Is the US economy in recession?

[SlowwHand]

You're not understanding. He's not talking about salaried. If you're cut back from working 40 hours at $20 an hour (or whatever) to 20 hours at $20 an hour, it's cutting wages by 50%, PLUS no insurance.

[giblets]

You're not understanding. He's not talking about salaried. If you're cut back from working 40 hours at $20 an hour (or whatever) to 20 hours at $20 an hour, it's cutting wages by 50%, PLUS no insurance.

That's a typo, right?

[SlowwHand]

No. I'm talking about people that are paid by the hour, not supervisory or managerial that get paid if they miss some time.

40 x 20 = 800
20 x 20 = 400
400 = 50% of 800

Why would that be a typo?

[Ben Kenobi]

It's gribbler - he's probably never had a job where he's not working out of the corner office.

[Aeson]

Except that they don't, Aeson. They take home half of what they were taking home before. I ask you again - the bills are the same. How does this help the worker if his paycheck is cut in half?

"Yep, exactly so, rather than cut wages, they cut hours which amounts to the same thing."

Their paycheck is going to be cut either way. Having their wages cut means they work the same for less. Having their hours cut means they work less for the same. For any given amount of cut in the employee compensation (which you say amounts to the same thing either way) it's better for the worker to save the hours rather than to be paid less for them.

It would, if the employer were permitted to fire people who were unproductive and hire and keep on just the productive.

They usually are.

My experience has been that they would prefer to cut everyone's hours, rather than just the unproductive.

Sounds like you've been employed by inefficient employers.

If they have too little work and too many people, it's easier for them to just overstaff and tell people to go home when the work is done. This actually encourages a decrease in production - because workers get to stay on longer the less work that they do. I've seen it happen.

Again, you've been employed by inefficient employers who don't know how to manage their workers.

It actually saves the employer considerable money to have a pool twice the size of 20 hour a week people, that they can expand and contract as needed, than it is to have a pool half the size of 40 hour a week people. If their goal was to increase productivity - you'd see them double shifting the productive folks (which is illegal, thanks to labor laws!) and keeping on only the most productive folks. But, the way that labor laws are set up - this is actually more expensive to the employer. Hence the pool of twice the necessary size of 20 hour a week people - that you can hire and fire as needed and don't have to pay any benefits, etc.

Completely irrelevant to a discussion about minimum wage.

[Aeson]

No. I'm talking about people that are paid by the hour, not supervisory or managerial that get paid if they miss some time.

40 x 20 = 800
20 x 20 = 400
400 = 50% of 800

Why would that be a typo?

Ben is postulating that their wages would have been cut, but since they can't be cut, their hours are cut. He says the result is the same. So the proper numbers (to combine your numbers with Ben's statements) would be:

40 x 10 = 400
20 x 20 = 400
400 = 400

The difference is the first works 40 hours for his 400, and the second works 20 hours for his 400. Obviously the second is better from the worker's perspective. They now have those other 20 hours to do something else with.

[SlowwHand]

Have you been eating peyote?

[Aeson]

You're not understanding. He's not talking about salaried. If you're cut back from working 40 hours at $20 an hour (or whatever) to 20 hours at $20 an hour, it's cutting wages by 50%, PLUS no insurance.

That is actually a difference (at least for a while... 2014?). Take it up with Ben, since his hypothetical is where there is no difference.

[Ben Kenobi]

Their paycheck is going to be cut either way. Having their wages cut means they work the same for less.

Except that they don't. They cut wages, some will quit and leave, and some will stay on. Meaning they get the workforce they want. That's how pricing works. You adjust the price to match demand. If demand for the job exceeds that of the supply, then the wages should be cut until demand for the job matches the supply. This is the most efficient solution for both the worker and the business. Paying workers more than their labor is worth, or more than their labour is in demand, is what creates this oversupply of labor, and the resultant cuts in work hours to compensate.

