I don't think it's nonsense. The things that are wrong with a $1000 minimum wage are the same things that are wrong with a $10 minimum wage. They're just happening to different people.
Setting a $1000 minimum wage would destroy essentially all jobs. There's nothing I or most people could do that's worth that much. Nothing at all. With my job gone, my income is zero and the products and services I contributed to society don't exist. Such a law would make me permanently poor, and would make society incrementally poorer.
This is what I think happens to people whose natural output is below the minimum wage. Because their skills and education justify $6/hr but not $9, they aren't allowed to make that $6. They and society are $6/hr poorer for it.
I believe firmly that people should be allowed to work if they want to, on whatever terms they find agreeable and can get. If you want to help them beyond that, I'm sure they'll think that's swell. But it shouldn't come in the form of destroying their job.
1000/hr will make all jobs unfeasible - on the basis that a job is a way to earn money by offering greater value in labour than in wage.
But what if we lived in a society where solar powered robots did everything and one guy earnt all the money for just pressing the power switch at 8am each day?
How would we share out the bounties of wealth these robots made? Giving everyone a job at below cost might be one way. Not the best but it is a way.
So I suggest that the coming world will have vast wealth, and fewer jobs - and we need to find new ways to make society fair for all. Because an unfair society is a Bad Thing.
I don't understand this view. Every time I see people spending hours of their time watching harlem shake videos or any other silly nonsense on the web, I am heartened that there are infinite jobs in entertaining each other and providing "non essential" services. OK sure, robots will take over construction and heavy lifting, leaving only a "super class" of surgeons and whatnot still able to get any of the jobs we recognize today. But I think we are far away from robots taking away other very human jobs. I pay for a twitch.tv subscription so I can see StarCraft games in 720p+. I literally pay other people to play video games. This is not some strange oddity, this is the future.
Remember: once upon a time it was a full time job for just about everyone in a society to get food, take care of children, and just generally do the bare minimum to survive. I'm sure they look at the world we live in today as "post-scarcity" the same way we imagine a world of tomorrow where robots do all of our duties. When agriculture introduced surplus into our society, it didn't cause a collapse. It instead allowed art and science to be born. Just as those early humans would have scoffed at Michelangelo getting a paycheck for putting colors on walls, so to does this possible future seem frivolous to us. But it is no more frivolous than all the current people employed in our current economy convincing each other to buy things we don't need.
If or when machines do everything we consider essential now, I assure you we will find new things to do with our time, some will be better than others at these new things, and thus we will pay each other to do them.
There is a difference between being paid to do a job and a job that increases the total wealth in the world.
There are two ways to look at this - the pg style do something people want (such as play Starcraft well) and a more physicist viewpoint of decreasing amount of energy needed to achieve a given outcome. (Yeah that definition needs some work but it is intuitively measurable)
Anyway, if robots do all the stuff that is physicist-style
Like farming or manufacture and humans then sit around doing arts and crafts, that's great for humans - as long as there is some means of distributing the wealth (energy transformed into goods?) - and preferably a fair means of doing so
We could just hand out food, or give everyone a "job" - but correcting the compensation when the job is not actually productive is hard. We are going to go into a world where economics will have to catch up.
A job is essentially an overloaded concept - it does two things, distributes wealth and is an actual means of wealth creation. Split the two and we are in uncharted waters, but splitting the two we are.
I don't understand why you think any rules change just because the jobs being done change. This revolution of automation has largely already taken place, and I would argue that the automation isn't even the important part. What difference does it make if all food is generated by robots vs today's reality of most food being generated by a tiny percentage of the humans with the huge help of technology? I certainly don't generate my own food, and I don't do anything very essential by the "physicist viewpoint", and yet I am still able to acquire food. Most people in this country don't farm and are still able to get food despite doing "non physicist" jobs. I didn't need a job handed to me or invented to keep me busy. My job is completely non-essential and would have made absolutely no sense 1000 years ago. It however exists because of technology and surplus.
The guy playing StarCraft makes money. He then uses said money to buy food from guy who owns the crops, just like today. Its no different than how soccer players play for people for money. What is the complexity here? Why do you think we will need to figure out means of "distribution"?
So you are saying that the "wealth" of the changes in farming is produced by say 5% of the population, and they are the only ones who are really needed. The rest of us get to play a game where we guess the total wealth of the world (ie the food) and assign money to it. Then we split that money somehow (playing starcraft) and give some of it back to the farmers.
I suppose I am now taking econ 101.
I would however suggest that the automation revolution has not finished - the mechanisation revolution may be slowing but software is barely started.
Exactly. Here's the trouble: we are already more productive than necessary. 90% of humans can adequately supply 100% of the population with everything necessary. What if we lower that 90% to 10%?
