27
Mar
2012
Minimum Wage
This will be the last ECON MOMENT until I experiment with the mic situation. I realize this sounds like I’m being huffy, but I don’t feel like reading a bunch of comments from people offering to buy me a mic every time I post one of these. Hopefully by the weekend I will see how much additional time it takes for me to incorporate an audio track and synch it up (which was always the constraint). After getting a few of these under my belt, I’m hoping it actually won’t be as much of a time suck as I had first thought…
Why can’t you just record, with a good mic, straight into the video program you are using now? Why would you need to do syncing?
If there is a PC at the heart of the recording setup, that may be possible. If instead a handheld “all-in-one” video camera is used, then it may have limitations on external mics. And likely its inbuilt mic is not sufficient for the task. This would necessitate separate recording of audio and video and the subsequent synching for the final product.
Et tu, Gene-us? Here’s the process right now:
(1) Rearrange the lights etc. in my office, set up the camera to minimize the fight-scene-from-old-Batman-show effect with my bookcase, etc. 10 minutes.
(2) Record the video. If first take, 10 mins. If two takes, 20 mins.
(3) Transfer from camera to desktop via USB. 5 minutes.
(4) Convert AVI file to MP4 file with utility. 30 minutes
(5) Import into iMovie. 10 minutes
(6) Put front and back starry sequence in, come up with “witty” subtitle, clip out leading and ending trail of video. 10 minutes
(7) Convert to finished MP4. 45 minutes (?)
(8) Upload to YouTube. 30 minutes
Now in theory I can be working during a bunch of the above, but in practice I get the spinning ball and everything slows way down when it’s processing. Also, it’s hard to concentrate when I may have just made a video that will change the course of Western civilization. (I don’t expect you to empathize, Callahan.)
Now, if I want to incorporate better audio, I think I have to:
==> Plug a mic into my laptop and record the audio track.
==> Load that into iMovie as well.
==> Figure out how to turn off the audio track from the camera.
==> Keep tinkering with the audio and video tracks to line them up properly, avoiding a kung fu movie effect.
Beyond the extra time it will require for every session, there is also the (I’m guessing) two hours it will take me the first time, to figure out how to do it.
So in light of the above, you can imagine how much I enjoy seeing:
“bob u need a better mic bro. have tom woods ask peter schiff. he’ll get u one. peace dawg”
Bob, you need to get Silas to build you a screaming fast PC. Capital investment time!
Hey, if Bob is willing to pay to have it shipped over, and sign a contract agreeing to run it to mine bitcoins at night, he can borrow my supercomputer
How’s the ROR on that thing today?
Not good 🙁
Btw, congrats on your posts on Sumner’s blog, hammering him on the 5% and all the other stuff. I don’t see why they don’t respond though.
Oh he’s responding, and so are a lot of the others. It’s just that he so often responds to the most trite of comments, while leaving the most crucial points untouched.
Ultimately I enjoy the banter. I’m learning a lot about what makes the more unconventional Chicago types “tick”.
I think the best part is that there, like here, most of the commenters and the blog owner are serious about ideas.
Oh he’s responding, and so are a lot of the others. It’s just that he so often responds to the most trite of comments, while leaving the most crucial points untouched.
I taught him that, but young Sumner has much to learn.
Maybe you can use the Jedi mind trick
“You don’t need to target NGDP, that isn’t the goal you’re looking for.”
Also, have a look at http://zencoder.com/
You might be able to click once to upload to them, and they handle the transcoding and upload to YouTube.
Hi Robert,
I can do all the editing for you. I have a fast computer and I’m experienced with video editing.
There are sites that allow you to do a direct transfer to other people through the browser: http://host03.pipebytes.com/ , http://click2copy.com/ , http://jetbytes.com/ .
I just tested the first one and it was very simple (select file, get a link for the other side, and click ‘start’). Its speed was limited at 625 kilobytes per second, which means a 500 megabyte file takes 13 minutes.
