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CMV: We should dramatically decrease the maximum work hours while eliminating minimum salary, both to increase efficiency and to achieve full employment (self.changemyview)

Miguelinileugim が 投稿

The logic goes like this: If there's unemployment of any kind, then the demand for jobs is higher than the offer for jobs.

Consequently, if the maximum work hours were decreased in those sectors that show unemployment, then there would be a shortage of employees, companies would have to compete with each other to get enough employees, and thus unemployment would become 0 in every sector of the economy and minimum salary would be unnecessary, as companies are willing to pay much more than that to get some really needed employees.

And of course, this would also mean a drastic decrease in the amount of time that people have to work, what would greatly increase the overall wellbeing of society (and to an increase in the efficiency of work hours, since companies now wouldn't be able to hire someone for little money to do tasks that a cheap machine could do, and thus there would be an economical "laissez faire" incentive for them to make jobs more efficient).

The only negative effect would be a decrease in the competitivity of the economy (what is bad but not catastrophic) due to decreased company profits as they'll now have to treat their employees like valuable, limited assets instead of disposable sources of labor (which is the case for unqualified jobs that anyone can do).

I believe that the increase in wages would be dramatic enough that people would be able to work less and earn the same without any dramatic effects in the economy.

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[–]robertmeta [スコア非表示]  (62子コメント)

The logic goes like this: If there's unemployment of any kind, then the demand for jobs is higher than the offer for jobs.

The flaw in this logic is that it assumes all people can do all jobs. It is significantly more complicated than that. Often times unemployment is misalignment of skills, which is why training programs exist for unemployed people.

Consequently, if the maximum work hours were decreased in those sectors that show unemployment, then there would be a shortage of employees, companies would have to compete with each other to get enough employees, and thus unemployment would become 0 in every sector of the economy and minimum salary would be unnecessary, as companies are willing to pay much more than that to get some really needed employees.

Businesses have to be successful to employ people. This idea would radically reduce the chance of a business being successful by driving up cost, and driving down skill and experience. This would basically collapse the economy in short order. You are treating businesses as if they have infinite money, and you are treating employees as if skill and experience doesn't matter, both of which are obviously untrue.

And of course, this would also mean a drastic decrease in the amount of time that people have to work, what would greatly increase the overall wellbeing of society (and to an increase in the efficiency of work hours, since companies now wouldn't be able to hire someone for little money to do tasks that a cheap machine could do, and thus there would be an economical "laissez faire" incentive for them to make jobs more efficient).

Your assumption that the well being of society is attached to leisure time is far from a universal truth. Many people find themselves profoundly unhappy after retirement, bored and restless. As for your idea that this would force many businesses to replace people with machines, it would indeed, and businesses that could do that would do that. This however would not increase employment, it would decrease it. You would have two categories of businesses, those that fail (see my last point) and those that automated and then need no employees.

The only negative effect would be a decrease in the competitivity of the economy (what is bad but not catastrophic) due to decreased company profits as they'll now have to treat their employees like valuable, limited assets instead of disposable sources of labor (which is the case for unqualified jobs that anyone can do).

Again, it would cause a complete collapse of the economy, and would be one of the most disastrous policies enacted in human history, the human suffering would make Chairman Mao blush.

I believe that the increase in wages would be dramatic enough that people would be able to work less and earn the same without any dramatic effects in the economy.

Where is your basis in fact, I think you vastly overestimate how profitable many businesses are -- and vastly underestimate how interdependent modern economies are, this would be a nightmare.

[–]Miguelinileugim[S] [スコア非表示]  (61子コメント)

The flaw in this logic is that it assumes all people can do all jobs. It is significantly more complicated than that. Often times unemployment is misalignment of skills, which is why training programs exist for unemployed people.

That's why I said "sectors", because decreasing the amount of work hours for highly specialized workers that are in great demand would hurt the economy, while decreasing the amount of work hours for jobs that literally anyone with two arms and two legs could, would decrease the high level of unemployment in that part of the market!

Businesses have to be successful to employ people. This idea would radically reduce the chance of a business being successful by driving up cost, and driving down skill and experience. This would basically collapse the economy in short order. You are treating businesses as if they have infinite money, and you are treating employees as if skill and experience doesn't matter, both of which are obviously untrue.

Skill and experience matter, that's why people are paid more than minimum salary, but for most people the fact that there are people out there who would be able to do their jobs almost as well for less leads them to being ok with low salaries, when if they knew that without them, the company would have serious problems to find a replacement (because people are allowed to work so little there's a little more offer than demand when it comes to jobs), and thus they're able to ask for more money!

Also, companies don't have unlimited money, but they have profits, and if you drive those profits to 0 and give it all to the employees, you'll have single-handedly made the market incredibly free (since the returns from capital in a free market would be 0) and made the employees much more richer. Imagine if Apple had to actually pay their employees as much as they could, their sweatshop workers would have first world salaries as their profit margins would collapse!

Your assumption that the well being of society is attached to leisure time is far from a universal truth. Many people find themselves profoundly unhappy after retirement, bored and restless. As for your idea that this would force many businesses to replace people with machines, it would indeed, and businesses that could do that would do that. This however would not increase employment, it would decrease it. You would have two categories of businesses, those that fail (see my last point) and those that automated and then need no employees.

I know that, hell if I know that (no personal experience I've just really studied the matter), work up to some extent is necessary for people to be happy, but this is not just about decreasing work hours, it is also about increasing people's wages. And anyway, don't you think that a 30 hour workweek wouldn't make people happier and less miserable? In an ideal society, nobody would work as the machines would do everything, but everybody would have hobbies they'd take as seriously as people today take their jobs seriously.

Similarly, those companies that fail do so because they're unable to automate or because they couldn't offer competitive prices while paying their employees competitive wages, what is of course how the economy improves itself. And those companies that succeed with no employees, good for them then, since the product will end up being as expensive as the raw resources (if any) as the free market will drive the price down (other companies would try to compete and drive the price down that is, the market isn't free at all, but this would happen anyway, albeit at a slower pace and never fully so).

Again, it would cause a complete collapse of the economy, and would be one of the most disastrous policies enacted in human history, the human suffering would make Chairman Mao blush.

When you understand that "dramatical" just means "to the point where employers have to compete with each other to hire employees and thus being forced to pay them as much as they can afford without closing" AND that this would be sector by sector so only sectors with unemployment would be affected (while highly specialized sectors with a chronic under-supply of capable employees would be fully unaffected) THEN you'll see how this wouldn't be as bad.

Oh wait, you mean that foreign imports would crush the economy as prices go up because of the employees? Surprise! The money would go from businessmen pockets into employees pockets, if a company tries to drive the price up to pay their increased employees' salary while keeping their profits, they'll close because they won't have anybody to sell to, but before doing that they'll decide that they'd rather keep their prices as they were at the expense of their profits. Most companies would rather keep a company with small profits working than close it, and if the employees become so expensive that they just can't hire them, then they should close, because they're not profitable anymore while the rest of the market who actually can afford those employees doesn't have that problem because they are profitable.

Same prices, same competitivity, same offer, same demand, no problem.

Where is your basis in fact, I think you vastly overestimate how profitable many businesses are -- and vastly underestimate how interdependent modern economies are, this would be a nightmare.

I estimated it, profits are small, but any profit is economically inefficient, and third world companies who exploit their workers (and those they work with such as Apple) have REAL high profits, and thus this policy would have to be applied in the whole world to work properly. Otherwise it would still work for the countries with that policy, but I feel like I've missed some reason of why it wouldn't work as well, but it feels like it could work though.

[–]A_Soporific70Δ [スコア非表示]  (22子コメント)

I think that there is a fundamental misunderstanding of the word "profit". After all, there's not one profit, but two. The first kind of profit is something that economists call accounting profit. This is taking in more money than you expend. Total revenue - Total expenses = profit. But that's not the inefficient kind of profit.

You see, there is also a thing called economic profit. This is total revenue - total expenses - profit of next best business = economic profit. It's THIS ONE that implies inefficiency if it is anything other than zero. Why? Because it means that there are too many/not enough businesses in this field or that field and those businesses that are in danger of failing should close and reopen doing something else entirely. This would bring economic profit back to zero where the relatively unprofitable business leaves the unprofitable field (increasing the profits of those who remain) and enters the profitable one (decreasing the profits of its new competitors). In a pure capitalistic system this would happen more or less automatically resulting in all adequately run businesses being more or less equally profitable, not with a balance sheet with a zero value.

You see, what is profit for a business except the return on investment for the people who put the money into the business to begin with? Many owners don't take a salary and don't get paid except by taking a share of whatever profit is left over after the business reinvests its financial capital. If a company is unable to pay its owners then owners will not put in their work or provide the resources that they do in order to make a business a success.

[–]Miguelinileugim[S] [スコア非表示]  (21子コメント)

You see, what is profit for a business except the return on investment for the people who put the money into the business to begin with? Many owners don't take a salary and don't get paid except by taking a share of whatever profit is left over after the business reinvests its financial capital. If a company is unable to pay its owners then owners will not put in their work or provide the resources that they do in order to make a business a success.

I don't really get your point, I mean thanks for the detailed explanation, but my point is that in equilibrium companies get as much for their products as it costs for them to make those products, accounting for the risks involved and some other things of course. But in the end, in the free market, those who put the money in aren't making a cent because the company isn't having any net profits, and if you could clarify that point that'd be great :D

[–]A_Soporific70Δ [スコア非表示]  (11子コメント)

The company would be making a profit in a free market. The company wouldn't be making economic profit in excess of anyone else's profit. Remember, profit and consumer surplus are the net benefit to society by taking a pile of sticks and turning it into a chair. By saying that profit shouldn't be a thing you're saying that society doesn't/shouldn't benefit from starting new businesses or investing in the ones we have now.

All of this comes down to the difference between the sort of profit that accountants use and the sort of profit that economists use. Accountants are simply trying to make sure that people benefit more than they give up by doing what they do. Economists are trying to determine if we can do better by doing something else. Chasing and capturing economic profit is how we get people to go out and take risks and make new and better things. It's a system that works by putting ever changing inputs in one side and spits out an ever changing solution. By saying "Accounting profit should be zero" and then forcing that to be true you aren't converting the market that exists into a hypothetical ideal free market state, instead you are simply breaking the mechanism by which companies that are doing it wrong get forced out and newer better companies are let onto the field. Profits are all about rationing and reward incentives, ideally the rationing would be perfect so there would be nothing to incentivize but that's just not a realistic situation.

[–]Miguelinileugim[S] [スコア非表示]  (10子コメント)

The company would be making a profit in a free market. The company wouldn't be making economic profit in excess of anyone else's profit. Remember, profit and consumer surplus are the net benefit to society by taking a pile of sticks and turning it into a chair. By saying that profit shouldn't be a thing you're saying that society doesn't/shouldn't benefit from starting new businesses or investing in the ones we have now.

If the next best option for a business is closing and not getting any return on the capital, then the company wouldn't be making any profit! Just where would they invest that money if not in that business? Every other business is making 0 profit too! Economic profit = Regular profit = 0.

All of this comes down to the difference between the sort of profit that accountants use and the sort of profit that economists use. Accountants are simply trying to make sure that people benefit more than they give up by doing what they do. Economists are trying to determine if we can do better by doing something else. Chasing and capturing economic profit is how we get people to go out and take risks and make new and better things. It's a system that works by putting ever changing inputs in one side and spits out an ever changing solution. By saying "Accounting profit should be zero" and then forcing that to be true you aren't converting the market that exists into a hypothetical ideal free market state, instead you are simply breaking the mechanism by which companies that are doing it wrong get forced out and newer better companies are let onto the field. Profits are all about rationing and reward incentives, ideally the rationing would be perfect so there would be nothing to incentivize but that's just not a realistic situation.

I understand that, that's why I said that a perfectly free market would have 0 profit in both, since no business is making profit, and thus you just can't make money out of money!

[–]A_Soporific70Δ [スコア非表示]  (9子コメント)

If the next best option for a business is closing and not getting any return on the capital, then the company wouldn't be making any profit! Just where would they invest that money if not in that business? Every other business is making 0 profit too! Economic profit = Regular profit = 0.

Except you would get a better return being closed because you wouldn't have to put in any work. Leisure time has value, you know. If you can work and earn nothing, or goof off and also earn nothing then a lot of people would goof off and relatively few people would work. Owning a company isn't easy and if you aren't getting a return on that work then your best option is to simply close.

Your next best option is very rarely to just close up shop. People want something and are willing to pay for it. You create additional value for everyone by supplying that thing. If you force all of the gains into wages then you will simply create a situation where consumers are unable to find the products they want because supplying those things is a lot of work and those who need to put in the work have zero reasons to do it.

Look, no company operates over the long term where the cost of production is equal to the sale price. They only do that temporarily over the short run while figuring out the least bad way to exit. The optimal always includes a payment to the owner(s) equal to the value of leadership and work on their part. Remember, if I built the plan, did the hiring, raise capital, provided management, and drive sales to get a thing off the ground then I definitely provided value to the company. Why are you insisting that I am not? That's what you're saying with this whole zero accounting profit thing. The ideal amount of accounting profit is a non-zero number. The ideal amount of economic profit is zero, the difference between these two numbers is value of the intellectual labor and leadership of the people who create and maintain the business.

