Unintended consequences: What do a deaf woman and an endangered woodpecker have in common?(nytimes.com)
nytimes.com
Unintended consequences: What do a deaf woman and an endangered woodpecker have in common?
http://www.nytimes.com/2008/01/20/magazine/20wwln-freak-t.html?ex=1358485200&en=0d05099c03c97375&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
16 comments
I agree that setting up straw men and other fallacies is a bad thing. There's two sides to every argument and they should be heard without reducing the argument down to insults or misrepresenting the other side's point of view.
On the other hand, I think you're yourself abusing the association fallacy by making a bold assumption that because the article points towards examples of laws with unintended consequences that they also automatically applies to the specific examples you've given. (i.e. opposing the minimum wage doesn't mean you hate the poor, but it equally doesn't necessarily mean that it's going to cause negative unintended consequences as implied)
On the other hand, I think you're yourself abusing the association fallacy by making a bold assumption that because the article points towards examples of laws with unintended consequences that they also automatically applies to the specific examples you've given. (i.e. opposing the minimum wage doesn't mean you hate the poor, but it equally doesn't necessarily mean that it's going to cause negative unintended consequences as implied)
In the case of minimum wage, it does. I thought it was a good example.
http://blog.russnelson.com/economics/minimum-wage.html
http://blog.russnelson.com/economics/minimum-wage.html
I disagree that it is that clear cut.
As a recent counter-example to the blog, view the UK's introduction of a relatively high minimum wage in 1998 which, despite above-inflation increases over several years, have caused little-to-no problems. Incidentally, the UK had it's highest employment rate in 2007 according to National Statistics Online (http://www.statistics.gov.uk/cci/nugget.asp?id=12). By the blog's reasoning, the exact opposite should have happened. For the record, I was fairly indifferent when it was introduced, but now I see it as a positive thing.
The blog makes the rather bold statement that "anybody whose labor is not worth the minimum shall not be employed" based around the assumption that anyone who earns less than the minimum wage's job is redundant and can be replaced. This simply isn't true, thinking about the large amount of service industry workers (e.g. waiters, supermarket-workers, fast-food workers) who are typically paid a low wage but are unlikely to lose their jobs. It doesn't mention that many companies can afford to pay more for unskilled workers but choose not to in order to create bigger profits in the knowledge that the employees don't have the choice of getting a better paying job. It avoids mention of the effect of increased consumption in the local economy, or the likelihood that price increases which require more manual labour will effect premium goods and services the most. There's plenty more additional variables too - it's simply not a case of the situation being summarised as "Higher wages = less jobs".
As a recent counter-example to the blog, view the UK's introduction of a relatively high minimum wage in 1998 which, despite above-inflation increases over several years, have caused little-to-no problems. Incidentally, the UK had it's highest employment rate in 2007 according to National Statistics Online (http://www.statistics.gov.uk/cci/nugget.asp?id=12). By the blog's reasoning, the exact opposite should have happened. For the record, I was fairly indifferent when it was introduced, but now I see it as a positive thing.
The blog makes the rather bold statement that "anybody whose labor is not worth the minimum shall not be employed" based around the assumption that anyone who earns less than the minimum wage's job is redundant and can be replaced. This simply isn't true, thinking about the large amount of service industry workers (e.g. waiters, supermarket-workers, fast-food workers) who are typically paid a low wage but are unlikely to lose their jobs. It doesn't mention that many companies can afford to pay more for unskilled workers but choose not to in order to create bigger profits in the knowledge that the employees don't have the choice of getting a better paying job. It avoids mention of the effect of increased consumption in the local economy, or the likelihood that price increases which require more manual labour will effect premium goods and services the most. There's plenty more additional variables too - it's simply not a case of the situation being summarised as "Higher wages = less jobs".
It's not clear cut, mainly due to a lack of useful data. I don't know much about the labor market in the UK (your link only discusses employment/unemployment in 2007, not the effects of minimum wage in 1998), but I'll discuss the US.
In the US, only 1-2% of workers make minimum wage. If a minimum wage law drove 50% of them out of work over 2 years, it would increase unemployment by only 0.25-0.5%/year. And 50% is a huge; in reality, far fewer than 50% of minimum wage workers will be driven out of the market.
The effects on minimum wage also don't last much beyond a few years, since the minimum wage is not indexed to market wage for low skill jobs (or even to inflation, which is not the same thing). So in a few years, the minimum wage drops below market wage and becomes irrelevant.
This effect is sped up by companies raising prices (since costs rise across the industry, this doesn't cause a loss of market share). This drives up prices, causing inflation, which again reduces the effect of minimum wage.