You can use Audacity for Mac ( http://audacity.sourceforge.net/download/ ) to record from a USB mic, and then save as mp3, which makes the audio file size around 10 megabytes.
There is probably also someone out there willing to allow us to use their FTP server (that’s where you upload and I download it later). I think I know someone I could ask.
That way you don’t have to worry about any of the computer stuff, just record video and audio, send the raw files, and receive back the final edit within a day, max. I can also give you some tips about the camera (how to use, etc).
I think you’re a very valuable Austrian, and I would love to see your online presence increase. So from that point alone I’d like to help. But I’m also trusted by people working for the Mises Institute. Danny can attest to that. I’m also not against donations 😉 ( http://nielsio.tumblr.com/post/20004717120/request-for-donation-subscriptions-and-a-new-channel ).
I hope you consider this.
I thought all those books were some downloadable backdrop.
Bob, I’ve always held much the same view as you on minimum wage, but have recently paused to reconsider in light of some new empirical research. And, by “new”, I don’t just mean the original Card and Krueger (1994) paper that every grad student has to study…
In that regard, what do you make of this discussion?
Stickman I think Phil Jones’ emails show that minimum wage laws don’t work.
His comments on minimum wage were taken out of context!
As usual, the theoretical arguments used to “explain” the empirical results of observing an absence of a temporal reduction in employment after minimum wages are increased, are fallacious.
“According to the economists the effect is driven by an entirely different force: market power of the employers. Imagine a fast food restaurant in a small city. Opening a second outlet might be profitable for the owner of the restaurant. However, he might have to pay higher wages for hiring the extra staff he needs in the second restaurant. Since he is not able to differentiate the wages between both restaurants, he would drive up his labour costs in the existing restaurant. This effect harms the profitability of the first restaurant less and might discourage the expansion of the business completely. However, if the government introduces a minimum wage, labour costs rise anyway and the second restaurant might become more attractive again.”
This is just jaw droppingly wrong. So many errors.
The owner will indeed be able to differentiate the wages between both restaurants. He’s the one paying his employees!
The notion that because “minimum wage will make labor costs rise anyway”, that the opening of the second restaurant will “become more attractive again”, is a non sequitur. The business owner knows the wages he has to pay. If he realizes that a wage rate of, say, anything greater than $10 an hour will make the second restaurant unprofitable, then it won’t matter to the owner if the state makes it mandatory to pay no less than $10 an hour. It will still be unprofitable. The minimum wage law isn’t a law that says consumers have to pay more at businesses where the minimum wage law is relevant. It would be like you considering the purchase of a house, and saying “I will not pay a penny more than $290,000 for it”, and then after the state swoops in and declares that this house is now legally forbidden from being sold for less than $300,000, you then say “Oh, well, now everything’s different. NOW the house is attractive to me and NOW I will buy it, for $300,000.”
“Due to frictions labour markets in the real world do not work as efficiently as economists use to assume in their models, Mannings monopsy theory goes. For one reason or another employers in the low paid segments of the labour markets are enjoying market power. They are able to push the wages of their staff below the equilibrium level of perfect competition.”
The real world is not pure and perfect. Refuting ANY conclusion made on the basis of the pure and perfect competition doctrine, is not the same thing as saying the state is justified in interfering in the real world market process.
It would be like me saying that because the state fails to satisfy the requirements of pure and perfect governance, it means that the market process should absorb governance, to abolish the state.
Then there is just the obvious question: If minimum wage laws really did have no effect on employment, then why not enforce a minimum wage of $1000 an hour? If you realize that would be detrimental to employment, then WHY? Because it’s higher than a specific wage rate, right? What is that wage rate then? Clearly we can only find out through the market process itself. It is not sent from Zeus or the state. And yet, the market process is the very “free market” wage that supporters of the minimum wage claim to be problematic in settling what wage rates “should” be!
Since there is no other recourse people have to know what wage rates should be, it makes no sense to say that one can know what the minimum wage rate should be, by basing it on the very market rate that one says is too low and that can be increased without generating any unemployment!
I think you are misunderstanding ‘distinguish’
Example
In restaurant 1 I pay you $4 and you earn me $5.