I understand that, that's why I said that a perfectly free market would have 0 profit in both, since no business is making profit, and thus you just can't make money out of money!

But you are not making money out of money. You're making money out of ideas, hard work, and the ability to convince other people to work together.

[–]Miguelinileugim[S] [スコア非表示]  (8子コメント)

Except you would get a better return being closed because you wouldn't have to put in any work. Leisure time has value, you know. If you can work and earn nothing, or goof off and also earn nothing then a lot of people would goof off and relatively few people would work. Owning a company isn't easy and if you aren't getting a return on that work then your best option is to simply close.

Of course! But if less people invest, less money will be put into circulation, and thus deflation will happen, people's money will be worth more and whoever invests is gonna make more money, and thus investing will be a job like any other where if they don't get enough returns to justify their work, they won't work!

Your next best option is very rarely to just close up shop. People want something and are willing to pay for it. You create additional value for everyone by supplying that thing. If you force all of the gains into wages then you will simply create a situation where consumers are unable to find the products they want because supplying those things is a lot of work and those who need to put in the work have zero reasons to do it.

They have reasons, because the demand will drive the price of the product sky-high, and thus any business in there is gonna get sky-high profits no matter how high the wages, ONLY when the market stabilizes then profits will become 0!

Look, no company operates over the long term where the cost of production is equal to the sale price. They only do that temporarily over the short run while figuring out the least bad way to exit. The optimal always includes a payment to the owner(s) equal to the value of leadership and work on their part. Remember, if I built the plan, did the hiring, raise capital, provided management, and drive sales to get a thing off the ground then I definitely provided value to the company. Why are you insisting that I am not? That's what you're saying with this whole zero accounting profit thing. The ideal amount of accounting profit is a non-zero number. The ideal amount of economic profit is zero, the difference between these two numbers is value of the intellectual labor and leadership of the people who create and maintain the business.

Of course those who work at the business are going to have to earn as much as an equally qualified worker, I should have it stated it before, my bad.

But you are not making money out of money. You're making money out of ideas, hard work, and the ability to convince other people to work together.

In the real world, you make money out of money, ideas and hard work just help to improve the returns.

[–]A_Soporific70Δ [スコア非表示]  (7子コメント)

Of course! But if less people invest, less money will be put into circulation, and thus deflation will happen, people's money will be worth more and whoever invests is gonna make more money, and thus investing will be a job like any other where if they don't get enough returns to justify their work, they won't work!

It doesn't matter how much you can buy with a dollar if you are not letting them have any dollars. That's what zero profits is, you put in 1 dollar and get 0 dollars in return. If you have profits you could put 1 dollar in and get anything from .1 dollars to 10,000 dollars out. The amount you get out depends entirely on what you are doing and how well you are doing it.

So, the idea that we should set the returns on all businesses to 0 means that the investment in all businesses will also be set to 0. The relative value of the dollar is quite beside the point. In this context a perfect market means that you would earn the same return on any business, not that you would receive zero return.

They have reasons, because the demand will drive the price of the product sky-high, and thus any business in there is gonna get sky-high profits no matter how high the wages, ONLY when the market stabilizes then profits will become 0!

Yes, but demand is equal to supply. If no one is willing to supply you with supermodel threesomes then it doesn't matter how much demand you have for them, the amount you will acquire will remain zero.

The point is that the power and interest between all stake holders must be balanced. Workers, investors, consumers, and society all of different wants and needs and these concerns must all be balance. You can't make the thing work by simply ignoring the half of the equation.

Also, markets never stabilize. It's not "survival of the thing with the most trait x" but rather "survival of the thing best suited for current conditions". Given that yesterday's current conditions and today's current conditions are not the same conditions then the best suited thing changes every day. So, you can go from being very well suited to the needs of the market to being well off without actually changing a thing, where you have stabilized but the market has not.

Of course those who work at the business are going to have to earn as much as an equally qualified worker, I should have it stated it before, my bad.

Except the owner is actually risking personal assets, credit, personal reputation, and stress in ways that a worker is not. A worker who makes some bad decisions can ruin a lot of production or two. An owner who is off his game can easily destroy the company completely.

If you have a risky job and a non-risky job and pay both the same then very few people would take the risky job. Markets are only as efficient as they are made to be. They are made more efficient by people taking risks and making changes. We need to make sure that those people who are making changes have all the reasons they need to do so.

I firmly believe that one of the biggest problems we are facing today is the fact that too few people start and are successful at starting new firms. A lot of the problems we have come from a dearth of effective corporate leadership and stiff competition for the handful of good executives. By flooding the market with good executives you will see companies run better and the compensation to the wealthiest fall dramatically. You'd also see stronger utilization of corporate profits as more can be devoted for capital investment.

In the real world, you make money out of money, ideas and hard work just help to improve the returns.

The money comes from the investment, not from money. If you put a hundred million dollars into a basket and bury it you don't have more dollars when you dig it up. If you put that money into a vault then you also don't end up with more. When you invest you do, but where does that money come from? Well, it comes from successful new projects.

By giving someone with an idea and the ability to work hard the tools required to execute you can capture some of the profit from that idea and that work. The person who had money wins because they now have more money. The person with the idea and work wins because they now have more money. The customer wins because while they have a thing that they value more than money. Society benefits because more people are happier.

What happens if the guy with the idea and hard work fails? The guy with the money loses because he now has less money. The guy with the idea and hard work is out of both and gained nothing, so he lost even more. Customers are unharmed because they still have their money. Society is only a little worse off, because that rich man's money could have been squandered on parties and boats and therefore been spent by party planners and boat builders but was wasted instead.

Ideas and hard work are everything. Money just makes it go easier. Some people need giant piles of money to make their ideas and hard work go, so there is an industry in renting out giant piles of money. That's pretty much what banks do.

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

It doesn't matter how much you can buy with a dollar if you are not letting them have any dollars. That's what zero profits is, you put in 1 dollar and get 0 dollars in return. If you have profits you could put 1 dollar in and get anything from .1 dollars to 10,000 dollars out. The amount you get out depends entirely on what you are doing and how well you are doing it. So, the idea that we should set the returns on all businesses to 0 means that the investment in all businesses will also be set to 0. The relative value of the dollar is quite beside the point. In this context a perfect market means that you would earn the same return on any business, not that you would receive zero return.

No-no-no, I meant that returns would be tiny, just enough for people to take on investing as a full-time job so that there could be investors doing whatever investors do.

Yes, but demand is equal to supply. If no one is willing to supply you with supermodel threesomes then it doesn't matter how much demand you have for them, the amount you will acquire will remain zero.

Nope, that's because prostitution is illegal, but if it were legal, and I had several spare hundred thousands and REALLY wanted that threesome, a company would, without a doubt, try to provide me with that service, your point is simply invalid.

The point is that the power and interest between all stake holders must be balanced. Workers, investors, consumers, and society all of different wants and needs and these concerns must all be balance. You can't make the thing work by simply ignoring the half of the equation.

Not necessarily, I'm just saying that the balance is seriously skewed in favour of the employer, so to change it my system would give A LOT of leverage to the employee, making things more balanced!

Except the owner is actually risking personal assets, credit, personal reputation, and stress in ways that a worker is not. A worker who makes some bad decisions can ruin a lot of production or two. An owner who is off his game can easily destroy the company completely.

As an equally qualified worker with the exact same responsibilities that is, so if the job as businessman is that demanding then it would perceive a great salary as few people have both the ability and the willingness to do that job.

If you have a risky job and a non-risky job and pay both the same then very few people would take the risky job. Markets are only as efficient as they are made to be. They are made more efficient by people taking risks and making changes. We need to make sure that those people who are making changes have all the reasons they need to do so.

If the job is risky, less people will want it, there will be less people wanting to do it, and thus employees will have more leverage and the job will pay more!

The money comes from the investment, not from money. If you put a hundred million dollars into a basket and bury it you don't have more dollars when you dig it up. If you put that money into a vault then you also don't end up with more. When you invest you do, but where does that money come from? Well, it comes from successful new projects.

Step 1: Find a million dollars under your pillow

Step 2: Put the million in a hedge fund

Step 3: Wait 20 years

Step 4: Now you have 2 millions with no effort on your part

By giving someone with an idea and the ability to work hard the tools required to execute you can capture some of the profit from that idea and that work. The person who had money wins because they now have more money. The person with the idea and work wins because they now have more money. The customer wins because while they have a thing that they value more than money. Society benefits because more people are happier.

And when do rich people who barely know what "innovation" means, take most of the profit while giving small change to the businessman and patting him in the back for doing a good job?

What happens if the guy with the idea and hard work fails? The guy with the money loses because he now has less money. The guy with the idea and hard work is out of both and gained nothing, so he lost even more. Customers are unharmed because they still have their money. Society is only a little worse off, because that rich man's money could have been squandered on parties and boats and therefore been spent by party planners and boat builders but was wasted instead.

What makes you think that the money was any worse spent? The money will eventually end up in someone else's pockets so there's no difference whether it ended up in the pockets of boat builders or in the pockets of store employees from his unsuccessful supermarket chain! The difference is that maybe he got to deliver a few products at a loss with his failure, while if he had bought a yacht, then society wouldn't have benefited at all, just himself with his stupid yacht would be better off.

Ideas and hard work are everything. Money just makes it go easier. Some people need giant piles of money to make their ideas and hard work go, so there is an industry in renting out giant piles of money. That's pretty much what banks do.

Banks don't give money out to entrepreneurs, no matter how good their ideas are, it's angel investors and the like those who do that.

But anyway, ideas and hard work help, but being born with a silver spoon, a 10M trust fund and a multimillionaire company that basically runs itself is what really helps, and surprise, most rich people are born rich.

[–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

I'll check this out later I'm nauseous after half the afternoon replying comments xD

[–]petersbro [スコア非表示]  (8子コメント)

in equilibrium companies get as much for their products as it costs for them to make those products

So... my stock would no longer pay dividends? And I, as an owner of a small business, would no longer be allowed to pay myself? This is what it means when you take away profit.

[–]Miguelinileugim[S] [スコア非表示]  (7子コメント)

Nope, you would pay yourself as an employee: The manager. And yes your stock would no longer pay dividends, in a free market society, you just can't make money out money, the notion of doing that is not capitalistic, it's oligarchic, Adam Smith would be turning in his grave if he even considered such an outrageous concept! Money should come out of work, not out of money!

[–]petersbro [スコア非表示]  (6子コメント)

So I'm not allowed to be a small-time investor anymore? That's what stock is. Your plan relies on investors for business growth but you are against the idea of money making money, which is what investment is.

And if I'm paying myself as a manager does that mean I can't work 60 hours a week anymore? Because I actually like doing that when I'm working for myself.

[–]Miguelinileugim[S] [スコア非表示]  (5子コメント)

So I'm not allowed to be a small-time investor anymore? That's what stock is. Your plan relies on investors for business growth but you are against the idea of money making money, which is what investment is.

If money makes just a tiny little bit of money, then investors should still be interested in investing, the difference is that instead of doubling their money every 10 years by investing wisely, maybe it'll take them 100 or 200 years, getting very little returns, but still some!

And if I'm paying myself as a manager does that mean I can't work 60 hours a week anymore? Because I actually like doing that when I'm working for myself.

Good point, great point actually, amazing-ass point actually! I guess that there's no way to overcome that, but there's no way that'd become generalized enough to be a problem!

[–]petersbro [スコア非表示]  (4子コメント)

Does my stock pay dividends or doesn't it?

And why would I own stock if I make little money from it and there remains a risk of losing it all? Why would anyone invest in this system?

Many people find working hard at meaningful work to be enjoyable. This is a widespread way people find meaning in life. I think you'd find that most small business owners, if forced to try to manage their business in 35 hours a week and then forced to pay someone else to make business decisions the rest of the time, 1) would not be able to find anyone who cares quite as much as they do about making great decisions, dramatically raising the ever-present risk of business failure, and 2) would go crazy with boredom while knowing someone else is messing things up back at the ranch. By and large we like working. If we didn't, we wouldn't be business owners. This is much more widespread than you think.

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

Does my stock pay dividends or doesn't it?

It does, a tiny amount.

And why would I own stock if I make little money from it and there remains a risk of losing it all? Why would anyone invest in this system?

They would because the returns would be tiny, but just enough for someone to want to invest, if the returns become too tiny, people would stop investing, the money will stop circulating, deflation will happen, money will be worth more, investing will become more profitable and investors will stay.

Many people find working hard at meaningful work to be enjoyable. This is a widespread way people find meaning in life. I think you'd find that most small business owners, if forced to try to manage their business in 35 hours a week and then forced to pay someone else to make business decisions the rest of the time, 1) would not be able to find anyone who cares quite as much as they do about making great decisions, dramatically raising the ever-present risk of business failure, and 2) would go crazy with boredom while knowing someone else is messing things up back at the ranch. By and large we like working. If we didn't, we wouldn't be business owners. This is much more widespread than you think.

Have you considered that for every person working hard at a meaningful job, there like 10 nine-to-fivers who really, really hate their job? If nobody worked because the machines did all the job, they'd find some hobby to fill their time, and that hobby might as well be managing a small business for example. The less people work, the more they can work at what they want!