The problem is that capitalism, which aligns your job/business with your income, breaks down at that point. If there is no job for you to do, then under this system you'll starve. Will we let 90% of the population starve just to preserve capitalism? That's not exactly sustainable.
The reality is that capitalism is not perfect, but it's the best we've come up with so far as a species. Once we hit the point where it stops working we'll have to re-imagine a whole lot of concepts.
On a reread I do not think that the next wave or whatever will cause a collapse - if there are no jobs to be had then we shall not all be livin in the dirt - we will find ways to share the wealth some other way than wage packets.
There are many ways of sharing the wealth - for example I benefit from road building schemes even if I do not recieve direct payments.
Michalangelo as compared to a Neanderthal is an interesting idea - but reverse it - although michaleangelo presumably thought he had to work hard, if he had lived a life of same utility as a Neanderthal he could have done so on an hours work a week. It's just that he liked clothes and houses and wine. So I agree that in the robot future the effort needed to live like you or I will be small - but it won't pay for that holiday to Mars
>> 1000/hr will make all jobs unfeasible - on the basis that a job is a way to earn money by offering greater value in labour than in wage.
>> But what if we lived in a society where solar powered robots did everything and one guy earnt all the money for just pressing the power switch at 8am each day?
This is highly unrealistic.
1) We are a very long way from having robots able to do most human jobs.
2) There will always be scarce resources. Even if you could 3D print houses for pennies, land, access to desirable events and people, etc will be scarce, coveted, and distributed to the highest bidder.
Let's talk about policies that work well in our actual, current world.
You're ignoring the fact that if you made $1000/hr, you could afford (and thus would be charged) higher prices for everything else, and so would everyone. Thus you would be producing $1000/hr, it's just that a thousand then would mean less than it does now. That's inflation. So long as people spend and the economy grows faster than that, we're better off than we were.
Inflation doesn't work that way. You can't legislate it into existence, and you can't legislate it away. If you could, it would be an easy problem to solve.
Inflation occurs when you add to the money supply more than you add to the economy. The California gold rush caused inflation. Countries with hyperinflation have governments that are printing money at incredible rates.
That's completely orthogonal to minimum wage. If you say I must have a $1000/hr job, it's in current dollars. Even if my employer wanted to pay me more, he can't -- he doesn't have the money to! Even if everyone wanted to switch over to doing that, they couldn't; there isn't enough money in the system! If everyone woke up tomorrow and agreed that a dollar was worth 1000x less, they'd all be 1000x poorer and nobody could afford anything.
No, the minimum wage doesn't change the value of a dollar. It just changes who's allowed to earn one.
It's not the money supply. It's the money flow, which you can model as a product of money supply and money circulation speed. A $1000USD minimum wage will increase circulation speed and from there induce inflation.
Don't read too much into my comment. Your argumentation was based on the the fact that inflation only occurs when you add monetary mass. I just pointed that that's a naive view. Contrary to your statement, you can legislate inflation into existence by creating conditions for increased money flow.
I did not say anything about the benefits of increasing minimum wage. In general it is known that the absence of minimum wage creates unsustainable imbalances of income society-wide. However, I don't know the US economy well enough for an informed opinion. Your current imbalance of income is huge, but that's only one data point.
It's hyperinflation if you're increasing to $1000/hr, which is why no one is seriously suggesting that. Otherwise it's a little bit of inflation, and one that would be overshadowed by the resulting growth.
"I don't think it's nonsense. The things that are wrong with a $1000 minimum wage are the same things that are wrong with a $10 minimum wage. They're just happening to different people"
You don't seem to consider elasticity. Basically, the main argument of the proponents of a higher minimum wage is that the hiring capacity is elastic enough that a raise in minimal wage's benefits far outweigh the resulting loss of jobs.
Saying that raising the minimal wage to 10$ show the same problems than raising it to 1000$ is wrong in that it considers that, at best, the elasticity of the hiring capacity equals 1. However, we can expect it to be false if we consider that the minimal wage has, in effect, went down in the recent years and that it did not result in a hiring frenzy.
Setting a $1000 minimum wage would destroy essentially all jobs. There's nothing I or most people could do that's worth that much. Nothing at all. With my job gone, my income is zero and the products and services I contributed to society don't exist. Such a law would make me permanently poor, and would make society incrementally poorer.
This is what I think happens to people whose natural output is below the minimum wage. Because their skills and education justify $6/hr but not $9, they aren't allowed to make that $6. They and society are $6/hr poorer for it.
I believe firmly that people should be allowed to work if they want to, on whatever terms they find agreeable and can get. If you want to help them beyond that, I'm sure they'll think that's swell. But it shouldn't come in the form of destroying their job.