What is a decent minimum wage?

[TenBobNote]

Actually, in the case of higher education, the government doesn’t have a monopoly. Government schools compete against private schools. There is somewhat of an advantage for the public schools because of lower tuition, but there is still competition in the market. Also, if you think that higher education does not need Ph.Ds and instead needs people with business experience there is nothing stopping you from starting your own university.

I would say the biggest problem with colleges is student loans. I see so many people waste their money on college classes and they have no idea what they want to do. The only reason they are allowed to procrastinate or just go to college because its what society encourages, is because the reality of the money is not present. If a student had to go to college on savings alone, many problems would disappear, college degrees would be worth more(supply and demand), they would care about their school work much more, and the colleges themselves would be forced to offer more services for less as the students are going to demand it.

There is no doubt that government can be inefficient. But even some large private firms can be inefficient and bureaucratic as well. When firms become larger the goal of the individual units can differ from the goal of the firm as a whole and that can create problems.

Corporations can fail, they have competition. Government does not.

 

[CPA2]

School is just a game. However, it is an important game. Grades are just the subjective opinion of a teacher. I have no idea what an “A” means. I also do not know what a 100 means. A 100 surely does not mean that I understand all of the material. I am in school to learn as much as I can. However, salespeople are notorious for being achievement oriented, and I love to compete in the game called school.

Private business is a smart organization. The owner/manager has the authority to change the incentives and disincentives. He can change the corporate culture.

The government is a “stupid organization (e.g. IRS).” The people in the organization may be smart (e.g. state university), but the organization will be forever stupid. Why? Top management does not have the flexibility or the authority to change the incentives and disincentives. In short, government is a “stupid organization” because there are no incentives to improve the organization.

I made up the words, “stupid organization.” I make observations and then I make up words to describe my observations. Guess I will need to explain my thinking.

You may remember the prisoner’s dilemma from economics. How do you get people to work for the good of the organization instead for their own best self-interest? Force is one way (e.g. Mafia). Another way is to appeal to a higher interest (e.g. religion).

Neither of those ways worked in my business. Therefore, I appealed to my employees’ best self-interest. I had 6 employees that did repairs. They were on a salary. They put out very little work. Therefore, I put my workers on commission. The 4 lazy employees quit. The 2 good employees stayed. It was a win-win situation. The 2 employees on commission repaired more merchandise than they did when they were on salary. The wait time for repairs, for example, went from three weeks to less than a week!

The next time the common man tells me that a person with a college degree has no common sense, I will agree with him. I will point out that there is a difference between schooling and education. There are many people with little formal schooling who are well educated. On the other hand, there are many people with college degrees who have no education.

Not everyone’s elevator goes to the top floor. I work with some of these people, and I admire them because they give 100%. Public universities are another matter. I classify these institutions of higher learning as stupid organizations. It is my belief that no one can improve a stupid organization if there is no incentive for improvement.

For example, XYZ State University employs a lot of nice, intelligent people. However, XYZ is a stupid organization. XYZ University does not look on the business side of anything. Committees run the university “in the spirit of compromise.” Committees do not follow the KISS principle.

XYZ University gets an A+ for confusion. Online registration is an example. How about online frustration? It took me 50 minutes for me to register online. The first time I got online, the system threw me out because I took too long to look up course numbers. The second time I registered for 6 courses. I only got one course. The college of business cannot do anything because they are locked out of the system until registration ends. I was locked out of 5 courses because I did not have the prerequisites. Do prerequisites matter if I want to audit the courses? I am locked out of one accounting course because I did not take an undergraduate course in statistics. My graduate course in statistics at XYZ University did not count. Oh, I forgot to tell you. The entire system went down after only being up 55 minutes!

I never made these stupid logic errors when I was in business. I tested any new service before I offered it to the public. My take on all of this is that organizations are “smart or stupid” based on incentives or the lack of incentives. Incentives count.

Stinkcat:
**State universities lack internal control, the cornerstone of accouning. State universities also lack quality control. ** After a professor is tenured, there seems to be an inverse relationship between what a professor is paid and output!