If I open restaurant 2 I will need to pay Fred $8 there, and so $8 to you too. Laws or contracts dictate this. [I cannot ie may not distinguish.]
Thus I lose $3 expanding. No new job for Fred.
The minimum wage rises to $8.
Now if I expand I will earn $2 not $1, so I expand. New job for Fred.
Clever. The nub is the requirement to pay you more if I pay Fred more.
Removing that requirement will be more effective in creating jobs than raising the minimum wage.
It will ‘create’ Fred’s job and not price any marginal workers out.
In restaurant 1 I pay you $4 and you earn me $5.
If I open restaurant 2 I will need to pay Fred $8 there, and so $8 to you too. Laws or contracts dictate this. [I cannot ie may not distinguish.]
Thus I lose $3 expanding. No new job for Fred.
The minimum wage rises to $8.
Now if I expand I will earn $2 not $1, so I expand. New job for Fred.
This is silly. If I earn you $5, then you’re losing $3 by paying me $8. You’ll fire me. It doesn’t matter if you will earn from hiring Fred. My job is toast.
You have misunderstood. My PROFIT on the meal is $5 not my INCOME Example. I sell a meal for $20. It costs me $4 for your services, $11 for food, lighting, inusrance, other employees etc. I charge Bob $20 for the meal Profit $5.
Try it again with $5 profit and you will see the point.
I am looking forward to seeing your mouth move desynchronized with your voice.
Wouldn’t the additional employee generate $4 worth of additional revenue rather than $4 worth of additional profit?
And if you are paying him zero initially (the basis for that calculation) then the two are the same.
Have you thought about talking to Peter Schiff. Maybe Tom Woods can get you in contact with him.
This is in the wrong place. I meant to comment under your response to Roddis. After you talk to Schiff have him give me a call. I need a new computer that prevents my jokes from being ruined by placing them in the wrong place.
Personally, I suffer from significant loss of hearing, especially in the higher frequencies. The high frequency audio from these videos is easy for me to understand. If the audio is changed and if I renounced Rothbard and if I then became a Nozickian, should I sue for the failure to accommodate my handicap?
http://www.lewrockwell.com/rothbard/rothbard63.html
So, what’s on the menu? IMAX video and surround-sound audio?
I’m hiring Lucasfilms, Bob. From now on CGI Yoda will deliver the ECON MOMENTS.
100% reserve have you will.
Mmmmm. Hard to see, the Bernank is.
I think the argument against the minimum wage needs to be made together with the argument against welfare. The government is in fact not hurting low-skilled people who couldn’t get a job because instead, they get a welfare check (which incidentally is probably higher than the minimum wage after tax, but besides the point).
Thanks for the video.
I am an opponent of minimum wage legislation but I think some of your point go wrong. Whether you hire someone and how much you pay them is a function of supply and demand of labor and not of productivity. The productivity just sets a maximum threshold for your salary. So as for your question why not everybody is being paid the minimum wage, the answer is very simple. Not everyone is competing in a labor market with excess supply. Brain surgeons certainly don’t. But some people who also do have a productivity of more than 5,50 may have to compete with their skills in a labor market with excess supply.
The second point is, saying someone has a productivity of 4 dollars an hour is wrong. As Austrians like to point out all the time, nominal values don’t matter. Someone has a productivity of producing a certain amount of products or delivering a certain amount of services per time. The prices at which these products and services sell can change over time. So if you are cutting hairs and you do one haircut an hour, what a minimum wage across for the entire market is going to do is raising the overall price level of haircuts. So you still do one haircut an hour, but your employer has to charge his customer more money. The minimum wage law raises your nominal productivity at the expense of your customers. Of course, this only works as long as you don’t have competitors that are not subject to the minimum wage.
I want to pay you $4 to cut my hair. You are willing to but good neighbor Sam intervenes, insisting I must pay at least $5. I decline. You don’t get the $5, you don’t even get the $4. I don’t get my haircut. Looks like Sam’s rule has cost us both.