[–]robertmeta [スコア非表示]  (5子コメント)

any profit is economically inefficient

Profits are the offset of risk, they are not an inefficiency. Without profit, there is NO reason to ever start a company, to ever take risk, to ever invest. It is a stillborn economy.

The vast majority of businesses fail, the people who invest in them lose their money (either owners or investors). This is fine because they are taking a risk in seeking profit. If you strip the ability to profit, you remove the reason to take risk.

[–]Miguelinileugim[S] [スコア非表示]  (4子コメント)

You don't get it, if a sector has almost zero profit and the risk isn't zero, nobody will ever try to get in there, profits aren't profits if they're there to account for the risks.

So if a sector has high profits but high risks too, then nobody will be interested in getting there, because the risks are high while the profits are just high enough to compensate for the risks, but not sky-high, as they would under the current economical system!

[–]robertmeta [スコア非表示]  (1子コメント)

You view wealth and economies as zero sum and static, and you assume perfect information is available. All of these are well understood to be false.

You don't get it, if a sector has almost zero profit and the risk isn't zero, nobody will ever try to get in there, profits aren't profits if they're there to account for the risks.

This assumes a defined "sector" which hardly ever exists. It assumes that the profit and risk profile can be perfectly ascertained, which of course it can't -- else we wouldn't need markets. Profits are still profits even if they are there to offset risk, the reason being is that sometimes it pays off. Lots of companies fail, but of course when you invest or create one, you do it under the good faith that yours will be the one that succeeds.

So if a sector has high profits but high risks too, then nobody will be interested in getting there, because the risks are high while the profits are just high enough to compensate for the risks, but not sky-high, as they would under the current economical system!

That is just absolutely false. There are different types of investment vehicles to specifically invest in high risk / high reward versus low risk / low reward. It is about how much you can lose. Those closer to retirement shift funds into low risk / low reward because they can't afford the risks anymore, while younger investors go for high risk / high reward because they aren't living off those funds.

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

You view wealth and economies as zero sum and static, and you assume perfect information is available. All of these are well understood to be false.

I used that as a simplification, and then tried to adjust things according to how it would look in real life.

This assumes a defined "sector" which hardly ever exists. It assumes that the profit and risk profile can be perfectly ascertained, which of course it can't -- else we wouldn't need markets. Profits are still profits even if they are there to offset risk, the reason being is that sometimes it pays off. Lots of companies fail, but of course when you invest or create one, you do it under the good faith that yours will be the one that succeeds.

It's an approximation, if the investors think that a company has a 50% chance of failure, then they'll only invest if their profits are going to be more than 100%! It doesn't have to be precise, more risk more profit or else no deal!

That is just absolutely false. There are different types of investment vehicles to specifically invest in high risk / high reward versus low risk / low reward. It is about how much you can lose. Those closer to retirement shift funds into low risk / low reward because they can't afford the risks anymore, while younger investors go for high risk / high reward because they aren't living off those funds.

What I mean is that if the risks are low and the profit is low, then investing is a bad idea, if the risks are high and the profit is high, then investing is a bad idea, for something to be profitable, potential profits must be higher than potential risks, it's not about the risks, it's about whether the potential profits do or don't offset the risks!

[–]JustDoItPeople2Δ [スコア非表示]  (1子コメント)

You don't get it, if a sector has almost zero profit and the risk isn't zero, nobody will ever try to get in there, profits aren't profits if they're there to account for the risks.

This is wrong. Risk adjusted returns are pretty important- an industry with low return but low risk will also get investors. Generally, although we don't break down profits into different factors attributing to it, we do so for returns (the investor's equivalent to profit), to which we generally write the model

Return = Inflation + Risk Free Return (we can think of this as the time premium of money) + Risky Return

[–]kilkil [スコア非表示]  (9子コメント)

Wait...

If you take the profit of a business and distribute it across its workers, where would the business get the money to buy stuff?

If what you're saying is that all profit after any possible expenses like that should be paid out to employees, then that still doesn't work. After all, who knows when we might need those hundreds of millions of dollars for some unseen vast expense?

If what you're saying is that the extra profit actually goes into the pockets of management (if that's what you're saying, which you might not be), that's not profit; I'm pretty sure employee payments are designated as an expense. So, in essence, this would be redistributing salaries to be more equal. Which, to be honest, has its own problems, and doesn't seem any more fair or effective than the status quo.

Honestly, we should just wait until companies become mostly automated, then nationalize them. Or, we could introduce basic income, as an attempt to simply patch up our economic system instead of replacing it.

[–]Miguelinileugim[S] [スコア非表示]  (8子コメント)

Wait... If you take the profit of a business and distribute it across its workers, where would the business get the money to buy stuff?

From investors, the little profit that its left after that distribution is still better than nothing, and if the business wants to expand they can still use investors!

If what you're saying is that all profit after any possible expenses like that should be paid out to employees, then that still doesn't work. After all, who knows when we might need those hundreds of millions of dollars for some unseen vast expense?

That's why some companies just have to close, and why insurances exist, you never know when your barely profitable company might get in fire! (literally of course!)

If what you're saying is that the extra profit actually goes into the pockets of management (if that's what you're saying, which you might not be), that's not profit; I'm pretty sure employee payments are designated as an expense. So, in essence, this would be redistributing salaries to be more equal. Which, to be honest, has its own problems, and doesn't seem any more fair or effective than the status quo.

What problems?

Honestly, we should just wait until companies become mostly automated, then nationalize them. Or, we could introduce basic income, as an attempt to simply patch up our economic system instead of replacing it.

Ahh communism, sweet communism, I thought it was really stupid, then after fighting with so many conservatives I yearned for some state-loving tree-hugging good ol' socialist comrade!

No seriously, that'd be great, have an income tax of 50%, give it to everyone equally, and let the remaining 50% for those who have property and stuff, everyone wins!

[–]kilkil [スコア非表示]  (1子コメント)

From investors, the little profit that its left after that distribution is still better than nothing, and if the business wants to expand they can still use investors!

Wait, who would invest in a company with literally 0 profit? How would that work?

That's why some companies just have to close, and why insurances exist, you never know when your barely profitable company might get in fire! (literally of course!)

Yeah, but companies don't want to close. If doing this means the company will be more likely to close, they won't do this. Why would I (a hypothetical business owner) do this?

So, in essence, this would be redistributing salaries to be more equal. Which, to be honest, has its own problems, and doesn't seem any more fair or effective than the status quo.

What problems?

If I'm paid the same as a superior, I have no incentive to want a superior position, and thus no incentive to work any harder than the basic minimum I have to do to not get fired.
If I'm paid the same as an inferior, I feel as though I'm being equated to an inferior. This makes me frustrated and/or angry, and will lead to apathy and general animosity between me, my superiors, and my inferiors.
If I'm paid the same as a co-worker who does the same exact job, but does it worse, then I either get angry that I'm not being paid more, or I begin doing my job only as well as the shittiest co-worker, or both.

These are all possible problems, in the case where pay is absolutely equal.

But the more equal you make people's pay, the closer you come to a scenario where a lot of employees in various businesses feel like this. Of course, the opposite is true as well (if there are too many differences, that causes a shit-ton of problems), but redistributing earnings isn't a very good idea, at least if it's done the way I'm thinking about it.

Also, I don't think communism works with human workers. Too messy, not enough catering to human biases, etc. I don't support communism so much as a system where the machine is the fundamental unit of labour. As in, instead of people providing goods and services among themselves, machines provide goods and services to people.

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

Wait, who would invest in a company with literally 0 profit? How would that work?

By 0 I meant with so little profit it's almost 0, but still a little profit, would you earn 1 dollar in returns or 0 dollars?

Yeah, but companies don't want to close. If doing this means the company will be more likely to close, they won't do this. Why would I (a hypothetical business owner) do this?

Because you're losing money real fast? Because half of your assets just got in fire and you have no money to repair them because you didn't get an insurance?

If I'm paid the same as a superior, I have no incentive to want a superior position, and thus no incentive to work any harder than the basic minimum I have to do to not get fired.

Not so fast! If you want to work in a superior position, you'll have to compete only with those who have the capacities for such a position, if you want to work in a lower position, you'll have to compete both with those who have the capacities for the superior position and the capacities for the lower position, and the more you have to compete with, the less money you'll end up making!

If I'm paid the same as a co-worker who does the same exact job, but does it worse, then I either get angry that I'm not being paid more, or I begin doing my job only as well as the shittiest co-worker, or both.

If he does less work, he will be paid more because his employer will have to hire more people to make up for his lower productivity!

But the more equal you make people's pay, the closer you come to a scenario where a lot of employees in various businesses feel like this. Of course, the opposite is true as well (if there are too many differences, that causes a shit-ton of problems), but redistributing earnings isn't a very good idea, at least if it's done the way I'm thinking about it.

Fully redistributing the income is bad, but society will work just as well is the most productive people earn 10 times as much as the least productive, than if they earn 1000 times as much! When someone earns more than 10k a month, any penny over that not only is being wasted because 10k is more than enough to supply any desire that money can fulfill, but also because nobody is THAT productive, nobody can work that hard and very, very few people have any ability that would make it seem reasonable such a high income! And those would mostly be geniuses, not unscrupulous businessmen!

Also, I don't think communism works with human workers. Too messy, not enough catering to human biases, etc. I don't support communism so much as a system where the machine is the fundamental unit of labour. As in, instead of people providing goods and services among themselves, machines provide goods and services to people.

I guess I agree.

[–]petersbro [スコア非表示]  (5子コメント)

From investors, the little profit that its left after that distribution is still better than nothing, and if the business wants to expand they can still use investors!

Wow, you just took away all incentive for me to continue to own my business. Time to dissolve it and go back to being a cog in a bigger company where I would have more free time anyway. Sucks to be my employee right now...

[–]Miguelinileugim[S] [スコア非表示]  (4子コメント)

Why not? What's wrong with that? The economy doesn't need to expand that much!

[–]Tsuruta64 [スコア非表示]  (1子コメント)

Why not? What's wrong with that? The economy doesn't need to expand that much!

You are literally saying that you are fine with businesses failing because "the economy doesn't need to expand that much!"

Tell me something. Do you think that it's a problem that we have 23 kinds of deodorant when children are starving?

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

I'm just saying that the economy is as much about producing wealth than about distributing it! You can judge a society by how well the median citizen lives, not by its total GDP, or even GDP per capita.

[–]petersbro [スコア非表示]  (1子コメント)

It means layoffs for my company as I close it. And the same for many other companies whose owners are disincentivized. Even fewer jobs to go around, if you are equalizing hours, means fewer hours per worker, means less income for everyone. And the people paying for my company's services are not going to be able to find anyone else- I'm the only provider in my area as it is, since it's a hard enough job that no one else wants to do it. Plus I like having my own business, so my quality of life just went down.

Three downsides just off the top of my head.

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

Well then you could simply work at your company and pay yourself as any other employee, or sell it to another company and work at your same job earning a salary!

[–]warsage [スコア非表示]  (21子コメント)

It seems like your goal is to drive the profit margins of businesses to 0. How WOULDN'T this ruin businesses? Businesses need extra money to be able to expand, to make it through hard times, to motivate entrepreneurs, and the like.

Note that a lot of companies barely make it by is it is. Some are already in the red. Your proposed changes would kill these businesses entirely, which would increase unemployment even more.

[–]Miguelinileugim[S] [スコア非表示]  (20子コメント)

It seems like your goal is to drive the profit margins of businesses to 0.

That's how the free market works.

How WOULDN'T this ruin businesses?

If a business wasn't profitable, they'll close, unemployment will rise a little, salaries will lower a little, the equilibrium would be reached again but still with really high salaries (just a little lower than before, but still higher than today).

Businesses need extra money to be able to expand

That money can come from investors, the profit margins will never be 0, and if you have a million dollars you'd rather earn a tiny amount of money from it over time than outright nothing.

to make it through hard times

If a business closes because of hard times, then there will be unemployment, companies will get leverage, salaries will be lowered a little and companies will be able to breathe again and have the extra money they'll need for hard times, but ONLY for hard times.

to motivate entrepreneurs

If they want profit, they'd better invent something new or that works substantially better than otherwise, they'll make a fortune before the market stabilises and profits become (nearly) zero. Free market rules!

Note that a lot of companies barely make it by is it is. Some are already in the red. Your proposed changes would kill these businesses entirely, which would increase unemployment even more.

That unemployment would decrease salaries a little what would lead to other companies absorbing that unemployment while salaries would lower a little (but still be higher than before applying the measures I'm suggesting) and other companies in the red would be able to breathe.

[–]robertmeta [スコア非表示]  (3子コメント)

That money can come from investors, the profit margins will never be 0, and if you have a million dollars you'd rather earn a tiny amount of money from it over time than outright nothing.

This assume no risk, which is obviously nonsense. Why risk a million to make very little additional income.

[–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

You don't get it, the more risk the more profit, so for example a 1% annual profit would only be ok if the risk was basically zero, a 10% annual profit would be for a business that has like 4% chance of bankruptcy in a year, 100% annual profit would be for a startup with a 45% chance of bankruptcy and so on.

The more risk the more profit, too risky ventures would simply be unprofitable to invest.

[–]robertmeta [スコア非表示]  (1子コメント)

This is again assuming magical (non-existent) perfect knowledge.

