Here's Why Supply and Demand is Overrated! | Economics Explained

[@EconomicsExplained]

A huge thank you to Acorns for making this video possible. Go check them out, it helps the channel and hopefully makes saving and investing that little bit easier! Sign-up for Acorns now and they'll deposit $5 into your investment account to help you get started with investing! 👉 www.acorns.com/ee?s2=SND1

[@simulping4371]

no

[@georgewood6897]

acorns in australia called raiz? looks the same

[@0xjrr]

I tried looking at it but it was a bit confusing for someone in Europe. By the way, another great video.

[@jemesmemes9026]

what music did you use?

[@1337w0n]

I disagree with the assertion that a $0 minimum wage would lead to 0% unemployment, and as far as I can tell, you don't actually defend that position. Also, you're ignoring the fact that if there's no minimum wage, then when new workers enter the workforce, they can be paid lower than the previous generation, and then be conditioned to accept the wages they receive as acceptable and normal. And this isn't speculation; this is what's happening in the United States at this very moment, because minimum wage has remained stagnant for decades.

[@bobguy280]

We talked today in my Econ class about how economist using “perfectly competitive” is the equivalent of a physics teacher using “in a vacuum”. Sure it’s true but it’s not what you find on Earth.

[@firstwavenegativity6379]

Theory is filled with these. Angles and lines also don't actually exist.

[@Zenheizer]

Great analogy

[@jimr3286]

It's a disgrace to compare a natural science with a social one.

[@honestabe6926]

Haven't taken physics, but I definitely agree with the "perfectly competitive" part!

[@_daudnasir]

Cetirus Peribus

[@quantumhorizon]

$0 dollar wage workers come in two forms: grad students and interns.

[@garethbaus5471]

I actually made $20 an hour as an inturn.

[@AdonisGaming93]

But then if there was a UBI to at least stop you from starving...that $0 internship is fine if it means I can go pursue something I love and not starve. But too bad modern politics will never allow this.

[@garethbaus5471]

@stockart whiteman depends a lot on what your major is, $20 an hour is about average for an engineering inturn.

[@StuartFerguson55]

@@garethbaus5471 but how much would an English inturn get paid?

[@thomasdtrain]

@@StuartFerguson55 I have no idea what English majors would even intern as. Do English majors just go into education to teach English or something?

[@AstolfoGayming]

It's worth noting that the countries mentioned at 17:20 have very powerful unions, so even if there is no standard minimum wage, you'll still be earning a pretty decent amount no matter what job you do.

[@EconomicsExplained]

definately worth mentioning. THey have alternative protections in place outside of regulation. Unions, Strong welfare, UBI's, all help make this possible.

[@alexcereuceta5907]

@@EconomicsExplained echoing a bit what op mentions, the idea of a $0 minimum wage in a “free market capitalism” system such as the American, is unsustainable without the social safety-netting of said Nordic countries. The video is great, and I knew that the examples were coming, but our “laissez-faire capitalism” enthusiast (read libertarians), will absolutely and unapologetically abuse your video to push against minimum wage increases, choosing to ignore the social systems put in place by the government itself to regulate the virtual $0 minimum wage Scandinavian work market. An extra 45 seconds or so to explain their remarkably robust safety net systems would’ve made your video simply perfect.

[@caorusso4926]

Just look at india, they have 0$ wages and still happy. The nordic system is inefficient and overrated

[@czechmeoutbabe1997]

@@caorusso4926 yeah uh huh www.indiatoday.in/business/story/indian-economic-slowdown-challenges-unemployment-coronavirus-inflation-demand-1713197-2020-08-20

[@indeed1023]

@@caorusso4926 India has a huge amount of poverty and the wealth disparity there is insane....

[@viktorsigurdarson]

Iceland doesn't have a minimum wage because everyone has the right to join a union and 90% of people are in a union wich set their own minimum wage for each field of work

[@firstwavenegativity6379]

@Viktor Kolbeinn Sigurðarson That's the point of the video, in the absence of artificial rigidities, market forces (such as unions) still shape and regulate wages.

[@viktorsigurdarson]

@@firstwavenegativity6379 well it's the law that everyone has a right to a union

[@jessicaneafie590]

@@ShiningTitan The United States. There are entires markets where unions are prevented from existing and regulation that has given them no power to actually collectively bargain.

