AEIdeas

The public policy blog of the American Enterprise Institute

Subscribe to the blog

Discussion: (247 comments)

  1. PeakTrader

    The article is worse than sloppy economics.

    The most rigorous empirical models reveal a higher U.S. minimum wage has little or no effect on employment.

    There are other factors that have a statistically significant effect (positive or negative) on employment.

    I suspect, countries with no minimum wage have fewer factors that that have a negative effect and more factors that have a positive effect on employment.

    The fact that a country has a minimum wage (a good policy) may also mean it has too many other government policies (mostly bad policies).

    1. Givemefreedom

      Of course the first comment comes from the self professed expert economist and super investor.

      I “suspect” that you “may” be an expert on only one thing, “sloppy economics”. Otherwise known as Peakenomics.

      1. PeakTrader

        You’ve proven American mainstream economics (what you call “Peakenomics”) is way beyond your very limited capacity, and you have a 50% chance of outperforming the market and a 50% chance of underperforming the market.

        1. Givemefreedom

          Hahaha, you have a 50% chance of outperforming the market and a 50% chance of underperforming the market??? Nobody who knows anything about the market would ever say that!!

          But anybody would reads your website knows that you have a 100% chance of losing 50% of your money if you follow your recommendations!!!!

          1. Givemefreedom

            Also, only your deluded thinking would call the minimum wage law American mainstream economics! There is no economics behind min. wage laws.

            Min. wage is American mainstream politics, nothing else.

          2. It would seem to me unless you work at a major house everybody on average under performs the maket since you have to to pay trading and transaction fees.

      2. morganovich

        gmf-

        there is no arguing with him on this.

        he is wedded to a set of badly designed models that are anything but empirical or sound and claims “it’s complex” to try to ignore evidence and then makes claims like “gdp growth was higher in this century than that century” as though the prove that the fed has driven growth.

        it’s one variable when it suits him and references to amorphous complexity and false empiricism when it doesn’t.

        if the min wage countries had lower unemployment, he’d be trumpeting this as proof we need to raise it.

        there is no having a serious conversation with such people.

        we’ve seen how well his options models work.

        his econ is worse.

        1. PeakTrader

          Morganovich, I’m sure Givemefreedom wants to hear more of your make believe.

          1. morganovich

            those of us wishing to see make believe will go read your website artie.

        2. Givemefreedom

          Morg,

          His delusions know no bounds. I used to wonder how he would always come back with the same posts every time different topics come up even though his original post was from months ago. Now we know, he uses his website to store his comments. Then he just keeps regurgitating them over and over like so much useless vomit all over the comments section.

          It detracts from the discussion, it is annoying and time wasting for us to scroll through them. Never an original thought in anything he posts and he posts more than anyone here!!

          We are all free to our opinions but if you have no intellectual integrity then just STFU, as the other useless troll says.

        3. I can only imagine if Switzerland had a $15 per hour minimum wage – per Peakonomics – their unemployment rate would go negative!

          But it will never happen unless there is a progressive takeover of Switzerland. Support the revolution!

    2. The most rigorous empirical models reveal a higher U.S. minimum wage has [some] effect on employment.

      That’s what concerns us.

    3. Glenn Jericho

      Sloppy + economics = slopponomics

      Sounds like a great name for the Obama policy agenda.

    4. It’s worse than “sloppy”.. ..

      there are a lot of factors involved not the least of which is what the proportionality of unemployment relative to the actual minimum wage.

      If the premise was correct, there would be some proportionality, that the higher the minimum wage – the higher the unemployment but does that follow ? – look at the chart. why is the chart NOT sorted according to unemployment rate or minimum wage?

      why? because if it was sorted on either variable, it would clearly show just how tortured the assertion is.

      there is a whole lot of daylight between the basic minimum wage claim – and the range of possible outcomes.

      apparently only one outcome is allowed – unemployment.

      Worse, it also fails to include the trade-union set minimum wage of the countries that choose to let the trade unions set the wages rather than govt. Those countries also have “minimum wages” or to be more precise – artificially set wages – which are the same thing.

      what is the “minimum wage” in countries where trade unions set it? isn’t that essentially the same ?
      In both cases the wages are set “artificially”.

      next, some countries supplement minimum wage earners with entitlements…as Cristina Romer advocated increasing instead of the minimum wage, in the NYT recently.

      which countries do this – and to what degree?

      Finally, what percentage of the workforce per country is minimum wage or more precisely – working at a non-govt/non-trade-union wage?

      are we talking about 1 or 2% or 40% per country?

      should that number also affect the top number?

      how could 1 or 2% cause whole percent point changes in unemployment?

      the whole narrative is tortured hand waving to support an ideological belief.. it disrespects economics.

    5. “The fact that a country has a minimum wage (a good policy) may also mean it has too many other government policies (mostly bad policies)”

      Yep. You’re correct. That country would be Italy. Look at the data again.

    6. The most rigorous empirical models reveal a higher U.S. minimum wage has little or no effect on employment“…

      Pure, unadulterated baloney…

      States with a higher minimum wage than the federal $7.25 requirement have an average 2-point higher unemployment rate than the rest of the country

      High Minimum Wage Equals High Unemploymen

      1. PeakTrader

        I stated before, states with a higher minimum wage may also have more other government policies, or greater intervention in the marketplace, that reduce employment.

        That’s why rigorous empirical models are needed, to seperate other significant factors, that have a negative or positive effect on employment.

        When the minimum wage is isolated, from other factors, it has little or no effect on employment.

        1. morganovich

          you are, once more, being deeply inconsistent peak.

          you certainly to not allow for such issues when pointing to the ridiculous card kruger study.

          you claim “extraneous factors” when you do not like the evidence and demand “rigorous empirical models” and then you cite extremely unrigourous models that look at only one industry and ignore all the knock on effects (like prices and crowding out) when you do like the conclusions.

          it’s just rhetoric and charlatanry masquerading as economics.

          taken as a group, your arguments are pure fraud.

    7. I am always wary of people who cite ‘rigorous’, ‘empirical’, ‘models’ as evidence for real world phenomena. Particularly when we have hundreds of truly empirical studies using real historical data from all over the world that confirm that demand for labor varies inversely with its price (like every other bloody commodity whether legal or banned) .

      Models are crude representations of reality not reality itself and reflect the modelers particular biases. Many of the models are funded by governments. Governments like power and control so the models tend to show top down state manipulation of basic variables as ‘working’.

      It’s always amusing to see one of the model ‘faithful’ confronted by actual, you know, facts. They stutter, their face flushes, for a moment their mind is blank. Then years of statist catechisms kick in and they announce with the vigor of a true believer that their God The Model is true and even more importantly is ideologically righteous and therefore it’s reality that has is wrong.

      Hallelujah, Amen.

      1. givemefreedom

        Well said Bill!

        You described Peak’s reaction to facts perfectly.

      2. morganovich

        bill-

        bingo.

        why look at reality? i have a model!

        post rationalism is an ugly thing.

    8. Here “sloppy” means “methodology that comes to conclusion I don’t like”. Isn’t that right, PeakTroll?

      …. NOM NOM NOM ….

    9. Talk about sloppy. Your entire comment, like your party, talks and says nothing. Who’s empirical data? Yours? I actually own companies with a “s” and as I agree that a small portion of unemployment in the USA is caused by minimum wage (bad bad policy), it does make me overpay young and inexperienced as well as lazy people much more than they’re worth. That money could be given to good workers with families as a raise if dumbass politicians would eliminate it. Any comments??

  2. Jon Murphy

    One of the things to keep in mind when discussing unemployment rates, is that is it actually possible for rates to fall but unemployment itself to actually rise.

    Remember what the unemployment rate is:

    UE = (U/LF)*100, where:

    UE = Unemployment Rate
    U = Number unemployed
    LF = Labor Force

    In order to be considered unemployed, you need to be 1) Actively looking for a job, 2) not institutionalized (not in the military, school, prison, etc), and 16+.

    So, let’s say we have Joe. Joe is looking for a job. He is considered unemployed. Joe, having become discouraged, stops looking for work. He is now no longer considered unemployed.

    Let’s throw in some numbers to show what I mean:

    Let’s say we have a labor force of 100 workers. Seven of these workers are unemployed. So, our unemployment rate is 7% (7/100 = 7%)

    The government passes a minimum wage law to bring the minimum wage up to $10/ hr. Of those 7 unemployed workers, 4 of them know they would never be able to earn a wage of $10/hr, so they stop looking for a job. The unemployment rate drops to 3% (3/100 = 3%).

    The poor researcher would conclude that minimum wage had no negative effect on unemployment, but that would be the wrong conclusion!

    Well, that’s today’s lecture. Your homework is to watch football.

    1. PeakTrader

      How do you know? Maybe, rather than working for cheap wages, they’d rather play video games, mooch off government or their parents, or build-up tens of thousands of dollars in debt going to college.

      1. Jon Murphy

        Wait…what are you…what are you doing?

      2. Yes, your point is valid, and if companies are having trouble attracting workers at $3 per hour, and workers would rather play video games, then the wages will naturally go up, until employers can get all the employees they need.

        At the low end there is also the issue of Government subsidizing sloth. If you give $10 worth of benefits per hour for sitting around, it is hard to get folks to go out and get a job for $9 an hour, with SSA removed as well. Take away the kick back and watch Judge Judy all day benefits, and watch the kids and parents get off the video games and get a real job!

      3. Maybe, rather than working for cheap wages, they’d rather play video games, mooch off government or their parents, or build-up tens of thousands of dollars in debt going to college.

        This is exactly what Jon said: they’d leave the labor force. They don’t have jobs and don’t meet the requirements to be considered part of the labor force, thus are not considered when computing the unemployment rate.

        The unemployment rate drops the labor force shrank, not because more people found jobs.

        Sheesh, for a guy that points the fingers at others for being “sloppy”, you sure are sloppy, PeakTroll.

        …. NOM NOM NOM ….

    2. Walt Greenway

      I know Joe. Joe is working under-the-table because he can’t afford the taxes at minimum wage and his employer does not want to handle the paperwork and expenses to legally hire him.

      1. Jon Murphy

        Until the FBI busts his @$$ :-)

        But you’re right, the black market thrives.

      2. What taxes? With the EITC Joe probably gets paid to work. Of course, if Joe has a family he gets public education, medicaid, subsidized school lunches, food stamps, WIC and maybe Section 8 vouchers for housing. If I was Joe I wouldn’t be too concerned about working under the table.

        1. Jon Murphy

          Ok, um, just for the record, I was just pointing out a mathematical quirk.

          1. Walt Greenway

            And for the record, I was just pointing out some of the quirks work. :)

          2. Jon Murphy

            No argument there, Walt. Just that MikeK started going down the road of taxes and I was afraid of my point getting lost.

    3. You actually bring up an interesting point. Thought you might not realize it.

      Different countries measure unemployment in different ways. You need to be careful to adjust for that when doing a comparison.

      For instance, some countries include military personel in their count, others, like the USA, do not.

  3. Jon Murphy

    If you look at youth unemployment rates or labor force participation rates, the story is even more stark.

    No two ways about it: minimum wage hurts.

    1. PeakTrader

      You have it backwards. The teen labor force participation rate, for example, has collapsed over the past few decades, which makes the teen unemployment rate much lower.

      1. Jon Murphy

        Um…that’s kinda my point.

        1. PeakTrader

          So, your point is unemployed teens are actually much higher than the teen unemployment rate shows.

          1. Jon Murphy

            Yes. That the damage of minimum wage is significantly higher than the unemployment rate shows.

            This, taken with my other comment about how the unemployment rate is calculated, should be a cautionary tale about focusing on only one indicator to make a bigger picture.

          2. morganovich

            so, wait, teens staying in school is supposed to be a bad thing?

            and that drop in LF participation would not explain the divergence between min wage and non min wage countries.

          3. Jon Murphy

            Yeah, I don’t know what he’s doing here, Morganovich. It seems like he’s just trying to pick a fight for the sake of picking a fight. I’m going to go have a beer and watch the Patriots game.

            Peace out, y’all!

          4. PeakTrader

            So, you don’t believe higher wages will attract teens with higher reservation wages or the opportunity cost of work.

          5. morganovich

            1. there is nothing to stop employers from offering a wage above min wage if they want employees.

            2. if more teens were not taking jobs due to reservation wages, then unemployment would be higher, not lower.

            3. if you think a job at $10/hr as opposed to $7.50 is enough to alter someone’s decision to go to college, then you know some truly odd teens. i suspect the marginal effect there would be so close to zero as to be unmeasurable.

          6. PeakTrader

            Employers are exploiting plenty of workers. Some Americans don’t want or need to be exploited.

          7. morganovich

            exploiting workers?

            how?

            they round them up and force them into work camps?

            a worker who feels under-compensated can;t go find another job?

            that’s a superficial and meaningless term.

            employers are not monopsonists and the ability to telework etc has given workers with skills more portability than ever in history.

            i mean, anyone who works for anyone is in a sense being “exploited” as why would i pay anyone as much as they produce?

            this specious talk of “exploitation” just sandbox marxism.

          8. morganovich

            also:

            if an american does not need or want to be exploited, then how is it that employers can exploit him?

            people have differing reservation wages.

            why are you so desperate to disenfranchise someone who happens to have one lower than you think they should?

            i don’t think you drink good enough wine.

            can i impose my preferences on you and require you to buy better bottles at higher prices?

            i doubt very much you would agree.

            but then you claim the right to dictate reservation wages to others?

            seems awfully inconsistent.

          9. PeakTroll,

            Employers are exploiting plenty of workers.

            Define “exploiting”. I’m sure by whatever definition you use, the statement “Workers are exploiting plenty of employees” will be just as applicable. So, what do you mean by “exploit”? And why is that bad? And what do you propose to do about it that won’t make the problem worse?

      2. Thanks morgonovich,

        Because of you, I have upgraded from T-Bird, to Night Train.

        Now I got a ticket to ride!

        1. morganovich

          well done!

          how’s your head this morning?

      3. The teen labor force participation rate, for example, has collapsed over the past few decades

        You have it backwards, PeakTroll. Teen labor force participation rates have collapsed because minimum wages have priced them out of the market.

  4. Harold Saxon

    But but but…OECD! OECD! They have to! OECD! OECDOECDOECDOECDOECDOECDOECDOECD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    1. morganovich

      lol.

      yes, so much for the “everyone in the oecd does it” argument.

      apparently, not only do they not all do it, but those that do not actually do better.

      clearly, this is not the only determinant in unemployment rates and there is considerable variation, but the no min wage group by and large outperforms with 5 out of 9 having lower unemployment than the lowest min wage country and all of them being below the min wage group average.

      that’s certainly enough to make one suspect a causal relationship and to demolish notions that high min wages create jobs and drive economic growth.

      1. I really don’t draw any conclusions until I also find out how the VA and the 3.7 million veterans who are on disability affect the equation.

        For me OECD is just a start.

        1. morganovich

          oh, agreed.

          i was just responding to the frequent claims of larry that “every country in the oecd has a min wage and thus to argue against a min wage is to call them all stupid and thus, min wage must be smart” which is not only a logical fallacy but also, as it turns out, not in accordance with the facts.

          however, it’s also worth keeping in mind that our disability rolls are quite small compared to those in some countries, notably france where i believe that something like 8-10% of the population is on disability.

          i’m not sure how it compares to europe as a whole, but i’d be surprised if the us were greater than the euro area in terms of folks out of the workforce for disability.

  5. @Morganovich

    teens staying in school is supposed to be a bad thing?

    Is it supposed to be a good thing?

    “It’s time to admit that four years of high school, just like four years of college, isn’t for everybody. We’ve long offered Associates of Arts degrees for passing two years of community college. Why not some kind of associate high school diploma for making it through 10th grade?

    That would give the bottom tier of students a feasible goal, and then allow them to get out in the work force earlier, and with a credential telling employers they aren’t complete goofs.”

    1. It might be good for some kids, after 10th grade to go into a trade school and work part time in a trade.

      Why not have them learn auto mechanics half a day, and spend the other half on on the job training. The Money would be a great motivator for some of these kids who otherwise would get bored with school and just drop out.

      1. morganovich

        hit-

        dropping out of high school?

        yeah, by and large, that is a bad thing.

        the evidence is pretty overwhelming that it dramatically reduces lifetime earnings.

        i think trade schools (akin to germany) might be a great idea.

        we could certainly use more plumbers.

        1. the evidence is pretty overwhelming that [dropping out of high school] dramatically reduces lifetime earnings

          Correlation isn’t causation. When variance in g is controlled-for, the correlation between formal educational attainment and future lifetime earnings disappears.

          1. morganovich

            hit-

            g is a vague and poorly defined, controlled for, established, and empirically measurable value, particularly when looking at a whole society.

            sure, there may be a correlation between things like discipline, intelligence, and graduation rates.

            i would be surprised if it were not.

            but for any given individual, not having a HS diploma is badly damaging to career prospects.

            many employers would not even interview you.

            to claim that this has no economic effect seems implausible.

            it puts the lower rungs of many of the paths to prosperity out of reach.

            this does not mean that any given person cannot succeed without an education, but it does mean that the group as a whole will fare worse.

          2. Increasing education, doesn’t necessarily increase lifetime earnings either, even for a good career. An example, a software engineer with a 4 year degree will most often earn more in a lifetime than a family doctor with 12 years of post – college learning. The income lost over 8 extra years is not made up over the lifetime, especially when you consider the extra 8 years of investment potential as well.

          3. morganovich

            marque-

            absolutely.

            architects need piles of education and do not make squat whereas a oil rig roughneck needs far less education, and can make a pile.

            college is a bit different, and grad school is even more fraught in many fields.

            my point was just that dropping out of high school is likely to have serious effects on any given individual.

          4. morg,

            g is a vague and poorly defined

            Not really. It’s an incredibly stable statistic and incredibly reliable predictor of many many things.