Cutting the wage by 50 cents to a dollar, will cut the workforce substantially. Someone who stays on for 40 hours a week at a dollar less, is making more money than someone who works only 20 hours a week.

it's better for the worker to save the hours rather than to be paid less for them.

The best solution for the worker is fulltime. It's simply a more efficient allocation of time. Paying a worker less than fulltime is an indication that there are distortions to the labor market driving these inefficient allocation choices. Look at it from an environmental standpoint. Does it make sense to work someone 4 hours a day, having a half hour drive there and back vs 8 hours and the same drive?

They usually are.

Ok, I'm going to give an example of when I worked in a bindery. We had a black guy, lots of koreans and filipinos, some white folks, some hispanic folks. We were all going over our ratios (mine was ok, I was about in the middle, since I didn't have much experience at the time). The black guy was the lowest. Quota was set, and he was doing about a third of quota. So, why wasn't the black guy fired? Because HR wanted to have a 'diverse workforce', and they feared an 'unlawful termination' suit should he be let go, because he would have claimed 'racism', being the only black guy there. Whenever we were short work, he'd slow even more down and do nothing for the whole day. I know this because that's what he told me.

HR is dominated by policies that are contrary to the best operation of the business, for the simple reason that politics often trumps good business sense.

Sounds like you've been employed by inefficient employers.

I'm telling you my experiences at least in the business world.

Again, you've been employed by inefficient employers who don't know how to manage their workers.

If they didn't have to provide benefits for fulltime workers, they would have fired the unproductive folks, and kept the most efficient on and halved their staff. By giving an hourly cutoff for benefits, they ensure that businesses who hire up to the limit, and no more, have a competitive advantage.

Completely irrelevant to a discussion about minimum wage.

I love it how cogent arguments that you can't rebut are dismissed as 'irrelevent'. Yes, it is relevant, wages and benefits are substantial part of compensation.

[Ben Kenobi]

The difference is the first works 40 hours for his 400, and the second works 20 hours for his 400. Obviously the second is better from the worker's perspective. They now have those other 20 hours to do something else with.

Ok, now take this example, where they cut wages to 18.

18x 40 vs 20 x 20.

Which paycheck is larger?

[MrFun]

If we think that some given poor person deserves more money, why should we make it the obligation of whoever gives that person a job to also give them the extra money? How ****ing stupid is that idea? Society thinks the poor person should get more money; society should be the one to pay up.

Then conservatives have no right to complain about the working poor being on welfare.

[Aeson]

Ok, now take this example, where they cut wages to 18.

18x 40 vs 20 x 20.

Which paycheck is larger?

If that was the example then obviously 18x40 is a better deal. That was not the comparison you gave. (Nor is it a comparison that's fair. To assume an employer would make 10x the cuts in one case than the other is not really going to result in a useful comparison.)

[Ben Kenobi]

If that was the example then obviously 18x40 is a better deal. That was not the comparison you gave. (Nor is it a comparison that's fair. To assume an employer would make 10x the cuts in one case than the other is not really going to result in a useful comparison.)

I explained why the employer would cut hours 50 percent, due to compensation incentives. He wants either full-time or part-time. He's not going to pay a part-timer benefits. This is why you want an employer to fix his wage costs through pricing.

[Aeson]

Except that they don't. They cut wages, some will quit and leave, and some will stay on.

It's good you can see more of the problems with your hypothetical.

Meaning they get the workforce they want. That's how pricing works. You adjust the price to match demand. If demand for the job exceeds that of the supply, then the wages should be cut until demand for the job matches the supply. This is the most efficient solution for both the worker and the business. Paying workers more than their labor is worth, or more than their labour is in demand, is what creates this oversupply of labor, and the resultant cuts in work hours to compensate.

