From: king@cogsci.ucsd.EDU (Jonathan King)
Newsgroups: alt.politics.clinton,talk.politics.misc,sci.econ
Subject: Re: Minimum wage: balancing job losses vs pay increases
Date: 26 Jul 92 20:02:57 GMT
Organization: University of California, San Diego

(Wish I could have consolidated this response with the other one; I'll
try to keep it short.)

mfriedma@uucp (Michael Friedman) writes:
>king@cogsci.ucsd.EDU (Jonathan King) writes:
>>First, I know that you know it's not just entry-level workers who get
>>canned.  Second, this is how the economy works.
>
>Only when you mess it up with things like the minimum wage.  Do you
>really think that it is good to be firing the most vulnerable people
>in our economy?

Do you really think it is good to promote the creation of jobs that
*keep* people in the most vulnerable situations?

>>[Shifting costs hurts them if there is no way they can become skilled 
>>workers, for certain; that's the real problem.  I suggest that government 
>>policy might better be aimed towards training a highly skilled 
>>workforce earning real money than towards ensuring a pool of cheap 
>>labor for low-wage employers.
>
>Duhh.  How the heck do you become skilled?  Well, very often you start
>on the job as an unskilled laborer and acquire skills.

If I thought that modern day minimum wage jobs helped you acquire useful
skills, I would agree with you.  But I don't think that they do; have
you ever seen anybody hired for a real job because of their ice cream
scooping experience?  Or hired for anything but another no-future job
for their cash register experience?  The only thing these jobs really
seem to do is provide some form of bogus "credentialing"; they could
help give you a continuous work history.  What a skill.

We haven't been doing a very good job recently of producing a skilled
workforce, or of retraining workers from obsolete industries, or of
creating new job opportunities except for lawyers and cashiers.

>1.  I contend that there is no benefit, 0, hada, from increasing
>income via minimum wage increases.  Please explain why you think there
>is a benefit.  In your explanation please do not forget that every
>dollar that goes to a worker whose salary gets increased has to come
>from someone else's pocket.

Which may not be so bad a thing in my opinion.  But I addressed this
whole issue in my other response.  

>2.  I contend that almost by definition the gain in productivity can
>not offset the extra cost of labor.  Why?  Well, without a minimum
>wage your productivity as a function of cost is at a maximum.  As soon
>as you make people move away from that maximum then, by definition,
>the production per dollar must go down.

Oh, please.  So the maximally productive wage is $0.00 per hour, and
if we can get people to work for less than it takes to keep body and
soul together, than that's a good thing?  I don't buy that; the world
is more complicated than that.  Further, why *can't* the gain in
productivity offset the extra cost of labor, if people in these low
wage jobs are learning all these great skills?  And, more seriously, I
didn't suggest it would offset the whole cost in any case, but not for
the reason you're suggesting.

>>And you keep ignoring the other way out:  the company could decide to
>>"skill-up" its workforce, and try to make money with higher quality
>>products; no, I guess that would never work. :-)
>
>Sure it would.  But it would work without the minimum wage too.  So we
>don't need the minimum wage to arrive at this result.

One certainly doesn't exclude the other, and I expect that route leads
to lower levels of poverty as well.  And has this ever worked anywhere
without some wage regulations or other government action, or without a
simultaneous massive poverty for many people?  Once again: our chief
economic competitors have minimum wage regulations, and often have
better quality products, too.  They're eating our lunch, and we're
just flippin' burgers.

jking
Xref: sparky alt.politics.clinton:801 alt.politics.bush:267 talk.politics.theory:3027