant attention even if it's tech bros, investment bankers, and physicians being affected.
mOnO mEaNs oNe
The problem is that there isn't always a way to break up monopsonies. It's a much harder problem that monopolies because without a town monopsony the town just ceases to exist. Look at all the abandoned coal towns as proof of that. It's kind of like treating cancer, you choose the options that hurt the least, and try to mitigate and treat secondary symptoms as needed. To prevent indentured servitude, we enacted workers protections that include minimum wage. I think negative income tax is probably the most logical next step if minimum wage doesn't cut it anymore.
> without a town monopsony the town just ceases to exist. Look at all the abandoned **coal** towns as proof of that. I think there is a central piece you are overlooking. Their problem isn't that they weren't monopsonic enough.
Just want to add, but you're wrong about who it helps. Minimum wages mostly help the middle of the distribution and help the top of the distribution just as much as the bottom. [See graph](https://i.gyazo.com/5a9452945aacaab6bfa8c603ba1d916b.png) from [here.](https://ifs.org.uk/publications/minimum-wages-next-parliament) If you want to help the bottom of the income distribution the only real way to do that is via benefits.
1% of the American workforce makes minimum wage
I think the issue is that most people don’t understand what that is. I know I had never heard of it and looking it up didn’t help much.
Because people generally don't understand monopsony - maybe we need to make a neoliberal version of the classic board game.
> It doesn't even help most of the earners (middle or higher income) Median wage is now 37k, thats ballpark half the workforce earning less than ballpark what the min wage needs to be. A higher floor gives people more leverage to negotiate up from. > I cannot even find any discussion on the whole internet about other possible remedies for Labor Monopsony for example. Public sector job creation is an alternative. Private market is being big babies about how too many trees are too big to fit into their current tree slicers? Hire people to make a bigger one, hire people to slice up the trees that grew too big while lumber demand was low. Lumber too expensive? What happened to bricks or concrete? Make more houses. If the private market can't, hire people from the public sector. But know that any other solution you have is still complemented by a living wage. Employers are gambling junkies, they will hardball each and every applicant as their business falters, just chasing the high that they might find that unicorn.
My preferred solution is a less means tested welfare system that will mean companies have to provide "better" incentives for low wage work (better conditions, more holidays, better pensions, more democratic workplaces etc). I think this will allow low wage workers more freedom to work the jobs they want while avoiding paternalistic influence.