RE: Bezos Bows To Pressure On $15/hr. Keep Pressuring Him. Keep Pressuring Them All.
Great article, well argued, as usual. I largely disagree.
First, I'm no fan of Jeff bezos, so none of what I say should be construed as an endorsement of him, and I am also worried about his ties to the intelligence agencies.
I agree with the article you cited which is that Bezos is pushing for a $15 minimum wage because it will help consolidate the market in his favor. A minimum reduces jobs, and makes it difficult to find entry level employment. Most people are not making minimum wage. Those that are are mostly people who are just trying to enter the job market for the first time. For them, getting job experience - any job experience - is crucial. Raising the minimum wage takes away that opportunity.
Of course, that being said, when you're talking about careers, rather than relatovely short term employment, it is sometimes necessary for people to collectively negotiate with their employers. I do not agree with the special rights many states give to unions. Business owners are not slaves. You should not leverage the state against them to force them to run their business in a certain way. But it's entirely valid for people to negotiate as a group.
As far as us going to space. It's highly important that we become a multi-planetary species. I'm not sure I'd want Bezos to be in charge of that, but it's crucially important that we do that as quickly as possible. If humanity is confined to earth it will lose its enterprising spirit and succumb to tyranny. And if anything then happens to planet Earth, that could mean the end of humanity. We need to pass the birth canal and cut the umbilical cord.
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So how is scarcity of employment working in his favor, wouldn't an employer want a surplus of labor to chose the workers that create the least overhead?
And?
Why and how is the demand for workers by businesses going to be affected negatively by a minimum wage?
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crickets?
No, I read your comment earlier but didn't have time to respond. That empty comment was made by mistake.
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Scarcity of jobs is great for Bezos. It's terrible for people seeking employment. If businesses have to shut down because they can't afford to hire people, then Bezos consolidates marketshare. Of course, this also means that there are fewer opportunities. When there are more jobs than there are workers, wages rise as a consequence. When wages are artificially raised, this creates a barrier for entry for entry level work. This means that employment rates decrease, which means that the economy shrinks overall, since people have no money to buy things at all, thus further damaging the job market. What typically happens then, is that the government borrows vast amounts of money to fund benefit programs. This artificially stimulates the economy, but it doesn't make people more productive, and thus, the growth is fuelled by debt, while the unemployed remain unemployed and become gradually less employable, as they become less and less desirable as employees. What's worse, this creates inflation, which reduces the buying power of the dollar. So, ultimately, that raise you forced businesses to give to everyone now means nothing, because the value of the dollar has decreased. So now, there are fewer people working, and the people that are still working are not actually better off, and you've also blown up the national debt.
Let businesses offer the wages that they are willing to offer, and remove barriers to entry for entrepreneurship. That maximizes the potential for job growth. When you do that, wages rise, because now there are more jobs than there are workers.
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It's not scarcity of employment, it's scarcity of employees.
If businesses cannot pay people they have no business.
Indeed when there are more jobs than there are workers the business will need to pay people more to compete for the scarcity of workers.
The supply doesn't dictate the demand, the scarcity of employees creates more pressure for higher wages, and again if the business cannot take advantage of a surplus of workers then they are going to have to increase the wages, yet if it's a surplus of workers business will not increase wages.
When wages are increased, the demand for entry level work doesn't dwindle.
If employment rates are decreased because of an artificial increase of the wages and the subsequent businesses who relay on a surplus of cheap labor created by the underlying surplus of workers go out of business then the demand for the work will still be there albeit that now the services and products from those entry level position will become more valuable and other business will take advantage of the demand, which is independent of supply, if those initial business didn't already consolidate the increase overhead to their consumers.
If people are competing for peanuts, peanuts will not make more jobs.
The consequences you speak about, such as inflation and unemployment benefits aren't consequences of an artificial increase in wages, they are the consequences of FIAT itself and unemployment benefits come from people who earned them through the taxes paid into social security, by them.
If people are driven to bid lower and lower for work the businesses benefit directly while there is no need for more jobs. If we let monopolies control any one sector, or let businesses exploit the constant surplus of employees then clearly they will become more and more efficient at exploitation.
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Minimum wage increases without fiat (that is, with a commodities backed currency) create consequences that are more immediate and pronounced, because the creation of welfare programs to compensate for the decrease in demand for labor is not possible without government debt instruments, and if the government devalues its currency, people demand the commodity over the currency, and the currency loses its backing and collapses. The same thing happens with fiat; it just takes a little longer, because it's a little more difficult (but certainly not impossible) to exchange the fiat for a stable form of value.
Demand for entry level jobs will always be there, but the higher the barrier for creating those jobs, the fewer there will be, which means that some people just won't be able to get jobs at all. This is not merely my opinion:
https://www.epionline.org/studies/r129/
http://thefederalist.com/2017/05/03/harvard-study-minimum-wage-hikes-cut-entry-level-jobs-harm-poor-minorities/
Those are the top two links on Google (which is a heavily left-leaning search engine).
There is another study I found in the top five that I can't share here, but it's a PDF that says the same thing. The other two links in the top five claim that minimum wage hikes don't have an effect on job growth, but, firstly, they are editorials, not scientific papers (which tend to supporty point), and they also fail to mention that, yes, it's true that minimum wages don't ALWAYS kill job growth - but only if they aren't OUTPACING job growth. But if the job market is growing relative to the pool of employment seekers, then wages will rise anyway. So minimum wage hikes don't cause overall wages to rise, and they certainly can cause job growth to stall - especially if they are raised dramatically (and a $15 minimum wage would be a dramatic increase).
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