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Comment by partiallypro | Hacker News Reader

That's a silly argument, Denmark for instance, doesn't even have a minimum wage, nor Iceland, Italy, Liechtenstein, Norway, or Singapore..and technically neither does Switzerland. I'd hardly call those "libertarian" societies. Then again, I have a hard time taking someone seriously when they equate general labor with literal slavery. If you have mobility of labor through your own free will, you are not a slave. It's disgracefully offensive to those that actually do, to this day, work as slaves. Working for $8.50/hr at McDonald's is not slavery.

As was debated in prior threads, minimum wages are nonsensical from an economic (and welfare) standpoint. Negative income taxes or living wages make a lot more economic sense.

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While technically the Scandinavian countries have no minimum wage, they also technically lack a standard work week and most other aspects of what in the U.S. is considered employment law. But these all still exist, just not as statute law. Employment conditions are instead set in collective negotiations between labor representatives and industry representatives. In Denmark, for example, the Confederation of Danish Industry (DI) and the Danish Confederation of Trade Unions (LO), mainly, periodically negotiate and revise big framework agreements. These cover almost all workplaces in the country, which makes the contents of the agreements de facto pretty close to the national labor law. They include agreements on the standard work week (37 hours) and the minimum wage (109 DKK, roughly $16.50). There may then be sector agreements or individual workplace agreements on top of these, but the big framework agreements set the basic conditions of employment.

It's worth noting that consumer goods in Denmark are insanely expensive, which is what many are arguing will happen here with a $15/hr min wage.

And yet Danes can somehow still afford them.

I live in Norway where many of the same conditions pertain. I suspect that one reason for there not being a minimum wage here is that unemployment is low, which means that you have to pay a reasonable amount in order to get someone to work for you.

What kinds of consumer goods? When I lived there, it seemed reasonably cheap to me. Groceries were about normal from a US perspective, and rent in Copenhagen was quite low for a major city (~$1250/mo for a nice 2bd in a central part of the city). Some things varied, e.g. pork was very cheap, while fresh fruits were often expensive, but that's more a question of geography than anything else. Beer was exceptionally cheap, like $4/sixpack type prices. Fast food was on the expensive side, and labor costs are probably a part of that. Nicer restaurants were normal by American standards (expensive compared to Texas, cheap compared to SF or NYC). Overall I think my cost of living was lower than when I lived in the SF Bay Area, by a not-trivial margin.

I don't see how you in any way address what I said (in fact I mostly agree with you):

> I'd hardly call those "libertarian" societies.

I didn't claim that society has to be libertarian to not have minimum wage.

> If you have mobility of labor through your own free will, you are not a slave.

It's a different definition of the word "slave", and perhaps more precise, that you are using here. Technical word for what I mean, is, I believe, "precariat". It's not the same as slavery but there is often an overlap. And historically it's not obvious that one or the other is definitively worse condition.

For example, Czechoslovakia was communist. People were not free, yet they were economically quite well off. Today, people are politically free, but economically, some (although a small minority) are worse off. Because of that, I don't think it's obviously "disgracefully offensive" to compare the two situations. It's certainly not offensive to the poor people who make the comparison themselves.

> As was debated in prior threads, minimum wages are nonsensical from an economic (and welfare) standpoint.

It is only nonsensical if you subscribe to theories of "rational" decision-making, which do not hold for humans in practice. See for instance the ultimatum game, and how people respond to it.

> It is only nonsensical if you subscribe to theories of "rational" decision-making

Oh, dear lord, you have just fallen into a stereotype of a person that thinks they understand economics, but actually doesn't. So, we'll just leave it here. Not all economics assumes 100% rational decision making from an overall perspective, you make those assumptions so you can make a model to test. A basic game theory table can tell you that much; even with the simple example of the prisoner's dilemma.

You can make a "rational" decision without it being rational to an outside observer. For instance in the prisoner's dilemma it's in both people's interest to not cooperate, but since not all factors are known the "rational" decision is less apparent and both will betray one another. The field of economics, that generally is on the side of free trade (even from people like Krugman), is a much deeper field than the shallow picture you just painted. I basically already had your politics/understanding of economics picked from your previous post, but now I have a pretty clear picture.

Well, as far as I can tell, minimum wage has been tested, and, contrary to the claims of "rational" economic theory, according to which it should cause unemployment, it doesn't. I agree that many economists do not completely subscribe to the rational choice, and by the way, many of them do support minimal wages. So my understanding of economics is not an issue here.

> So my understanding of economics is not an issue here.

Actually it is, because most economists agree that you can raise the minimum wage and have -some- positive outcome. It depends on market elasticity. But, sure you can believe whatever you want. There's a reason why you can raise a minimum wage by $1 with some positive effects (you could still have negative effects,) and not $100 because it would have massive negative effects. It all depends on market elasticity, it's curve.

The argument above was basically, 'modern economics isn't a real because it assumes rational actors!,' which is absolute nonsense.

FYI, the Nordic countries do not have national minimum wage, but they have strong government protected unions who negotiate a minimum wage per industry. It's a much better solution, and frankly the loss of industry unions is a tragedy for the US and the only reason people think they need a national minimum wage - which is really a dumb solution.

The conspiracist in me likes to think that corporations there push for minimum wage as one of many ways of stripping unions of power, and to argue that they're not necessary

It's possible that a national minimum wage increase could be achieved revamping the entire nature of labor and unions not as likely. We can talk about implementing the later and doing away with the national minimum wage thereafter.

Minimum wages proposed by unions are designed to destroy the job prospects of non-union workers. It is pure self-interest on the part of the union.

So don't allow contractual exceptions. Incidently almost all union workers make more than minimum wage.

That doesn't make sense. A business wants to have as few union workers as possible. If they only give raises to union members then everyone will want to join a union further putting the business during negotiations in a even worse position than just raising the wages for everyone.

Those countries mostly have stronger unions which negotiate effective minimum wages.

Singapore is the exception. Economically it's business friendly to an almost absurd degree (which approximates liberatarianism). Consequently income inequality there is ridiculous even compared to America.

what do you mean by the "living wages" then?

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