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

I'm assuming they're estimating the risks, so something that looks very risky but extremely profitable might be worthy of investment, while something that looks very risky but moderately profitable might not be worthy of investment. It doesn't have to be exact numbers!

[–]TriCyclopsIII [スコア非表示]  (15子コメント)

If a company has 0 profits then why would I invest? 0 profits means 0 returns.

[–]Miguelinileugim[S] [スコア非表示]  (14子コメント)

By zero I meant so little that it's almost 0, but still something, would you rather get 1 dollar in returns or 0 dollars?

[–]TriCyclopsIII [スコア非表示]  (6子コメント)

You are ignoring risk.

A 90% chance at $1 return on a $20 investment with a 10% chance of losing the $20 is a worse investment than just holding the cash.

[–]Miguelinileugim[S] [スコア非表示]  (5子コメント)

That would be accounting for the risks of course! So the profits in a company in a risky sector could be quite high, but if the risks just a little smaller than the profits, then it's a investment that will, overall, yield just a tiny little amount of profit!

[–]TriCyclopsIII [スコア非表示]  (4子コメント)

I mean, you can say that will happen but I'm not sure what you are basing the statement on. Have you covered how this will work out in another comment?

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

I'm basing it in that if the profits are smaller than the risks, then nobody will invest because they aren't stupid, and thus they'll only invest when the profits are as good as the risks or better! That's how they account for the risks! The profit won't be driven down to zero, but as low as people will agree to, and that means that if there are risks involved, the profits might be substantial to make up for that risk!

[–]White_Lotus [スコア非表示]  (6子コメント)

If the return on my investment was so little, then I would just stop investing. Nothing forces people to invest. If a return on investment is not worth the time, then they'll find another way to make money and stop investing.

Maybe instead of investing they'll pick up one of these new jobs you created with short work weeks and relatively high salaries. All of a sudden you've killed off investments which will damage the economy in the long run.

[–]Miguelinileugim[S] [スコア非表示]  (5子コメント)

If there are no investments, you're holding the money, that means less money in circulation, that means that everyone's money is gonna be worth way more, and thus with less money you'll be able to get better returns, and thus the equilibrium would be that people would get as many returns as time they're willing to invest in the investment itself! Investing will become a job like any other!

[–]Tsuruta64 [スコア非表示]  (4子コメント)

If there are no investments, you're holding the money, that means less money in circulation, that means that everyone's money is gonna be worth way more, and thus with less money you'll be able to get better returns, and thus the equilibrium would be that people would get as many returns as time they're willing to invest in the investment itself! Investing will become a job like any other!

You are literally arguing that deflation is a good thing. Anyone with even the slightest knowledge of economics can tell you that it is not. Because why would anyone bother taking the risk of investing when I can sit on a pile of cash and watch it grow in value?

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

Good point, that is until you notice that the increased investment would allow companies to grow and/or get increased profits, that would fund their expansion anyway.

[–]bayernownz1995 [スコア非表示]  (16子コメント)

Power asymmetries would make it so that people's labor was grossly undervalued.

What I mean by this, is, in industries with a large surplus of labor (pretty much any unskilled field), the business always has the advantage over the applicant, because there are multiple people looking for the same position.

So this means person A can apply for a job, seeking $6/hr. If there are 10 other people applying for the same job, it creates a race to the bottom where all of them try to make a slightly lower bid. Person B does it for $5.90, Person C does it for $5.80, and so on. This mean's people will have significantly undervalued labor in unskilled fields, because it's logical for an individual to bid slightly lower, but everyone would be better off if you designated a lowest value.

A couple things are bad about that.

First, since most wages are based off of other wages in the market, everyone's salary goes down since the relative value of the human labor market drops.

Second, if large groups of people are too poor to buy a house, or buy anything other than super cheap groceries, it means fewer taxes are paid. These people would be paying no property taxes and likely be too poor to pay significant income taxes. With an overall decrease in tax revenue, it means more people are poor but we're actually less capable of dealing with our poor.

We value jobs in the status quo because they give of this ability to live somewhat comfortably at the very least. If you take that away, at best, out GDP is a tad higher, and our unemployment stats are better, but the overall happiness of the people, which is why we care about those numbers to begin with, is gone.

[–]Miguelinileugim[S] [スコア非表示]  (15子コメント)

Power asymmetries would make it so that people's labor was grossly undervalued.

What I mean by this, is, in industries with a large surplus of labor (pretty much any unskilled field), the business always has the advantage over the applicant, because there are multiple people looking for the same position.

So this means person A can apply for a job, seeking $6/hr. If there are 10 other people applying for the same job, it creates a race to the bottom where all of them try to make a slightly lower bid. Person B does it for $5.90, Person C does it for $5.80, and so on. This mean's people will have significantly undervalued labor in unskilled fields, because it's logical for an individual to bid slightly lower, but everyone would be better off if you designated a lowest value.

You got it!

A couple things are bad about that.

:(

First, since most wages are based off of other wages in the market, everyone's salary goes down since the relative value of the human labor market drops.

That's what happens in the actual market, with my system it wouldn't because there would be more offer for jobs than demand! Please re-phrase what you were trying to say here please :D

Second, if large groups of people are too poor to buy a house, or buy anything other than super cheap groceries, it means fewer taxes are paid. These people would be paying no property taxes and likely be too poor to pay significant income taxes. With an overall decrease in tax revenue, it means more people are poor but we're actually less capable of dealing with our poor.

Not necessarily, because less work hours mean less money, but less work hours also means that competition between employees to get a job would stop and competition between employers to offer a job would start, and thus if the unemployment is at, say, 10%, then work hours would decrease by 10% (plus a little more to create a permanent surplus of job offers, a negative unemployment) and salaries would decrease by 10% too, BUT since companies would have to compete with each other to get employees, then they'd have to increase their salaries, probably more than 10% (and thus paying them about as much as when they worked more time), and thus everyone would have a job, but those with a job (everyone) would work less and earn, at least, just as much, the only losers would be company profits, which end up in the pockets of rich people, which don't really need that much money anyway (it's not communism, it's how the actual free market would look like).

And thus, if everybody ends up earning the same, tax revenue would be about the same, only that the rich would be less rich and thus pay less taxes while the unemployed would start working and paying taxes while regular people would earn about as much and thus pay about as many taxes.

We value jobs in the status quo because they give of this ability to live somewhat comfortably at the very least. If you take that away, at best, out GDP is a tad higher, and our unemployment stats are better, but the overall happiness of the people, which is why we care about those numbers to begin with, is gone.

As I said, salaries would end up about the same, maybe 5% lower, maybe 5% higher, but there would be no real difference, and because those with a job would work less (and unemployment would disappear), then the overall happiness of the people would improve!

[–]bayernownz1995 [スコア非表示]  (14子コメント)

I'm in a hurry so I don't have time to make a really long response or anything, but your argument presupposes that most businesses would higher more workers if salaries were lower, but that's unlikely to be the case. A McDonalds would only need a few people to work a shift, no matter how many people were wanting that job.

That's why the race to the bottom is bad, because it ends up with a few people getting jobs, not everyone.

Or, in order, to end unemployment you have to set a pretty noticeable cap on maximum hours.

Even capping at 30 hours, in sectors with low or negative unemployment, this really fucks them over and leaves to a noticeable human capital shortage in skilled sectors, while staying at the same equilibrium there already was in unskilled sectors. How does any of that lead to more efficiency?

Ninja edit: Also, human capital shortages most noticeably exist in the some of most important sectors (i.e. medicine, computer security, etc.). Worth considering the impact of either unskilled laborers being forced into more skilled jobs due to demand, or just having those jobs not taken.

[–]Miguelinileugim[S] [スコア非表示]  (13子コメント)

I'm in a hurry so I don't have time to make a really long response or anything, but your argument presupposes that most businesses would higher more workers if salaries were lower, but that's unlikely to be the case. A McDonalds would only need a few people to work a shift, no matter how many people were wanting that job.

If they need to say open 24h every day (168 hours a week), and the maximum workweek is, say, 42 hours, then they'll need 4 employees. If the workweek becomes now 34 hours, then they'll need 5 employees (34*5=170).

That's why the race to the bottom is bad, because it ends up with a few people getting jobs, not everyone.

Nope, it'd mean that 99% of available job positions would be filled, while the remaining 1% would make companies fight with each other by offering employees the best wages, I was never talking about decreasing the work hours to the point where >1% of the job positions would be empty!

Or, in order, to end unemployment you have to set a pretty noticeable cap on maximum hours.

Yeah, but it'd vary from sector to sector, so manual labor workers, a sector with a lot unemployment, would see their maximum work hours greatly reduced, but specialized engineers that are in great demand and with zero unemployment would see their maximum work hours stable or even increased!

Even capping at 30 hours, in sectors with low or negative unemployment, this really fucks them over and leaves to a noticeable human capital shortage in skilled sectors, while staying at the same equilibrium there already was in unskilled sectors. How does any of that lead to more efficiency?

As I just said, this would be sector-by-sector! :D

Ninja edit: Also, human capital shortages most noticeably exist in the some of most important sectors (i.e. medicine, computer security, etc.). Worth considering the impact of either unskilled laborers being forced into more skilled jobs due to demand, or just having those jobs not taken.

Sector-by-sector, remember :D

[–]bayernownz1995 [スコア非表示]  (12子コメント)

Didn't realize it was sector-by-sector, my bad. Have a delta for that since it makes a lot of my stuff irrelevant: ∆

But how do you deal with changes within that sector. For example, a manager needing to work more than his subordinates?

Also, given that McDonalds needs four people for a shift, and raising the minimum wage to, say, $10, wouldn't change that, why do you prefer a world where overall income of the unskilled class is lowered for the sake of even distribution (given that the actual value of a McDonald's employee is probably under the minimum wage?)

It seems like the slightly higher wages create a larger taxbase and more spendable income, which make a better safety net for the 1/10 unemployed people.

The argument about wages being relatively the same doesn't work because McDonalds still just needs to pay for the same number of hours of labor, just at a lower rate. If they're paying the same number of hours at a lower $/hr rate, it's just a net decrease.

Demand wouldn't bring the salaries up because all your doing is reaching an equilibrium, where the market rate for 1/hr of labor is lower than the status quo, but the number of hours needed is constant.

[–]Miguelinileugim[S] [スコア非表示]  (11子コメント)

Didn't realize it was sector-by-sector, my bad. Have a delta for that since it makes a lot of my stuff irrelevant: delta

It doesn't work like that, and I like deltas :'(

But how do you deal with changes within that sector. For example, a manager needing to work more than his subordinates?

If he has to work more its fine, since per-hour he's earning about the same and probably more! No problem here.

Also, given that McDonalds needs four people for a shift, and raising the minimum wage to, say, $10, wouldn't change that, why do you prefer a world where overall income of the unskilled class is lowered for the sake of even distribution (given that the actual value of a McDonald's employee is probably under the minimum wage?)

Nope, they'll have more leverage, so they'll earn more or at least as much as if they worked as much as before. And before you say it, if McDonalds prefers to automate the process over hiring new employees, then that's great, who cares, even less work hours for everyone!

It seems like the slightly higher wages create a larger taxbase and more spendable income, which make a better safety net for the 1/10 unemployed people.

That's, like, good right?

The argument about wages being relatively the same doesn't work because McDonalds still just needs to pay for the same number of hours of labor, just at a lower rate. If they're paying the same number of hours at a lower $/hr rate, it's just a net decrease.

Employees have more leverage because unemployment is basically 0 remember? So they'll have to pay them just as much or they'll leave for someone else who pays them more!

Demand wouldn't bring the salaries up because all your doing is reaching an equilibrium, where the market rate for 1/hr of labor is lower than the status quo, but the number of hours needed is constant.

That's right up to a point, more offer for jobs would mean that employers would have to compete with each other to get employees, what would lead them to "bribing" those employees with high salaries so that they prefer to work for them, and thus salaries would go up!

[–]bayernownz1995 [スコア非表示]  (10子コメント)

If he has to work more its fine, since per-hour he's earning about the same and probably more! No problem here.

My point is, if you make it sector-by-sector, doesn't that include the manager? When you cap the work week at 30 hours, he's gotta stop working, too.

That's, like, good right?

Yeah, so if you lower overall income, that's bad. Removing the minimum wage decreases the cost of labor per hour, the amount of hours worked remains constant, so overall income goes down.

So they'll have to pay them just as much or they'll leave for someone else who pays them more!

I think this is your primary misunderstanding. If you adjust the market so that it hits an equilibrium and everyone has work, it doesn't mean there are other employers offering them money, because the market is still saturated. Markets are based on supply and demand, not just demand. You're adjusting it so demand meets supply, not so it exceeds it.

The company that chooses to pay slightly higher wages will only have slightly more unskilled workers, while the other one can still maintain lower prices. That's not enough of an incentive for companies to raise wages to a wage you can live off of.

[–]Miguelinileugim[S] [スコア非表示]  (9子コメント)

My point is, if you make it sector-by-sector, doesn't that include the manager? When you cap the work week at 30 hours, he's gotta stop working, too.

And that's bad because...?

Yeah, so if you lower overall income, that's bad. Removing the minimum wage decreases the cost of labor per hour, the amount of hours worked remains constant, so overall income goes down.