          5. morganovich

            ken-

            i have read some of jensen’s work and remain unconvinced.

            he moved the goalposts a great deal and guys like gould ripped him a new one.

            mostly, he’s just making circular arguments that if you are good at stuff, you do well.

            g does not really outperform conventional iq meaningfully in anyhting that i have seen.

            if you have some data, i’d be interested to see it.

            i have taken only a couple psych classes, but i did work with a prof developing an iq test that could be re centered to more easily draw distinctions at more than a couple standard deviations from mean, so i do have a little grounding here.

            they were quite dismissive of jensen and g and seemed to view it as poorly defined psuedo science wrapped up in the painfully obvious.

            i believe there was an unsavory air of white supremacy around him as well (which wikipedia seems to support) but i have no real info there nor does that necessarily invalidate his claims (though it does make me tend to check them more carefully).

            iq matters to be sure, but claims that it is ALL that matters and that education is irrelevant are specious.

          6. i believe there was an unsavory air of white supremacy

            Yes, this is the primary reason why most research surrounding g, IQ and intelligence measures is seen “as poorly defined pseudo science”. It’s also like saying astronomy is poorly defined pseudo science because Plutarch was so wrong. Research into IQ is very politically incorrect because it shows robust statistics showing differences in IQ across races. And, yes, IQ research in the past was awfully abused by many to justify racism. This, still, isn’t the early 20th century.

            The main thing to remember is that IQ in no way determines whether or not you are a good person, nor does it say anything about your human dignity. It’s simply another quantifiable about a person, much like height and weight. The quantity has meaning and can say certain things about you, but it doesn’t make you less of a man, deserving of less dignity or rights, if you’re short, fat, and/or stupid.

            iq matters to be sure, but claims that it is ALL that matters and that education is irrelevant are specious.

            At not time did I claim IQ is all that matters. I was claiming, though, that it is the most important factor. Much like height isn’t all that’s important in being a basketball player, but when the average NBA player is 6’6″, a full four standard deviations from the norm, you can bet that if you’re less than 6′, you probably don’t have much of a shot at being a pro ball player.

            As for education being specious when IQ is accounted for, this isn’t quite correct. Still, though, education certainly doesn’t have the effect that most people think. While Paul Krugman probably wouldn’t be earning his millions had he not gotten his PhD, he almost certainly would have earned more than most people, even those with degrees and advanced degrees, regardless of his education level. IQ and education are correlated, but getting an education doesn’t make you smarter, being smarter determines just how much education you can handle.

            As for source material, the first thing that comes to mind is The Bell Curve and the psychometric research Herrnstein and Murray reference. The research cited is exhaustive. That book was roundly panned by many because of the racial disparities it highlighted surrounding race, though, because of the stigma attached to IQ research.

      2. Morganovich,

        mostly, he’s just making circular arguments that if you are good at stuff, you do well.

        But…that’s true.

        believe there was an unsavory air of white supremacy around him as well (which wikipedia seems to support) but i have no real info there nor does that necessarily invalidate his claims (though it does make me tend to check them more carefully).

        And yet Jensen believed Asians and Ashkenazi Jews had a higher avg IQ than whites. So how does that supremacy thing work, with that in mind? The charge of “white supremacist” gets thrown around willy-nilly by the Left to shut people up who don’t toe the politically correct line regarding human biodiversity. Charles Murray, Richard Herrnstein, Arthur Jensen, Richard Lynn, and most recently Jason Richwine have all had to endure it and usually have their careers ruined.

        1. Oh, forgot about James Watson. He was told to take his Nobel Prize in DNA research and shove it where the sun don’t shine.

    2. Hit,

      ” Why not some kind of associate high school diploma for making it through 10th grade?”

      And while we’re at it, why not crack down like mad on illegal immigration? The overwhelming majority of the illegals who sneak through our southern border do not have a high school degree, and then their anchor babies lead the pack in high school dropouts.

      1. a basic theory that assumes a perfect environment cannot predict real-world outcomes that have real world influences.

        A model cannot either UNLESS YOU honestly CHOOSE to:

        1. – include real world influences

        2. – acknowledge the ones you did not.

        3. – highlight the apparent contradictions

        selectively cherry picking correlation data is not an empirical study… but worse – the folks who did it do not acknowledge that they cherry-picked nor that they ignored OECD data that did not confirm their premise.

        at that point – it don’t matter if they are spouting theory or claiming modelling or anything because their whole enterprise is corrupt.

        Then Morg makes it worse by repeating the same dishonest tactics of highlighting SOME countries but ignoring others – that have no minimum wage and terrible unemployment numbers…

        None of this is truly about economics. It’s about a belief system… like a religion.

        1. morganovich

          larry-

          you are so dishonest on this it’s breathtaking.

          you cite a couple of countries that are cherry picked (nz, japan) and then when someone else names a few more then THEY are the cherry picker?

          your hypocrisy is astounding.

          you call evidence ideology and ideology evidence depending upon what suits you.

          this is precisely why, any time i begin trying to actually have a discussion with you, i immediately regret it.

          i’m going to return to ignoring you now.

          it’s clear that nothing has changed with you.

          1. geeze Morg.. I thought I was on your “do not talk” list guy…..

            If I am such a foolish person, why in the world do you even bother?

        2. “If I am such a foolish person, why in the world do you even bother?”

          Mostly for the entertainment value.

          1. Someone else on another thread pointed out that Larry won’t go away if you ignore him, so ridicule is more cathartic.

          2. morganovich

            paul-

            that really is it, isn’t it?

            if you can’t get the water out of your basement, you might as well heat it and make a pool.

          3. Paul

            Someone else on another thread pointed out that Larry won’t go away if you ignore him, so ridicule is more cathartic.

            How would we know? It may be necessary to ignore him for more than a few days.

            As a member of RA (ridiculers anonymous) I can assure you that the cathartic effect grows ever smaller over time, until the effort isn’t worth it.

            I can now ignore trollish comments and most of the responses to those comments by others, as they typically have no useful content either.

            On occasion I reach the end of a thread without reading anything at all.

  6. I do know that in Germany and Austria unions are strong and most businesses are unionized with industry level agreements. See this NYtimes story: http://www.nytimes.com/2013/08/05/business/workers-of-amazon-divergent.html?pagewanted=all&_r=0
    It even says that retail workers get higher wages than warehouse workers. I believe that most employees who would get minimum wage in Germany are covered by collective bargaining agreements. (Consider that german companies have union reps on their supervisory board also). If you have pervasive unionization you don’t need a minimum wage.

    1. Givemefreedom

      We tried pervasive unionization and we ended up with Detroit.

      1. Well, that’s part of the reason we ended up with 2013 Detroit.

      2. The Unknown One

        “We tried pervasive unionization and we ended up with Detroit.”

        Then how come Stuttgart, Wolfsburg and Munich – the centers of the German auto industry – aren’t also replicas of Detroit?

        BTW, the suburbs of Detroit, which is where most of the auto industry jobs are anyway – are actually fairly well-off.

        This is a very poorly done study. It fails to understand that most of the nations in the list “without” a minimum wage have de-facto minimum wages through labor agreements.

    2. Of course one has to consider that when these decisions were made in 1949 in Germany there was a significant possibility that the East German model might have taken over. (That model at the time appeared to work as well as the western model but was proven over the next 20-30 years to be much worse than the Western model). Indeed this is IMHO a large part of the Social Democracy in Europe, in Particular France and Italy where the Communist party had like 30% vote in elections at the time. So the Powers that Be had to give things to make sure that that vote did not go to 51%.

      1. morganovich

        lyle-

        worth noting however is that the recent drop in german unemployment followed the hartz reforms that loosened those union rules and allowed for temp workers,contract workers, , mini jobs, etc.

        this drove lots of new workers NOT covered by collective bargaining and led to big gains in german employment as companies could be more aggressive in hiring as they were no longer hiring your for life and or having to pay set rates and provide large benefit packages.

        not having such a price floor on wages increased employment and provides an excellent test case for how price fixing reduces employment.

  7. Benjamin Cole

    However, the European governments subsidize wages, as Sumner also made clear in his blog. Perry should have noted this.

    That is, a worker might make $2 an hour on the job and another $6 from the German government in wage subsidies.

    I have suggested the same for the USA: That people receiving monthly disability checks from the federal government be required to accept jobs at $2 an hour, since they are already receiving income from taxpayers.

    We have 3.7 million vets receiving monthly disability checks, and 8.9 million SSDI recipients.

    Imagine putting those people to work! Imagine if American enterprise could have a workforce of 12 million working at $2 an hour!

    1. Jon Murphy

      You’re right. Wages are subsidized. Which is also an important point: if you want to encourage something, you subsidize it, not tax it.

    2. We already have “it pays to work” and earned income tax credits. We would have more if it weren’t for the VA.

      1. actually, “make work pay” has gone away – and the EIC only gives credits – if you work.. No work, no EIC.

        1. Right Larry we were talking about a work subsidy for folks with low hourly wages. EIC is a work subsidy.

          If we were talking about welfare -,I would understand your point.

          1. re: “work subsidy”

            in the context of being on the dole, staying home and playing videos games?

            was that the context or did I miss it?

    3. Tell me again how the VA is in any way connected to the minimum wage.

  8. PeakTrader

    It’s amazing the lengths the two charlatans, Morganovich and Jon Murphy, go to.

    One just makes things up and assumes it’s economics. He’ll also create statements you didn’t make and then disagrees with them to prove you’re wrong. LOL. Moreover, he’ll personally attack you with something he doesn’t understand, e.g. how to turn $6 into $33,000 in three weeks trading RMBS calls, or making over a 40 times return trading only IMCL calls over several months. He just can’t believe anyone can hit it big, although it’s not surprising given his poor understanding of risk and reward.

    The other charlatan will cut & paste a statement about economics without putting it in quotes in the first half of his comment to establish he knows economics, and in the second half of his comment present a simple example that completely contradicts his own conclusion, e.g. the higher minimum wage caused teen unemployment, although in reality the real minimum wage declined, while teen unemployment increased.

    1. PeakTrader

      And, I say, they’re charlatans, because one claims to have a BA in economics, from Brown University, along with multiple other BAs, and the other often calls himself an economist.

      Yet, neither uses the economics terminology appropriately, the few times they use it (economics is rich in terminology), understands basic models (not only partial equilibrium models, also input-output models, optimization models, contemporaneous models, etc.), nor realizes when their statements are in the form of equations, they’d be full of contradictions and simply wouldn’t make any sense.

      1. morganovich

        peak-

        you are merely projecting your own failings onto others.

        for a guy who routinely misuses economics terms and regurgitates simplistic equations to accuse other of not being fluent in economics is hilarious.

        if one cannot speak of a subject simply and in clear language, then one does not understand it.

        you are just hiding your ignorance behind technical terms that you do not understand.

        you do not have anyhting like the math to be building models in n space.

        i doubt you could to basic calculus, much less linear algebra.

        your economics education is as large a falsehood as your trading prowess.

        you cite “models” that you never provide and studies so flawed than a freshman econ student could see through them then you claim to have made buckets of money in a coupe of trades based on binaries you could not possibly have known beforehand and post a track record of non stop losing for years on a website with investment claims so absurd that it’s clear you do not even understand the relationship between risk and reward.

        your sputtering, broken brain is a tangle of contradictions and misunderstood terms buoyed up by your emotional need to feel competent.

        it’s not fooling anyone. (well, except maybe larry)

        but, by all means, keep talking.

        as we have seen over and over, the more rope you get, the more you hang yourself and the more folks you actively drive into the camps you oppose.

        i only wish that your arguments could be seen by more people so they too could see how intellectually and economically bankrupt they are.

        1. I can’t do linear Algebra – I was warned I might have to do some on an employment test – so I had to look up basic matrix multiplication and how to solve multi variables with matrices on the Internet. Haven’t used it since out of college. Sorry if I disappoint the elite crowd here

          1. morganovich

            marque-

            most of us have not used it since college.

            i certainly don’t (at least not since i stopped designing trading algos in 1995).

            but when a guy (peak) who seems unable to manipulate basic algebra and understand the way that ratios interact begins trotting out “models” based on “vectors in n space” (which are conveniently never provided for anyone to examine) then i call shenanigans.

            when someone points to such a purported model and claims it disproves actual observations and them provides no evidence, i call double shenanigans.

            and when, after making such appeals to complexity someone trots out a one variable century long proof that somehting like the fed has made growth higher, well, then i starting thinking words less polite than shenanigans.

            he’s hiding his ideological beliefs and lack of evidence behind terms he hopes will be sufficiently intimidating to deter dissent and then ignoring his own dictates when he seeks to try to make other points.

            the problem with telling everyone you know karate to get them to be afraid of you, is, eventually, you run into someone who does know karate.

            then, “squish, just like grape”.

            i suspect that peak has not yet truly learned this lesson, but one can hope…

          2. it helps if someone knows the difference between a theory and a model…

            theories don’t account for influences.

            they assume a perfect environment.

            models take theories and try to add in the influences but there is no guarantee that any process of doing that will actually result in anything useful.

            the most important test of any model – is can it predict some outcome …..with some fidelity?

            not all models do. some are trash. others do – partially. None do it perfectly.

            if you want to see an example of how models “work” – look at this:

            http://icons.wxug.com/hurricane/2013/sandy-historical-tracks.jpg

            every one of these models is based on the SAME THEORIES but each of them account for real influences in different ways.

            this is for hurricane modelling but all modelling, including economic modelling has similarities.

            modelling is NOT correlation… either…

            you take ONE of these models – and you plug in the starting conditions for – say a dozen different hurricanes – and you see how well that one model predicts that tracks for those 20 different hurricanes.

            then you take the next model – and do the same…

            some models will perform better than others depending on what they are using to represent real world influences (or not).

            what the charlatans here are saying is that they KNOW that if a hurricane starts at X that it WILL hit Y.

            that’s dumb.

          3. morganovich

            are you seriously using hurricane plot models as a proxy for reality?

            you really have no idea how any of this works, do you?

          4. are you seriously using hurricane plot models as a proxy for reality?

            you really have no idea how any of this works, do you?

            I’m telling you that when you model for hurricanes – this is how it works.

            It’s not a Proxy for reality – it’s a model to predict outcomes and what the graphic shows is that you can have multiple models using the SAME theories but accounting for real world influences in different ways to yield different predictions.

            Each one of these models is compared to the actual track and analysis used to go back and re-calibrate the parts of the model determined to have been not as good as needed.

            once the model is updated – they go back and use it in prior hurricanes to see how well it predicted them.

            each model develops a reputation for how accurate it is and those models become the ones they are sure to include in future tracks.

            that’s the process for modelling Morg.

            you obvious have no concept of it.

            but the “truth” of you model – is – how well it can predict not how “logical” your argument or after-the-fact correlations.

        2. Regarding your comment below:
          A little long but worth it
          http://www.youtube.com/watch?v=LMIfAmQYig8

    2. Right Larry we were talking about a work subsidy for folks with low hourly wages. EIC is a work subsidy.

      If we were talking about welfare -,I would understand your point.

    3. Right Larry we were talking about a work subsidy for folks with low hourly wages. EIC is a work subsidy.

      If we were talking about welfare -,I would understand your point.

    4. What’s really amazing is what a troll you are.

      … NOM NOM NOM …

      You’re starting to make Larry the Troll look like a piker.

  9. It’s surprising that Boudreaux fails to grasp the economic difference between a de jure (statutory) and de facto (collective bargaining) minimum wage. Isn’t the union coverage rate in Iceland 100%?

    1. Pretty sure both Boudreaux and Perry and acolytes here do understand the difference between de jure (statutory) and de facto (collective bargaining) minimum wage…

      that’s why I said it takes real chutzpah for either or both to continue these types of posts – dozens of them over the last few years – all of them blatantly disingenuous and really disrespectful of economics as a field.

      It’s like a religious belief among some of them but the problem is it even if there were no de-facto minimum wages – there are still myriad ways besides just unemployment that increases in wages (and other costs) get expressed in an economic system not the least of which is passing on that cost to customers and they choose to re-allocate what they spend less on – as you would see in many high cost areas.

      when the price of beef or electricity goes up – they do not lay off people if demand stays the same even with higher prices….

      for folks with legitimate economic credentials to purposely and wrongly portray something like this in the simplistic and disingenuous way (because I think both Boudreaux and Perry DO KNOW) should be beneath them… because they are both also educators.

      It seems that when one walks into a Calculus or Physics class one would never expect an ideological presentation of those subjects but in economics… Holy Moly.

    2. Jon Murphy

      Isn’t the union coverage rate in Iceland 100%?

      Not quite. 85%

      1. Not quite. 85%. Study the difference between density and coverage and report back to your boss before lunch today.

        1. Jon Murphy

          My boss is in New York today and he wants to look at animal food production, not unions.

        2. Jon Murphy

          But you’re right. I was wrong. I misread your statement and thought you were looking at unionization rates. Coverage is actually 89% (see page 5), NOT the 85% I previously reported.

          Sorry for the confusion.

          1. morganovich

            but then, of course, we have germany, where the big drop in union coverage from the hartz reforms drove a big drop in unemployment.

            why, it’s almost as if when you make it cheaper to hire workers, people hire more workers…

          2. Jon Murphy

            why, it’s almost as if when you make it cheaper to hire workers, people hire more workers…

            Mind = blown

          3. morganovich

            also:

            this argument seems to be based on a false premise.

            are you arguing that unions increase employment?

            the evidence in the us contradicts this.

  10. Harold Saxon

    Wow…it’s amazing how pissed people get when the real world contradicts their preconceived notions.

    There are a lot of angry loony lefties on this post.

    1. There are a lot of angry loony lefties on this post.

      You may be correct. Apart from Iceland, Finland has 98% union (minimum wage) coverage. What say you?

      Perhaps the most illuminating chart to produce, is de jure, de facto, none when it comes to a wage floor. Okay, let’s say that 85% collective bargaining constitutes a de facto minimum wage. Then redraw the charts.