What am I missing here?
Sure, it’s possible (however not proven) that customers react to the increase in price by having their hair cut by their mothers for free. But it’s also possible that they cut back on something else and accept the increased price. In any case, that’s not what Dr. Murphy said.
So if by dint of his innate shrewdness barber Bob has determined I will pay $4 but no more then barber Bob will hire you if want less than $4 but won’t hire you if you want more than $4. Looks to me like the $5 minimum rule pinches you, me and barber Bob. QED.
And it IS QED because we are talking about the marginal worker ex hypethesi.
The law in all its majesty forbids the rich and poor alike from paying brain surgeons $6 an hour.
What Christopher is missing is that we are looking at the workers who are on the margin, those whose value to their employer is greater than the least they would themselves accept but less than what the minimum wage law requires. Arguing that there are workers, like brain surgeons, who don’t fall in that category is beside the point.
Please keep in mind that I am not trying to make the case for minimum wage legislation. I am in fact opposed to it. I am reacting to some things that Dr. Murphy has said that I think are inaccurate or at least incomplete.
He made the point that you can’t explain why brain surgeons are being paid more than the minimum wage law if you believe there are workers that are being paid less than the minimum wage despite the fact that their productivity is higher than the minimum wage. I don’t think that is correct.
My second point is that Dr. Murphy is ignoring the effect on prices that a minimum wage law could have. I am not saying that there are no effects on the unemployment rate and I am not saying that all adverse effects are set off by increases in prices, I am just saying that the worldview that employers will compensate for 100% of the additional costs of a minimum wage by laying off people is simplistic and implausible. The world is a little bit more complex than this.
He made the point that you can’t explain why brain surgeons are being paid more than the minimum wage law if you believe there are workers that are being paid less than the minimum wage despite the fact that their productivity is higher than the minimum wage. I don’t think that is correct.
It is correct. Brain surgeons are making more than the minimum wage because their marginal productivity is that much higher. If you accept that, then you must reject the notion that brain surgeons are making that much more than the minimum wage through chance or whim on the part of their employers. Well, if you accept that is the case, then you must also reject the notion that workers who are paid less than the minimum wage are making less than what their marginal productivity will allow for, through chance or whim on the part of their employers.
My second point is that Dr. Murphy is ignoring the effect on prices that a minimum wage law could have. I am not saying that there are no effects on the unemployment rate and I am not saying that all adverse effects are set off by increases in prices, I am just saying that the worldview that employers will compensate for 100% of the additional costs of a minimum wage by laying off people is simplistic and implausible. The world is a little bit more complex than this.
What you believe is a common fallacy. It’s what Hazlitt spoke about in one of his chapters called “Enough to Buy Back the Product.”
As for the “the world is more complex than 100% perfect relation between additional costs of minimum wage and laying off people”, is something that no central planner of wage rates can understand in detail such that is able to raise minimum wages here, not raise them there, and cause no additional unemployment anywhere.
THAT is a simplistic view of bureaucrats having omniscient knowledge.
Minimum wage law is a blanket law. It applies to everyone. It is silly to bank the law on “maybes”, like “maybe in this particular business, employers are willing to raise wages, but aren’t because the employees aren’t informed enough to ask for them”, or “maybe there is a restaurant that currently pays less than what the employees could get if they striked, but they’re too afraid to do that, so it’s a good thing the state swoops in and make the raise mandatory so that the onus is on the state instead”, etc.
This is why most large scale panel data studies of across country data concerning minimum wage versus employment, do show that raising the minimum wage decreases employment, and it is why studies like Card and Krueger (1994), who looked at only two states, NJ and PA, show no such evidence.
“Whether you hire someone and how much you pay them is a function of supply and demand of labor and not of productivity. The productivity just sets a maximum threshold for your salary.”
Professor Murphy wouldn’t deny this. He’s only stating that competition makes the wage rates tend toward their respective MRPs.
“Not everyone is competing in a labor market with excess supply.”