Nope, if the maximum hours a worker can work is decreased, then companies will have to hire more employees, and once everyone gets hired and unemployment becomes zero, then any company that wants to hire any more will have to "bribe" the employees from other companies by offering them better salaries and the like. Ultimately we'd have an equilibrium where everyone gets paid much more, company profits go down, unemployment goes down and people have to work less!

I think this is your primary misunderstanding. If you adjust the market so that it hits an equilibrium and everyone has work, it doesn't mean there are other employers offering them money, because the market is still saturated. Markets are based on supply and demand, not just demand. You're adjusting it so demand meets supply, not so it exceeds it.

Nope, I'm adjusting it so that employers need more employees but, since they can't find any more, they'll have to take them from some company by offering them a better deal.

The company that chooses to pay slightly higher wages will only have slightly more unskilled workers, while the other one can still maintain lower prices. That's not enough of an incentive for companies to raise wages to a wage you can live off of.

Yep it is, if the employees can work at many companies due to a high offer of jobs and not enough employees, then those companies will compete with each other to offer the employees the best wage!

[–]bayernownz1995 [スコア非表示]  (8子コメント)

And that's bad because...?

There wouldn't be enough supply to meet the demand for those positions. So if you cap the work week for paralegals, you do it for lawyers, too, and now the person who wants a public defender can't get one. You're placing constraints on a market that would stop it from functioning entirely.

Yep it is, if the employees can work at many companies due to a high offer of jobs and not enough employees, then those companies will compete with each other to offer the employees the best wage!

This would only make sense if companies needed infinite employees. The company paying more will eventually not have job openings, and the one paying less will just keep paying less, have a slight shortage in workers, but still be able to profit because they pay less in salary.

[–]Miguelinileugim[S] [スコア非表示]  (7子コメント)

There wouldn't be enough supply to meet the demand for those positions. So if you cap the work week for paralegals, you do it for lawyers, too, and now the person who wants a public defender can't get one. You're placing constraints on a market that would stop it from functioning entirely.

Then why not hire more goddamned public defenders? Why not allow more than one person to do jobs that used to be done by only one? Why not simply make that person work twice as much as what is legally allowed and then take half year off? So many possibilities!

This would only make sense if companies needed infinite employees. The company paying more will eventually not have job openings, and the one paying less will just keep paying less, have a slight shortage in workers, but still be able to profit because they pay less in salary.

But because work hours are limited, there will be a shortage of employees!

[–]meteoraln1∆ [スコア非表示]  (16子コメント)

The only negative effect would be a decrease in the competitivity of the economy (what is bad but not catastrophic)

There are plenty of ways to solve unemployment. You can ban the use of freight trains and freight trucks. This simple change would be enough to create enough job openings for every unemployed person to ship cargo in their cars. You will solve unemployment, and at the same time, make your economy much worse. Freight trains are by far the most efficient way to transport cargo. By forbidding the use of trains and trucks, you cause everyone to require enormous shipping charges and use fuel in a very wasteful manner.

The idea that you propose would indeed eliminate unemployment. However, it would be far more detrimental to society than to have a small amount of unemployment. Henry Hazlitt's book Economics in One Lesson has a similar example of this on page 38.

https://mises.org/sites/default/files/Economics%20in%20One%20Lesson_2.pdf

[–]Miguelinileugim[S] [スコア非表示]  (15子コメント)

You don't get it, since everyone would work less, unemployment would disappear overnight as companies require more workers.

[–]meteoraln1∆ [スコア非表示]  (14子コメント)

I get what you're saying. Instead of 3 people working full time and 3 people unemployed, you change it to 6 people working half time. More often than not, the likelihood is that the 3 unemployed people are inferior workers than the ones with jobs. Otherwise, they'd have little trouble taking over someone else's job. Similar to how transporting cargo with cars is less efficient than transporting with a train. You're implementing a rule to reduce unemployment by enforcing the use of a less efficient resource.

[–]Miguelinileugim[S] [スコア非表示]  (13子コメント)

Just because they're less efficient doesn't mean that they should be allowed to get a job, maybe they're less capable, and thus they would be paid less, and thus instead of halving the work hours, maybe it would be more of decreasing them by 40% to keep things balanced, but my system still stands.

[–]meteoraln1∆ [スコア非表示]  (12子コメント)

Just because they're less efficient doesn't mean that they should be allowed to get a job

Would you be willing to hire someone who you know is constantly late to work, always full of excuses, makes lots of mistakes, and works very slowly? Would you actually be willing to reduce hours for your best workers so that it would be "fair" to the people who were fired for poor performance? Would you even be willing to work with someone like that? When's the last time you were upset about a coworker because they were bad at their jobs and would be happier working with someone else? Would you ever purposely lose your money in a poker game because you felt bad for someone at the table? I've certainly never seen anyone do such a thing.

It's easy to say that someone should have to do something when the pain of failure does not come out of your pockets. It isn't fair to expect someone to do something that you would not be willing to.

[–]Miguelinileugim[S] [スコア非表示]  (11子コメント)

Would you be willing to hire someone who you know is constantly late to work, always full of excuses, makes lots of mistakes, and works very slowly? Would you actually be willing to reduce hours for your best workers so that it would be "fair" to the people who were fired for poor performance? Would you even be willing to work with someone like that? When's the last time you were upset about a coworker because they were bad at their jobs and would be happier working with someone else? Would you ever purposely lose your money in a poker game because you felt bad for someone at the table? I've certainly never seen anyone do such a thing.

I'd hire those employees anyway, they might be bad but if I pay them 5$ an hour they'll start taking work seriously to get a raise, or not, 5$ for an employee is so cheap that as long as they do some work it's still gonna be cheap!

It's easy to say that someone should have to do something when the pain of failure does not come out of your pockets. It isn't fair to expect someone to do something that you would not be willing to.

People fail for reasons, you don't know what's behind the lives of everyone, however the point is that if you give them an opportunity, they will eventually take it, even if it requires hard work.

[–]meteoraln1∆ [スコア非表示]  (5子コメント)

I'd hire those employees anyway, they might be bad but if I pay them 5$ an hour they'll start taking work seriously to get a raise, or not, 5$ for an employee is so cheap that as long as they do some work it's still gonna be cheap!

I think you just found the real problem for unemployment. It's minimum wage. We don't need to reduce maximum work hours. Allowing employers to hire at $5 already solves the problem. With current minimum wage at around $8, people who are only worth $5 are essentially unhirable. It's fair to pay someone $5/h when he is only capable of doing half the work of someone who is paid $10/h. I have no problems with that. I would be unwilling to pay both of them $10.

[–]Miguelinileugim[S] [スコア非表示]  (4子コメント)

But what if the company can afford to pay them 15$ an hour, but they don't because they don't want to? Companies in general could afford much, much better salaries for their employees, some more than others though, if you lowered minimum salary a lot of people would see their salaries decreased substantially, if it can be abused, it will be abused, capitalism.

[–]petersbro [スコア非表示]  (2子コメント)

So why does your plan involve abolishing minimum wage?

[–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

Because it'd be redundant since salaries would be decided by the employees, while the employers would be pretty much price-takers!

[–]meteoraln1∆ [スコア非表示]  (0子コメント)

But what if the company can afford to pay them 15$ an hour, but they don't because they don't want to?

This is no different than me asking why you didn't buy a cheaper car and donate the difference to charity. It's because you won't be happy being told how to spend your money. You use the word "company" as if it was a faceless, evil entity that just wants to hurt as many people as possible. There's a person who owns and runs a business. He doesn't want to pay more because he doesn't have to. He only needs to pay enough to keep his workers. The same way that you can't be told to buy a cheaper car and donate the difference.

If you, or any of your friends or family owned any businesses, you would wouldn't think this way. If you can afford to pay your employees significantly more, it means competition hasn't kicked in yet. Take cronuts for example. The creators made an incredible profit for being first to the market. They could have afforded to pay higher salaries only temporarily. Now that every imaginable shop has a variation of a cronut, (competition stepped in), it wouldn't be possible to pay your workers anymore than what's normal for a donut shop. Had you paid out all your extra profits, you'd be in big trouble when you have a few bad months where you lose money. A couple of rainy days would mean you could go bankrupt.

[–]Tsuruta64 [スコア非表示]  (4子コメント)

I'd hire those employees anyway, they might be bad but if I pay them 5$ an hour they'll start taking work seriously to get a raise, or not, 5$ for an employee is so cheap that as long as they do some work it's still gonna be cheap!

And that's why you're not running a business.

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

It doesn't matter how awful they are! If they're cheap enough even the laziest of workers will be able to do something worth it's tiny salary!

[–]petersbro [スコア非表示]  (2子コメント)

This does not work in the real world for many reasons, one of which is the manager's time spent on managing the employee. Even if no extra time is spent on lousy employees, the manager's time is worth something more than what s/he is getting from a lazy employee.

[–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

Well then if that's the case then to the hell with the employee, but if I could just put cameras then it might do the trick with minimal cost, or I might just tell them something like "cleanup everything" and if its not clean I just fire them, people aren't stupid, everything will be clean when I'm back, I don't think that more than the 1% most retarded of the population will ever dare to lose a job like that.

[–]TDaltonC [スコア非表示]  (7子コメント)

Current unemployment in the US is near the 'natural rate'. Any thing that changes that by much would cause serious inflation.

Also, what do you mean by "maximum hours"? What would the law that decreases "maximum hours" look like?

[–]Miguelinileugim[S] [スコア非表示]  (6子コメント)

Doesn't that exist? The maximum workweek or something?

[–]TDaltonC [スコア非表示]  (3子コメント)

Not really. There's no law telling people "you cannot work more then 'X' hours per week". There are laws that say " can cannot employ someone more than 'Y' hours per week without paying overtime." But if you lower 'Y' you won't get many more people in the workforce. You'll just get a lot more people working multiple jobs.

[–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

What if you just forbid people from working multiple jobs when the total amount of hours worked was more than the maximum allowed?

[–]TDaltonC [スコア非表示]  (1子コメント)

That would be politically impossible to enact [cut to video of woman softly sobbing, "I want to work so that I can provide for my children, but the gov'ment says it's illegal"], nearly as hard to enforce (the Blue Eagle program was voluntary because it was impractical to enforce), and unconstitutional (again, see Blue Eagle).

[–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

Well then you tell me how are we supposed to cut on unemployment? This strategy would make sure that employers would fight tooth and nail with each other to provide the best salaries so that nobody would have to work at two jobs! Also if that woman was so poor then maybe she shouldn't have had that many children.

[–]petersbro [スコア非表示]  (1子コメント)

Not to my knowledge. Even medical residents who are only allowed to work X hours at their day jobs can't be disallowed from moonlighting somewhere else.

[–]BadWolf_Corporation [スコア非表示]  (50子コメント)

and thus unemployment would become 0 in every sector of the economy and minimum salary would be unnecessary

We don't want there to be 0 unemployment. All unemployment is not created equal, and while I'm not going to go into all the differences here (Google this: Types of unemployment ), I will tell you that some amount of unemployment is nessecary in order for there to be any growth or innovation in the economy. We generally consider unemployment in the 3 - 4% range to be "full employment".

[–]Miguelinileugim[S] [スコア非表示]  (15子コメント)

I'm only saying that if someone wants to start a new business, they'd better lure employees from leaving their jobs at other companies BY PAYING THEM A BETTER SALARY than simply getting one of the 3-4% unemployed and giving them a low paying job since the second someone asks for too much, they can just choose the next one and pay him peanuts, probably the mexican (no racism here that's just how it works for unqualified workers).

Also, I know that there are some kinds of unemployment that are temporary and all, but still if there's unemployment that means that the companies get to choose and the employees to compete, what ends up leaving them with terrible salaries, reverse the situation and is the companies who end up with employees that are going to be paid as much as the company can afford since they could leave any time to work for their competitors!

If you know any microeconomy, you'll immediately understand that that would transfer company profits into the employees, and the less (net) profits companies make the better the market works, since a truly free market would have 0 business profit!

[–]JustDoItPeople2Δ [スコア非表示]  (14子コメント)

Wow. There's so much here, but I think this stems from a fundamental misunderstanding of microeconomics.

I'm only saying that if someone wants to start a new business, they'd better lure employees from leaving their jobs at other companies BY PAYING THEM A BETTER SALARY than simply getting one of the 3-4% unemployed and giving them a low paying job since the second someone asks for too much, they can just choose the next one and pay him peanuts, probably the mexican (no racism here that's just how it works for unqualified workers).

This makes several assumptions about the market for labor that is unwarranted- it is not the case that firing people has no transaction costs (we can think of the labor market as an imperfect matching function), and it is certainly not the case that I can just hire a random guy off the street and pay him whatever I want to. Even if the particular market for laborers has laborers as price takers, the only way in which I can singlehandedly change the equilibrium wage is if I am a monopsonist. This also assumes, once again, that I can just find someone to replace my employee easily which is not true in the vast majority of cases.

So no.

Also, I know that there are some kinds of unemployment that are temporary and all, but still if there's unemployment that means that the companies get to choose and the employees to compete, what ends up leaving them with terrible salaries, reverse the situation and is the companies who end up with employees that are going to be paid as much as the company can afford since they could leave any time to work for their competitors!

There are several points here. I'm confused as to why you think companies shouldn't be able to choose who they hire, but it doesn't necessarily follow that bad wages result from temporary unemployment

since a truly free market would have 0 business profit!