Paying workers more than they're "worth" is actually a good thing so long as it doesn't result in more unemployment. Essentially that would mean they were being paid less than they're "worth" before. This is the case with the minimum wage in the US so far. We've been able to keep at near total employment (of those looking for work) for decades, and when we weren't at full employment it was due to other factors. We've done this with a minimum wage. We're already seeing increases in employment above $7.50 an hour since 2009. It's obvious our economy can handle a current ~$7.50/hr minimum wage with ~0 effect on unemployment. We've been at similar levels when adjusted for inflation at various times in the past. How high we could push that is of course not obvious. No one's ever really tried to find a limit, and there's not really any need to do so other than to keep up with inflation.

The important thing about the minimum wage is it gives a bump to creates a more affluent working class who can participate in the economy as consumers. Without some "bump" to get them there though the market will naturally just let them waste away as "subsistence+1" for generations and the outcome is horrific levels of poverty for billions of people. You can see this all over the world currently, outside us lucky bastards who were born between the right lines and/or to the right parents.

Cutting the wage by 50 cents to a dollar, will cut the workforce substantially. Someone who stays on for 40 hours a week at a dollar less, is making more money than someone who works only 20 hours a week.

Depends on the wages paid, and what other options are available. Assuming that cutting time in half would happen instead of a dollar less (from $7.50) is using two such divergent situations where there's nothing to be learned by comparing between them.

When you cut all wages (available to the minimum wage worker) by the same amount people won't leave for another job because they all pay the same. If there are no other readily available jobs they also won't leave because they want to continue to have a livelihood. This is survival. If they have another option that now looks better (welfare) they may go for that, but it's a terrible thing to incentive.

The best solution for the worker is fulltime. It's simply a more efficient allocation of time. Paying a worker less than fulltime is an indication that there are distortions to the labor market driving these inefficient allocation choices. Look at it from an environmental standpoint. Does it make sense to work someone 4 hours a day, having a half hour drive there and back vs 8 hours and the same drive?

Yes, it's better if they can work fulltime and make more in compensation than they would at half time. But that wasn't the hypothetical you offered. Your hypothetical was a cut in hourly wage, or a cut in hours worked. The worker is going to view that as a simple choice when they are comparable options in overall compensation. They'll take less hours because their time is valuable to them.

Ok, I'm going to give an example of when I worked in a bindery. We had a black guy, lots of koreans and filipinos, some white folks, some hispanic folks. We were all going over our ratios (mine was ok, I was about in the middle, since I didn't have much experience at the time). The black guy was the lowest. Quota was set, and he was doing about a third of quota. So, why wasn't the black guy fired? Because HR wanted to have a 'diverse workforce', and they feared an 'unlawful termination' suit should he be let go, because he would have claimed 'racism', being the only black guy there. Whenever we were short work, he'd slow even more down and do nothing for the whole day. I know this because that's what he told me.

HR is dominated by policies that are contrary to the best operation of the business, for the simple reason that politics often trumps good business sense.

There are bad policies in workplaces. (Some dictated by government even.) This is the exception to the rule though, as usually employers have the ability to choose who they let go. (I don't know if this is even an exception at that. Sounds like it wasn't something forced on them necessarily. They chose to worry more about a potential lawsuit than to worry about productivity.)

If they didn't have to provide benefits for fulltime workers, they would have fired the unproductive folks, and kept the most efficient on and halved their staff. By giving an hourly cutoff for benefits, they ensure that businesses who hire up to the limit, and no more, have a competitive advantage.

Nothing to do with minimum wage.

I love it how cogent arguments that you can't rebut are dismissed as 'irrelevent'. Yes, it is relevant, wages and benefits are substantial part of compensation.

They're called "strawmen", not "cogent arguments". For any given value of minimum wage the "argument" you were making there is remains unaffected. As such it's not applicable to the discussion we're having.

[Aeson]

Except that they don't. They cut wages, some will quit and leave, and some will stay on.

It's good you can see more of the problems with your hypothetical.

Meaning they get the workforce they want. That's how pricing works. You adjust the price to match demand. If demand for the job exceeds that of the supply, then the wages should be cut until demand for the job matches the supply. This is the most efficient solution for both the worker and the business. Paying workers more than their labor is worth, or more than their labour is in demand, is what creates this oversupply of labor, and the resultant cuts in work hours to compensate.

