I had no idea Scott Walker was so popular

[DaShi]

And it can stick it to China.

[Kuciwalker]

which is a poor measure for what we're talking about.

if you look at the gini coefficient, you can see how some countries redistribute wealth from the rich to the poor very effectively.

No you can't. That's not what the Gini coefficient shows. The Gini coefficients in the list linked shows that income (which improperly conflates wage and capital income, and also incorrectly measures capital income) is more evenly distributed* in those nations. The list you linked didn't compute the Gini coefficient on wealth (which would be impossible to do properly anyway, as only financial assets and certain other types of explicit property are easily measurable, even people have large holdings of alternate forms of wealth e.g. human capital), but even the Gini coefficient on wealth would not measure effectiveness of redistribution. Effectiveness of redistribution is based on how much inequality is changed because of that country's system of redistribution. Different countries may have different "natural" levels of inequality; a country that would "naturally" have high inequality may have a very effective system of redistribution and yet still appear more unequal than a country with no redistribution at all.

*if we accept the Gini coefficient as our measure of equality - the construction of a metric that captures our notion of "equality" is a mathematically difficult and ultimately subjective task.

[C0ckney]

as for kuci's response to kentonio in post 162, we've discussed things like this many times before, so at the risk of rehashing an old debate...

it's not that kuci is completely wrong, it's more that his post is simply a long defence of letting the market set the level of wages without interference and that the laws of supply and demand will produce the best outcomes. however there is clear evidence from the UK that it is possible to have a minmum wage which raises the living standards of low paid workers without having significant negative impacts on employment, inflation or business viability.

from the low pay commission's 2011 report

4. We assessed the impact of the adult rate across low-paying sectors, firm size, and groups of
workers. The minimum wage increased by nearly 65 per cent between its introduction in
April 1999 and October 2010. Over that period, the increase was much higher than price
inflation or average earnings growth.

5. The bite of the minimum wage (its value relative to median earnings) increased from just
under 46 per cent when it was introduced to around 51 per cent in April 2007.

.....


Our own analysis, commissioned research, evidence submitted in our consultation and
anecdotal evidence from visits and meetings have found that some employers have
responded to the change in earnings (and consequent increase in labour costs) by adjusting
non-wage costs and changing pay structures. Overtime and unsocial hours premia may have
been reduced; pensions and annual leave entitlement made less generous; pay zones
(geographic and hierarchical) merged; or differentials may have been squeezed. Further, there
is also evidence to suggest that some firms may have coped with minimum wage increases
by reducing hours, raising prices, or by accepting lower profits. However, the evidence
available to date suggests that minimum wages do not appear to have cut employment to
any significant degree. Further, the reduced hours do not appear to have reduced weekly
earnings and the lower profits have not led to business closures.

here we can see a clear example of a government intervention in the market that resulted in better outcomes for the low paid than when the market was left alone to decide the level of earnings for those people.

[Kuciwalker]

Econometric studies of the effect of the minimum wage are garbage and can be found supporting either side. Econometrics in general is a terrible field and this question in particular is almost impossible to study well.

[Kuciwalker]

If you want to give money to poor people just give give it to them. Don't do something ridiculous like put the burden on their employer and make it contingent on their employment. That is just begging for problems. Why make it more expensive to employ poor people? Why penalize the people who do?

[giblets]

If you want to give money to poor people just give give it to them. Don't do something ridiculous like put the burden on their employer and make it contingent on their employment. That is just begging for problems. Why make it more expensive to employ poor people? Why penalize the people who do?

In the real world giving money to able-bodied adults who don't have to work to get it is politically difficult.

[Kuciwalker]

It has the advantage of actually helping the poor.

[kentonio]

If you want to give money to poor people just give give it to them. Don't do something ridiculous like put the burden on their employer and make it contingent on their employment. That is just begging for problems. Why make it more expensive to employ poor people? Why penalize the people who do?