No. A free market has no economic profit, not no accounting/business profit.

Finally, do keep in mind that the short term relationship between unemployment and inflation tends to be a negative one, and a non-linear one at that, so expect to see absurdly high inflation under your proposed system.

[–]Miguelinileugim[S] [スコア非表示]  (13子コメント)

Wow. There's so much here, but I think this stems from a fundamental misunderstanding of microeconomics.

Yay! Exactly what I thought! Thanks Mr.CoolGuy for showing me that I'm not surrounded by idiots but rather that I'm in a world whose depth defies most of my current knowledge about the world! Take that nihilism!

Sorry for saying that it just happens to me sometimes.

This makes several assumptions about the market for labor that is unwarranted- it is not the case that firing people has no transaction costs (we can think of the labor market as an imperfect matching function), and it is certainly not the case that I can just hire a random guy off the street and pay him whatever I want to. Even if the particular market for laborers has laborers as price takers, the only way in which I can singlehandedly change the equilibrium wage is if I am a monopsonist. This also assumes, once again, that I can just find someone to replace my employee easily which is not true in the vast majority of cases. So no.

Transaction costs- THAT IS AWESOME, it feels like what an astronomer would feel after being told about the complexities of the gravitational interaction between three bodies, it feels like what a painter would feel after being told about the complexities of the interaction between different kinds of paints and materials, it feels like what a teenage boy would feel after contemplating a naked woman for the first time, THAT SENSATION WHEN YOU FIND OUT SOMETHING THAT DEFIES YOUR EXPECTATIONS IS INCREDIBLE.

Alright time to calm down, so yeah I get your point, there are incentives for the company not to just fire employees who ask for a raise even if there are people outside who could do the job just as well, AMAZING UNTIL NOW I THOUGHT THAT THE SOLE REASON EMPLOYERS GAVE THEIR EMPLOYEES RAISES WAS FOR MOTIVATION PURPOSES EVERYTHING MAKES SENSE NOW!!!

But still I believe that if companies not only had to pay the transaction costs (which are a fixed price) but also had to compete with other companies for employees, then the leverage from the employees "threatening" to leave appealing to these transaction costs (especially as they get more experienced- IT MAKES SO MUCH SENSE) would pale in comparison with the leverage they get as every company desperately wants to hire new employees in a market with just a little less employees available than necessary, and thus I think I'm still right (OR NOT I WISH THAT I'M NOT BECAUSE BEING WRONG IS MORE FUN THAN BEING RIGHT YEAHHH!!!).

There are several points here. I'm confused as to why you think companies shouldn't be able to choose who they hire, but it doesn't necessarily follow that bad wages result from temporary unemployment

They can choose whoever they think is more capable for doing the job, but they can also choose the employee who will accept being paid the least, unemployment of any kind means that companies can choose anyone without a job to work for them, and thus the job-seekers will most likely accept any salary that barely covers their living costs as they compete with each other and drive the price down. That's why the "mexican" will get the job, and that's why everybody with a job hates mexicans (no racism here), because that's more competition for the employees of the country, and more choice for the employers, and that's less leverage for unemployed people, and that's less money they will earn.

If companies weren't able to choose the employee who would accept the least money, because for a company to get a new employee, it would mean they'd have to "bribe" an employee from another company to work for them, then to do so they'll have to offer him a better salary. So if they want some "mexican" to do some menial job they'll have to get one from another company, and thus they'll have to pay him more, and then the company they're already working in will offer them more money, until one company chooses to let go of the employee, and this would be done over and over again until the wages raise globally.

No. A free market has no economic profit, not no accounting/business profit.

Exactly, wait, from where would that accounting/business profit come from? Think about that for a moment.

Finally, do keep in mind that the short term relationship between unemployment and inflation tends to be a negative one, and a non-linear one at that, so expect to see absurdly high inflation under your proposed system.

Exactly! That's why some anti-inflationary measures should be taken accordingly, but I don't know how would those look like actually.

[–]JustDoItPeople2Δ [スコア非表示]  (12子コメント)

Rude tone aside,

But still I believe that if companies not only had to pay the transaction costs (which are a fixed price) but also had to compete with other companies for employees, then the leverage from the employees "threatening" to leave appealing to these transaction costs (especially as they get more experienced- IT MAKES SO MUCH SENSE) would pale in comparison with the leverage they get as every company desperately wants to hire new employees in a market with just a little less employees available than necessary, and thus I think I'm still right

They already do compete for employees, particularly the best ones. And once again, this situation that you're describing is not necessarily a good one- you're describing a situation that cannot come to equilibrium given current firms in the market, because you've designed in such a way that it's inherently unstable.

unemployment of any kind means that companies can choose anyone without a job to work for them, and thus the job-seekers will most likely accept any salary that barely covers their living costs as they compete with each other and drive the price down.

That's literally not how labor economics works. I don't know what else to say except that decades of research on how jobs are found and wages are set disagrees with the assertion that I can or want to just hire anybody or that job seekers just take any wage. Quite frequently, the job seeker has a bit of negotiating power- they are often weaker than the company, but to call them price takers is false.

If companies weren't able to choose the employee who would accept the least money, because for a company to get a new employee, it would mean they'd have to "bribe" an employee from another company to work for them, then to do so they'll have to offer him a better salary.

Alternatively, such a company goes out of business, and other companies in the market absorb only some of the labor and not all of it.

The equilibrium you're think of cannot last- it is inherently unstable and will degrade. Companies will not be able to sustain this production system that you propose, and it's possible people will enter the labor market.

Exactly, wait, from where would that accounting/business profit come from? Think about that for a moment.

What? A free market can have accounting but not economic profit. This is a well accepted idea.

[–]Miguelinileugim[S] [スコア非表示]  (11子コメント)

Rude tone aside,

It wasn't rude, it was supposed to be enthusiastic and playful :(

They already do compete for employees, particularly the best ones. And once again, this situation that you're describing is not necessarily a good one- you're describing a situation that cannot come to equilibrium given current firms in the market, because you've designed in such a way that it's inherently unstable.

Yep I have just discovered that, yet I think that by doing that once, we could give very valuable leverage to employees, and when the market has stabilized, this time it will be with higher salaries. So a country with a 40 hour workweek might have regular salaries-per-hour, but with a 32 hour workweek the salary-per-hour might be much higher than that, possibly even to the tune of the total salary remaining the same, all at the expense of the employers of course!

That's literally not how labor economics works. I don't know what else to say except that decades of research on how jobs are found and wages are set disagrees with the assertion that I can or want to just hire anybody or that job seekers just take any wage. Quite frequently, the job seeker has a bit of negotiating power- they are often weaker than the company, but to call them price takers is false.

What leverage do they have? At entry-level unqualified jobs, anybody could do it, which is why they'll always hire the mexican (no racism just an example) with no experience who asks for minimum salary over the Ph.D who asks for a little more than that!

Alternatively, such a company goes out of business, and other companies in the market absorb only some of the labor and not all of it.

And thus some unemployment would remain, and then the salaries would lower a little but they'll stay quite high, some new companies would appear and unemployment would disappear. 0 unemployment and still better salaries than otherwise! (per-hour at least!).

The equilibrium you're think of cannot last- it is inherently unstable and will degrade. Companies will not be able to sustain this production system that you propose, and it's possible people will enter the labor market.

It will degrade, now I understand that (I mean I discovered that like 45 minutes ago by myself), however the thing is that a shorter workweek will lead to the equilibrium establishing at a point where employees have more leverage as they're more needed (getting better salaries with the rest of the economy working as usual), while a larger workweek will lead to the equilibrium establishing at a point where the employers have even more leverage as employees get desperate for getting a job and unemployment goes through the roof (with employees getting lower salaries and the rest of the economy working just as usual).

And if someone enters the labor market, well, then even shorter workweeks! In the end the problem is overpopulation anyway, everybody hates immigrants because they make the labor market more competitive and lets employers have more choice and get the cheapest workers (usually the immigrants), but those immigrants are better off that way that in their countries of origin, so yeah, share the wealth, let everyone work less and earn less, so that those immigrants can do the work for them (at least at entry-level) and earn their money!

What? A free market can have accounting but not economic profit. This is a well accepted idea.

No, I mean, that if companies have 0 economic profit, since that's how the free market works, then that means that their investment is as good in there than in the next best option. BUT what is the next best option? WHAT IS IT? Give me an example that would work in the free market please.

[–]JustDoItPeople2Δ [スコア非表示]  (8子コメント)

Yep I have just discovered that, yet I think that by doing that once, we could give very valuable leverage to employees, and when the market has stabilized, this time it will be with higher salaries. So a country with a 40 hour workweek might have regular salaries-per-hour, but with a 32 hour workweek the salary-per-hour might be much higher than that, possibly even to the tune of the total salary remaining the same, all at the expense of the employers of course!

What I'm trying to tell you is that this equilibrium you're dreaming of will not happen. People will want to continue working even more than they do now, so people will seek to work multiple part time jobs; companies will not be able to absorb the higher salaries, so they'll go out of business, so we're right back where we started.

At entry-level unqualified jobs, anybody could do it, which is why they'll always hire the mexican (no racism just an example) with no experience who asks for minimum salary over the Ph.D who asks for a little more than that!

The problem is that you're only talking about entry level unqualified jobs, and I'm talking about the macroeconomic market for labor. Yes, as you have pointed out, it is obvious that I would prefer to hire someone who won't leave me (presumably soon) and will work a lower wage for a job picking tobacco or framing a house. However, this is not what you have been suggesting.

And thus some unemployment would remain, and then the salaries would lower a little but they'll stay quite high, some new companies would appear and unemployment would disappear.

Your statement is nonsensical. "They'll be unemployment and at the same time, there won't be unemployment!"

The entry rate of new companies will not be the same as the exit rate in the case of dramatic wage increases across the board resulting from non-market forces.

It will degrade, now I understand that (I mean I discovered that like 45 minutes ago by myself), however the thing is that a shorter workweek will lead to the equilibrium establishing at a point where employees have more leverage as they're more needed (getting better salaries with the rest of the economy working as usual), while a larger workweek will lead to the equilibrium establishing at a point where the employers have even more leverage as employees get desperate for getting a job and unemployment goes through the roof (with employees getting lower salaries and the rest of the economy working just as usual).

This just isn't true. I'm telling you that your ideal equilibrium is no equilibrium at all.

In the end the problem is overpopulation anyway,

That's not the problem at all. The "problem" in the market is frictional, structural, and cyclical unemployment. Your proposal would do nothing to target any of these in any real sense of "fix". Unemployment comes from a mismatch between employee candidates and employers up to a given point in time.

No, I mean, that if companies have 0 economic profit, since that's how the free market works, then that means that their investment is as good in there than in the next best option. BUT what is the next best option? WHAT IS IT? Give me an example that would work in the free market please.

Dropping out of the market. However, if we're assuming the market is at equilibrium (or something close to it now) in a number of situations, your idea of degrading accounting profit translates into negative economic profit, leading to decreased production and firms, thus defeating the entire purpose of the plan.

[–]Miguelinileugim[S] [スコア非表示]  (7子コメント)

What I'm trying to tell you is that this equilibrium you're dreaming of will not happen. People will want to continue working even more than they do now, so people will seek to work multiple part time jobs; companies will not be able to absorb the higher salaries, so they'll go out of business, so we're right back where we started.

The maximum workweek will also apply to multiple jobs, so if they want to work more than the allowed workweek, that's illegal.

And if the companies can't absorb the new salaries, then unemployment will appear again, the salaries will lower a little and businesses will absorb the unemployment, no problem, salaries will still be higher than otherwise!

The problem is that you're only talking about entry level unqualified jobs, and I'm talking about the macroeconomic market for labor. Yes, as you have pointed out, it is obvious that I would prefer to hire someone who won't leave me (presumably soon) and will work a lower wage for a job picking tobacco or framing a house. However, this is not what you have been suggesting.

Then pay him a lot and he won't leave you! If someone else wants to hire him, you just have to give him even more!

Your statement is nonsensical. "They'll be unemployment and at the same time, there won't be unemployment!" The entry rate of new companies will not be the same as the exit rate in the case of dramatic wage increases across the board resulting from non-market forces.

Unemployment will appear, the market will readjust itself by lowering salaries a little, and then companies will hire more and unemployment will disappear.

This just isn't true. I'm telling you that your ideal equilibrium is no equilibrium at all.

Yep I understand that, the equilibrium is full unemployment, not negative unemployment, I know thanks I got it :D

That's not the problem at all. The "problem" in the market is frictional, structural, and cyclical unemployment. Your proposal would do nothing to target any of these in any real sense of "fix". Unemployment comes from a mismatch between employee candidates and employers up to a given point in time.

No no, I meant that the economy can only grow so much, while population can grow forever! It's a malthusian kind of problem not simply a matter of economic mismanagement!

Dropping out of the market. However, if we're assuming the market is at equilibrium (or something close to it now) in a number of situations, your idea of degrading accounting profit translates into negative economic profit, leading to decreased production and firms, thus defeating the entire purpose of the plan.

Dropping out of the market, that's 0 profit, that means that economical profit AND accounting profit will be 0, just what I said, 0 returns on capital, money won't be making money anymore! Free market!