Paying workers more than they're "worth" is actually a good thing so long as it doesn't result in more unemployment. Essentially that would mean they were being paid less than they're "worth" before. This is the case with the minimum wage in the US so far. We've been able to keep at near total employment (of those looking for work) for decades, and when we weren't at full employment it was due to other factors. We've done this with a minimum wage. We're already seeing increases in employment above $7.50 an hour since 2009. It's obvious our economy can handle a current ~$7.50/hr minimum wage with ~0 effect on unemployment. We've been at similar levels when adjusted for inflation at various times in the past. How high we could push that is of course not obvious. No one's ever really tried to find a limit, and there's not really any need to do so other than to keep up with inflation.

The important thing about the minimum wage is it gives a bump to creates a more affluent working class who can participate in the economy as consumers. Without some "bump" to get them there though the market will naturally just let them waste away as "subsistence+1" for generations and the outcome is horrific levels of poverty for billions of people. You can see this all over the world currently, outside us lucky bastards who were born between the right lines and/or to the right parents.

Cutting the wage by 50 cents to a dollar, will cut the workforce substantially. Someone who stays on for 40 hours a week at a dollar less, is making more money than someone who works only 20 hours a week.

Depends on the wages paid, and what other options are available. Assuming that cutting time in half would happen instead of a dollar less (from $7.50) is using two such divergent situations where there's nothing to be learned by comparing between them.

When you cut all wages (available to the minimum wage worker) by the same amount people won't leave for another job because they all pay the same. If there are no other readily available jobs they also won't leave because they want to continue to have a livelihood. This is survival. If they have another option that now looks better (welfare) they may go for that, but it's a terrible thing to incentive.

The best solution for the worker is fulltime. It's simply a more efficient allocation of time. Paying a worker less than fulltime is an indication that there are distortions to the labor market driving these inefficient allocation choices. Look at it from an environmental standpoint. Does it make sense to work someone 4 hours a day, having a half hour drive there and back vs 8 hours and the same drive?

Yes, it's better if they can work fulltime and make more in compensation than they would at half time. But that wasn't the hypothetical you offered. Your hypothetical was a cut in hourly wage, or a cut in hours worked. The worker is going to view that as a simple choice when they are comparable options in overall compensation. They'll take less hours because their time is valuable to them.

Ok, I'm going to give an example of when I worked in a bindery. We had a black guy, lots of koreans and filipinos, some white folks, some hispanic folks. We were all going over our ratios (mine was ok, I was about in the middle, since I didn't have much experience at the time). The black guy was the lowest. Quota was set, and he was doing about a third of quota. So, why wasn't the black guy fired? Because HR wanted to have a 'diverse workforce', and they feared an 'unlawful termination' suit should he be let go, because he would have claimed 'racism', being the only black guy there. Whenever we were short work, he'd slow even more down and do nothing for the whole day. I know this because that's what he told me.

HR is dominated by policies that are contrary to the best operation of the business, for the simple reason that politics often trumps good business sense.

There are bad policies in workplaces. (Some dictated by government even.) This is the exception to the rule though, as usually employers have the ability to choose who they let go. (I don't know if this is even an exception at that. Sounds like it wasn't something forced on them necessarily. They chose to worry more about a potential lawsuit than to worry about productivity.)

If they didn't have to provide benefits for fulltime workers, they would have fired the unproductive folks, and kept the most efficient on and halved their staff. By giving an hourly cutoff for benefits, they ensure that businesses who hire up to the limit, and no more, have a competitive advantage.

Nothing to do with minimum wage.

I love it how cogent arguments that you can't rebut are dismissed as 'irrelevent'. Yes, it is relevant, wages and benefits are substantial part of compensation.

They're called "strawmen", not "cogent arguments". For any given value of minimum wage the "argument" you were making there is remains unaffected. As such it's not applicable to the discussion we're having.