“Excess supply” would be minuscule to nonexistent if the government eliminated its self-created barriers to competition. Ironically enough, the minimum wage is one of these barriers to competition that the government creates. In addition, rather than thinking of it as excess supply, think of it as a deficiency of demand.
“The second point is, saying someone has a productivity of 4 dollars an hour is wrong.”
This is just short for saying that “an employer”, or “the average employer”, or perhaps “the employer willing to pay the highest wage,” values the worker’s services at 4 dollars an hour. That is, the employer believes the worker has a productivity of 4 dollars. This is a video made for the layman, so shortcuts in speech should be expected.
“So if you are cutting hairs and you do one haircut an hour, what a minimum wage across for the entire market is going to do is raising the overall price level of haircuts.”
This is certainly a possibility, but it depends on the circumstances. What you have to realize is that in such a case, the barber’s real productivity was originally lower than his real wage. That is, although the minimum wage doesn’t increase his real productivity, his real productivity already validates a higher real wage than he is receiving. In such a case, he wouldn’t be fired. Yet, again, with less barriers to entry, such a case would be minuscule to nonexistent. In addition, there are likely other fields in which workers will be fired. These are the fields where competition has already bid up their wages to their respective MRPs, or at least where the minimum wage is absolutely too high for the workers’ productivities.
Thank you for the videos; they are great.
Why didn’t you mention that minimum wage laws were designed to help already employed whites at the expense of not yet employed blacks? Saying the law was designed to help the less fortunate when the motive for passing the law was the complete opposite is misleading.
And by artificially creating unemployment (as well as with other costly regulations and taxes), leftish politicians create a demand for their “solutions” which creates four constituencies, that of the those who receive the help , the bureaucrats whose job it is to provide it, the social or civil rights groups who get paid to defend the laws and stir up support for the laws amongst the people, and business owners whose high costs can lead them to look for help from the very people who are screwing them over.
Of course if these are intro videos maybe you just don’t want to get into all that.
Warren wrote: Why didn’t you mention that minimum wage laws were designed to help already employed whites at the expense of not yet employed blacks?
Because I suck.
I need to apologize for make critical remarks without first letting you know that I appreciate the video.
You have been one of my favorite people since the ASC days and I know you work hard at this stuff and it is important that more coherent economic theory gets put out there in as many different venues as possible.
So thank you for the work you do.
I’m mostly kidding Warren. It takes me a day to bounce back after diving into the comments of my Sunday blog posts.
That’s it. I’m not commenting on your Sunday blog posts anymore.
I would rather you be on your game in economics Monday mornings.
“Because I suck.”
Well said.
In all seriousness, what do you hope to accomplish with these videos? What demographic are you aiming for?
Bob makes his living selling books and consulting. That’s the target demographic. This is not to imply anything cynical on Bob’s part. He likes teaching economics, and is looking for ways to do it that let him earn a living. Like carl Sagan liked teaching science, except Sagan had better sound quality.
Like carl Sagan liked teaching science, except Sagan had better sound quality.
You’re trying to turn me into a villain from a Scooby Doo episode at this point, aren’t you?
Redundant.
I really don’t understand what the big deal is over the audio. It doesn’t bother me in the least. If I was watching a movie then it would but not for some 5 to 10 minute video blog. I say don’t worry about it and let the haters hate. I’d rather have the videos as is than no videos.
It’s all for you, Swazi.
Yes, yes, yes, of course.
if you are trying to appeal to your current “fan base” , that’s great, just great. But come on, how many times have libertarians heard arguments about the minimum wage? There must be dozens of videos on Youtube about it (made by more, ahem, professional video makers), and even more columns on mises.org using the analysis you use to condemn wage controls. For that matter, I could have cracked open Paul Krugman’s textbook and found a similar condemnation of the minimum wage.
If you are trying to appeal to the average Youtube viewer, who may not have any understanding of economics, your video still falls short. How many Youtube viewers flock to videos that feature a nervous-looking man speaking into poor audio equipment for 9 minutes? And do you think having AnCap in your username might scare some people off who are new to free market economics? I’m just curious as to what your ultimate goals are for these videos. And if you do respond, please at least try to be serious.