      1. morganovich

        “Perhaps the most illuminating chart to produce, is de jure, de facto, none when it comes to a wage floor. Okay, let’s say that 85% collective bargaining constitutes a de facto minimum wage. Then redraw the charts.”

        but why would that be so?

        ion the us, min wage is what, 3% of jobs?

        i doubt it is much different abroad.

        let’s be generous and call it 7%.

        thus, 15% of jobs is more than enough to suck up all of that and a bunch of other folks making lower wages besides.

        if only 85% of the us were covered by min wage, that would have a profound effect on the employablity of 5X the number of people that currently earn min wage.

        the standard you are attempting to erect here does not appear to be useful.

    2. this is not real-world economics though. It’s pure ideology posing as “empirical” economics.

      anyone who thinks the “real world” has but one and only one outcome to increased wages is living in their own ideological bubble. The real world is more complex.

      And folks who have actual economic credentials – PHDs no less – and who promote such bias, just totally disrespect the field of economics… and encourage folks to continue to hold it in low esteem.

      Here is just one example of what is ignored:

      New Zealand NZ$13.75 per hour for workers 18 years old or older, and NZ$11 per hour for those aged 16 or 17 or in training; there is no statutory minimum wage for employees who are under 16 years old.

      unemployment – 6.2%

      and another:

      Japan
      Ranges from 664 Japanese yen ($8.17) to 869 yen ($10.65) per hour; set on a prefectural and industry basis.[91]

      unemployment – 3.9%

      what kind of a credentialed scholar willingly promotes “studies” that just ignore the countervailing data?

      1. morganovich

        singapore.

        no min wage.

        1.8% unemployment.

        seychelles, 4.6%

        qatar 0.5%

        brunei 1.1%

        yes, who indeed would leave out such data?

        1. morganovich

          http://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate

          i’m sure it’s just a coincidence that so many of the countries at the top of the low unemployment rate list have no min wage.

          1. I gave larry that link last week. It didn’t sway him.

          2. re: ” I gave larry that link last week. It didn’t sway him.”

            because .. it don’t make sense to scan down the list and only pick out the ones you like

            you have to look at the entire list next to a list of minimum wage policies THEN you might have the beginning of an honest correlation.

            but cherry-picking data to prove a point is pretty worthless but a standard procedure with ideologues.

        2. re: ” yes, who indeed would leave out such data?”

          they left out data that would seriously undermine their premise also… that’s the point.

          that’s dishonest.

          1. morganovich

            no, it’s not.

            they looked at europe and said “this is true in europe”.

            we can also look at states in the us (juandos link above) and see higher unemployment in states with min wages higher than the fed level.

            we can see the effects in germany of loosening the labor rules and allowing lower paying temp and contract work.

            how many rocks do you have to drop before you start saying “hey, maybe there’s gravity”?

            you yourself routinely point to the card kruger study that looked just at fast food employment at a few stores in nj and pa.

            that ignores massive amounts of contradictory data from the rest of nj employment, the rest of pa employment and data from the rest of the country.

            thus, by your own “logic” isn’t that study even more dishonest and are you not also dishonest for repeatedly pointing to it?

            your standards here are deeply inconsistent.

            real world data that disagrees with your dogma is “ideology” but the even more limited studies you rely upon are “fact”.

            if you wish to see dishonest, look to your own arguments.

            they are not even internally consistent, much less truthful.

            wasn’t it you who claimed that “all oecd countries have a min wage”? as you can see, this is not true.

            isn’t making such a claim the precise definition of dishonesty?

            you are making the absurdist claim that anyone ever claimed that min wage was the ONLY determinant in unemployment.

            clearly, it is not.

            there are outliers on both sides because many other factors are at play.

            but, by and large, when you chart min wage to unemployment, a correlation emerges.

            nothing in economics is ever perfect as you cannot isolate variables.

            ceteris is never paribus in entire economies.

            but to ignore the broad correlation when it appears in so many places is to simply stick your fingers in your ears and chant “la la la i can’t hear you”.

            your accusations apply far more to you than to mark who made a qualified and precise statement:

            “There have been various comments on minimum wage posts here and elsewhere from minimum wage proponents who argue that other countries have minimum wage laws apparently without any adverse consequences on employment levels or jobless rates. The empirical evidence from Western Europe seems to suggest otherwise”

            you, on the other hand, seem to lie repeatedly and deliberately use inconsistent standards and bluster about “ideology” because reality fails to conform to your preconceptions.

          2. no, it’s not.

            they looked at europe and said “this is true in europe”.

            they sure did – they misrepresented countries with no govt minimum wage but trade union minimum wages.

            we can also look at states in the us (juandos link above) and see higher unemployment in states with min wages higher than the fed level.

            no more convincing that the other bogus study.

            we can see the effects in germany of loosening the labor rules and allowing lower paying temp and contract work.

            they still have trade unions…

            how many rocks do you have to drop before you start saying “hey, maybe there’s gravity”?

            we’ve been over this before.

            I do not dispute there are impacts when wages increase. I dispute the ideological distortions to claim selected impacts and ignore the other possible impacts that we know do exist.

            you yourself routinely point to the card kruger study that looked just at fast food employment at a few stores in nj and pa.

            I pointed out that they did try to look at the same stores for staffing levels – which is a far more honest approach.

            that ignores massive amounts of contradictory data from the rest of nj employment, the rest of pa employment and data from the rest of the country.

            when you look at regional scale impacts and not same store impacts – you’re hand waving.

            thus, by your own “logic” isn’t that study even more dishonest and are you not also dishonest for repeatedly pointing to it?

            it’s dishonest when as an economists – you know there are myriad possible impacts and yet you promote the ideological blather.

            your standards here are deeply inconsistent.

            yours are worse Morg.. you’re okay with dishonesty if it suits your biases.

            real world data that disagrees with your dogma is “ideology” but the even more limited studies you rely upon are “fact”.

            it’s not “real-world” guy when it’s cherry-picked and ignores other data and at best – it’s a very weak correlation that only works for some not all.

            wasn’t it you who claimed that “all oecd countries have a min wage”? as you can see, this is not true.

            If I said that I would be wrong and, unlike you, I’d admit it but I’m pretty sure I said policies which includes the trade unions.

            isn’t making such a claim the precise definition of dishonesty?

            Morg – you’d the last person to lecture on dishonesty, guy.

            you are making the absurdist claim that anyone ever claimed that min wage was the ONLY determinant in unemployment.

            clearly, it is not.

            what did this “study” say?

            there are outliers on both sides because many other factors are at play.

            but, by and large, when you chart min wage to unemployment, a correlation emerges.

            no it doesn’t. Not if you honestly include all countries.
            that’s the problem.

            nothing in economics is ever perfect as you cannot isolate variables.

            see – you KNOW THIs guy…

            ceteris is never paribus in entire economies.

            then why do “studies” that rely on that premise?

            but to ignore the broad correlation when it appears in so many places is to simply stick your fingers in your ears and chant “la la la i can’t hear you”.

            if the “broad correlation” was true – you’d be right but it’s only true if you ignore data you don’t like.

            your accusations apply far more to you than to mark who made a qualified and precise statement:

            do you want me to go back and tally up the blog posts here that CONCLUDE that minimum wage policies HARM low-skilled workers – and they stop there.. and do not acknowledge other possible impacts?

            “There have been various comments on minimum wage posts here and elsewhere from minimum wage proponents who argue that other countries have minimum wage laws apparently without any adverse consequences on employment levels or jobless rates. The empirical evidence from Western Europe seems to suggest otherwise”

            you, on the other hand, seem to lie repeatedly and deliberately use inconsistent standards and bluster about “ideology” because reality fails to conform to your preconceptions.

            when your study says there is ONE “adverse consequence” and it is unemployment – it’s totally bogus.

            when someone PROMOTES such a study and is a PHD economist – they are not “educating” .. they are promoting quackery and dishonesty.

            Let me repeat once more.

            There ARE IMPACTS to increasing wages. They DO cause impacts.

            but of those impacts, unemployment is but possible one and to date not a single so-called “study” has developed a model that shows how much unemployment results from a dollar increase in wages

            why is that?

            if it were so simple – it should be easy to show that – right?

            Why would you even have to go beyond the businesses directly affected much less a regional, state, national or international scale. Each time you expand the scale, you make it that much harder to account for other influences.

            the most valid study would be a before/after of the same businesses… why not do that?

          3. Harold Saxson

            The funny thing about a trade union minimum wage is that they actually only affect those in the trade union. If a worker wants to work for less than the trade union minimum wage, he just doesn’t join a union. A national minimum wage doesn’t give him that choice.

            That’s sort of a key difference.

            Take, for example, the United States. Major League Baseball has a minimum wage for its players. The second they are placed on a major league roster, the player earns $400,000 at least. That minimum wage is not going to affect a grocery store bagger.

            So, as per usual, your argument is just as foolish as you are. Christ, you really need to educate yourself on how things work if you’re going to have such a loud opinion on things. It might just prevent you looking like a fool who is out of touch with reality.

          4. morganovich

            “the most valid study would be a before/after of the same businesses… why not do that?”

            no, it would not.

            that is the least valid form of study.

            it misses all the other effects.

            if price rises and therefore real income drops, jobs might be lost at a neighboring business that consumers no longer have the money to patronize.

            such studies are tantamount to fraud.

            they are designed to miss most of the effects.

            the best study would be to look at the effects in an entire, closed economy that does not trade with anyone else.

            as there is no such thing, we must look for next best and look at germany across the hartz reforms or at states in the us by min wage, or countries by min wage and we need to look at them in groups because any one could always be dominated by some other issue (like an economic boom or collapse or tax policy etc)

            you have this precisely backwards lar.

            the studies you declare “bogus” without a shred of evidence for such a claim or even a rationale, are the ones that are accurate.

            the sort of study you claim to be “best” is one designed to miss what it is supposed to measure.

          5. morganovich

            “but of those impacts, unemployment is but possible one and to date not a single so-called “study” has developed a model that shows how much unemployment results from a dollar increase in wages

            why is that?

            if it were so simple – it should be easy to show that – right?”

            no, unemployment is an inevitable effect over time.

            and it is easy to show.

            it has been shown to you in about 5 different ways.

            eu countries, the list of low unemployment nations worldwide, comparisons of us states, germany across hattz, etc etc.

            but then you bellow “ideology” and make absurd claims that only by looking at one company and thereby missing all the effects you admit exist can we see the truth.

            if a company faces higher costs, it may respond by increasing prices.

            this either drops revenues leading to job loss or lower profits which leads to less future investment and fewer jobs, or, it results in lower real income due to inflation and less spending at other businesses which either costs jobs now, or soon from lower investment.

            such a prediction is borne out by the data on countries and states.

            it’s very easy to prove, just not to someone who is so determined to cling to his unfounded beliefs and whose thinking is so devoid of consistency that they just keep ignoring reality while claiming they are representing it.

          6. morganovich

            actually, let me qualify that statement and be more precise:

            “no, a lower level of employment than would have otherwise occurred is an inevitable effect over time.”

            like a car rolling down a hill, and economy that is booming can keep booming even if you put on the brakes.

            it can grow in spite of bad policies, but it will not grow as much.

            but, over time, if you look at cars with the brakes on and cars without, you see that those without brakes are going faster.

            we see the same in nations with no min wage.

          7. morganovich

            “but of those impacts, unemployment is but possible one and to date not a single so-called “study” has developed a model that shows how much unemployment results from a dollar increase in wages

            why is that?”

            once more, you are caught lying.

            “Using data drawn from the Current Population Survey, we estimate the
            employment effects of the 2004-2006 New York State minimum wage increase,
            and use these estimates to simulate the employment and distributional
            consequences of a newly proposed state minimum wage hike. Difference-indifference-
            in-difference estimates show that the last state minimum wage hike
            from $5.15 to $6.75 per hour reduced employment among 16-to-29 year-olds
            without a high school degree by approximately 26 percent, an implied elasticity of
            -0.8. This result is robust to a wide set of cross-state and within-state control
            groups and is further bolstered by results from falsification tests in the periods just
            before and after the minimum wage was increased.”

            http://www.sole-jole.org/9317.pdf

            there are literally hundreds of studies like this.

            as others on this thread have so aptly stated, you really ought to get at least a rudimentary economics education and familiarize yourself with the published studies before making such outlandish and false claims.

            you seem to be getting caught in this same snare over and over.

            you make some claim about the oecd or about thre being no studies before even bothering to check and see if it is true.

            then you attack others for being ideological when, in fact, that is the fault that you yourself are guilty of possessing.

            seriously, how many times do you need to be shown up for making provably false claims before you come to your senses?

          8. “but of those impacts, unemployment is but possible one and to date not a single so-called “study” has developed a model that shows how much unemployment results from a dollar increase in wages

            why is that?”

            once more, you are caught lying.

            “Using data drawn from the Current Population Survey, we estimate the
            employment effects of the 2004-2006 New York State minimum wage increase,
            and use these estimates to simulate the employment and distributional
            consequences of a newly proposed state minimum wage hike. Difference-indifference-
            in-difference estimates show that the last state minimum wage hike
            from $5.15 to $6.75 per hour reduced employment among 16-to-29 year-olds
            without a high school degree by approximately 26 percent, an implied elasticity of
            -0.8. This result is robust to a wide set of cross-state and within-state control
            groups and is further bolstered by results from falsification tests in the periods just
            before and after the minimum wage was increased.”

            http://www.sole-jole.org/9317.pdf

            there are literally hundreds of studies like this.

            as others on this thread have so aptly stated, you really ought to get at least a rudimentary economics education and familiarize yourself with the published studies before making such outlandish and false claims.

            you seem to be getting caught in this same snare over and over.

            you make some claim about the oecd or about thre being no studies before even bothering to check and see if it is true.

            then you attack others for being ideological when, in fact, that is the fault that you yourself are guilty of possessing.

            seriously, how many times do you need to be shown up for making provably false claims before you come to your senses?

            I cannot believe you posted this guy:

            ” …and use these estimates to simulate the employment and distributional consequences”

            do you know what “estimate” means?

            where is the actual before and after data?

            hundreds of studies – like this one?

            hahahahahah

            that’s my point guy… this stuff is not based on real data… it’s roll-your-own biased hand-waving…

            real data is pretty simple.

            you isolated businesses that will be affected and you get the staffing levels before and after the wage change.

            and you document the actual real data.

            where is THAT study?

          9. morganovich

            larry-

            are you really that bereft of comprehension?

            read the text again.

            using data, they arrive at an estimate of elasticity.

            any result in such a study is called an estimate.

            when one looks at at global temperature, it’s an estimate. when a car manufacturer gives you a curb weight, it’s an estimate.

            this is both common scientific parlance and a reflection of the fact that all such calculations have a range of certainty.

            what you think is a “gotcha” is really just a demonstration of your own illiteracy in economics, science, and statistics.

            you are totally wrong. this is based on evidence.

            read the study.

            your whole laughable argument here is based on your not understanding what words mean.

            i would now make fun of you, but honestly, i see no way to make you look a bigger fool than you have just done yourself.

            the study you keep demanding is not a good study.

            it misses many of the possible effects.

            you cannot “isolate the businesses that will be effected”.

            the effects flow through the whole economy.

            you yourself have admitted this. yet you then go on to act as if you have not or that such effects can be ignored.

            your determination to cling to these false and easily disprove beliefs is a true inspiration to Luddites and illiterates everywhere.

            oh, and btw, even when one does a study in the manner you propose, the results still contradict your position in many cases.

            “We re-evaluate the evidence from Card and Krueger’s (1994) New Jersey-Pennsylvania minimum wage experiment, using new data based on actual payroll records from 230 Burger King, KFC, Wendy’s, and Roy Rogers restaurants in New Jersey and Pennsylvania. We compare results using these payroll data to those using CK’s data, which were collected by telephone surveys. We have two findings to report. First, the data collected by CK appear to indicate greater employment variation over the eight-month period between their surveys than do the payroll data. For example, in the full sample the standard deviation of employment change in CK’s data is three times as large as that in the payroll data. Second, estimates of the employment effect of the New Jersey minimum wage increase from the payroll data lead to the opposite conclusion from that reached by CK. For comparable sets of restaurants, differences-in-differences estimates using CK’s data imply that the New Jersey minimum wage increase (of 18.8 percent) resulted in an employment increase of 17.6 percent relative to the Pennsylvania control group, an elasticity of 0.93. In contrast, estimates based on the payroll data suggest that the New Jersey minimum wage increase led to a 4.6 percent decrease in employment in New Jersey relative to the Pennsylvania control group. This decrease is statistically significant at the five-percent level and implies an elasticity of employment with respect to the minimum wage of -0.24. ”

            even the notorious card kruger study turned out to be false when actual records were used as opposed to a phone survey.

            http://www.nber.org/papers/w5224

            you seem to have no idea that your “data” is actually fiction and the “ideology” you attack is actually evidence based economics.

            the hand waving is all coming from your end.

          10. are you really that bereft of comprehension?

            read the text again.

            using data, they arrive at an estimate of elasticity.

            any result in such a study is called an estimate.

            in a REAL study you COMPARE your estimate with the reality.

            when one looks at at global temperature, it’s an estimate. when a car manufacturer gives you a curb weight, it’s an estimate.

            it’s an estimate that you can verify by actually weighing the car…

            this is both common scientific parlance and a reflection of the fact that all such calculations have a range of certainty.

            you’re confusing an “estimate elasticity” with a variance between predicted and actual… that’s called a RMS error.

            what you think is a “gotcha” is really just a demonstration of your own illiteracy in economics, science, and statistics.

            I think it’s yours guy.. you don’t understand modelling.

            you are totally wrong. this is based on evidence.

            read the study.

