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OldGimletEye

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About OldGimletEye

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    Assistant To The Assistant Manager

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  1. OldGimletEye

    Minimum Wage: Fight For Fifteen

    Another example many people can relate to. Anyone, ever apply for a job, only for the job application to ask information about your income history, as if its any prospective employers fuckin' business.? If labor markets are purely competitive markets why bother asking? Shouldn't the employer just pay the market wage, which everyone knows about? Well of course, that's not what happens in the real world. Employers know damn well they get an informational advantage by asking such questions. And yet they will argue that any minimum wage will cause unemployment, using the purely competitive model. Uh, yeah, what a bunch of BS.
  2. OldGimletEye

    Minimum Wage: Fight For Fifteen

    For anyone interested in the minimium wage, probably worth reading: https://www.amazon.com/Monopsony-Motion-Imperfect-Competition-Markets/dp/B005ZOFVCI
  3. OldGimletEye

    Minimum Wage: Fight For Fifteen

    On one hand its pretty simple. On the other hand it's not. Imagine you've trained people for 30 years to expect about a 2% rise inflation, using the FEDs preferred inflation measure. In short people's inflation expectations are well anchored. And then there is this huge drop in aggregate demand. No problem, you'll just lower the Federal Funds rate and all will be well. Until of course you hit zero. Then you have a real problem on your hands. You could try negative interest rates, but nobody has done that before and it probably won't work unless you ban paper money. You could try price level or NGDP targeting, but those are big changes and probably would be controversial. And then there is good old fashion stimulus. But, nope you have a Republican Congress and you have knuckleheads like John Bonehead talking about crowding out. And then you have a bunch of deficit fear mongering going on because that's what some really rich people worry about, since being unemployed isn't on their radar screen. You could try to raise inflation expectations, but then you kind of defeat the whole point of anchoring inflation expectations at 2%. That part of low inflation over the years is easy. The hard part is that the so called natural rate of unemployment isn't looking like what it used to be. And I think that is what got a lot of econ types scratching their heads.On explanation is that there is a lot more slack in the labor market than people think. The definition of U3 employment is kind of arbitrary. On a deeper theoretical level, maybe the whole concept of the natural rate of unemployment just sucks and we need to go back to the drawing board on that one.
  4. OldGimletEye

    Minimum Wage: Fight For Fifteen

    Start with a monopsony model. Suppose the government mandates a wage that is no higher than what would exist in a competitive equilibrium. Does inflation happen in this case. No it doesn't. Employment rises and so does output. That said, there is some evidence that prices rise some with minimum wage laws. But, not enough to offset the gains by wage workers. Your assuming that an increase in the minimum wage will result in a one for one rise in prices. There is no reason to assume that. Also lets play around with a general equilibrium model. Lets say there is some kind of friction in the labor market. Government mandates a minimum wage. It causes demand to rise because the people benefiting from the wage increase tend to spend on the margin than those who don't. The FED notices inflation starts to pick up. They raise the Federal Funds rate. Given how close the current rate is to 0, not a terrible result.
  5. OldGimletEye

    Minimum Wage: Fight For Fifteen

    Re: The "but, it will cost business" argument. Supposing we pass a law that will tax heavily monopoly profits. Bad idea because it will cost business? Nope. Not at least to basic economic theory because it suggest producers don't need monopoly profits in order to put factors (capital) into production. The point here is whether "it will cost business" is a good argument depends on how the market is structured. In a monopsony model, wages can be raised and its even theoretically possible that employment will increase, even though it might cost business. Ultimately, what I care about is whether we can make workers better off, by raising their wages, without causing too much unemployment in the process. Whether "it cost business" is only a concern if it impacts the rate of employment.
  6. OldGimletEye

    Minimum Wage: Fight For Fifteen

    Having worked some low wage craptastic jobs in my youth its not surprising that people bolt fast food restaurants often. In my personal opinion, low wage customer service jobs, where you have to deal with the public, are even worse than low wage physically demanding jobs. About 95% customers you deal with are okay. The other 5% are either knuckleheads or assholes. And that 5% will wear your ass out. Personally, I'd rather dig ditches in the summer heat for low pay, than work a customer service job for low pay. That's of course my personal preference. Still, those kinds of jobs are tough gigs. There are of course lots of jobs that do have high turnover. Partly because some employers choose low pay as a business strategy. And partly because of management incompetence. High employee turnover is usually a fairly strong signal of poor management. Anyway, low wages do persist ,in part, because of informational problems. It takes quite a bit of work to find a decent job. If everyone had full information about every job, its characteristics, and the wages it paid, it's likely places like McDonalds would have to pay more.
  7. OldGimletEye