Swazi I have absolutely zero interest in placating you on this issue. You think you are asking an honest question when your hostility oozes out of your “legitimate” inquiry. Hey Swazi, what do you hope to gain from this constant barrage of nitpicking in the comments of my blog? Heck, Krugman does a much better job ripping Austrians. Give it up man. And pick a better nickname; who would side with “Swazi”?
Awesome. I feel your pain reading these comments. It’s usually the case that nitpicking know-it-alls are the ones who comment while the people who like the videos don’t even think to say anything.
What a stupid complaint. These videos are fantastic for people in my family. I’ve been able to convince them of the merits of libertarians but they don’t understand a lot of the arguments yet. Videos like these save me a lot of time and effort trying to explain these issues. If Swazi has better ideas let him make his own videos. To heck with all the haters.
Awww, did I make Bob Murphy upset?
Save your hostility for Krugman, big boy!
Geez…not as upset as he apparently made you merely by posting a few informative videos…
Fuuuuny. You didn’t notice what Bob did there, did you Swazi?
This might help your audio mic problems.
If you can, use your video camera as a video source in your iMovie. In other words, don.t use the “tape or disk” on your camera but only use it as a live source. That way your Mac is the one recording the video/audio and you will have the capability to plug any mic you want in the audio jack of your Mac.
Some would argue that workers who earn measly incomes due to a lack of a minimum wage mandate will not be able to sustain themselves. That may be true in the current economic environment. However, if the markets were deregulated, business costs would decrease and thus consumer goods would become more affordable. This allows the low-wage workers to have a better chance of sustaining themselves.
I don’t get what the big deal is with the sound. It sounds great to me. Keep the videos coming Bob!
Title cards would help. Like that old Bob Dylan song, or Birth of a Nation.
I like the sound in your videos. I pretend I’m in a far future dystopia, listening to the transmissions of a revolutionary, and the the sound is a result of the many state security measures you must hack through in order to transmit your messages.
Can’t stop the signal!
I aim to misbehave.
You cover the point of why all employees wouldn’t just be paid minimum wage, i.e. collusion between all employers is impossible.
I would suggest, though, that an intermediate position between total competition and total collusion exists – employers collude to a small degree which pushes down wage rates for employees. Only some employers would have to hold off bidding away labour from their competitors for there to be an effect.
A recent article I read, which I can’t find at the moment, depicted the supply of labour as being price-insensitive – workers would work for any wage they could get.
But I think there could be a more complicated model which includes ideas of bargaining: by workers holding their prices high, they could pull up the demand curve. A minimum wage is similar in effect to the suppliers of labour bargaining collectively rather than individually and increasing their negotiating power.
Another angle to look at the problem is division of revenue between complementary types of labour and owners of natural resources. Suppose for a product to be sold in a shop, one needs shop workers, managers, engineers, accountants, and owners of natural resources to sell them to get production started. The revenue is divided, first by wages in the business selling the goods, and the remainder goes to its suppliers. (For simplicity, assume there are no investors to pay, and no taxes.) Then the same happens in the suppliers, back up the supply chain until whatever is left reaches the owners of natural resources. If any one of these groups withdraws, there will be no good produced whatsoever! These groups are essentially negotiating between themselves how to divide up the revenue through (a) the labour market and (b) the market for sales between businesses. Who comes out the better depends on negotiating power, which can depend on things like the prestige of people in certain professions, or how big a negotiating block one is part of. (For example, an unemployed person without much savings will not be willing to hold out for a higher wage for a long time. This is essentially the essence of negotiating power – how long you can hold out for.) A minimum wage increases the negotiating power of low-wage workers by forcing them to hold out for a higher wage than the minimum wage. The effect is a redistribution of the revenue from the others to the low wage workers.
http://www.youtube.com/watch?v=4zNoxjUUyec
As a serious question, is there some body of empirical research economists point to that demonstrates that minimum wages laws affect jobs as you claim?