            “estimates” are NOT evidence… real data is evidence.

            your whole laughable argument here is based on your not understanding what words mean.

            i would now make fun of you, but honestly, i see no way to make you look a bigger fool than you have just done yourself.

            go ahead.. fool.. you’re just showing just how dumb you are …

            the study you keep demanding is not a good study.

            it misses many of the possible effects.

            the “effects” are the actual data guy.. you don’t need to account for “effects” if you have real data… you may want to go back and try to figure out which things actually caused what impacts.

            in a real model – you’ll actually be adding and subtracting… the various effects…

            you cannot “isolate the businesses that will be effected”.

            the effects flow through the whole economy.

            you yourself have admitted this. yet you then go on to act as if you have not or that such effects can be ignored.

            you’re telling me there is no way to compare the same stores before and after? really?

            you’re confusing the actual outcome with what might cause it.

            but you have no trouble asserting the claimed outcome of only lower employment as the sole effect?

            good lord!

            your determination to cling to these false and easily disprove beliefs is a true inspiration to Luddites and illiterates everywhere.

            modelling guy.. look at those hurricane tracks and tell me that’s Luddite… it’s not.. it’s the way you really do a model if you are serious about a useful predictor of future outcomes.

            oh, and btw, even when one does a study in the manner you propose, the results still contradict your position in many cases.

            if you show me a true before/after of the actual data – then I’ll admit it.. until then your “studies” are mostly bogus hand-waving of perceived correlations.

            “We re-evaluate the evidence from Card and Krueger’s (1994) New Jersey-Pennsylvania minimum wage experiment, using new data based on actual payroll records from 230 Burger King, KFC, Wendy’s, and Roy Rogers restaurants in New Jersey and Pennsylvania. We compare results using these payroll data to those using CK’s data, which were collected by telephone surveys. We have two findings to report. First, the data collected by CK appear to indicate greater employment variation over the eight-month period between their surveys than do the payroll data. For example, in the full sample the standard deviation of employment change in CK’s data is three times as large as that in the payroll data. Second, estimates of the employment effect of the New Jersey minimum wage increase from the payroll data lead to the opposite conclusion from that reached by CK. For comparable sets of restaurants, differences-in-differences estimates using CK’s data imply that the New Jersey minimum wage increase (of 18.8 percent) resulted in an employment increase of 17.6 percent relative to the Pennsylvania control group, an elasticity of 0.93. In contrast, estimates based on the payroll data suggest that the New Jersey minimum wage increase led to a 4.6 percent decrease in employment in New Jersey relative to the Pennsylvania control group. This decrease is statistically significant at the five-percent level and implies an elasticity of employment with respect to the minimum wage of -0.24. ”

            even the notorious card kruger study turned out to be false when actual records were used as opposed to a phone survey.

            http://www.nber.org/papers/w5224

            you seem to have no idea that your “data” is actually fiction and the “ideology” you attack is actually evidence based economics.

            where in this study is the before and after data?

            and Morg – tell me how many companies they actually got data from – and was that data before and after data and where is it in the “study”?

            and Morg – most studies have a part called Conclusions – what do they say? do they show real data?

            the hand waving is all coming from your end.

          11. morganovich

            larry-

            you are completely hopeless.

            you do not even understand the discussion you are tryign to have.

            the study i showed you is THE SAME study you cited as evidence on an earlier thread.

            it is the precise design that you claim works.

            you loved it when it used the bad data from phone surveys.

            but now, when it uses the actual data, from the same stores over the same period but actually gets the data right because it used their actual payroll records, it conflicts with your obsessive ideology and suddenly, it’s all wrong.

            you cannot even keep your story straight.

            and you clearly do not understand what “estimate” means in a scientific setting.

            you use payroll data. that data has an error bar in it’s collection.

            thus, anyhting that you derive from it is an estimate.

            there is no such thing as pure economic data.

            all of it is an estimate.

            cpi is an estimate. gdp is an estimate. money supply is an estimate.

            this is not some pure math construct where data is absolute.

            you are just making a fool of yourself and proving, over and over, that you do not understand the subject matter than you are so strident about.

            you constantly lie, fabricate stuff, miss what is being discussed, and then sit on both side of an issue while pretending you are not. you cl aim the same study is great one minute then bogus the next. you cite one part of a survey as “evidence” and then the next question from the same damn survey as “propaganda”.

            your problem is that you have no idea what you are talking about. you have no grasp of the material, never read anyhting that others give you, and just hipshot whatever prevarication seems handy.

            then you have the gall to accuse others of ideology and dishonesty?

            your hypocrisy is as boundless as your stupidity driven arrogance.

            i have, in all candor, never seen anyhting like it.

            there is simply no possible way to have a real conversation with you.

            so, once more, i bid you adieu oh larry, prince of trolls.

            as ever, i deeply regret trying ignoring my own “do not talk to larry” rule and shall henceforth attempt to be more rigorous in my application thereof.

          12. you are completely hopeless.

            you do not even understand the discussion you are tryign to have.

            the study i showed you is THE SAME study you cited as evidence on an earlier thread.

            no it’s not. I’m pointing out to you that most of these studies are after-the-fact correlations – not instrumenting the actual before/after data.

            it is the precise design that you claim works.

            you loved it when it used the bad data from phone surveys.

            it does not matter HOW you get the data but it is important that you do get authentic data.

            but now, when it uses the actual data, from the same stores over the same period but actually gets the data right because it used their actual payroll records, it conflicts with your obsessive ideology and suddenly, it’s all wrong.

            did you read this study? I did.. and can you tell me how many actual businesses that they got real data from before and after ?

            you cannot even keep your story straight.

            OH STFU…

            and you clearly do not understand what “estimate” means in a scientific setting.

            you use payroll data. that data has an error bar in it’s collection.

            better than hand waving correlations though…

            thus, anyhting that you derive from it is an estimate.

            there is no such thing as pure economic data.

            all of it is an estimate.

            actual collected data is not an estimate – it’s evidence.

            cpi is an estimate. gdp is an estimate. money supply is an estimate.

            and subject to different methods and subjective views.

            this is not some pure math construct where data is absolute.

            there is no math “construct” in collecting actual data.
            collecting actual data is “empirical”.

            telling others what you think you are “observing” is not.

            you are just making a fool of yourself and proving, over and over, that you do not understand the subject matter than you are so strident about.

            hahahahahah the “strident” folks are like Sowell. who says without hesitation that minimum wage hurts low skilled people with absolutely no proof of it at all – just his ideological blathering.. and you guys defend it.

            you constantly lie, fabricate stuff, miss what is being discussed, and then sit on both side of an issue while pretending you are not. you cl aim the same study is great one minute then bogus the next. you cite one part of a survey as “evidence” and then the next question from the same damn survey as “propaganda”.

            no MOrg… lying is your speciality here.. you can’t stand the truth.

            your problem is that you have no idea what you are talking about. you have no grasp of the material, never read anyhting that others give you, and just hipshot whatever prevarication seems handy.

            go on won’t you?

            then you have the gall to accuse others of ideology and dishonesty?

            it is EASY to accuse the study in the Europe affair as bogus.. it’s totally bogus.. and you know it.

            your hypocrisy is as boundless as your stupidity driven arrogance.

            and Morg – you are an arrogant simpleton.

            i have, in all candor, never seen anyhting like it.

            look in the mirror dumbass.

            there is simply no possible way to have a real conversation with you.

            but you keep doing it ? what’s wrong with you?

            so, once more, i bid you adieu oh larry, prince of trolls.

            really? really? this is funny… for how long this time?

            as ever, i deeply regret trying ignoring my own “do not talk to larry” rule and shall henceforth attempt to be more rigorous in my application thereof.

            here.. because I’m feeling sorry for you – go talk to Ron – he’s much more successful than you are at this.. so get help.!

            ;-)

          13. morganovich

            “if you show me a true before/after of the actual data – then I’ll admit it.. until then your “studies” are mostly bogus hand-waving of perceived correlations.”

            the data is in the studies.

            they include it and the equations they used.

            i gave you links.

            being too lazy to click them and read is not an excuse larry. this is just absurd grandstanding on your part.

            it’s also why you remain so ignorant of this field. you need to actually read the studies, not just pick 3 words out of the abstract and misrepresent them.

            (i realize this appears to be a violation of the ignore larry rule, but it was queued up in my browser and did not post, so it’s actually a previous comment)

          14. re: ” (i realize this appears to be a violation of the ignore larry rule, but it was queued up in my browser and did not post, so it’s actually a previous comment)”

            gawd o’mighty.. I knew it wouldn’t take long but this is ridiculous…

            come on Morg… do better guy.

        3. She sells seashells in the Seychelles!

          One extra job right there. :)

          1. even the notorious card kruger [sic] study turned out to be false when actual records were used as opposed to a phone survey.

            Bull

      2. New Zealand […] there is no statutory minimum wage for employees who are under 16 years old.

        So job-seekers have to pretend they’re under 16?

        1. morganovich

          “So job-seekers have to pretend they’re under 16?”

          a boon for the fake id industry!

          job creation!

          1. If the study honestly included all countries in the OECD.. that would have been okay.

            but they have no true correlation … to start with, further they pretended that the countries without minimum wage – had no minimum wage policies…

            and ignored countries that add entitlements….

            and of course ignored all the other possible outcomes from increased wages….

            so they’ve cherry-picked selective data that supports their premise and ignored other real world influences like trade unions and entitlements.

            what is the purpose of doing this? what is the purpose of promoting it on blogs like this?

          2. morganovich

            that’s just arbitrary and foolish larry.

            european countries are more similar than oecd countries and thus, make for a less noisy sample set where it is easier to see the signal of min wage vs employment.

            and countries that have large union participation still have 15% or so of the economy uncovered by such rules, which is more than enough to suck up the min wage tyoe workers that comprise 3-5% of the workforce, so your claims about “de facto min wage” are misleading at best and outright false at worst.

            and then we have the fascinating test case of germany, whose union hold on the workforce was considerably lessened by the hartz reforms. this made it cheaper and easier for big companies to hire and made wages and contracts flexible.

            unemployment dropped a great deal as a result.

            that is the closest thing to a controlled experiment you are going to find for reducing the wage floor driving employment.

            you are just objecting to data that you want to ignore and tryign to raise bogus issues to hide the fact that you do not have a shred of evidence to support your views and that the evidence to the contrary is overwhelming.

          3. Morg,

            that’s just arbitrary and foolish larry.

            Well, yeah. That’s how the idiot troll rolls. He’s just going to keep moving the goal posts no matter how exhaustive the studies.

        2. re: ” New Zealand […] there is no statutory minimum wage for employees who are under 16 years old.

          So job-seekers have to pretend they’re under 16?”

          I saw that and did not clip it – on purpose.

          but also found it interesting.

          1. Do you wonder how many 16-year-old Kiwis pretend they’re 15 to prospective employers?

      3. this is not real-world economics

        Orwell would be proud of your double plus good statement.

  11. The unemployment rate doesn’t mean what the typical person thinks it means. Shouldn’t you look at the labor force participation rate the group of people the minimum wage supporters claim they want to help?

    1. Jon Murphy

      Labor Force Participation has its faults, too, but it is a measure one can look at.

      Realistically, you want to look at multiple indicators. If you focus on just one, you’ll miss the whole picture.

      Labor force, unemployment rates, maybe even poverty rates, you’ll want to look at a whole bunch of stuff.

      I know I am preaching to the choir here, but when you look at all these things (which has been done a multitude of times) the same conclusion is reached: minimum wage harms, not helps.

  12. Harold Saxson

    It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

    There are at least three totally irresponsible people here today. Shall I name names?

    1. the only thing irresponsible are those who knowingly promote false economics to serve an purely ideological purpose and those that defend it and attack those that question it. Such is the typical pattern here in CD and CH.

      A valid study of minimum wage would expressly seek to acknowledge the various influences that can effect it, show which ones you are going to attempt to account for, acknowledge the others you are not.

      the smaller the study with the fewest external influences, the better the fidelity of the results.

      looking at the same businesses before and after a minimum wage increase – would seem to offer a much more legitimate basis for such a study.

      the further the scale is extended to regional to include all businesses unemployment, or states, or the nation or groups of nations brings in so many other real-world influences as to make a legitimate study so difficult that it would be suspect – and rightly so.

      1. givemefreedom

        “the only thing irresponsible are those who knowingly promote false economics to serve an purely ideological purpose and those that defend it and attack those that question it. Such is the typical pattern here in CD and CH.”

        If the above is true and if you know more about these topics that Perry and Boudreau, why don’t you go start your own blog??

        Yours would soon be the most popular economics blog since you have all the right answers and CD/CH are all populated by ideologues and frauds.

        If you truly believed what you post here then that is exactly what you would do, so why are you not doing it?

        We all know the answer to that question. Trolling is all you are capable of. Your blog would be as popular as Peakaboo’s website because nobody wants to read crap.

        You are back on ignore now Troll.

        1. re: ” You are back on ignore now Troll.”

          yes indeed.. a true troll gets ignored permanently.

          give it a try nimrod.

        2. givemefreedom

          Nimrod Economics

          That would be a good name for your blog.

      2. Harold Saxson

        the only thing irresponsible are those who knowingly promote false economics to serve an purely ideological purpose and those that defend it and attack those that question it. Such is the typical pattern here in CD and CH.

        You’re absolutely right. It is the typical pattern of commentators like you, Peak, Murdiot, Newman the Nitwit, et. al but here at at Cafe Hayek. And it is shameful that you would choose ideology over reality. But, alas, it is so.

      3. morganovich

        “the only thing irresponsible are those who knowingly promote false economics to serve an purely ideological purpose”

        i’m so pleased yo have realized this.

        so, you’ll refrain from speaking on economics going forward?

        that is wonderful news.

        1. re: ” so, you’ll refrain from speaking on economics going forward?

          that is wonderful news.”

          what? and let pretenders like you continue to blather idiocy.. like confusing theory with modelling?

          jesus..

          1. Harold Saxson

            Your problem, Larry the Lunatic, is thinking this is a ideological issue. That right-wing economists think minimum wage causes harm and left-wing causes no harm.

            That is simply not true; all a product of your fevered imagination.

            There is virtually no argument whatsoever in the economics profession that minimum wage harms employment opportunities. You can ask mainstream economists like Paul Krugman (left) or Greg Mankiw (right) or Ben Bernanke (centrist). You can ask people who think they’re mainstream economists (like your idiot friend Peak Trader). You can ask those on the radical fringes. They’ll all say the same thing: minimum wage harms employment opportunities of those affected by it.

            Where the disagreement lies, however, is whether the benefits of such a policy outweighs the cost.

          2. Harold – let me go back and get the last years worth of blog titles from CH and CD on minimum wage and impacts and let me list them for you.

            At least you admit that the can be more than one impact and even folks like Christina Roma belief that while the impact are minor, not major – she prefers boosting the EIC instead.

            NOw – with you guys – and this IS ideological – you do not see increasing the EIC as any better alternative to increase the minimum wage – right?

            you consider BOTH of them – BAD – right?

            and for essentially the same reasons, right?

          3. Harold Saxson

            For radically different reasons.

            All depends on what you want to do.

            If you want to encourage the hiring of low-skilled workers and make their lives better, EITC is the way to go; after all, if you want to encourage something you subsidize it.

            If you want to make the economy more efficient so everybody benefits and not just one special interest group, then an EITC is not the way to go.

            Christ, you really need to learn these things if you are going to pontificate about them.

            Once again, I quote Rothbard:

            It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

          4. re: ” so, you’ll refrain from speaking on economics going forward? that is wonderful news.” what? and let pretenders like you continue to blather idiocy.. like confusing theory with modelling? jesus..

            For radically different reasons.

            same reason – taking money from one group to give to another – right?

            All depends on what you want to do.

            oh jeeze.. let’s not equivocate here.. ya’ll have a simple set of “reasons”.

            If you want to encourage the hiring of low-skilled workers and make their lives better, EITC is the way to go; after all, if you want to encourage something you subsidize it.

            If you want to make the economy more efficient so everybody benefits and not just one special interest group, then an EITC is not the way to go.

            Christ, you really need to learn these things if you are going to pontificate about them.

            Once again, I quote Rothbard:

            It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

            so you FAVOR .. INCREASING the EIC ?

          5. what? and let pretenders like you continue to blather idiocy.. like confusing theory with modelling?

            LOL. Larry actually thinks his ignorant ramblings, despite having never taken a basic economics course, are performing some kind of service to humanity.

          6. Harold Saxson

            so you FAVOR .. INCREASING the EIC ?

            Depends on what you want to do.

            What part of this are you not getting?

            What your intentions are dramatically changes your actions.

            Christ, you are dumb as a sack of bricks.

          7. so you FAVOR .. INCREASING the EIC ?

            Depends on what you want to do.

            What part of this are you not getting?

            What your intentions are dramatically changes your actions.

            Christ, you are dumb as a sack of bricks.

            I’m asking YOU what YOUR view is. are you so dishonest you cannot even admit it?

          8. Harold Saxson

            Paul,

            Larry likes to pretend he is some great fighter for Truth and Justice, waging war against us uneducated heretics spreading lies. He can pretend all he wants, but the majority of people see him for what he is: a joke.

            To quote George Selgin:

            “Mr. Gross’s charge, that because I have already reached some conclusions regarding X and Y in my other writings, I am not competent to write about Z, is (as others here have noted) indeed very silly in part because it implies that, once an economist has gotten known for having any views, he’d better pack it in. But he also chooses a rather poor instance at which to hurl his charge of “bias,” since the post in question is itself a criticism of one-sided views concerning the potential role of monetary policy in business cycles. In short, he chooses to attack me for not favoring the middle-of-the-road, on one of the few occasions when that is precisely what I’ve done! “Gross error” indeed!”

            Or, how about a reader of Cafe Hayek?

            “Do you [Don Boudreaux] and Professor Roberts ever get discouraged by the commenting of George Belala, Larry Gross, and Jamie Newman? These guys make me want to stop reading your comments section.”

            His arguments are weak. He hasn’t a clue what he is talking about, and is quite frankly a bully (like our sometimes commentator Jack Harkness found out).

            As is always true, Paul, what Larry thinks is going on, actually isn’t.

          9. Harold Saxson

            I do not favor an EIC, or any subsidy for that matter. They (by design and intention) skew the market and prevent information from getting to decision makers.

          10. re: ” I do not favor an EIC, or any subsidy for that matter. They (by design and intention) skew the market and prevent information from getting to decision makers”

            and that’s pretty much your complaint toward minimum wage, correct?

            be honest here.