Minimum wage is mainly just a a propaganda tool for politicians. That's why it's not indexed to inflation: if it were, they couldn't get on TV and say "I care about America's poorest workers" every few years. That's also why minimum wage is kept low; if they pushed it above market wage for the bottom 1-2%, the harmful effects might be large enough to be visible (even if they are questionable, this is not a risk a politician wants to take).
In the US, only 1-2% of workers make minimum wage. If a minimum wage law drove 50% of them out of work over 2 years, it would increase unemployment by only 0.25-0.5%/year. And 50% is a huge; in reality, far fewer than 50% of minimum wage workers will be driven out of the market.
The effects on minimum wage also don't last much beyond a few years, since the minimum wage is not indexed to market wage for low skill jobs (or even to inflation, which is not the same thing). So in a few years, the minimum wage drops below market wage and becomes irrelevant.
This effect is sped up by companies raising prices (since costs rise across the industry, this doesn't cause a loss of market share). This drives up prices, causing inflation, which again reduces the effect of minimum wage.
Minimum wage is mainly just a a propaganda tool for politicians. That's why it's not indexed to inflation: if it were, they couldn't get on TV and say "I care about America's poorest workers" every few years. That's also why minimum wage is kept low; if they pushed it above market wage for the bottom 1-2%, the harmful effects might be large enough to be visible (even if they are questionable, this is not a risk a politician wants to take).
Well said. +1. I think Russ's point was that if minimum wage actually was raised high enough by the well-meaners that they thought it would institute social change, it would backfire in a most comical and epic way. Imagine if the minimum wage were set to 100/hour tomorrow...
Instead, politicians just wait till election season then realign the letter of the law to more or less match the current market value and then proclaim what a friend to the poor they've been from the doorway of their gulfstream.
Instead, politicians just wait till election season then realign the letter of the law to more or less match the current market value and then proclaim what a friend to the poor they've been from the doorway of their gulfstream.
We often take into account the most direct effects of a law without taking into account the indirect effects. Or, as Bastiat would put it, we look at the things seen but ignore the things not seen:
http://bastiat.org/en/twisatwins.html
http://bastiat.org/en/twisatwins.html
A minor meta comment; Good titles really do matter: http://news.ycombinator.com/item?id=103834
Ah, and now I understand why there even can be multiple submissions: I guess because of the various random parameters some websites attach (session ids or whatever), the duplicate detection mechanism of news.yc doesn't work.
Makes me wonder if there could be a way to assign a unique id to every website. I guess at least for news feeds it already exists, but not every submission has a news feed.
Makes me wonder if there could be a way to assign a unique id to every website. I guess at least for news feeds it already exists, but not every submission has a news feed.
I like your title better. I can already name a large number of things that a deaf woman and an endangered woodpecker have in common.
I think people vote up long, uninformative titles like this one because they secretly dread the prospect of reading about "second order" anything, but not about woodpeckers or deaf people (or cats or people being hit in the groin with a football).
I think people vote up long, uninformative titles like this one because they secretly dread the prospect of reading about "second order" anything, but not about woodpeckers or deaf people (or cats or people being hit in the groin with a football).
Indeed. I have been on the losing side of alternate-title later submissions more than a few times. However, I think I did search for "unintended" before posting this, and that wouldn't have found your post...
I enjoyed this piece, now whenever I find a loophole in a law that I can exploit for my own benefit I can blame the law! I'm not a bad person, it's a bad law! Along with the invisible hand of Adam Smith, I was basically bitchslapped into maximizing my profit at the cost of the needy, the disabled, and those damn woodpeckers. Won't someone feel bad for poor (rich) little (rotund) old me?
This is a puff piece ("things have unintended consequences" is as pablum as it gets).
The anti-environmental slant implicit in the piece is intellectually offensive. If land is in the hands of developers with plans for real estate development, the wildlife is already screwed. That doesn't mean tanking environmental regulations is somehow "better" for wildlife.
Ceteris paribus, this article sucks.
The anti-environmental slant implicit in the piece is intellectually offensive. If land is in the hands of developers with plans for real estate development, the wildlife is already screwed. That doesn't mean tanking environmental regulations is somehow "better" for wildlife.
Ceteris paribus, this article sucks.
I don't think the article is any more anti-environmental than it is anti-deaf people. Isn't it a benefit to the environment to point out policies which damage it when intended to help it so that they can be replaced with policies which help it?
What I think people should consider as a good course of action in some cases is not throwing their hands in the air and saying "shucks, we can't do anything", but rather considering things carefully, and perhaps modifying policies as they go in order to improve them given actual outcomes.
Economic law is almost as immutable as physical law: trying to fix poverty using a minimum wage is like building a bridge using the wrong tensile strength for steel. Intent is irrelevant, because you can't fool nature.