[–]JustDoItPeople2Δ [スコア非表示]  (6子コメント)

The maximum workweek will also apply to multiple jobs, so if they want to work more than the allowed workweek, that's illegal.

Rule 1 of economics: Banning something doesn't make it go away.

And if the companies can't absorb the new salaries, then unemployment will appear again, the salaries will lower a little and businesses will absorb the unemployment, no problem, salaries will still be higher than otherwise!

You're assuming the fluctuations in salary will be in equal magnitude, when it should look like a differential equation oscillating around a point with a stable equilibrium- so, in other words, we can think that wage will go down (using made up numbers) 5%, go up 3%, go down 1%, etc. until it finds equilibrium somewhere in the middle of the two extremes. The same would go for unemployment.

No no, I meant that the economy can only grow so much, while population can grow forever! It's a malthusian kind of problem not simply a matter of economic mismanagement!

What? The economy can always grow if population is growing. Per capita growth, most likely not, but there is no reason to assume the aggregate economy cannot grow indefinitely with the population.

Dropping out of the market, that's 0 profit, that means that economical profit AND accounting profit will be 0, just what I said, 0 returns on capital, money won't be making money anymore! Free market!

Yes, but dropping out of the market can be better than staying in the market.

At this point, I really have no idea what you're arguing- you're using a lot of economic terms in ways that they aren't used and you don't seem to have a strong idea of how equilibrium movements work,

[–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

Rule 1 of economics: Banning something doesn't make it go away.

They'll solve it somehow! Who cares how!

You're assuming the fluctuations in salary will be in equal magnitude, when it should look like a differential equation oscillating around a point with a stable equilibrium- so, in other words, we can think that wage will go down (using made up numbers) 5%, go up 3%, go down 1%, etc. until it finds equilibrium somewhere in the middle of the two extremes. The same would go for unemployment.

And...?

What? The economy can always grow if population is growing. Per capita growth, most likely not, but there is no reason to assume the aggregate economy cannot grow indefinitely with the population.

There's a limited amount of space on Earth, that means that at some point almost nobody will be able to have a large house with a large yard in a quiet rural location. That kind of wealth won't ever be able to exist for most of the population in an overpopulated world. The economy can only grow so much.

[–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

Yes, but dropping out of the market can be better than staying in the market.

Actually by 0 profit, I mean very, very little profit, free markets are just theoretical anyway!

At this point, I really have no idea what you're arguing- you're using a lot of economic terms in ways that they aren't used and you don't seem to have a strong idea of how equilibrium movements work

I'm no economist sorry :D

[–]JustDoItPeople2Δ [スコア非表示]  (7子コメント)

We generally consider unemployment in the 3 - 4% range to be "full employment".

Not even. We generally consider ~5% full employment in the US, and ~6-8% in most countries in Europe.

3-4% is almost certainly accelerating inflation.

[–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

I wonder why is the "baseline" for full employment so high in some places. For example in Spain we have 30% unemployment and people are just moderately freaking out, while in the US such a level unemployment would trigger a nation-wide panic.

[–]JustDoItPeople2Δ [スコア非表示]  (1子コメント)

Because that's the rate at which it is expected that equilibrium exists.

A lot of things go into equilibrium- expectations, actual growth of supply and demand, government programs (they affect behaviors), microeconomic structures (the putty-putty model and the putty-clay models of the firm both come to mind), etc. If you want me to do the full general equilibrium analysis for each country, I can't really help you out.

コメントをもっと表示する (4 返事)

    [–]Miguelinileugim[S] [スコア非表示]  (25子コメント)

    Whoops, now I get it, sometimes that 3-4% employment might simply be because it's not the season or month or whatever and there's not too much demand for workers, got it, then my idea would work the same, but if some sector requires twice as many workers in, say, the summer, then in the summer work hours would be cut in half! :D

    [–]BadWolf_Corporation [スコア非表示]  (24子コメント)

    The problem with that logic is: while you can mandate wages, and you can mandate hours, you can't mandate employment. There have to be enough people willing to do a specific job, or the hours and wages don't matter.

    [–]Miguelinileugim[S] [スコア非表示]  (23子コメント)

    Of course! If there aren't enough people then the (maximum of course) work hours should remain the same, or even increase! But if there are too many people, then they should decrease them so that employees get leverage instead of the employers!

    [–]BadWolf_Corporation [スコア非表示]  (22子コメント)

    But if there are too many people, then they should decrease them so that employees get leverage instead of the employers!

    If there are too many people, then the surplus should find other lines of work; we don't want to try and shoehorn workers into an industry where they're not needed.

    [–]Miguelinileugim[S] [スコア非表示]  (21子コメント)

    What if every single job has been filled? And the only remaining require so many years of experience and aren't even enough to fill the current demand? Ever thought of that?

    The economy only needs X amount of labor, and when there's more labor than what is needed, then it's best to cut how much labor can someone offer so that the remaining labor is distributed equally!

    [–]JustDoItPeople2Δ [スコア非表示]  (11子コメント)

    The economy only needs X amount of labor,

    That's not how the economy works. The economy doesn't need X amount of labor, it needs an amount of labor subject to given constraints, or which X amount of labor is a solution. This is not the only amount of labor which could form an equilibrium. In other words, it is possible for employment to permanently change at every point across the relevant functions in a positive or negative manner.

    [–]Miguelinileugim[S] [スコア非表示]  (10子コメント)

    Of course, but my point is that you can't just expect an economy to grow faster than its workforce all the time! At some point adding more labour just isn't gonna be profitable, that's what is happening already, and thus there's no way to make the ends meet without decreasing the workweek!

    [–]JustDoItPeople2Δ [スコア非表示]  (9子コメント)

    At some point adding more labour just isn't gonna be profitable,

    I agree.

    thus there's no way to make the ends meet without decreasing the workweek!

    Wrong. We can structure the economy in such a way that encourages capital investment, which will lead to a higher demand of labor. We can create social welfare programs. We can do any number of things. This proposed system is just silly though.

    [–]Miguelinileugim[S] [スコア非表示]  (8子コメント)

    Wrong. We can structure the economy in such a way that encourages capital investment, which will lead to a higher demand of labor. We can create social welfare programs. We can do any number of things. This proposed system is just silly though.

    So, in a future world with 20 billion people, you expect everyone to be able to get a well-paying job? How big do you think the Earth is?

    [–]petersbro [スコア非表示]  (4子コメント)

    This would be a lot more inviting of a proposition if you left out the part where you abolish minimum wage.

    [–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

    Maybe at some point minimum wage might get in the middle, but I assume that it won't, but anyway why do you say that?

    [–]petersbro [スコア非表示]  (2子コメント)

    We do have to eventually face the declining number of entry level jobs compared to the number of people who lack the ability or desire to be trained for anything else. Your proposition of forbidding 40 hr workweeks in the entry level sector is a response to that problem. I don't love it, but I don't love any of the proposed solutions to that problem.

    It's when you take away minimum wage and business profits that the giant problems arise.

    [–]BadWolf_Corporation [スコア非表示]  (3子コメント)

    The economy only needs X amount of labor, and when there's more labor than what is needed, then it's best to cut how much labor can someone offer so that the remaining labor is distributed equally

    When you limit the amount of "labor that can be offered", you're also limiting the amount of income a worker can receive. Paying one person $10 hr for 40 hours, or two people $10 hr for 20 hours is only going to cost me a little bit more as an employer, but you're essentially cutting both of their incomes in half. How exactly do you see that helping anyone?

    You're under this impression that the market will support higher wages do to a shortage of workers- it won't because there won't be a "shortage" of workers. Those two people who are working 20 hours a week for me, will more than likely also be working 20 hours a week for someone else; they'll have to since you just cut their pay in half.

    [–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

    When you limit the amount of "labor that can be offered", you're also limiting the amount of income a worker can receive. Paying one person $10 hr for 40 hours, or two people $10 hr for 20 hours is only going to cost me a little bit more as an employer, but you're essentially cutting both of their incomes in half. How exactly do you see that helping anyone?

    If there was 50% unemployment, then everybody would cut their work hours in half and unemployment would disappear and their money will come from the 50% who work. What is nice because those people might have needed the money, but the unemployed need it way more. And similarly, now we have those who used to work a lot, to work less, and those who didn't work to actually work, earning money.

    The situation isn't that bad, so, say, a 10% unemployment, would mean a decrease in work hours of just 10%!

    You're under this impression that the market will support higher wages do to a shortage of workers- it won't because there won't be a "shortage" of workers. Those two people who are working 20 hours a week for me, will more than likely also be working 20 hours a week for someone else; they'll have to since you just cut their pay in half.

    Nah you don't get it, imagine a market where we have 90 workers and just two companies hiring them, each company requires 1600 hours of work per week each. With a maximum workweek of 40 hours, they'll simply hire 80 employees in total, but since they can choose who, then those 90 workers will compete with each other, and whoever would work for the least money will get hired and the remaining 10 will remain unemployed, their salaries of course were pretty low.

    Now if the government decided that the maximum workweek shall be now 32 hours, then the companies will need 100 employees, so they'll hire 45 each, but they'll need 5 more each to be full, and thus they'll compete with each other, but this time it'll be the employees the ones choosing who to work for, and thus the companies will try to get those 5 employees out of the other company by tempting them with a better wage. Long story short, in the end the market stabilised, one company got 50 employees and the other one 40, and the salaries of the employees were much higher, while at the same time their work hours much smaller and unemployment was zero.

    See why does my system work?

    [–]BadWolf_Corporation [スコア非表示]  (1子コメント)

    There is so much wrong here, that I hardly know where to start:

    What is nice because those people might have needed the money, but the unemployed need it way more. And similarly, now we have those who used to work a lot, to work less, and those who didn't work to actually work, earning money.

    The situation isn't that bad, so, say, a 10% unemployment, would mean a decrease in work hours of just 10%!

    Why should someone who has a job, be forced to give up their income simply because someone else needs to work? So someone out there working to support their family now has to find a way to replace the income you just cost them, and your message to them is: "someone else needed it more"? Good luck with that.

     

    See why does my system work?

    First of all, you're leaving out way too many parts of this equation.

    For one thing, when labor costs (i.e. wages) start going up, the demand for labor is going to start going down, so your two companies aren't going to be "competing" for workers, your workers are going to be priced out of the market. Competition can only exist when there is enough underlying demand to support it, and your plan does absolutely nothing to increase market demand. If you want more people to work, you need to create more jobs, it's that simple. Your system doesn't do that.

    Your idea is to give everyone a smaller peace of the pie, instead of just baking another pie.

    [–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

    Why should someone who has a job, be forced to give up their income simply because someone else needs to work? So someone out there working to support their family now has to find a way to replace the income you just cost them, and your message to them is: "someone else needed it more"? Good luck with that.

    ARE YOU CRAZY??? DO YOU THINK THAT SOMEONE IN THE MIDDLE CLASS DESERVES MORE THAT MONEY THAN SOMEONE UNEMPLOYED AND HOMELESS WHO CAN'T EVEN EAT EVERY DAY???

    It's insane how can you believe that cutting their salaries 10% to give it to those who need it, THE ACTUAL POOR AND DESPERATE PEOPLE OUT THERE, is a bad idea, especially when that 10% IS ALSO FREE TIME THEY CAN USE FOR WHATEVER THEY WANT TO DO ANYWAY AND AN INCREASE IN THEIR WELLBEING that at least partially offsets the damage by losing that small part of their salary.

    For one thing, when labor costs (i.e. wages) start going up, the demand for labor is going to start going down, so your two companies aren't going to be "competing" for workers, your workers are going to be priced out of the market. Competition can only exist when there is enough underlying demand to support it, and your plan does absolutely nothing to increase market demand. If you want more people to work, you need to create more jobs, it's that simple. Your system doesn't do that.

    Read my post again, if employees work less hours, then companies will have to hire more employees... to produce the same amount of output. I'm not assuming that demand will magically increase, I'm assuming that companies will need more employees to do the same job!

    Your idea is to give everyone a smaller peace of the pie, instead of just baking another pie.

    There are lots of pies, a lot of pies are baked every day, however the economic system awards most of them to the rich who get those pies in form of returns on their capital. If you want the poor to get a pie, you need to take that pie from the rich, because production is always increasing, but if nobody but the rich truly benefit from that production, then it's worthless.

    Keep the pies going, but this time make sure they get to those who need it, the unemployed and the underpaid employed, and do so by taking it from the net profits from businesses, since that money are the returns on capital that end up on rich people's pockets anyway!

    Pies must be eaten by those who baked them, not by those who owned the bakeries yet haven't baked any by themselves, or if they did, then certainly they deserve their cut, not half the whole bakery.

    [–]dantheman91 [スコア非表示]  (9子コメント)

    Reading through your responses, you don't seem to know how companies work. There is no way to know your exact revenue or expenses, so you have to keep capital to pay for these expenses and hope your revenue is higher than expenses.

    Lets assume as you put it, that a company will have 0 profit. This means the company can't grow. Also that 100% employment and everything else you're stating. what about the problem of the ENORMOUS POPULATION GROWTH?

    How can we create new jobs, when companies can't make a profit? If a company takes out a loan for 3% interest, a low rate, they have to make more than a 3% profit to be able to pay that loan back. Which, according to you, they can't make a profit.

