
The Class of 2017 – Raising America's Pay - frgtpsswrdlame
http://www.epi.org/publication/the-class-of-2017/
======
csense
> Raise the minimum wage

> Make it easier for workers to bargain collectively for higher wages

> Make more workers eligible for overtime pay

> Provide earned sick time and paid family leave

Good suggestions. Unfortunately, if you do this, the affected jobs will simply
be moved overseas to countries where policies like this don't exist. Unless we
get rid of free trade policies and impose taxes on foreign trade, to take the
money companies save from this form of cost cutting out of their pockets.

Trump is the first President in a long time to actually seriously consider
rolling back globalization. People say it's a good thing, citing Ricardian
theory. But it has essentially destroyed entire local economies (my hometown
being one of them). Economic theory is all well and good, but theory needs to
be tested against the real world. The evidence that globalization causes great
harm is simply too obvious for me to ignore.

I'm disappointed Trump is starting to get friendly with Xi, instead of
following through on his campaign rhetoric and slapping some taxes on imports.

I'm no xenophobe. As far as I'm concerned, those taxes can go away as soon as
China stops crapping all over the environment and starts giving its workers
the same rights and wages that we give our workers in the US. That way the
playing field would be level, and companies would no longer be able to use
free trade to exploit their workers.

~~~
pm90
> I'm no xenophobe. As far as I'm concerned, those taxes can go away as soon
> as China stops crapping all over the environment and starts giving its
> workers the same rights and wages that we give our workers in the US. That
> way the playing field would be level, and companies would no longer be able
> to use free trade to exploit their workers.

Its really hard for me to not burn with anger when I see comments like this.
The US and the West did the exact same thing that you mention: crap all over
their environment and treat workers terribly, to accumulate all the capital in
their hands. That capital was re-invested in technology/research and that is
the main reason why people in the West have higher standard of living now. And
when Europe and US were in the path of industrial development, they DID have
high import taxes as well. And now that China is doing essentially the same,
you are not OK with that? That's just hypocrisy, plain and simple.

~~~
dforrestwilson1
What you neglect to mention is that Europe and the US had high import taxes to
protect their industries from eachother.

Somehow the US still managed to become a superpower. China will be fine _if_
it can transition to a better system of government. Globalization doesn't seem
necessary for a country with a huge domestic market.

Demanding better working conditions for Foxconn employees is called having a
conscience not hypocrisy.

~~~
ben_jones
Ok the historian in me has to say something. The US is only a superpower
because we pilfered an incredibly large and resource-rich land mass and had
incredibly good geopolitical luck during World War One and Two. And that
involved dropping a nuclear weapon on a civilian population. Those
circumstances are _NOT_ repeatable.

~~~
MR4D
The US is the only superpower because of two reasons:

1 - The Atlantic 2 - The Pacific

Those two present enormous competitive barriers in a fight.

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Jabanga
The Economic Policy Institute is heavily funded by labour unions who dominate
the tax money receiving sector of the economy, and thus benefit from the
public discrediting of economic theories that endorse the free market.

~~~
soVeryTired
What do you mean by "the tax money receiving sector of the economy"?

~~~
Jabanga
Those sectors of the economy that receive tax dollars, most prominent among
them the public sector.

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strathmeyer
Damn wish I could've gotten someone from CMU to admit there was a recession.
Instead everyone just said I wasn't trying hard enough and got angry when I
asked for help.

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lawrencewu
\- Raise the minimum wage

If we raise the minimum wage, that would surely increase unemployment. Even a
minimum wage job is hard to get for an uneducated, unskilled person, so how
would it be easier for them to get a job at a rate employers are even less
willing to pay?

~~~
scottea17
Raising the minimum wage doesn't necessarily mean an increase in unemployment.
Following the introduction of the minimum wage in the UK in 1999, a large body
of research (a lot done by the Low Pay Commission) has been carried out which
shows that the minimum wage has had a very small or no effect on unemployment.
The same has been seen in research carried out in Australia and in the USA.

~~~
lawrencewu
It also doesn't mean a decrease in unemployment, which is what this report
claims. I'm also still unclear on _how_ a minimum wage would have no effect on
unemployment, which is what the law of supply and demand predicts.

~~~
frgtpsswrdlame
I see this a lot here and if you believe there is basically _any_ market where
the simple supply and demand model is relevant you're probably mistaken. The
other thing is that this graph:

[http://i.investopedia.com/inv/tutorials/site/economics/econo...](http://i.investopedia.com/inv/tutorials/site/economics/economics5.gif)

is not a free market model! Not at all! It is a "perfectly competitive" model
and has several very specific assumptions:

    
    
      1) All firms sell an identical product
    
      2) All firms are price takers - they cannot control the market price of their product
    
      3) All firms have a relatively small market share
    
      4) Buyers have complete information about the product being sold and the prices charged by each firm
    
      5) The industry is characterized by freedom of entry and exit.
    

I'm not sure the labor market actually meets any single one of those criteria.

Furthermore, if you are interested in how minimum wage actually effects
employment I would check out the following report(here's a good quote).

 _The employment effect of the minimum wage is one of the most studied topics
in all of economics. This report examines the most recent wave of this
research – roughly since 2000 – to determine the best current estimates of the
impact of increases in the minimum wage on the employment prospects of low-
wage workers. The weight of that evidence points to little or no employment
response to modest increases in the minimum wage._

[http://cepr.net/documents/publications/min-
wage-2013-02.pdf](http://cepr.net/documents/publications/min-wage-2013-02.pdf)

~~~
mason240
The argument that because no market is the theoretical, textbook prefect
market means we can ignore market forces and supply and demand is dubious.

~~~
frgtpsswrdlame
That's not what I'm saying. Our understanding of supply and demand is shaped
by the model we place them in. In this case if your understanding of supply
and demand is that regardless of any of the 5 factors I listed above, supply
and demand will converge to a pretty equilibrium like two lines on a graph
with only two lines then you're wrong. And if you look at the empirical
evidence and it strongly contradicts what your model says should happen then
your model needs an update. In this case the perfectly competitive model is
absolutely the wrong way to understand the labor market.

The paper I linked mentions a dynamic monopsony model and also 11 different
channels through which adjustment is possible. Basically the market is lots
and lots of different forces (not just supply and demand) all originating from
(not always rational) people, in this case we need a model which more
accurately models this.

If you'd like to read more about how the proliferation of the basic supply and
demand model has really hurt the layman's understanding of the economy there's
a great book that came out recently called "Economism." Here's a short article
which can give you a bird's eye view:
[https://www.theatlantic.com/business/archive/2017/01/economi...](https://www.theatlantic.com/business/archive/2017/01/economism-
and-the-minimum-wage/513155/)