For goodness sake, compensating people fairly for their labour is not a damn handout, its ensuring that large powerful companies can not exploit individuals who have very little bargaining leverage against a rich organization.

[Kuciwalker]

Workers have tons of leverage against rich organizations, it's called finding another job. We know that they have this because if they didn't wages would necessarily fall to subsistence level. We keep going over this.

[C0ckney]

Econometric studies of the effect of the minimum wage are garbage and can be found supporting either side. Econometrics in general is a terrible field and this question in particular is almost impossible to study well.

i don't consider you an authority i'm afraid. the consensus in the UK, among academics, politicians and the general public is that the minimum wage has been a success. the evidence supports the view that it has raised the living standards of the low paid with few negative consequences.

of course, it's not a magic bullet. it's easy to imagine a situation where a minimum wage set too high would create more problems that benefits.

If you want to give money to poor people just give give it to them.

and how are you going to do that? it's a political question and it needs a certain political environment to achieve such an end.

[giblets]

Workers have tons of leverage against rich organizations, it's called finding another job. We know that they have this because if they didn't wages would necessarily fall to subsistence level. We keep going over this.

This is a false dichotomy between "workers have absolutely no leverage and will get paid subsistence wages" and "workers get enough leverage from threatening to quit to get paid their marginal product".

[C0ckney]

No you can't. That's not what the Gini coefficient shows. The Gini coefficients in the list linked shows that income (which improperly conflates wage and capital income, and also incorrectly measures capital income) is more evenly distributed* in those nations. The list you linked didn't compute the Gini coefficient on wealth (which would be impossible to do properly anyway, as only financial assets and certain other types of explicit property are easily measurable, even people have large holdings of alternate forms of wealth e.g. human capital), but even the Gini coefficient on wealth would not measure effectiveness of redistribution. Effectiveness of redistribution is based on how much inequality is changed because of that country's system of redistribution. Different countries may have different "natural" levels of inequality; a country that would "naturally" have high inequality may have a very effective system of redistribution and yet still appear more unequal than a country with no redistribution at all.

*if we accept the Gini coefficient as our measure of equality - the construction of a metric that captures our notion of "equality" is a mathematically difficult and ultimately subjective task.

yes, sorry, i was not precise with my language, it does measure the level of income inequality.

however, when talking about redistribution it should be clear that we're talking about income, since practically every country taxes income and very few have significant taxes on wealth (france, norway, switzerland, any others?).

i'm not really sure what you mean by a natural level of inequality, do you simply mean differences in income before any government intervention?

[Kuciwalker]

This is a false dichotomy between "workers have absolutely no leverage and will get paid subsistence wages" and "workers get enough leverage from threatening to quit to get paid their marginal product".

I'm not the one who set up the false dichotomy; kentonio was the one who originally asserted the "race to the bottom" hypothesis.

Why do you think workers should be paid their marginal product?

[Kuciwalker]

however, when talking about redistribution it should be clear that we're talking about income, since practically every country taxes income and very few have significant taxes on wealth (france, norway, switzerland, any others?).

We should actually care about consumption. The only reason to get money is so you can spend it on stuff. If everyone actually gets to consume similar amounts of stuff, who cares how unequal their income is?

i'm not really sure what you mean by a natural level of inequality, do you simply mean differences in income before any government intervention?

Yes, it's not wildly implausible that this level would differ between nations. At the extreme end you would certainly expect it to be different between e.g. 21st-century USA and 15th-century China.

[C0ckney]

We should actually care about consumption. The only reason to get money is so you can spend it on stuff. If everyone actually gets to consume similar amounts of stuff, who cares how unequal their income is?

of course that's important, but it's not the only thing. there's a fair amount of research which tells us that greater equality is better for societal cohesion. people are happier when they live in a more equal society.

Yes, it's not wildly implausible that this level would differ between nations. At the extreme end you would certainly expect it to be different between e.g. 21st-century USA and 15th-century China.

well sure, but i find it harder to to imagine why there would be big differences between 1st world industrialised nations.