    Or, you say what I said above is allowed. That the company is effectively making a profit, but pays back those loans. Why wouldn't every company simply take this approach? Would have had a 10% profit? Take it out as a 10% loan, and use that money for whatever you wanted to originally. Companies already look to make money, if it's a choice between literally giving it away or paying interest, they'll pay interest. Banks are then making this profit, and everyone in banking is becoming wealthy.

    In your situations you either cripple growth, or people will just find a way around it.

    [–]Miguelinileugim[S] [スコア非表示]  (8子コメント)

    Reading through your responses, you don't seem to know how companies work. There is no way to know your exact revenue or expenses, so you have to keep capital to pay for these expenses and hope your revenue is higher than expenses.

    Yeah, no perfect information, but you can get an approximation!

    Lets assume as you put it, that a company will have 0 profit. This means the company can't grow. Also that 100% employment and everything else you're stating. what about the problem of the ENORMOUS POPULATION GROWTH?

    It would be a little over zero profit, but in practical terms, zero, the company would grow exclusively by investors who would rather invest their money there than otherwise.

    And population growth should be stopped, completely, however the fact is that, unless you plan to kill the unemployed or give the middle finger and let starve the unemployed, the truth is that the best for humanity overall is to make sure everyone has a job, no matter how much you have to cut the work hours to make the ends meet. In the end population growth is going to have catastrophic consequences, but personally I'd rather live in an overpopulated world where everyone has just about enough to live than in an overpopulated world where half of everyone has more than enough while the other half is unemployed and basically starving.

    How can we create new jobs, when companies can't make a profit? If a company takes out a loan for 3% interest, a low rate, they have to make more than a 3% profit to be able to pay that loan back. Which, according to you, they can't make a profit.

    Profits don't have to be absolutely 0, but maybe 1% instead of the 5% or 10% or whatever percent you find today, and thus interest rates would be way lower, maybe 0.5%.

    Or, you say what I said above is allowed. That the company is effectively making a profit, but pays back those loans. Why wouldn't every company simply take this approach? Would have had a 10% profit? Take it out as a 10% loan, and use that money for whatever you wanted to originally. Companies already look to make money, if it's a choice between literally giving it away or paying interest, they'll pay interest. Banks are then making this profit, and everyone in banking is becoming wealthy.

    What? Please explain better.

    [–]dantheman91 [スコア非表示]  (7子コメント)

    Basically, situation

    A) a company makes 10% in profits. According to your scenario, that company then must give away that 10%.

    B) A company can take out a loan. Lets say this company had an expense of 900,000 and a revenue of 1,000,000. They're making a 10% profit. Now, if they had taken out a loan which would result as an increased operating cost of 10%, the company would effectively be paying that profit to the bank, and instead receiving capital up front.

    Basically, someone tells you that they will give you 100$ next week, but what you don't spend you have to give back. So you can do a lot of things, but basically if someone says I'll give you 45$ now, and next week you'll give me that 100$ you're going to be getting. If you weren't going to spend that 100$, aka a company was going to put that cash into something a few years down the road, it's the better alternative to just giving the money away. In this way the people really making the money are the people doing the lending, aka the banks.

    [–]Miguelinileugim[S] [スコア非表示]  (6子コメント)

    What if we just declared illegal the banks already and create a public bank? Insurance companies should probably stay private though, they're too complicated for the public sector.

    [–]dantheman91 [スコア非表示]  (2子コメント)

    With obama-care they're already starting to become centralized anyways. And then these companies will find private lenders//venture capitalist groups? Or are you going to make that illegal too. You're getting to be about 1/4 a step from full communism.

    [–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

    Banks are one of the main forces taking money from the public, it's insane how they play with their financial crap to take money from the public, a public system might get corrupt, but not to that extent!

    [–]dantheman91 [スコア非表示]  (0子コメント)

    you realize the #1 force that takes money from the public right?....the government.....lets just get rid of that too while we're at it? Do you also realize one of the top factors people are able to start businesses in the first place? or buy homes? It's not like the banks set interest rates whilly nilly, there's this whole world bank concept....

    [–]petersbro [スコア非表示]  (2子コメント)

    Then the government bank makes all the money.

    [–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

    What's wrong with that?

    [–]petersbro [スコア非表示]  (0子コメント)

    Same problem as when the private bank makes all the money.

    [–]ChipotleMayoFusion [スコア非表示]  (2子コメント)

    Short Term Unemployment

    If there's unemployment of any kind, then the demand for jobs is higher than the offer for jobs.

    Unemployment is a natural part of the economy where there is imperfect information. A person may have the perfect fit of skills, personality, and interests to work at a certain company in a certain role, but neither part may have a way to know about each other. For this reason short term unemployment is inevitable.

    Long Term Unemployment

    then there would be a shortage of employees, companies would have to compete with each other to get enough employees, and thus unemployment would become 0 in every sector of the economy

    This is critical to your idea: if the government artificially inflates demand for certain types of jobs to reduce unemployment, the demand feedback loop is broken and companies cant get employees with the skills they need because they cant motivate people to go get those skills.

    There is already huge demand for employees of every stripe who can add value to a company, a big constraint for businesses is having the capital to hire more employees. In order for the economy to churn, businesses take advantage of opportunities to make profit. There is a lack of demand for certain job roles, a company wont need more janitors or security guards unless they expand to build more buildings, which requires a quite healthy businesses to begin with. This creates a feedback loop, when there is high demand for a certain type of job the average pay of that job goes up, and more people want to become qualified for that job. The government should step in and ensure that people are not starving in the streets, but forcing companies to hire twice the janitors at half the cost is not the way.

    [–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

    This is critical to your idea: if the government artificially inflates demand for certain types of jobs to reduce unemployment, the demand feedback loop is broken and companies cant get employees with the skills they need because they cant motivate people to go get those skills.

    Wait why?

    There is already huge demand for employees of every stripe who can add value to a company, a big constraint for businesses is having the capital to hire more employees. In order for the economy to churn, businesses take advantage of opportunities to make profit. There is a lack of demand for certain job roles, a company wont need more janitors or security guards unless they expand to build more buildings, which requires a quite healthy businesses to begin with. This creates a feedback loop, when there is high demand for a certain type of job the average pay of that job goes up, and more people want to become qualified for that job. The government should step in and ensure that people are not starving in the streets, but forcing companies to hire twice the janitors at half the cost is not the way.

    Nope, I just can't agree with that, it's not capital what they need, is demand, if a company tries to expand, but nobody will buy their products because the demand is finite, that's it, if you want to open a store, that store is going to compete with every other similar store and steal their customers, because demand is finite.

    [–]ChipotleMayoFusion [スコア非表示]  (0子コメント)

    Demand is finite but not fixed, and is nowhere near being met. There are billions of people on this Earth that cant yet buy a car or a house with a toilet. Access to resources, both human and mineral, constrains most businesses that I have been a part of or am connected to.

    [–]LuckMaker [スコア非表示]  (1子コメント)

    Any jobs this system created at an entry level/service sector wouldn't be able to cover the cost of living and would increase the total level of poverty. Everyone who would be effected by having no minimum wage ends up being a part time employee making much less than the minimum wage.

    If you apply this to more advanced jobs (are you?) then the workplace synergy would get massive fucked up and that would greatly decrease "efficiency."

    [–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

    Any jobs this system created at an entry level/service sector wouldn't be able to cover the cost of living and would increase the total level of poverty. Everyone who would be effected by having no minimum wage ends up being a part time employee making much less than the minimum wage.

    Since employees would get more leverage, salaries-per-hour would increase, certainly to the point where they earn just as much as before. If the unemployment is 10%, then the reduction in work hours will be just a little over 10% (to maintain a negative employment), so if salaries rise only 10% because of increased employee leverage, then everybody would keep earning the same.

    If you apply this to more advanced jobs (are you?) then the workplace synergy would get massive fucked up and that would greatly decrease "efficiency."

    This applies to everything, but sector-by-sector, so unqualified jobs would have little work hours while very advanced and specialized jobs might as well have no limit to their work hours since not even then there'd be enough workers!

    [–]ReverendHerby [スコア非表示]  (1子コメント)

    The only negative effect would be a decrease in the competitivity of the economy (what is bad but not catastrophic) due to decreased company profits as they'll now have to treat their employees like valuable, limited assets instead of disposable sources of labor (which is the case for unqualified jobs that anyone can do)

    You're massively understating this part. If it becomes more difficult to make their products here, a company just won't; that's why outsourcing exists. We'd end up with no production or exports, only employing the people it takes to run our society while importing everything else (and maybe a few companies that want that "Made In America" label).

    r/BasicIncome identifies the same problem you do, but they propose that all citizens be given a guaranteed income by their government; whether or not you agree, I think you'd find a lot of relevant information there.

    [–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

    You're massively understating this part. If it becomes more difficult to make their products here, a company just won't; that's why outsourcing exists. We'd end up with no production or exports, only employing the people it takes to run our society while importing everything else (and maybe a few companies that want that "Made In America" label).

    That's the problem with doing this in just one country, but the thing is that simply the currency of the country would devalue to the point where imports would become as expensive as producing in the country itself!

    r/BasicIncome identifies the same problem you do, but they propose that all citizens be given a guaranteed income by their government; whether or not you agree, I think you'd find a lot of relevant information there.

    Not sure if you don't give me an example, also I fully agree with the concept, in fact I agree with almost anything that involves taking money from the rich xD

    [–]petersbro [スコア非表示]  (8子コメント)

    I'll try to put this really simply. If everyone ends up making the same as they did before (an assumption I think is incorrect), while working fewer hours, the increase in total salary paid to employees has to come from the company's profit margin. You've already established this. But for reasons I don't understand at all, you're saying the companies can afford it.

    If nothing else, this would trigger a sudden stock market collapse as company profitability became compromised.

    [–]Miguelinileugim[S] [スコア非表示]  (7子コメント)

    Yeah, and investors would run away, and the country would end up in ruins, or would it? (I'm asking you about it, how bad can it be?).

    However, if applied worldwide, this would be the greatest thing that has ever happened to employees since unions appeared!

    [–]petersbro [スコア非表示]  (6子コメント)

    If everyone loses their stock investments, everyone loses their retirements. Almost no one keeps their retirement savings in a savings account. You seem to be talking about investors as though they are a few rich people, when in reality anyone with a typical IRA or 401k, however small, is an investor. (Even savings accounts are investments, just not in stock.)

    [–]Miguelinileugim[S] [スコア非表示]  (5子コメント)

    Well then I guess that they'd tell everyone to put their money into savings accounts first!

    [–]petersbro [スコア非表示]  (4子コメント)

    Again, your plan relies on investors for businesses to grow. The stock market is a collection of investors. Are you now removing the concept of business investments?

    Edit: I forgot the biggest problem here... if everyone sells their stock and puts the money in savings accounts the stock becomes worthless because no one is buying. So there is no money to put in the bank. The money is all lost.

    [–]Miguelinileugim[S] [スコア非表示]  (3子コメント)

    Not really, I mean, money will still make money, investing will still be profitable, only that just as much as any other job, and thus investors would still be able to make money, and when they made less than in other jobs, they'll leave, and when they made more than in other jobs, they'll stay.

    [–]petersbro [スコア非表示]  (2子コメント)

    Investing isn't a job for anyone but the top 1%. Investing is what my money does while I'm at work.

    [–]Miguelinileugim[S] [スコア非表示]  (1子コメント)

    Your money doesn't work, your money shouldn't be able to make money, if your money makes money then you certainly don't deserve that money you didn't work for!

    [–]petersbro [スコア非表示]  (0子コメント)

    your money shouldn't be able to make money

    You said elsewhere I would still get dividends proportionate to the risk involved. Which is it?

    you certainly don't deserve that money you didn't work for!

    Elsewhere you say investing is a job like any other. If I spend my free time setting up and maintaining a system that then runs while I'm at my day job, why don't I deserve to get paid for it just because I don't do it full time?

    What I have been repeatedly trying to explain here is that we are (almost) all investors and that when you restrict investor profits we (almost) all suffer because we are (almost) all investors whether or not we do it full time.

    [–]1millionbucks3Δ [スコア非表示]  (3子コメント)

    A job performed by two people is generally of lower end quality than a job performed by a single person.

    [–]Miguelinileugim[S] [スコア非表示]  (2子コメント)

    Henry ford is turning in his grave, in fact he's spinning so fast he's powering a dynamo and generating electricity to power half of new york, keep it going!

    [–]1millionbucks3Δ [スコア非表示]  (1子コメント)

    I guess we'll just look past the part where dynamos no longer power anything, assembly lines and factories no longer employ many Americans, and Ford's business nearly went bankrupt.

    [–]Miguelinileugim[S] [スコア非表示]  (0子コメント)

    At some point they did! And if the economy simply has so many unemployed people in every sector with every level of education of expertise, that the only realistic solution is to decrease the work hours and redistribute the labor, but you don't want to do that, then what then? Give the unemployed enough money to live without doing nothing for society?

    [–]TDaltonC [スコア非表示]  (0子コメント)

    As a historical note, you may be interested in the National Industrial Recovery Act and the Blue Eagle.

    [–]forestfly12341Δ [スコア非表示]  (0子コメント)

    The only disadvantage?

    I mean you cut disposable income and you might as well close my friends bar. You are just going to create a bunch of people who have to live paycheck to paycheck.