            I do not have a dog in the hunt. seriously.

            What I object to is the bogus “studies” to justify an obvious ideological view.

            I’m pretty sure that minimum wage has impacts – but I’m not at all sure what they are – yet and these “studies” don’t help because they are wretchedly biased…

            I accept the theory – but there is a lot of daylight between a wage increase – and the impacts.. and what we should ALL want to KNOW is WHAT are they?

            we don’t now what impacts are when someone does an after-the-fact correlation of minimum wages versus things like regional unemployment.. rather than looking at the actual businesses affected.

            why would someone, for instance, attempt to correlate minimum wage with nation-scale unemployment?

            there are hundreds of things that could be in play… and there is no way in hell that a simple correlation tells you anything at all of any worth.. it’s just blather…

            we have two new minimum wage laws.

            one in NJ and one in Washington.

            there are usually a lag between when a law is passed and implemented.

            there is an opportunity right now – to go to those areas and get the current staffing levels of the businesses that will be affected.

            A few months after – should be able to go back and repeat the data collection.

            I’d certainly look at staffing levels but I’d also look at prices to see if they went up – and demand to see what happened to demand.

            I suspect that there are probably going to be several different impacts not just one…

          11. Harold,

            Just don’t let the half-wit get under your skin. Remember he will never abandon the hive of incompetent government bureaucrats and all the mischief they make. That how he managed to fill his rice bowl during his “working” years.

          12. Harold Saxson

            and that’s pretty much your complaint toward minimum wage, correct?

            About 1/3rd of the reason.

          13. Harold Saxson

            Just don’t let the half-wit get under your skin. Remember he will never abandon the hive of incompetent government bureaucrats and all the mischief they make. That how he managed to fill his rice bowl during his “working” years.

            Oh don’t worry Paul. He’s not under my skin. He’s my favorite toy. I love to make him dance and sing like a puppet on a string. I love to get him ranting and raving like this so people can see what a lunatic he is.

            He is my puppet and I am his Master. The best part? He doesn’t even know it!

          14. Harold

            I love to get him ranting and raving like this so people can see what a lunatic he is.

            I don’t think there are many regular readers of this blog that don’t already realize what you are demonstrating. In fact, many of us are previous puppet masters who have done exactly what you’re doing now, for the entertainment of ourselves and others.

            The trouble is, the puppet displays a very limited number of responses to a wide variety of string manipulations, so eventually everyone realize that every response we elicit has been repeated many times before, even though the combination and sequence of string pulls is new and unique. The same few rants and raves get repeated ad nauseam without regard to relevance to the topic being discussed.

            I suppose you deserve your turn at the it just like everyone else, but I would urge you to hurry, have your fun, get your fill quickly, then join the rest of us in reading and writing threads with more actual content.

            The puppet hasn’t done anything new in the several years it has been at this blog, despite the best efforts of some very capable puppeteers. I doubt you will succeed in producing any new tricks.

    2. Harold: “Shall I name names?

      No need. Apparently the names will name themselves.

  13. PeakTrader

    Harold Saxson, the purpose of raising the minimum wage is not to create employment, it’s to increase output and efficiency in production, along with correcting a market failure.

    If you want to just create employment, you can pay people to dig holes and fill them up again.

    You’re as ignorant about economics as the misery loves company crowd, i.e. the five or six wackos, who drove most normal people out of this blog.

    No one will build-up inventory and hire workers when there are no customers, because wages are too low.

    Prices don’t have to fall. Profits can rise instead, and firms can underproduce to maximize profits.

    Also, I may add, it’s amazing, when the Morganovich zoo describes me, they describe themselves perfectly.

    Very cute.

    1. Harold Saxson

      See, Larry? No ideological dispute here. It’s just as I said.

      That said, I find it funny Peak called me ignorant. If he agrees with me, and I am ignorant, then he, too, must be ignorant.

      1. PeakTrader

        I find it funny you believe I agree with your ignorance.

        1. Harold Saxson

          I said “There is virtually no argument whatsoever in the economics profession that minimum wage harms employment opportunities.”

          You said “the purpose of raising the minimum wage is not to create employment.”

          We say the same thing. Ergo, you agree with me.

          Unless you are now saying the purpose of minimum wage is to create jobs?

          1. If you take a business that is employing minimum wage workers and the cost of hamburger or fries or soft drinks goes up – what happens?

            do they lay off minimum wage workers to compensate?

            why? why not?

    2. No one will build-up inventory and hire workers when there are no customers, because wages are too low.

      If you want people to have money, then give it to them.

      What need would there be to involve any minimum wage?

  14. @moganovich

    guys like gould ripped [Jensen] a new one

    Gould never replied.

  15. @morganovich

    many employers would not even interview you

    Their loss. This is an example of credentialist bias, and, like all other forms of economically-fallacious bias, an unfettered market routes around it. The very fact that such a bias exists creates a market opportunity for employers with less or no credentialist bias.

    to claim that this has no economic effect seems implausible

    It has an effect in the short run. That effect washes out in the long run.

    it puts the lower rungs of many of the paths to prosperity out of reach

    It creates market opportunities for non-bigots.

    the group as a whole will fare worse

    …In the short run — as long as we neglect the time wasted in “school” (which is really daycare).

    1. Hit

      Their loss. This is an example of credentialist bias, and, like all other forms of economically-fallacious bias, an unfettered market routes around it. The very fact that such a bias exists creates a market opportunity for employers with less or no credentialist bias.

      And it’s a rational way to avoid vetting 100 non HS graduates to find the one or two who might be qualified, and valuable employees. “Their loss” may not be as great as their cost of sifting through a shovel of dirt for that 1 or 2 small gemstones.

      By requiring a HS diploma, employers can be reasonably sure that every applicant has at least been exposed to the skill set the employer requires.

      1. “[hiring on the basis of credentials is] a rational way to avoid vetting 100 non HS graduates to find the one or two who might be qualified, and valuable employees”

        Why not just give them IQ and/or reaction-time tests and/or vet them on the job at low or zero pay? Why would only one or two per 100 non-credentialeds be potentially valuable employees? Why should an employer care about qualifications? Are you aware that qualifications are credentials, and that credentialism was what we were talking about?

        By requiring a HS diploma

        …The employer pays for worthless credentials, allowing his non-credential-requiring competitors to out-compete him.

        employers can be reasonably sure that every applicant has at least been exposed to the skill set the employer requires

        In the long run, no employer requires any high school skills that can’t be obtained on the job.

        Again, we’re talking about short run vs. long run. Credentials matter in the short run, but not the long run, because people learn on the job. People with higher IQ’s learn more on the job, and eventually obtain more skill relevant to that job than people who were hired at the same time holding greater credentials. Source.

  16. @LarryG

    If you take a business that is employing minimum wage workers and the cost of hamburger or fries or soft drinks goes up – what happens?

    That business might close, because the value proposition for the customer base just got worse, inducing them to spend their dollars elsewhere.

    1. how would they close if demand for their product did not diminish even when prices increased?

      as long as their competitors had the same cost increases, how would any one of them be disadvantaged relative to the others?

      stipulate here that all businesses are affect by the same price increase… so none are put at a competitive disadvantage but all have increased costs.

      1. demand for their product did not diminish even when prices increased

        …Then why not put an excise tax — say, $1/burger — on hamburgers and distribute the proceeds to the general populace? If Americans buy 14 billion fast-food burgers per year, that would allow the distribution of $44 per year to each of the 317 million people in America. Would that extra $44 per year satisfy your goals? What are your goals?

        If you were instead hoping to increase each person’s annual income by, say, $1.75 x 2,000 = $3,500 (the same result as an increase in minimum wage from $7.25/hour to $9.00/hour for a 2,000/year full-time worker), then the hamburger excise tax would have to be $79.25/burger. Are you sure that wouldn’t cause “demand for [the] product [to] diminish”? If it did turn out to cause demand diminishment, would it ever be possible to raise the excise tax high enough to reach the $3,500/person/year funding goal (again, equivalent to a minimum-wage increase from $7.25 to $9.00/hour)?

        1. re: ” …Then why not put an excise tax — say, $1/burger — on hamburgers and distribute the proceeds to the general populace? If Americans buy 14 billion fast-food burgers per year, that would allow the distribution of $44 per year to each of the 317 million people in America. Would that extra $44 per year satisfy your goals? What are your goals?”

          my goals on this issue is to ask why this is a difference to what businesses do or don’t do with staffing levels depending on what went up in cost – materials or labor.

          “If you were instead hoping to increase each person’s annual income by, say, $1.75 x 2,000 = $3,500 (the same result as an increase in minimum wage from $7.25/hour to $9.00/hour for a 2,000/year full-time worker), then the hamburger excise tax would have to be $79.25/burger. Are you sure that wouldn’t cause “demand for [the] product [to] diminish”? If it did turn out to cause demand diminishment, would it ever be possible to raise the excise tax high enough to reach the $3,500/person/year funding goal (again, equivalent to a minimum-wage increase from $7.25 to $9.00/hour)?”

          we don’t know … until the price is raised .. so you’d not be doing layoffs until you actually saw reduced demand, right?

          why would you lay off BEFORE then?

          fast food varies considerable in price about their product lines and McDonalds even offers a dollar menu – but the thing is – it still takes people to produce dollar hamburgers so even if people switch from a higher-priced burger to a lower-priced, you still need a person build that cheaper burger..

          and I suspect McDonalds make up that reduction on other items like cokes… or whatever…

          but the basic premise promoted among the ideologues is that there is one basic outcome to higher wages and that is harm to minimum wage workers…

          and what I’ve been saying is that –

          1. – that is not really been proven by actual data but rather these hand-waving type “studies”.

          2. that increases in costs can and do happen do materials also – and sales taxes as you say and they have the same effect on the profitability of the business.

          3. that there are innumerable ways that such increases in wages, and materials can be allocated across a product line – it’s NOT ONE commodity.. which is what is necessary to perform as a true supply/demand AND across the business.

          4. the easiest, most-direct, most-convincing way to actually “prove” effect is to get the staffing levels of affected businesses BEFORE and then AFTER the institution of minimum wage instead of doing these patently bogus regional, state, nation, multi-nation (in this case) scale study on general unemployment of all workers.

          it’s just bogus.

          1. my goals on this issue is to ask why this is a difference

            Really? You don’t think minimum wage should be raised? If you were in a position to raise minimum wage, you wouldn’t raise it?

          2. my goals on this issue is to ask why this is a difference

            Really? You don’t think minimum wage should be raised? If you were in a position to raise minimum wage, you wouldn’t raise it?

            not if, it’s irrefutably conclusive that it causes harm – every time but also believe that most countries that do it -see it as better than giving entitlements for being poor and not working.

            In other words, like the EITC, some may believe that rewarding workers for working is better than not having their work and get entitlements.

            but what I strongly disagree with is the premise that minimum wage always results in harm to minimum wage workers… and that is the only possible outcome – from an economic perspective.

            we know it’s not.

            but then I also ask – what is the difference between cost increases for labor or materials in terms of what the responses to them are… and why responses to minimum wage increases are different than responses to other cost increases.

            why do minimum wage increases always lead to reducing minimum wage staff and other cost increases do not?

            what is the difference?

            is there a fundamental difference in the outcomes that depends on whether wages are the cost increase or materials are the cost increase?

            and why would any businesses that could successfully pass on those cost increases without reducing demand – still lay off people especially if they needed those people to continue to meet continuing demand that did not reduce?

  17. This table tells me nothing. Devils are in the details. If min wage is key to unemployment, Greece and Spain both have the highest unemployment rate have the lowest min wage. Luxembourg has highest min wage, but unemployment rate is as low as those countries without min wage.

    Can we get a table of productivity level per employee based on countries? I bet the results are going to be very different from the table above.

  18. @LarryG

    most countries that do it -see it as better than giving entitlements for being poor and not working.

    Basic Income isn’t an entitlement for being poor and not working.

    1. I understand how some people feel. I’m looking at the way most countries feel.

      that’s the reality.

      All of the OECD countries believe there is a poverty level and they institute entitlement and other policies to help that demographic and – some feel if there is a choice – it better to help the working poor than the idle poor so they favor policies like EITC to incentivize work.

    2. Hit

      Basic Income isn’t an entitlement for being poor and not working.

      No, it’s just an entitlement for being poor.

      The basic problem with this notion of giving people something they haven’t earned, by taking it away from those who HAVE earned it, is flawed.

      Poor people are poor, because they’ve demonstrated they aren’t productive and don’t contribute much to the well-being of others. Rich people are rich because they’ve demonstrated they ARE productive and DO contribute to the well being of others.

      A capitalist free market society rewards people according to the amount they contribute to the benefit of others. We all vote directly with our dollars for those who provide us the most benefit for our money

      There’s no possible way third parties can have the ability to weigh the relative benefits to others, as all value is subjective.

      To short circuit that market process by taking freely given votes from those that have received them and giving them instead to those we HAVEN’T voted for, is to reduce the overall benefit for all of us, as those who receive the unearned votes have PROVED themselves incapable of serving our needs.

      To advocate income redistribution via Basic Income is to believe that those who don’t produce will somehow make better use of the money than those who DO produce, in direct defiance of the votes we have all willingly cast.

      Now, if your concern is that poor people are suffering, then by all means direct some of YOUR resources to them, and I will do the same, as I see fit. Voluntary, private charity is wonderful, and helping others who are in need is part of our nature as human beings.

      Just don’t suggest that your agent should take MY resources at gunpoint for YOUR noble purpose.

      1. >> Basic Income isn’t an entitlement for being poor and not working.”
        > No, it’s just an entitlement for being poor.

        No, it isn’t. Maybe you don’t understand what Basic Income is. It’s not means tested.

        > The basic problem with this notion of giving people something they haven’t earned, by taking it away from those who HAVE earned it, is flawed.

        OK. Get rid of all of the thousands of different kinds of welfare in America. Do it now. I’m waiting. [crickets chirping]. Why haven’t you done it yet?

        > To advocate income redistribution via Basic Income

        If there’s a choice between Minimum Wage and Basic Income, the latter would be a superior option in terms of economic efficiency. If you don’t like welfare, then get rid of all of it. Why haven’t you done it yet?

        > Rich people are rich because they’ve demonstrated they ARE productive and DO contribute to the well being of others.

        They’re also rich partly because of luck. Luck is a source of economic inefficiency. Ceteris peribus, reducing the influence of luck improves economic efficiency. Basic Income reduces the influence of luck.

        > To advocate income redistribution via Basic Income is to believe that those who don’t produce will somehow make better use of the money than those who DO produce

        Yes, because luck contributed to making some of the poor poor, and some of the rich rich, some of the poor will indeed make better use of that money than some of the rich.

        > Now, if your concern is that poor people are suffering

        It’s the concern of the people who have created the thousands of different types of welfare in America. Go ahead and get rid of that welfare. We’re waiting.

        > Voluntary, private charity is wonderful

        No, actually, private charity to strangers is always economically harmful. It’s essentially a form of prostitution. The charitable giver is the “john”. Wherever prostitution is illegal, so should be charity toward strangers be illegal, as it’s essentially the same thing.

        1. No, it isn’t. Maybe you don’t understand what Basic Income is. It’s not means tested.

          You’re right. I was thinking of EIC. I understand what Basic Income is -just another form of theft that requires an uninvolved third party to determine how much you are over-compensated and how much I am under-compensated.

          Who has too little income and who has too much? What amount of “basic income” is the right amount? No one can possible determine that for others.

          OK. Get rid of all of the thousands of different kinds of welfare in America. Do it now. I’m waiting. [crickets chirping]. Why haven’t you done it yet?.”

          Believe me, I’m doing everything in my power to eliminate all forms of redistributive welfare. You aren’t recommending fixing the problem, only changing its form. The basic problem of theft by third parties remains.

          If there’s a choice between Minimum Wage and Basic Income, the latter would be a superior option in terms of economic efficiency.

          Economic efficiency isn’t the goal of redistribution, and shouldn’t be the goal of government actions. It’s more economically efficient to allow producers to keep their income so they can produce even more. We know who those people are because we vote for them with our dollars.

          Are you confusing efficiency with equality?

          If you don’t like welfare, then get rid of all of it. Why haven’t you done it yet?

          I don’t like welfare. I’ve explained that.

          1. @Ron H.

            > Who has too little income and who has too much?

            Who cares?

            > What amount of “basic income” is the right amount?

            …The amount necessary to get rid of means-tested welfare.

            >> OK. Get rid of all of the thousands of different kinds of welfare in America. Do it now. I’m waiting. [crickets chirping]. Why haven’t you done it yet?.
            > Believe me, I’m doing everything in my power to eliminate all forms of redistributive welfare.

            You don’t have much to show for it. Maybe you’re doing something wrong — like trying to get rid of all welfare, instead of replacing means-tested welfare with non-means-tested welfare. Do you know why there exists mean-tested welfare? It’s because of the existence of libertarians. More libertarians – more means-tested welfare. The more you do “everything in [your] power to eliminate all forms of redistributive welfare”, the more means-tested welfare there will be.

            > You aren’t recommending fixing the problem

            Actually, I am. The problem is means-tested welfare. There are policies that greatly harm society, and Basic Income is not one of them. Being personally offensive to you is not the same as being economically inefficient.

            > The basic problem of theft by third parties remains.

            It’s not a problem if it’s not economically harming society. It’s merely offending you, which isn’t a big deal.

            > If there’s a choice between Minimum Wage and Basic Income, the latter would be a superior option in terms of economic efficiency.
            >> Economic efficiency […] shouldn’t be the goal of government actions.

            Why not? If economic efficiency “shouldn’t be the goal of government actions”, then every government should delete all property rights instantly and permanently.

            > It’s more economically efficient to allow producers to keep their income

            That requires property rights, which require government action. You’re contradicting yourself.

            > Are you confusing efficiency with equality?

            No.

            >> If you don’t like welfare, then get rid of all of it. Why haven’t you done it yet?
            > I don’t like welfare.