 

[stinkcat_14]

I notice that whenever CPA2 cannot answer a question he changes the topic. He starts off with a claim that economists with doctorates make lousy investors. Since this is a claim that may or may not be true, I asked him for the source of his data to back up such a claim. His response was twofold. First to say that his claim was based on anecdotal evidence, i.e. a friend of his knew of economists who can’t retire. Second, he tried to downplay the importance of more systematic evidence. When pressed on this issue, he moves on to criticize public universities because they are bureaucratic. In every case we get a lot of claims and very little facts. For example, universities can be very bureaucratic and have perverse incentives. But if government is so bad, why do private universities have these exact same issues?

 

[CPA2]

I notice that whenever CPA2 cannot answer a question he changes the topic. He starts off with a claim that economists with doctorates make lousy investors. Since this is a claim that may or may not be true, I asked him for the source of his data to back up such a claim. His response was twofold. First to say that his claim was based on anecdotal evidence, i.e. a friend of his knew of economists who can’t retire. Second, he tried to downplay the importance of more systematic evidence. When pressed on this issue, he moves on to criticize public universities because they are bureaucratic. In every case we get a lot of claims and very little facts. For example, universities can be very bureaucratic and have perverse incentives. But if government is so bad, why do private universities have these exact same issues?

I gave you my assertions based upon my observations. In auditing, observations by an independent person are more persuasive than anything else!

Economics is a social “science.” Economics is about people and their economic behavior. However, people change. You are not going to get any peer reviewed research from me. ** I think that you would learn more about the economic behavior of people by watching them.**

**If all of the economists formed a circle and held hands, they could not form a conclusion! **

 

[stinkcat_14]

I gave you my assertions based upon my observations. In auditing, observations by an independent person are more persuasive than anything else!

And as I have said, you are basing your conclusions on anecdotal evidence, and it is very dangerous to generalize based on anecdotal evidence.

Economics is a social “science.” Economics is about people and their economic behavior. However, people change.

This I agree.

You are not going to get any peer reviewed research from me.

This you have made clear. You are too comfortable with your own preconceived notions to subject them to anyone else’s evaluation.

** I think that you would learn more about the economic behavior of people by watching them.**

Which of course is one of the many things that economists do. However, we do not generalize from anecdotal evidence, we do pay attention to things like data quality and the limitations of a particular sample.

**If all of the economists formed a circle and held hands, they could not form a conclusion! **

I am not sure what your point is when you keep bringing these types of claims up. Half the time they are not even remotely accurate. Are you trying to say that economists are stupid? If that is the case, why is it that we keep getting hired by private businesses? After all, if we add nothing of value they could save a lot of money by not hiring us because we don’t work cheap.

 

[CPA2]

And as I have said, you are basing your conclusions on anecdotal evidence, and it is very dangerous to generalize based on anecdotal evidence.

This I agree.

This you have made clear. You are too comfortable with your own preconceived notions to subject them to anyone else’s evaluation.

Which of course is one of the many things that economists do. However, we do not generalize from anecdotal evidence, we do pay attention to things like data quality and the limitations of a particular sample.

I am not sure what your point is when you keep bringing these types of claims up. Half the time they are not even remotely accurate. Are you trying to say that economists are stupid? If that is the case, why is it that we keep getting hired by private businesses? After all, if we add nothing of value they could save a lot of money by not hiring us because we don’t work cheap.

You forget that generalizations in business are very useful. They save us time! Perfection is the enemy of good enough. I do not need a 95% confidence level to make an assertion.

I love economics. However, I fail to see the jobs in the private economy for economists. There is, and always will be, a shortage of CPAs because of rent seeking behavior by the AICPA.

 

[Texas_Roofer]

…
**If all of the economists formed a circle and held hands, they could not form a conclusion! **

Economics is trade

All people are economists to some extent

 

[Texas_Roofer]

…I love economics. However, I fail to see the jobs in the private economy for economists. …

Setting price is a fundemental economic activity whether pricing is simple or complex. The price setter acts as an economist whether formally trained or not.

 

[stinkcat_14]

You forget that generalizations in business are very useful. They save us time! Perfection is the enemy of good enough. I do not need a 95% confidence level to make an assertion.

You have no problem making assertions, its just that you lack the requisite critical thinking skills to determine whether or not those assertions are valid.

However, I fail to see the jobs in the private economy for economists.

Well, if you don’t see them, then they must not exist.

 

[CPA2]

Something as important as education should not be administered by the state. If you cannot see from one end of an organization to the other end, you are already in trouble. Politicians NEVER spend a minute actually experiencing public schools, nor do their children, grandchildren, and yet they are the ones writing flawed policies for public schools.

