
Mechanical Turk Market, Ethics and Milton Friedman - Siah
http://openresearch.wordpress.com/2011/04/07/mechanical-turk-market-ethics-and-milton-friedman/
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gavinballard
From the article: "If business owners could hire people in the US to clean up
their messy databases for $3.00 they wouldn’t need to go on mechanical turk to
hire the same person for $1.50 an hour."

That's completely against the very pure form of economic rationalisation
Friedman epitomises. A self-interested, economically rational business would
hire the worker for $1.50 an hour. They get the same result for half the cost
- it's a no brainer. In the absence of a minimum wage, the income of folks in
developed countries are depressed towards the levels of income of folks in
developing countries - without a corresponding shift of the cost of living.
Minimum wages protect the poorer members of society in a developed nation from
falling even further behind economically.

As to the point that "minimum wages cause unemployment" - I think this article
misrepresents the nature of Friedman's argument in this respect, and
completely skips the depth of his position. It also begins to take on the view
that low unemployment is the end itself rather than a means to improve
underlying social conditions. 0% unemployment with an average low-income wage
of $0.50 is not 'better' than 5% unemployment with an average low-income wage
of $7.

A final note - the minimum wage in Australia is currently nearly double that
of the United States. Our current unemployment rate is about half that of the
United States. Unemployment is far more dependent on broader economic factors
than just the minimum wage.

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yummyfajitas
_A self-interested, economically rational business would hire the worker for
$1.50 an hour._

This assumes that MTurk is an exact substitute. It isn't even close.

I know of a person who made this exact choice - instead of going lean and
using MTurk at $1.50/hour, he is paying close to $5/hour (loaded cost, wage is
probably about $2.50) for live humans and suffering with monthly contracts and
renting office space. (I'm helping him with the data analysis.)

Among other things, with a single turk at $1.5/hour, you need to hire 2 more
turks each at $1.5/hour and get a majority vote on their work. You also need
to hope you didn't hire two colluding spammers. You don't get to give them
live, in-person training, and checking work is more difficult.

Then there are statistical issues. If you have 10,000 HITs produced by 100
turks, you need to check 100 x 15=1500 HITs and you have a low confidence that
any individual turk did a good job. If you have 10,000 HITs produced by a
single employee, you can check 200 HITs and get a much higher confidence rate.
Do this for a few rounds, you now have a set of employees who you can trust.
Additionally, you can control when the work is done. If something is
important, it will be done in precisely #HITs / (employees x HIT rate) hours.
On MTurk, you hope it will eventually be done one day.

 _0% unemployment with an average low-income wage of $0.50 is not 'better'
than 5% unemployment with an average low-income wage of $7._

The average low income wage in the US is far lower than $7. Most poor adults
(about 70%) have a wage of $0 due to having no job.

<http://www.bls.gov/cps/cpswp2007.pdf>

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mynameishere
Even the central planners recognize that minimum wages are inappropriate in
certain contexts, and are conditionally exempted for interns, family workers,
wait staff, farm workers, soldiers (in the past anyway), etc.

You guys maybe don't know this, but there's a huge ongoing scam generally
advertised as "work from home" or "make 4000/month working on your computer",
etc, etc, which is basically aimed at housewives and old people and shut-ins
who can't work shifts, but want to make money. Amazon is providing a non-
fraudulent, though badly-paid, alternative to this scam. Feel free to outlaw
it, though.

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motters
This seems like bogus reasoning. When a minimum wage was introduced in the UK
unemployment went down, at least for a while. The article contains assertions,
but no experimental results. An experimental economist would experiment with
different minimum wage levels and observe the results.

I think the bottom line is that economies are complex systems, and simplistic
"just so" narratives which don't take multiple interdependencies (themselves
adaptive systems) into account are typically insufficient to describe the
dynamics of these systems.

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yummyfajitas
_When a minimum wage was introduced in the UK unemployment went down, at least
for a while._

This is because politicians are (usually) smart enough to introduce minimum
wages only during growth periods and to keep the minimum wage well below
market rates.

I won't speak about the UK, but in the US, less than 4.5% of the poor earned
minimum wage [1].

<http://www.bls.gov/cps/minwage2007.htm>

When the minimum wage is raised significantly higher than market rates, the
results can be devastating.

<http://washingtonexaminer.com/node/127791>

[1] I'm dividing 1.7M min wage earners / 37.3M poor people to get an upper
bound. The real number is less since many min wage earners are teenagers or
spouses from non-poor households.

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zooey
It's stupid. Economy doesn't exists in a vacuum. It' very influenced by
politic. And saying politic I mean the way a society decide to use its finite
resources AND the rules a society define for his citizens. And an Economy
simply lives there, in circle of rules.

So if minimum wage let some people out, the same happens not letting children
work. And why taking care of people with physical problems (no hands? no legs?
why the State, using public money should care? You are a problem just let you
take care of yourself)?

You set the rules of your society. It doesn't exists something called free
market. The market is defined by the rules of the society AND the society
change in time AND space. So the market change in time AND space.

And these Friedman bullshit are the same you hear over and over and over.

And I'm a bit tired.

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lukas
I'm not sure what an optimal minimum wage would be, but surely there should be
_some_ minimum wage. Simple thought experiment: if one person or corporation
controlled all the world's resources, should they be able to pay everyone some
vanishingly small delta above zero? In that case a minimum wage would only
increase everyone's wages and make the marketplace fairer.

Obviously on the other hand, minimum wage increases can certainly reduce jobs.

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pandaassembly
This Milton Friedman..just wow. He is still bringen the world so much good.

~~~
tomjen3
Agreed.

If you want, here is a list [[http://miltonfriedman.blogspot.com/2006/08/pbs-
tv-series-fre...](http://miltonfriedman.blogspot.com/2006/08/pbs-tv-series-
free-to-choose-by.html)] of videos of his free to choose tv series.