            …And that’s why means-tested welfare exists. You are economic-efficiency’s worst enemy.

          2. re: ” Being personally offensive to you is not the same as being economically inefficient.”

            ouch!

          3. Well, finally you’re out in full collectivist colors. Nothing held back.

            It’s not a problem if it’s not economically harming society. It’s merely offending you, which isn’t a big deal.

            Theft isn’t a problem? Theft is OK with you? If I take your car because I have a better use for it (in MY judgement) You won’t mind?

            Society can’t decide whether my taking your car is OK. There are no collective positions, only individual positions that a group of people may share.

            If you believe that some people are better able to make decisions you approve of, and should therefore be allowed to do so, then *that* is what you should argue. Not this “society” nonsense.

            Despite your penchant for attributing human characteristics to society, as if society had thoughts and feelings and wishes, society is no more than a description of the interactions of individuals and groups of individuals. Individual human actions are the basis of society, and to write nonsense like “economically harming society” is to display a profound misunderstanding of human nature and the ways in which individuals interact.

            Society is not a self aware entity, has no consciousness, and can’t be economically harmed – only individuals can be economically harmed.

            Actually, I am. [recommending fixing the problem] The problem is means-tested welfare.

            Why would that be a problem unless you believe that person “A” taking from person “B” to give to person “C” is wrong? It only requires that person A’s judgement prevails. “A” knows what is in the best interest of “B” and “C”, and how best B’s property should be used, instead of allowing “B” to decide for himself. Means testing is only a way of asking “C” if they deserve (in YOUR view) some of the loot taken from “A”.

            Advocating Basic Income shows you have little understanding of how individuals react to incentives. People who have things provided FOR them are less inclined to produce for their own benefit. Those who have their production (property) taken FROM them are less inclined to produce, because the reward for their efforts is less. You have created a condition in which overall well being is reduced.

            Me: “> What amount of “basic income” is the right amount?

            You: “…The amount necessary to get rid of means-tested welfare.

            A meaningless answer. How can a third party know how much you, or I, or Bill Gates, or a subsistence farmer needs to consume to have “Basic Satisfaction of Wants”, which is, after all, what Basic Income would provide? How can YOU determine a single level that meets all those needs for everyone? Hint: You can’t.

            Perhaps you don’t care what level of satisfaction others experience, and believe YOU can just pick some amount that YOU think is good enough.

            The reason I say YOU is because it is YOU or someone else, or some group of individuals that must make those choices for others. there is no “society’ that can make choices for all of us.

            Be careful here, we are verging on a discussion of economics – something you have demonstrated you have little knowledge of.

            Why not? If economic efficiency “shouldn’t be the goal of government actions”, then every government should delete all property rights instantly and permanently.

            Do you mean that some group of individuals should delete all property rights? That’s what government is, after all.

            Actually, property rights don’t come from government. It is the role of government, if there is a role of government, to *protect* property rights.

            Me: “ It’s more economically efficient to allow producers to keep their income

            You: “That requires property rights, which require government action. You’re contradicting yourself.”

            Clearly you don’t understand property rights or human nature. Imagine someone breaks into your home and steals your TV. Unless you are completely divorced from your own feelings, You will be outraged, and claim that you have been wronged. That TV was YOURS: you owned it because you exchanged your labor for it, and no one else has a right to take it from you. Government didn’t give you that feeling of ownership.

            Other property rights are created by contract for the mutual benefit of the parties involved. For instance a rental agreement in which one party grants the use of their property – a house – to another party in exchange for money. The role of government, if there is one, is to enforce that contract, thus protecting the property rights of the parties involved.

            At no point did those rights come from government.

            Being personally offensive to you is not the same as being economically inefficient.

            LOL! It’s not me that’s offended, but basic economics and understanding of human nature that are offended.

        2. Sorry, couldn’t get my last comment to post in one piece.

  19. They’re also rich partly because of luck. Luck is a source of economic inefficiency. Ceteris peribus paribus, reducing the influence of luck improves economic efficiency. Basic Income reduces the influence of luck.

    Luck is only involved to the extent that we can’t know the future with absolute certainty. Think about it: You are not reducing the influence of luck by redistributing income re-rolling the dice.

    Yes, because luck contributed to making some of the poor poor, and some of the rich rich, some of the poor will indeed make better use of that money than some of the rich.

    And who gets to decide what “better use” means? We have already voted for those who provided us the most benefit. we can predict with some confidence that they will continue to do so. You may be making judgements here that aren’t yours to make.

    It’s the concern of the people who have created the thousands of different types of welfare in America.

    No, their concern is to assuage their own guilt about being better off, at little cost to themselves, by taking money out of my pocket to give to those less well off.

    No, actually, private charity to strangers is always economically harmful. It’s essentially a form of prostitution. The charitable giver is the “john”. Wherever prostitution is illegal, so should be charity toward strangers be illegal, as it’s essentially the same thing.

    1. > You are not reducing the influence of luck by redistributing income

      False. If luck has anything to do with who ends up poor and who ends up rich, at any given moment, then any redistribution of income from rich to poor, by definition, will reduce the role of luck in making individuals rich and poor.

    2. > And who gets to decide what “better use” means?

      No one need decide what “better use” means. The market decides, for its own purposes.

      1. No one need decide what “better use” means. The market decides, for its own purposes.

        But you don’t agree with those market results and wish to redistribute income after the market has allocated it to it’s best use. What do you really mean, do you even know?

    3. > You are […] re-rolling the dice.

      No.

    4. If you give

      1. False. If luck has anything to do with who ends up poor and who ends up rich, at any given moment, then any redistribution of income from rich to poor, by definition, will reduce the role of luck in making individuals rich and poor.

        In that case, so would a redistribution from poor to rich. Since the rich have demonstrated their ability to produce more, for the benefit of all of us, (unless you believe it’s ALL luck) it would make more sense to redistribute from poor to rich for greater overall well being.

        If you give $1,000 to each c-asino patron as he leaves a given c-asino, you’re not re-rolling the dice. You’re doing the exact opposite. You’re unrolling the dice. The role of luck in determining who walks out rich and who walks out poor has just been reduced. Thus: the dice have been unrolled (to some degree).

        Ahh…No. the dice have been rolled, the outcome has occurred, and that game is over. The results are what they are. You can redistribute the winnings to the losers, but you can’t unroll the dice.

        You can play again with a new roll of the dice, but because this involves human beings, and because incentives matter, you will attract more losers than winners (based on ability and merit) next time, because the previous losers have more to gain than the previous winners.

        If you redistribute chips from winners to losers at the table as the game is in play, you have only changed the payouts, not the role of luck, and have reduced the incentive for winners to continue playing. Odds of 6:1 that only pays 3:1 isn’t very attractive. Of course losers are thrilled with the opposite result.

        You didn’t explain where the $1000 came from, but it’s understood that it came from the winners.

        Of course life isn’t actually a c-asino, and luck plays only a small role in who gets rich and who doesn’t.

        And of course you wrote “a given c-asino” implying there’s more than one. The winners who have some of their winnings taken may seek a c-asino that takes less of their winnings. Tax avoidance is a universal strategy. Incentives matter.

        To say you are reducing the role of luck means you know how much of a role luck plays in real life. Otherwise you may be over-correcting or under-correcting. How will you know? and what is your purpose in the first place? What’s wrong with luck?

    5. $1,000 to each

    6. c-asino patron as he leaves a given c-asino, you’re not re-rolling the dice. You’re doing the exact opposite. You’re unrolling the dice. The role of luck in determining who walks out rich and who walks out poor has just been reduced. Thus: the dice have been unrolled (to some degree).

  20. nteresting. You are again arguing against your own statement. First of all, I don’t believe any voluntary transaction between consenting adults should be illegal, so prostitution shouldn’t be illegal. A person should be able to do whatever they want with their own property, including having sex for money – an exchange in which both parties expect to benefit.

  21. Your argument seems to be that I shouldn’t be allowed to give sex for free, but that it’s fine if a third party forces me to give sex at gunpoint.

    Are these self defeating arguments really the ones you wish to make?

    1. > Your argument seems to be that I shouldn’t be allowed to give sex for free, but that it’s fine if a third party forces me to give sex at gunpoint.

      In the former case, you’re bribing strangers to be poor, or at least to pretend to be poor, and this particular bribing activity is economically harmful. Basic Income isn’t such a bribe, while still acting to neutralize the economically harmful factor of luck.

      > but that it’s fine if a third party forces me to give sex at gunpoint.

      It’s possible for luck-reduction to have a voluntary component. For example, if the tax, fine, and fee collection schemes only target those activities that are harmful to society, an individual could reduce his tax/fee/fine liability simply by reducing his participation in such activities. In that respect, it’s his own choice that his tax/fee/fine liability is as high as it is, and it is not equivalent to being robbed at gunpoint, in which latter case the party being robbed has no choice but to hand over all his money.

      1. In the former case, you’re bribing strangers to be poor, or at least to pretend to be poor, and this particular bribing activity is economically harmful. Basic Income isn’t such a bribe, while still acting to neutralize the economically harmful factor of luck.

        Wait a minute. Let’s go over this slowly: How is giving income to someone who hasn’t earned it not a bribe, if my giving sex to someone who hasn’t earned it IS a bribe? And what’s wrong with luck?

        I think you are tripping on your lack of economic understanding here.

        Income, after all, is what we get for our productive efforts. We exchange something we have produced, perhaps our labor, for something we want more, perhaps sex. How is spending income we haven’t earned for seks any different from getting free seks?

        Your Basic Income recipient is only a bagman in this scenario, and has no skin in the game, so to speak. He has produced nothing to exchange for seks, so it’s free to him. The production came from someone else, and in this case could be the same person who provides the seks, as they’ve forgone the amount of income they COULD have produced by having seks.

        It’s possible for luck-reduction to have a voluntary component. For example, if the tax, fine, and fee collection schemes only target those activities that are harmful to society“…

        First of all, society can’t be harmed as it’s only an abstraction. Only individuals can be harmed. Then you haven’t defined “harmful”, nor have you explained who gets to decide what’s “harmful”. Is it you? A group of yous? You’re making assumptions here, and not providing enough information.

        …an individual could reduce his tax/fee/fine liability simply by reducing his participation in such activities.

        Absolutely: Incentives matter. However, you’re creating incentives that YOU believe will produce better outcomes than would occur without them. How do YOU know what’s best? Who does other than the people directly involved?

        In that respect, it’s his own choice that his tax/fee/fine liability is as high as it is, and it is not equivalent to being robbed at gunpoint, in which latter case the party being robbed has no choice but to hand over all his money.

        Indeed. My tax burden is as high as it is because I choose to work. I could instead choose to NOT work, and become a dependent on those who DO work, since someone (you?) can decide that I should receive some of the production of others through Basic Income.

        If my income (my property) can be taken against my will by the state – which means by some group of people – and the state can decide how much of it to leave me, then it isn’t really my property, is it? It must belong to the state. You would probably use the word “society” instead of state, but that would be incorrect, as only individuals can act.

        Obviously if the state robs me at gunpoint of ALL my property, it will be a one time event only, and I will cease producing. I may chose to pay some amount of protection money to the state to avoid going to prison, but it certainly isn’t an un-coerced choice.

        1. >>> Your argument seems to be that I shouldn’t be allowed to give sex for free, but that it’s fine if a third party forces me to give sex at gunpoint.
          >> In the former case, you’re bribing strangers to be poor, or at least to pretend to be poor, and this particular bribing activity is economically harmful. Basic Income isn’t such a bribe, while still acting to neutralize the economically harmful factor of luck.
          > How is giving income to someone who hasn’t earned it not a bribe,

          It isn’t incentivizing him, or disincentivizing him, to any particular action.

          > if my giving sex to someone who hasn’t earned it IS a bribe?

          Watch Slumdog Millionaire. The professional beggar children are blinded so they can earn more money. That’s what bribes do. They incentivize.

          Tidy yourself up. Put on a 3-piece suit. Put on dress shoes. Shine them up. See how much money you can earn as a beggar.

          > I think you are tripping on your lack of economic understanding here.

          You’re projecting again.

          > Your Basic Income recipient […] has no skin in the game

          Actually, Basic Income guarantees he has skin in the game. That’s why it’s more efficient than means-tested welfare (he spends it carefully, because, once he has it, it’s his money), and that’s why he will be better behaved. His money is easily confiscated if he, for example, commits the public-harm of sleeping in a public park.

          > The production came from someone else

          …Or it came from him. Basic Income doesn’t distinguish recipients. It simply gives the same amount of money to every individual.

          > you’re creating incentives

          Name them.

          > If my income (my property) can be taken against my will by the state – which means by some group of people – and the state can decide how much of it to leave me, then it isn’t really my property, is it?

          There are indeed hierarchies of ownership. Some tiers are more latent, other tiers are more discrete.

          1. It isn’t incentivizing him, or disincentivizing him, to any particular action.

            It disincentivizes him to work and produce. You might want to study up on the economic concepts of income and production. You are confusing them with money.

            Money is only a medium of exchange. Giving someone free money means giving them free whatever they chose to spend it on. Free money can equal free seks. It makes no difference.

            Actually, Basic Income guarantees he has skin in the game. That’s why it’s more efficient than means-tested welfare (he spends it carefully, because, once he has it, it’s his money),

            That’s complete nonsense. Money in the hand is money in the hand.

            and that’s why he will be better behaved. His money is easily confiscated if he, for example, commits the public-harm of sleeping in a public park.

            You hadn’t previously mentioned that there were strings attached. What public harm is done by sleeping in a public park?

            Name them. [incentives]

            You wrote: “For example, if the tax, fine, and fee collection schemes only target those activities that are harmful to society“…

            What behavior are you trying to incentivize? It was your statement, not mine. Are you losing track of what you wrote?

            Have you ever rented an apartment? Did you consider it being “rob[bed] at gunpoint”? Land Value Tax is like renting an apartment. No one’s forcing you to rent an apartment that valuable/sqft or that large. No one’s forcing you to rent a piece of land that valuable/sqft or that large.

            Apparently you didn’t understand my statement, as this isn’t a response to it. Try again.

        2. > Obviously if the state robs me at gunpoint of ALL my property

          Have you ever rented an apartment? Did you consider it being “rob[bed] at gunpoint”? Land Value Tax is like renting an apartment. No one’s forcing you to rent an apartment that valuable/sqft or that large. No one’s forcing you to rent a piece of land that valuable/sqft or that large.

  22. @Ron H.

    >> It’s possible for luck-reduction to have a voluntary component. For example, if the tax, fine, and fee collection schemes only target those activities that are harmful to society, an individual could reduce his tax/fee/fine liability simply by reducing his participation in such activities. In that respect, it’s his own choice that his tax/fee/fine liability is as high as it is, and it is not equivalent to being robbed at gunpoint, in which latter case the party being robbed has no choice but to hand over all his money.
    > Indeed. My tax burden is as high as it is because I choose to work.

    Earning income is harmful to society? Prove it.

    1. Earning income is harmful to society? Prove it.

      Reading failure. Try again.

      1. >>> Indeed. My tax burden is as high as it is because I choose to work.
        >> Earning income is harmful to society? Prove it.
        > Reading failure.

        You’re projecting again. Again, I wrote: “if the tax, fine, and fee collection schemes only target those activities that are harmful to society“.

        Try acknowledging that in your response, instead of straw-manning again with income tax. Your tax liability under an LVT doesn’t rise if you choose to work.

        1. Try acknowledging that in your response, instead of straw-manning again with income tax. Your tax liability under an LVT doesn’t rise if you choose to work.

          You have missed my point – again. You haven’t defined “harmful to society”, but you are suggesting that such activity, whatever it is, can be discouraged through “tax, fee, and fine collection schemes”, which of course, is absolutely correct, and in fact, is one of my points about taxing, and thus discouraging high producers.

          If you are referring only to a LVT, then owning land is the only activity that’s being discouraged. Is that one of the activities that you believe is “harmful to society”?

          No, I didn’t think so. Try to keep your own narrative straight.

          In addition, you suggested that taxation isn’t theft if a person could chose whether to engage in that activity – truly tortured logic when applied to an LVT – and that the amount of tax was optional because a person could choose how much they would be taxed by choosing the amount of an activity they engaged in.

          After I stopped laughing, and although you couldn’t see the sarc tag, I suggested that my tax burden is as high as it is because I choose to work, and thereby subject myself to taxes.

          Please tell me you understand it now.

          You haven’t explained how luck is “harmful to society” keeping in mind that only individuals can be harmed.

          1. Incidentally, when I say “choose to work” you are to understand that most people feel they HAVE to work if they want to live comfortable lives, so it’s not really much of a choice. In that context, your claim that people are only taxed if they engage in a particular activity is hilarious.

            For some people, though, your Basic Income may remove any incentive to work at all. “Society” then loses the benefit of their production and “society” is worse off.

          2. >> We know what to disincentivize when we see it causing inefficiencies. For example: congestion. Land Value Tax is a form of congestion tax. It incentivizes people to conserve horizontal area, particularly where productivity per unit area is highest, and to grow vertically. Note that property tax does the opposite.
            >> Try acknowledging that in your response, instead of straw-manning again with income tax. Your tax liability under an LVT doesn’t rise if you choose to work.
            > You haven’t defined “harmful to society”

            Harmful is that which reduces economic efficiency. Congestion reduces economic efficiency. Therefore, congestion is harmful to society.

            > you are suggesting that such activity […] can be discouraged through “tax, fee, and fine collection schemes”

            …According to Mark J. Perry, it can be:

            “Feb 11, 2007 – The only effective way to reduce traffic congestion is to use pricing. The potential benefits to Americans in time and fuel savings are enormous.”

          3. Harmful is that which reduces economic efficiency. Congestion reduces economic efficiency. Therefore, congestion is harmful to society.