If we are going to improve the school system, we are going to have to have competition. School vouchers to parents with no strings attached are a step in the right direction.

My wife was a teacher in the public schools and now she is a college professor. We have seen first hand the inflexibility and the stupidity of a school system administered by the state.

“Public schools” are no longer public. These schools are government schools.

Are vouchers going to suddenly make our children get straight A’s? No. School vouchers will not solve that problem, but public education does solve the problem of more A’s with grade inflation. When I was teaching school I was told politely that the legislature expected 90% of the students to pass!

I divide people into two groups: those that can count change and those who cannot count change. This division is highlighted every summer when I take a vacation.

I empty my pockets of change every night before I go to bed. I take all of this change with me every summer when I take a vacation. I have learned the hard way never to give a cashier more than one dollar in change. They cannot count it. If I give less than one dollar in change, the cashier just puts it into the cash register without counting it.

Most things have been “dumbed-down” for our high school functional illiterates, even our state colleges. Forty percent of the freshmen in college either fail college algebra, or drop with an F. The same percentage holds true in sophomore micro economics. (These percentages come from the professors in our local state college.) Many college professors have resorted to all sorts of gimmicks to help raise the grade average of their students. Many professors actually have a review for the test, which is actually a veiled attempt to go over the questions on the test.

I guess we should expect this from a “public” educational system that is administered by the state governments. The cornerstone of accounting is internal control. Internal control exists in accounting for private business; however, there is no internal control in government accounting. Quality goes down and prices go up in public monopolies. “Public” education is no different. Efficiency and effectiveness are hallmarks of private business, not government administration. The highest ACT scores were in 1963.ACT scores have been going down every since.

Name 7 possible objections to the school voucher plan and Milton Friedman’s answer to those objections.

1. The church-state issue. “…Vouchers would go to parents, not to schools. Under the GI bills, veterans have been free to attend Catholic or other colleges and, so far as we know, no First Amendment issue has ever been raised.”
2. Financial cost. “…(There is) present discrimination against parents who send their children to nonpublic schools. Universal vouchers would end the inequity of using tax funds to school some children but not others.”
3. The possibility of fraud. ‘…The voucher would have to be spent in an approved school or teaching establishment and could be redeemed for cash only by such schools.”
4. The racial issue. “Discrimination under a voucher plan can be prevented at least as easily as in public schools by redeeming vouchers only from schools that do not discriminate.”
5. The economic class issue. “Some have argued that the great value of the public school has been as a melting pot, in which rich and poor, native- and foreign-born, back and white have learned to live together. That image…is almost entirely false for large cities. There, the public school has fostered residential stratification, by tying the kind and cost of schooling to residential location. It is no accident that most of the country’s outstanding public schools are in high-income enclaves.”
6. Doubt about new schools. “What reason is there to suppose that alternatives will really arise? The reason is that a market would develop where it does not exist today…The one prediction that can be made is that only those schools that satisfy their customers will survive…Competition would see to that.”
7. The impact on public schools. “The threat to public schools arises from their defects, not their accomplishments. In small, closely knit communities where public schools, particularly elementary schools, are now reasonably satisfactory, not even the most comprehensive voucher plan would have much effect…But elsewhere, and particularly in the urban slums where the public schools are doing such a poor job, most parents would undoubtedly try to send their children to nonpublic schools.”

 

[stinkcat_14]

Something as important as education should not be administered by the state. ”

What does this have to do with the topic of this thread? Once again, everytime you have a question you cannot answer you change the topic. If you want to talk about the efficiency of the private sector versus the public sector start another thread. But don’t hijack this thread for demagoguery.

 

[Ignatius]

Worthy5:

What minimum wage do you think is a " decent" wage?

It would have to be at least $85-$100 per hour in order to allow the level of leasure and pleasure that most people would like. Anything less is a violation of Social Justice!

 

[Texas_Roofer]

It would have to be at least $85-$100 per hour in order to allow the level of leasure and pleasure that most people would like. Anything less is a violation of Social Justice!

Would 40% of average wage be so bad? Or if the current minimum wage were indexed to the cpi annully would that be so bad?