    Minimum Wage: Fight For Fifteen

    Was recently looking at an old micro text book of mind. And I saw a diagram of labor supply curve intersecting with a labor demand curve, and of course where they cross is where the equilibrium wage was supposed to be set. And I snorted with laughter. That kind of model, where the labor market is concerned, probably ought to be banned from economic textbooks. What I want to say here is probably already understood by anyone that has actually spent anytime looking for a job. And if you have looked for a job, at some point during your working career, which probably includes most us, you know that its an enormous time cost. There is time in researching jobs and interviewing and so forth. Finding out what kind of wages pay and finding out about the working conditions of the company. And of course companies are spending time trying to find out about workers. The point here is that the labor market is shot through with informational problems that makes the purely competitive demand and supply model inappropriate. Accordingly, anyone that says that minimum wage laws are likely to lead to lots of unemployment probably don't know what they are taking about. Put it this way. Supposing your employer says they are going to pay you 10 dollars less every week. If the purely competitive model were true most of use would simply leave and go a find a job paying the market wage which would be well known to everyone. But, in reality, most of us wouldn't just walk out. And the reason is that most of us know that finding a new job would be costly. So we would likely just eat the 10 dollars less per week. Or at least we wouldn't quit right then and there.
  8. OldGimletEye

    Workable Objectivism (Ayn Rand)

    I'll correct this as well run companies understand that employee turnover is expensive and high employee turnover is usually a strong sign of very bad management. Not all companies understand this. Not all managers get this.
  9. OldGimletEye

    Workable Objectivism (Ayn Rand)

    Evidently, its fine to condemn millions of people as being morally or ethically defective. But, one harsh word against a Randian, well that's just outrageous.
  10. OldGimletEye

    Workable Objectivism (Ayn Rand)

    Yeah, let me elaborate on this a little further. Rand's philosophy goes beyond just arguing that free market economics is the best because it promotes economic growth or is the best in promoting human welfare. It gets into basically arguing that there is something morally or ethically defective about all poor people. And that is insulting and not justified. And is very insulting even though nobody got called a mother fucker or an asshole or whatever. So, I have really no problem telling Rand or her disciples to go jump in a lake.
  11. OldGimletEye

    Workable Objectivism (Ayn Rand)

    When people like Paul "Numbers Guy" Ryan (a Randian fanboy) talks about the world being simply one of "makers and takers" that is pretty insulting to lots of people, particularly if you found yourself in an unemployment line right after the GFC. Ryan's language might not have had one f-bomb in it. It might not have contained one god dammit in it. It might have been stated very "civilly". But, in reality it was a pretty nasty thing to say about lots of people.
  12. OldGimletEye

    Workable Objectivism (Ayn Rand)

    I don't know. Kind of reminds of wealthy people that spout Randian nonsense and then when people push back against Randian nonsense, those same wealthy people turn around and complain about "class warfare" when the truth is that Rand's philosophy is one of the biggest pieces of class warfare ever. Pushing Randian nonsense might be politely stated. But, it is an insult to millions of people. That they might get a bit hot about it, should not be surprising.
  13. OldGimletEye

    Workable Objectivism (Ayn Rand)

    Probably not for a real actual corporation. If he did, he'd probably know the C suite ain't always the ever wise and smart Randian super heros of his imagination.
  14. OldGimletEye

    Workable Objectivism (Ayn Rand)

    Do you believe in the concept of involuntary unemployement? Or do you believe that the Great Depression was caused by a spontaneous mass vacation. And what did Ayn Rand have to say about this matter?
  15. OldGimletEye

    Workable Objectivism (Ayn Rand)

    Sure. Just as soon as conservatives own up to the failure of supply side economics and Kansas. And by the way, Rand, the knuckle head, was a big fan of the gold standard, which played a key part in causing and prolonging the Great Depression.
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