            Only individuals can be harmed by economic inefficiency, and you must realize that markets are much better at promoting efficiency than government bureaucrats and lawmakers. In fact government interference in markets most often promotes inefficiency due to lack of information and unintended consequences. This isn’t a role for government. Central planning doesn’t work.

            you are suggesting that such activity […] can be discouraged through “tax, fee, and fine collection schemes”

            …According to Mark J. Perry, it can be:” [link]

            …And also according to Ron H. it can be. The rest of my comment from which you quoted out of context reads:

            “which of course, is absolutely correct, [prices can influence behavior] and in fact, is one of my points about taxing, and thus discouraging high producers.”

            Yes, incentives matter. We don’t disagree on that. We only disagree on whether individuals operating in free markets or government central planners can produce the better outcomes. My bet is on individuals acting in their own self interest by serving others – markets.

            [Congestion pricing]

            Is a great example of harm to individuals, and congestion pricing can help determine the true value of a speedy trip at a particular time to those individual commuters. Choice is good. Efficient use of a street or bridge can be accomplished in this way, but it just forces drivers to reorder their opportunity costs. It’s not clear that there’s any overall savings in time and/or money, although it could maximize revenue for the street or bridge operator.

            By the way, when you provide a link, please be specific. Despite the promising Google summaries, the word “congestion” doesn’t appear on any of the 26 pages resulting from your search that I actually clicked through.

  23. @Ron H.

    >> Actually, I am. [recommending fixing the problem] The problem is means-tested welfare.
    > Why would that be a problem unless you believe that person “A” taking from person “B” to give to person “C” is wrong?

    …Because it’s economically inefficient.

    > People who have things provided FOR them are less inclined to produce for their own benefit.

    …Then get rid of all welfare. Why haven’t you done so yet?

    > Those who have their production (property) taken FROM them are less inclined to produce

    Do you consider renting an apartment having your production taken away from you?

    > , because the reward for their efforts is less.

    If you voluntarily choose to rent an apartment, do you consider “the reward for [your] efforts is less”?

    >>> What amount of “basic income” is the right amount?”
    >> …The amount necessary to get rid of means-tested welfare.
    > How can a third party know how much you, or I, or Bill Gates, or a subsistence farmer needs to consume to have “Basic Satisfaction of Wants”

    Not relevant.

    > How can YOU determine a single level that meets all those needs for everyone?

    Loaded question. The level of Basic Income needed to get rid of means-tested welfare would be determined by experiment.

    > YOU can just pick some amount that YOU think is good enough.

    No. The level of Basic Income needed to get rid of means-tested welfare would be determined by experiment.

    > it is YOU or someone else, or some group of individuals that must make those choices for others.

    No. The level of Basic Income needed to get rid of means-tested welfare would be determined by experiment.

    1. > People who have things provided FOR them are less inclined to produce for their own benefit.

      > Those who have their production (property) taken FROM them are less inclined to produce.”

      I’m attempting to explain incentives to you.

      Do you consider renting an apartment having your production taken away from you?

      What the eff are you talking about? Try to make sense. Shelter is one of the things I choose to exchange my production for. It’s not taken away from me.

      because the reward for their efforts is less.

      If you voluntarily choose to rent an apartment, do you consider “the reward for [your] efforts is less”?

      Renting an apartment IS one of the rewards for my efforts.

      The amount necessary to get rid of means-tested welfare.” [Basic income]

      Not relevant.

      You understand that the term “Basic Income” doesn’t mean the same amount to everybody, right?

      > How can YOU determine a single level that meets all those needs for everyone?

      Loaded question. The level of Basic Income needed to get rid of means-tested welfare would be determined by experiment.

      LOL How do you imagine that would actually work?

      1. >>> Those who have their production (property) taken FROM them are less inclined to produce.
        >> Do you consider renting an apartment having your production taken away from you?
        > What […] are you talking about?

        Land Value Tax is like the rent you pay for an apartment. It’s not an income tax. It’s not a wealth tax. In what way does a Land Value Tax disincentivize production, if being obligated to pay rent for an apartment doesn’t disincentivize production?

        > “Basic Income” doesn’t mean the same amount to everybody

        Source? Basic Income means the same amount to everybody:

        “A basic income (also called basic income guarantee, unconditional basic income, universal basic income or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally from the government. […] basic income is paid to all irrespective of income or other eligibility criteria.”

        1. Land Value Tax is like the rent you pay for an apartment.

          I believe the following simple and obvious statements are necessary at this time to make sure we are on the same page. If you disagree or want more explanation please speak up.

          Humans act to move from a position of less satisfaction to a position of more satisfaction. From hungry to not hungry, from cold and wet to warm and dry. They labor to improve their level of satisfaction. They may labor directly, or exchange their labor, or labor to produce something to exchange for the things they want. It’s all the same basic concept of acting to satisfy their wants.

          We produce things, often labor, that we can exchange for the things we want more, such as shelter. In those exchanges, it is often convenient to use *money* as a medium of exchange to represent the things we want, such as shelter, because the other party in the exchange doesn’t have shelter to give us directly.

          When you rent an apartment part of your rent payment is applied to the LVT by the property owner. The end user ultimately bears all costs.

          Any problems so far?

          When we pay rent for an apartment (shelter) we are actually exchanging our production for the shelter we want. This is a voluntary, uncoerced exchange in which both parties expect to benefit.

          We could also buy shelter or build shelter, but the basic principle is the same. We want shelter, so we produce something to exchange for it. Only the financial arrangement – the manner in which money is involved – is different, but the bottom line is that we produce shelter for ourselves.

          LVT, on the other hand, involves a third party deciding we should be robbed because we have *acquired* shelter (or land) through exchanges of our production. The third party determines that there is some use of our production that is, in their judgement, more important than the choices we might make for ourselves.

          Obviously such taxation can disincentivize production by reducing the amount of our production available for other things. An initiation of, or an increase in LVT might cause us to spend less on eating in restaurants, for example, thereby reducing the demand for restaurant meals, and reducing the number of restaurant meals produced. This may mean fewer jobs in the restaurant business. Nothing happens in a vacuum.

          It’s not an income tax. It’s not a wealth tax.

          It *is* a wealth tax, unless you don’t consider land a form of wealth.

          In what way does a Land Value Tax disincentivize production, if being obligated to pay rent for an apartment doesn’t disincentivize production?

          I believe I’ve answered that at great length. Let me know if you don’t understand some of it.

          Me: “> “Basic Income” doesn’t mean the same amount to everybody

          You: “Source? Basic Income means the same amount to everybody:

          Perhaps I could have worded that more carefully: The same amount of money doesn’t mean the same thing to everyone equally, as their needs aren’t the same.

          Here’s a statement from your source:

          “A basic income is a proposed system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on.

          What, exactly, does “sufficient to live on” mean? Who gets to decide? Obviously, different people would consider different amounts “sufficient to live on” as all value is subjective. The amount YOU decide is sufficient might be considered insufficient by some and very generous by others.

          Making that determination has exactly the same problems as determining levels of means tested welfare. You still need to decide how much to take from every level of income above a certain poverty level.

          1. >> It’s not an income tax. It’s not a wealth tax.
            > It *is* a wealth tax, unless you don’t consider land a form of wealth.

            Land isn’t the most general form of wealth. Hence, an LVT isn’t a wealth tax. Please explain why cigarette taxes aren’t called “wealth taxes”. Please explain why tariffs on imported sugar aren’t called “wealth taxes”. Please explain why gasoline taxes aren’t called “wealth taxes”.

            > The same amount of money doesn’t mean the same thing to everyone equally, as their needs aren’t the same.

            Not relevant.

            > Here’s a statement from your source […] sufficient to live on

            Not relevant. The Alaska Permanent Fund is Basic Income regardless of it’s being arbitrarily deemed “sufficient to live on” or not.

            > What, exactly, does “sufficient to live on” mean?

            Not relevant.

            > Who gets to decide?

            Not relevant.

            > different people would consider different amounts “sufficient to live on”

            Not relevant.

            > The amount YOU decide is sufficient

            Not relevant.

            > might be considered insufficient by some

            Not relevant.

            > and very generous by others.

            Not relevant.

            > Making that determination

            Not relevant.

            > has exactly the same problems

            Not relevant.

            > as determining levels of means tested welfare.

            Not relevant. The problem with means-tested welfare isn’t determining the amount, but the fact that it acts as a bribe. For that reason, Basic Income could overshoot its optimum level by some distance before doing as much social harm as means-tested welfare.

            > You still need to decide

            No. Experiment can be used to determine.

          2. Land isn’t the most general form of wealth.

            Oh my gosh! a lot of people will be dismayed to hear that! So land is a form of wealth but not the most general form of wealth. Do you realize how tortured that sounds? What, then IS the most general form of wealth?

            Hence, an LVT isn’t a wealth tax.

            What IS it then?

            Please explain why cigarette taxes aren’t called “wealth taxes”. Please explain why tariffs on imported sugar aren’t called “wealth taxes”. Please explain why gasoline taxes aren’t called “wealth taxes”.

            I can’t believe you don’t know the answer to your own question. Did you give that some thought before you wrote it?

            OK, I’ll give you the answer: All those other taxes are imposed on the value of a *transaction*. Only at that one instant is a tax imposed. Once someone *owns* gasoline, or cigarettes or sugar through an exchange, those goods are not taxed again. Land, on the other hand, is taxed at a periodic rate just because it is owned.

            I think the reason you have so much trouble with these questions is because you have a very limited understanding of property rights. Again, I’ll offer: Just ask, and I’ll explain it to you and even give you some reading assignments. You shouldn’t continue to suffer from such muddled thinking.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            Not relevant.

            Meaning you have no answer.

            No. Experiment can be used to determine.

            Experiments with people’s lives. Nice one.

            Well, I guess we’re done with that topic. You are out of arguments and have no answers.

    2. Hit

      You have ignored several important questions. Please reread my comments and respond to those questions if you can.

  24. @Ron H.

    >>> How is giving income to someone who hasn’t earned it not a bribe,
    >> It isn’t incentivizing him, or disincentivizing him, to any particular action.
    > It disincentivizes him to work and produce.

    Does he lose the money if he produces?

    >>> Your Basic Income recipient […] has no skin in the game
    >> Actually, Basic Income guarantees he has skin in the game.
    > That’s complete nonsense.

    Please clarify. The very reason Basic Income is more efficient than means-tested welfare is that it guarantees the recipient does have skin in the game. In the case of the welfare programs that give food vouchers, for example, the recipients tend to waste the vouchers, because if they don’t they lose them anyway at the end of the month. They waste them because they don’t have skin in the game.

    > What public harm is done by sleeping in a public park?

    …Essentially the same harm that would be done to you if random strangers barged into your home and camped out there in tents. Try camping overnight in a public park sometime and see if it annoys anyone.

    >>>> For example, if the tax, fine, and fee collection schemes only target those activities that are harmful to society
    >>> you’re creating incentives […] How do YOU know what’s best?

    We know what to disincentivize when we see it causing inefficiencies. For example: congestion. Land Value Tax is a form of congestion tax. It incentivizes people to conserve horizontal area, particularly where productivity per unit area is highest, and to grow vertically. Note that property tax does the opposite.

    > Apparently you didn’t understand my statement, as this isn’t a response to it.

    Land Value Tax is not an income tax. It’s not like being robbed.

    1. Does he lose the money if he produces?

      No, but for some people the Basic Income might be enough to scrape by without working at all, so the value they might have produced is lost to the rest of us even though we are still paying for it.

      …Essentially the same harm that would be done to you if random strangers barged into your home and camped out there in tents. Try camping overnight in a public park sometime and see if it annoys anyone.

      LOL It’s nothing like that. My home is my private property and I can allow or disallow anyone I wish. I can forbid any type of speech or behavior I wish, I can require anything I wish as a condition of entry, and I can deny entry to any group, including ethnic and racial groups, women, children, gays, straights, old people, fat people, etc., etc., because it is mine. That’s the whole idea of private property. I get to say how it’s used.

      The public park, on the other hand, is owned by the state (that means the government, just to be clear). It is a commons, supposedly available to everyone. Who gets to decide that sleeping in a public park is causing public harm? You have already stated that annoying or offending someone is no big deal, so what is your argument here?

      We know what to disincentivize when we see it causing inefficiencies. For example: congestion. Land Value Tax is a form of congestion tax. It incentivizes people to conserve horizontal area, particularly where productivity per unit area is highest, and to grow vertically. Note that property tax does the opposite.

      I can only assume from your comments that you consider real life which includes real people to be a just a larger version of SimCity. What fun for you.

      Land Value Tax is not an income tax. It’s not like being robbed.

      Well, I’m glad you finally agree that an income tax is theft.

      I have already covered LVT, but just to be sure, remember that taking someone’s property without their consent is called theft. Your intentions don’t matter, and what you call it doesn’t matter. It’s theft.

      1. > I have already covered LVT, but just to be sure, remember that taking someone’s property without their consent is called theft. Your intentions don’t matter, and what you call it doesn’t matter. It’s theft.

        If an LVT is theft, then, according to your logic, the fee charged to you for renting an apartment is theft.

        1. If an LVT is theft, then, according to your logic, the fee charged to you for renting an apartment is theft.

          I explained the difference in great detail. I’m not sure what else I can write to make it clearer to you. Renting is a voluntary, mutually beneficial exchange between two parties. Taxation involves another party who doesn’t necessarily provide any benefit for the money that is forced out of the land owner’s pocket, and the only thing voluntary about it is to own not own land, but to be useful, someone must own the land.

          Renting instead of owning provides no relief from the tax, as the renter, an end user, is essentially paying it, with the landlord passes it through to the taxing authority. All costs of providing an apartment for rent are ultimately borne by renters, or there would be no apartments for rent.

          In addition, multiple local landlords compete for renter’s dollars, the single local taxing agency doesn’t.

          Please figure this out. They aren’t at all the same thing.

          If you just mean that money leaves my hand when I rent and when I’m taxed, then OK, but that’s so trivial as to be meaningless.

          1. >> If an LVT is theft, then, according to your logic, the fee charged to you for renting an apartment is theft.
            > the only thing voluntary about [an LVT] is to own not own land

            No. One can voluntarily reduce his LVT liability by reducing his area of land holding, and/or by shifting his landholding to lower-value/unit land. One can’t do that with an income-tax liability.

            > Renting instead of owning

            Off topic and equivocation. To own land in any country is also to rent it from government, since there’s no such thing as outright ownership. LVT is rent charged on “privately owned” land.

            > In addition, multiple local landlords compete for renter’s dollars, the single local taxing agency doesn’t.

            Various jurisdictions compete against each other for tenants. Hence, the California evacuation that’s been going on for the past decade or so.

          2. No. One can voluntarily reduce his LVT liability by reducing his area of land holding, and/or by shifting his landholding to lower-value/unit land. One can’t do that with an income-tax liability.

            How obtuse can you be? Why are you arguing the difference between an LTV and income tax? Both are theft. Are you really interested in asserting different degrees of theft?

            Off topic and equivocation. To own land in any country is also to rent it from government, since there’s no such thing as outright ownership. LVT is rent charged on “privately owned” land.

            Government is a group of people, some elected some appointed. Is it your claim that a group of people owns all the land within an arbitrary political boundary called “the border”, that has no physical meaning, and that everyone else has no ownership but must rent from from these elites? That is truly one of the nuttiest ideas I’ve ever heard. I’ve heard it before, mind you, but I never get over the novelty. I chuckle every time.

            Don’t you think an individual can own anything Not even themselves? how about the fruits of their labor? No? You are describing slaves. Nice one, hit.

            Would you like some basic education on the concept of original ownership and property rights? Just ask. It’s obvious you have missed some important points.

            Listen, If you believe no property can be privately owned, just say so and we’ll be done. There’s no possible discussion without agreement on that.

            Various jurisdictions compete against each other for tenants. Hence, the California evacuation that’s been going on for the past decade or so.

            You are down in the weeds here.

    2. Me: “Your Basic Income recipient […] has no skin in the game</i."

      You: "Actually, Basic Income guarantees he has skin in the game.

      Me: “That’s complete nonsense.

      You: “Please clarify.

      The recipient hasn’t produced anything to exchange for what he gets for the money. He is spending someone else’s production on the things he wants, so he values them less.

      Do you understand that if you have to work hard for something it has more value to you than if it’s handed to you for little or no effort? It’s just human nature in action.

      The very reason Basic Income is more efficient than means-tested welfare is that it guarantees the recipient does have skin in the game.

      See above. Free stuff is free stuff.

      In the case of the welfare programs that give food vouchers, for example, the recipients tend to waste the vouchers, because if they don’t they lose them anyway at the end of the month. They waste them because they don’t have skin in the game.

      Food vouchers can be sold at a discount from face value to other people, and the cash proceeds used for whatever the recipient wants including drugs and alcohol. They aren’t wasted.

      You may be tempted to point out that with EBT cards, ID can be required to verify that the correct person is using the benefit, but that’s no real obstacle. We can go together to the store where we will shop for me and pay with your $100 card. I will give you $70 for the $100 in groceries and we will both be better off. I have $100 in groceries for only $70, and you have $70 cash in exchange for a plastic card you had no use for. Free markets in action. Incentives matter.

  25. @Ron H.

    > Only individuals can be harmed by economic inefficiency,

    What if what you were calling “individuals” were actually collectives?

    > markets are much better at promoting efficiency than government bureaucrats and lawmakers.

    Just because government micromanagement can’t promote efficiency, doesn’t mean an LVT can’t. Do propose zero income for government?

    In fact government interference in markets most often promotes inefficiency due to lack of information and unintended consequences. This isn’t a role for government.

    > Central planning doesn’t work.

    There’s a difference between micromanagement and macromanagement. A federal government deciding how much thermal insulation each domicile should have is micromanaging. A federal government assessing each state under that government an LVT isn’t micromanaging.

    > whether individuals operating in free markets or government central planners can produce the better outcomes.

    There’s a difference between micromanagement and macromanagement. A relatively latent incentive, such as an LVT, leaves plenty of room for the market to choose discretely.

    > My bet is on individuals acting in their own self interest by serving others – markets.

    How is this serving others?