 

[Darkbloom]

his sales? How do you separate the sales of the boss? need to create a fantasy land to justify $0.01 ? Only in the newly created fantasy land $0.00 opportunity cost exist because the person knows no alternative and that is one of the prime reasons a minimum wage is successful. I never placed the $0.01 wage in fantasy land My posts are consistent $0.01 is horrible wage and inconsistent with the catechism. It would seem you attempted to defend it and then needed a fantasy land condition to justify that defense.
When an uneducated population is at the mercy of capitalism, often the capitalist take advantage of that person. The capitalist often treats that person simply as a source of labor. The catechism clear calls for fair treatment in the setting of wages regardless of education levels. This very condition along with history is why the US has a minimum wage.

“intrinsic value” as a quality that makes something of practical use.

that’s pretty good

You’re terribly inconsistent, and what is quoted above is splendid proof of how little you understand economics.

You posit a scenario where someone has a $0.00 opportunity cost, which is truly high fantasy, then bemoan the $0.01/hr your very scenario invites.

Truth is, anyone with an open mind has been presented with more than enough evidence to disagree with MW laws in this thread. But the entire liberal position is one of appeals to emotion and obfuscation.

 

[Darkbloom]

Keynes did quite well in investing, especially relative to the market as a whole:

maynardkeynes.org/keynes-the-investor.html

The guy who rejects any study he disagrees with as some sort of right wing propaganda wants us to accept a laudatory link about Keynes from his own website? That’s rich.

 

[Darkbloom]

Quoted here:

“William Wascher of the Federal Reserve System asked, “If it benefits some and hurts others, should we still do it?” An extensive literature review suggests that a minimum wage hike would have limited positive effects and may even increase poverty, he said.”

“Some concerns were voiced about whether raising the minimum wage could curb the already limited resources spent on training workers. Likewise, would the higher salaries squeeze important worker benefits?”

Those who want to help the working poor, but understand economics, have long sought ways to structure tax law to help. This is a good idea:

“Elaine Maag, also of the Urban Institute, said that a minimum wage hike should be considered with other proposals that would ease the squeeze on the nation’s poorest families. The earned income tax credit and the child tax credit, which target families with children, could be changed to better meet low earners’ needs. A slight modification to the child credit, for instance, could help families earning near the minimum wage offset a declining child credit each year.”

Quoted here:
“However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect.”

“First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.”

 

[vz71]

need to create a fantasy land to justify $0.01 ? Only in the newly created fantasy land $0.00 opportunity cost exist because the person knows no alternative and that is one of the prime reasons a minimum wage is successful. I never placed the $0.01 wage in fantasy land My posts are consistent $0.01 is horrible wage and inconsistent with the catechism.

While you are accusing others of creation of a “fantasy land” you are guilty of the same.

You are forced to create circumstances to force a .01 wage to conflict with the catechism. This alone means that your blanket statement that it is “inconsistent with the catechism” simply false.

There are many real world scenarios at our disposal that make a .01 wage (or even a 0.00 wage perfectly acceptable.

 

[vz71]

It would have to be at least $85-$100 per hour in order to allow the level of leasure and pleasure that most people would like. Anything less is a violation of Social Justice!

Your thinking too small.

Everyone should be the same. Legislate a minimum of 500k every year to everyone’s bank account.
That should allow for the cars, boats, and vacations that we all have a right to.

 

[TenBobNote]

The guy who rejects any study he disagrees with as some sort of right wing propaganda wants us to accept a laudatory link about Keynes from his own website? That’s rich.

My thoughts as well.

 

[stinkcat_14]

The guy who rejects any study he disagrees with as some sort of right wing propaganda wants us to accept a laudatory link about Keynes from his own website? That’s rich.

A couple of things here:

1. I never suggested from my response about Keynes that I thought this piece indicated anything more than Keynes seemed to have a good investment record. I never suggested anything beyond this. I would not generalize anything beyond that for the same reason that I reject CPA2’s evidence. It is clearly anecdotal. And I said as much in my next sentence:

But, whether or not he was a good investor or a bad investor tells us little about whether economists with doctorates (which was the claim) are bad investors.

If that is not a clear disclaimer of the limitations of my data point, I don’t know what is.

1. Second, if you knew anything about Keynes, you would know that he was dead long before Al Gore invented the internet. It is possible that someone fabricated the data. If you have evidence that the data I provided is false, then by all means provide it and we will discuss the data quality issue.