    [Congestion pricing]

    > It’s not clear that there’s any overall savings in time

    If a given trip takes me a minute, instead of an hour, I haven’t saved any time?

    1. What if what you were calling “individuals” were actually collectives?

      What, collectives of cells? That’s an interesting discussion, but a pointless one for our purposes here on an econ blog. A collective of humans has no characteristics that can’t be described as multiple iterations of individual characteristics.

      The bases of human societies and every other grouping of humans you can imagine is the individual. To attribute individual characteristics and properties to a collective will cause confusion, as you have demonstrated. It’s apparent that you struggle, and often fail, to provide meaningful, logical, and consistent answers to questions that are relatively simple when viewed from the perspective of the individual.

      Just because government micromanagement can’t promote efficiency, doesn’t mean an LVT can’t.

      How do You know the optimal amount to steal from each landowner based on *your* estimation of the benefit they receive? What is your purpose in imposing the tax in the first place?

      Do propose zero income for government?

      I propose zero government income by theft. Instead I propose private provision of services based on voluntary, mutually beneficial market transactions. If there is demand for something, the market will provide it.

      The very fact that government must steal from people to fund the services it provides tells us that those services aren’t what people want, or they would pay for them willingly, perhaps on the free market. “I know what’s best for you” doesn’t work.

      There’s a difference between micromanagement and macromanagement. A federal government deciding how much thermal insulation each domicile should have is micromanaging. A federal government assessing each state under that government an LVT isn’t micromanaging..”

      So, national government (a group of individuals) can know the most “economically efficient” amount to assess?

      An interesting slip of the tongue to describe states “under” that a federal government. Are you unfamiliar with the republican system that theoretically exists in the US?

      There’s a difference between micromanagement and macromanagement. A relatively latent incentive, such as an LVT, leaves plenty of room for the market to choose discretely.

      To what end? What is your purpose? Who is served, and how do you know they want to be served in that manner? Why do you think government must manage where people live by creating disincentives?

      It’s really bizarre when you think about it.

      How is this serving others?

      “It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest.” – Adam Smith

      You go to work, not because you love your employer, but because you selfishly want to increase your own well being. Remember – from less satisfaction to more satisfaction. Humans act. Incentives matter.

      If you provide others with a great deal of value, your reward will be great. If you make many people’s lives easier and better by inventing, say, a smartphone, you will become insanely rich – a measure of the amount of value you have provided to others, all in your own self interest.

      We know this is the correct measure because consumers have willingly voted for your idea with their dollars. Nothing was coerced. You are better off, consumers are better off. It’s important to note that central planning can’t provide innovation or new products because there are no incentive to make changes. No possible reward.

      By the way, you have earned that reward and you own it. If you tax the rewards of people who provide great value to others, they will be disinclined to provide as much of it. It’s that (individual) human nature thing again.

      [congestion pricing] “If a given trip takes me a minute, instead of an hour, I haven’t saved any time?

      You have traded money for that time. You have paid more to cross a bridge at that time of day in one minute than you would pay at some other time. That time saved is worth more to you than the many other things the same money could have been spent on.

      Other people have valued the price of crossing the bridge at that time at *less* than their opportunity costs, and so they cross at some other time that is less desirable, or take an alternate route that may take them longer. That’s why they’re not clogging up the traffic lanes in front of you.

      Notice I wrote *overall* savings in time. That includes all commuters time not just yours.

  26. Mark,

    Both Your tables say the unemployment rate in Germany is 5.2%

    According to a bloomberg article, it was 6.9% in september

    http://www.bloomberg.com/news/2013-10-01/germany-s-unemployment-unexpectedly-rose-in-september.html

    Can you explain the difference?

  27. @Ron H.

    > What […] IS the most general form of wealth?

    Money.

    >> Hence, an LVT isn’t a wealth tax.
    > What IS it then?

    From:

    “Bostonian In MO answered 9 months ago

    A tax on your net worth. The US only has one that I’m aware of, an excess retained earnings tax that can be assessed on corporations. It’s rarely assessed as it’s nearly impossible to properly define. France does have a net worth tax that ranges from 0.25% to about 1.5% based upon your net worth after a fairly generous exemption amount. Few French residents actually ever pay it.”

    Speaking in terms of continuums, rather than absolutes, a property tax would be more of a wealth tax than would an LVT. An income tax is often assumed to be a wealth tax, but that’s tricky because sometimes, temporarily, rich people have low incomes, and poor people have high incomes. Also, that would depend on how “income” is assessed. Some high-income people would owe no income tax if their income were all in the form of unrealized capital gains, and if unrealized capital gains weren’t counted as “income” — which is often the case.

    >>> [An LVT] *is* a wealth tax
    >> Please explain why cigarette taxes aren’t called “wealth taxes”.
    > Once someone *owns* gasoline, or cigarettes or sugar through an exchange, those goods are not taxed again. Land, on the other hand, is taxed at a periodic rate just because it is owned.

    One never gets back the tax payed on “one time” taxed items. Hence, an opportunity cost is payed again and again, forever. For that reason, there’s ultimately no difference between a “one time” tax and a periodic tax.

    >> Experiment can be used to determine.
    > Experiments with people’s lives. Nice one.

    Indeed. If you already know everything, there’s no need to experiment, and hence there’s no need for markets, which inherently are experiments. You can now implement absolute centralized micromanaging command-and-control and expect perfect economic efficiency.

    1. [The most general form of wealth is…] “Money.

      And there we have it! You have just confessed to having no understanding of economics.

      Money is a medium of exchange. Period. Full stop.

      Money as we know it, fiat money, has NO VALUE outside of the goods and services it represents.

      Money allows exchanges to occur indirectly rather than directly. I can exchange my labor for food by accepting money that represents food from my employer, who doesn’t actually have food to give me. When I present that proxy for food to my grocer who DOES have food, he sees me presenting him with a new hat, which is what he wants in exchange for the food.

      It’s magic. I only need to close my eyes, rub a $20 bill, and speak the words “I want lunch” and lunch will appear before me. Or instead I could close my eyes, rub *the same $20 bill* and speak the words “I want to see a movie”, and I’ll be on my way to a seat in the theater. What could be more useful than that?

      My employer gave me that magic $20 bill after he closed his eyes, rubbed the bill and spoke the words “I want an hour of labor from Ron H., and it appeared for him.

      The movie theater owner may have seen me handing him a bottle of wine in exchange for a license to view a movie in his theater. The restaurant owner may have seen me exchanging a toy he wanted for his child for the lunch he gave me.

      Money is truly magical stuff, and makes the modern world possible, but no, those few electrons on a disk drive at the bank, or those little green pieces of paper have no intrinsic value, and are definitely not wealth.

      You: “Hence, an LVT isn’t a wealth tax.
      Me: “
      What IS it then?

      From:

      “Bostonian In MO answered 9 months ago… blah, blah, blah…

      No. You misunderstood. What is an LVT if it isn’t a wealth tax? If land is a form of wealth and you tax land, then what could you call an LVT if not a tax on wealth?

      Well, besides theft, of course. Don’t tell me I’m paying rent to the collective for the use of the collective’s land. I don’t buy that nonsense.

      Speaking in terms of continuums, rather than absolutes, a property tax would be more of a wealth tax than would an LVT.”

      So an LVT *is* a wealth tax, just not as much of a wealth tax as a property tax is? It’s a partial tax on wealth, or a tax on partial wealth? It’s hard to keep up with the twists and turns in your convoluted reasoning. What do you really mean? Why not figure out what you want to say before your fingers hit the keyboard, then stick with it?

      An income tax is often assumed to be a wealth tax…

      Only by economic illiterates. An income tax is usually considered to be a tax on income.

      …but that’s tricky because sometimes, temporarily, rich people have low incomes, and poor people have high incomes. Also, that would depend on how “income” is assessed. Some high-income people would owe no income tax if their income were all in the form of unrealized capital gains, and if unrealized capital gains weren’t counted as “income” — which is often the case.

      I’ll say it’s tricky! The many devious ways in which government attempts to steal our property, while calling it something else, are hard to keep up with. That’s why we hire tax accountants – to protect us as best they can from the muggers.

      One never gets back the tax payed on “one time” taxed items. Hence, an opportunity cost is payed again and again, forever.

      Sheer meaningless drivel. What does “again and again” mean”, once a minute? Once a year? Once per century?

      For that reason, there’s ultimately no difference between a “one time” tax and a periodic tax.

      The only difference I see is that you pay a one time tax…um…one time, and a periodic tax…uh…periodically, which I think means MORE than once.

      Where do you get this stuff?

      Indeed. If you already know everything, there’s no need to experiment, and hence there’s no need for markets, which inherently are experiments. You can now implement absolute centralized micromanaging command-and-control and expect perfect economic efficiency.

      LOL. Yes, and if you already know everything, there’s nothing to micromanage, so no need for government at all.

      What is the purpose of government again?

      1. >>>> Experiment can be used to determine.
        >>> Experiments with people’s lives. Nice one.
        >> Indeed. If you already know everything, there’s no need to experiment, and hence there’s no need for markets, which inherently are experiments. You can now implement absolute centralized micromanaging command-and-control and expect perfect economic efficiency.
        > and if you already know everything, there’s nothing to micromanage

        That doesn’t follow.

        > so no need for government at all.

        Micromanagement isn’t the only possible role for government.

        1. That doesn’t follow

          *sigh*

          Management is needed to make decisions and direct activities toward a particular end when the group being managed doesn’t have sufficient information to work on its own toward that end. If everybody already knows everything, there is no need for a manager.

          You previously wrote that with complete information there would be no need for markets or experiments. By extension there would be no role for absolute centralized command and control (government), as everyone would already be doing the most rational and efficient thing.

          If it isn’t to guide and control the actions of others, what possible role do you see for government?

          I know, it’s nearly impossible for you to imagine a world in which you are on your own, with no one else telling you what to do.

  28. @Ron H.

    >> Do propose zero income for government?
    > an LTV and income tax […] Both are theft.

    Should governments have incomes?

    >> Off topic and equivocation. To own land in any country is also to rent it from government, since there’s no such thing as outright ownership. LVT is rent charged on “privately owned” land.
    > Is it your claim that a group of people owns all the land within an arbitrary political boundary

    Ownership is hierarchical. Some ownership is more latent. Some is more discrete.

    > and that everyone else has no ownership

    They have more discrete ownership.

    > but must rent from from these elites?

    They would be renting the latent value, not the discrete value, which they themselves would own.

    Since you’re interested in fairness and anti-welfare, here are a couple of things to consider:

    1. Since the “property owner doesn’t own all of the latent value of the property, it might be said to be unfair for him not to pay rent on it.

    2. An LVT is not just a congestion tax. It’s also a welfare deleter. The reason is that land gets its value from being surrounded by productive people (and we know this because land is more expensive in New York City than in the middle of Alaska). That’s a positive externality, which can be thought of as a form of welfare. An LVT internalizes that positive externality, and, hence, deletes that welfare. Thus, if you don’t like welfare, you should like an LVT, since it takes back a form of welfare payment people are “unfairly” receiving.

    > Don’t you think an individual can own anything

    Sure. With absolute military superiority, he can exert absolute ownership over anything he likes. Does that describe any person in the real world?

    Meanwhile, real people can own things in a relatively discrete sense, which are simultaneously owned in a more latent sense by other bodies. This relatively discrete ownership by individuals allows for economically efficient interaction with markets.

    1. Should governments have incomes?

      Well, income is the wrong word, but first let’s ask “Should there be governments?”

      And if there should be governments, what should their purpose be?

      If government is a means for one person or group of people to exercise control over another group, then I’d so no, that type of government shouldn’t exist, and therefore shouldn’t receive income (or funding) from stolen goods.

      If the purpose of government is to act as an agent of the people (individuals) and perform functions they assign to it, then yes, government should have funding – or income if it’s a private business – and those who authorized that agent, and enlisted it’s services would voluntarily pay for the services they received, and there would be no need for theft.

      Me: “Is it your claim that a group of people owns all the land within an arbitrary political boundary

      You: “Ownership is hierarchical. Some ownership is more latent. Some is more discrete.

      Not exactly an answer. The “latent” owners are…who? Since “society” or “the state”, or “government”, or “the collective” have no existence or meaning outside the minds of individual people, it must be some group of people who collect rent from everyone else. And what about that border?

      You understand that you have described feudalism, right? Some one or some ones at the top own all land and resources and the serfs own the shirts on their backs, and must toil on the master’s land for subsistence, and may NOT hunt the King’s deer in the King’s forest.

      Why do you prefer that system to private, individual ownership?

      It’s really time for a lesson in original ownership and property rights. Just ask.

      They would be renting the latent value, not the discrete value, which they themselves would own.

      Yes. They can keep some of what they produce on the master’s land.

      Since you’re interested in fairness and anti-welfare, here are a couple of things to consider:

      1. Since the “property owner doesn’t own all of the latent value of the property, it might be said to be unfair for him not to pay rent on it.

      I disagree. You collectivists are fond of using land as an example of property, but that’s only one type of property. My labor is my property, yet you would say that government has a claim on some or all of it. That defines a slave. What I fashion with my labor into something useful is my property. That which I acquire in an exchange is my property. I have traded ownership rights with another party.

      I found a nice stick on the ground that was claimed by no one else, and I fashioned it into a spear. That’s *my* spear, you have no right to it, and you can’t use it without my permission. I can use it as I see fit. I can loan it or rent it to you if I chose, or I can produce meat with it and trade meat to you for something YOU have, perhaps some vegetables you have raised – which are YOUR property.

      See how easy that was? Perfectly logical, reasonable, and consistent. That same concept can be expanded to include any number of individuals interacting for mutual benefit. We like to call that a “society”.

      2. An LVT is not just a congestion tax. It’s also a welfare deleter.

      The congestion came first, before the tax. The tax is merely a device for extracting benefit from what others own.

      Government didn’t create the land, nor did government create the city in which space is valued more highly . The government merely exacts tribute from the legitimate owners, supposedly in exchange for services they may not want.

      The reason is that land gets its value from being surrounded by productive people (and we know this because land is more expensive in New York City than in the middle of Alaska).

      You have that part right, somehow. Good work. People value proximity because it provides more choices for less cost in time and travel. Competition for that desirable proximity increases the price required to outbid others.

      That’s a positive externality, which can be thought of as a form of welfare.

      It’s not an externality at all. The proximity is desirable, so the price is bid up. That’s all it is. An externality is something that’s “external” to an exchange. That’s why it’s called an externality. I can be either good or bad.

      An LVT internalizes that positive externality, and, hence, deletes that welfare.

      And why would I want to delete the welfare? If people benefit from proximity, what possible purpose could you have in diminishing that benefit?

      Thus, if you don’t like welfare, you should like an LVT, since it takes back a form of welfare payment people are “unfairly” receiving.

      LOL What utter nonsense. No one is unfairly receiving anything. Getting the benefits of proximity requires *paying* for it. the market sets the price. What could be more fair than that? You’re trying to add to the already high price for some inexplicable reason.

      And, I LIKE welfare. Welfare is GOOD. Redistribution of resources from producers to non-producers, commonly erroneously called welfare, is BAD.

      Me: “Don’t you think an individual can own anything?

      You: “Sure. With absolute military superiority…

      I meant, does an individual have a *right* to own anything or does it all belong to the Master(s)?

      Meanwhile, real people can own things in a relatively discrete sense, which are simultaneously owned in a more latent sense by other bodies. This relatively discrete ownership by individuals allows for economically efficient interaction with markets.

      Complete nonsense. Interactions ARE markets. they don’t interact WITH markets. Without clear property rights, commerce and markets can’t exist.

      And “simultaneous ownership”? You must be kidding. Common ownership is a valid concept, simultaneous ownership isn’t.

      1. > government should have funding

        How would you fund it?

        1. How would you fund it?

          An agency, created or contracted by a group of individuals to provide a particular service or package of services would be funded by those individuals who requested the services.

          Voluntary organizations, mutual aid societies, mutual insurance companies, private businesses. There is no service currently supplied by government, that people actually want, that couldn’t be provided more efficiently and at lower cost by private businesses and organizations.

          1. >>> government should have funding
            >> How would you fund it?
            > [it] would be funded

            How would it be funded?

          2. How would it be funded?

            I explained it pretty clearly, but apparently not clearly enough.

            If by “it” you mean government, meaning an agent of the people, then “it” would be funded by the users of the service in the form of fee-for-service, or by subscription, or by premium, just like every other service is currently provided.

            Perhaps “government” is an inaccurate term, as it implies governance. People don’t need to be governed, they need services.

            When I need a haircut I seek out someone who provides that service and pay them a fee to perform that service.

            If I need periodic trash pickup at my residence, I contract with a company that provides that service and agree to a monthly fee for that service. a subscription, so to speak.

            I can join any number of organizations that provide benefit to members with mutual interests.

            If I want to protect myself against financial loss from fire I can buy homeowner’s insurance for that purpose. My insurer in turn might pay a fire loss limiting company (fire department) to rush out to put out a fire at my house to limit damage, and resultant financial loss, because that’s in their interest.

            Actually fire departments are a perfect example of a service that could just as easily be provided by private companies instead of government.

            Private security now protects many businesses and private communities. There’s no reason all police services couldn’t be provided by competitive private businesses.

            As I wrote, there isn’t a single service provided by government at every level that couldn’t be provided more efficiently and cheaply by private organizations.

            I now expect barrage of lame and tired collectivist objections.

  29. @Ron H.

    Lord Christopher Monckton explains here the logic behind replacing the normal means-tested welfare with Basic Income.

  30. taillebois

    WRONG, We have a minimun wage in Swiss, 2800 Franc Suisse, or in euro : 2060€ , !!!!!!!!! and in germany too, 8,50€!!!!!!!

    1. Older article

      You do realize this article was written before Germany implemented its minimum wage law? Switzerland doesn’t have a law on it either, it relies on collective bargaining between employers and employees.

Comments are closed.

Sort By:

Refine Content:

Scholar

Additional Keywords:

Refine Results

or to save searches.

Open
Refine Content