[@Zmap6191]

@@ShiningTitan no where in the US. Federal law (and in many cases State law) prohibits companies from stopping their employees from joining unions..On the other end of the spectrum "Right to work" proponents think that somehow it means unions can't be formed in those states. In fact it's the not the case at all.. here is an excerpt of what this actually means..They claim this helps attract businesses but there is no evidence to actually back that claim up. 24 of the states already have these laws but a majority of these states have blue collared workers in manufacturing jobs and they also have unions..eg. Michigan, Ohio etc.. "Right to work" laws address situations related to memberships in labor unions -- In short, you never need to join a union or pay union dues to be hired or to work for a company. Commonly, these laws involve employers refusing to hire non-union workers or requiring that workers join a union as a condition of employment. This behavior is illegal because people have the "right to work" without being part of a union under state and federal laws.

[@Zmap6191]

@@ShiningTitan maybe read my second paragraph which literally says the same thing you are saying..

[@mastergreenfox6004]

"When was the last time you checked the price of a nice restaurant before you sat down?" Every. Single. Time. I guess I'm not normal for wanting to make sure the price seems reasonable for the food and location before I'm obligated to pay it. I don't just waltz into some new location without trying to find information on it first.

[@Olivia-W]

... Yep. I don't have the funds to just willy nilly waltz into a restaurant and pay whatever the going rate is. Going to a restaurant is a _planned_ event for me.

[@Anonymous-ld7je]

Me too buddy.

[@At0micMeltd0wn]

I just don't go, ez

[@mikemiller7377]

This is just to let you know that you are in violation of the laws of economics. Please adapt your behaviours to better conform to the standard model. Thank you for your cooperation.

[@briandbeaudin9166]

But how can you possibly know if a restaurant is worth it until you've eaten the food? If you are basing your decision to eat at a place solely on price that is an irrational decision. There may be other factors inside the restaurant such as the ambience which may influence your desire to pay more. If price will influence your decision, then perhaps you would be better off just to eat at McDonald's...

[@wrednax8594]

Do the Economy of Argentina, the only developed country to go back to developing.

[@rtfj5341]

Yes please. I watch your Venezuelan video and there were a LOT of wrong things. I'm Venezuelan. But if you do a good argentinian video I will like it

[@pnp072000]

Isn't Brazil going back to developing too?

[@economicsinaction]

... so far

[@tiaandeswardt7741]

@@pnp072000 Not sure if Brazil was ever developed to start with...

[@joaopedroraffo7964]

you mean before Peron? Argentina was the 6th most powerful economy after WW2 if im not mistaken even europeans were jealous of their lifestyle

[@adamhenriksson6007]

You have really good clickbait in a way that i rarely see anyone else have. Title: "Supply and demand is overrated" Text on image: "Case for 0$ minimum wage" My thought is "How those you could possibly be linked?". My mind spins along, but i know that the only way i can find out is if i click, so i do. Really good.

[@redhidinghood9337]

And he actually answers it

[@EconomicsExplained]

haha nicest comment calling me a click baiter ever

[@emperorza5777]

@@EconomicsExplained The second comment is the most important lol

[@haughtywillow2499]

Minimum wage is just a price floor for the labor market. That’s it. Draw a horizontal line at your minimum wage price on a supply and demand graph and there you go you got a surplus of labor (unemployment).

[@Mythhammer]

@@EconomicsExplained If it works, use it. ^^

[@husseinbonaud1883]

My wife introduced me to the awesome concept of walking out of a restaurant after having been seated because either the prices seem too high and no item on the menu is really appealing. Now it feels like a real life superpower. I mean... I didn't know I could do this!

[@kirstyjjamieson]

Yay - we do the same.

[@justinblechinger6723]

As someone who worked in the food industry for a decade. Please don’t do this. Ask for a menu or search up one on the internet. It sucks when you’ve been sat and the table leaves. I lose that table and the money.

[@danielye3600]

@Elias Håkansson If I do this and I have the cash, I’ll usually leave the server a dollar or two. They did do some work and it’s not within their power to change prices or the menu.

[@66maybe66]

@@justinblechinger6723 As someone else who has worked in the food industry for almost a decade, I 100% disagree. People are not obligated to pay just for sitting down. Unless your restaurant is completely packed and has no spare tables, there's no real difference between them checking out the menu for a couple minutes or them not showing up at all aside from a very minor inconvenience.

[@aceous99]

@@justinblechinger6723 u sound desperate man.. have you heard of onlyfans?

[@vitus1549]

Yes, Denmark has no minimum wage, but in turn we have extremely good union laws. Unions set standards (paid time off, vacation days, minimum wages etc.) across entire industries, and these are negotiated every 2-4 years. Unions even negotiate these same standards with the government. So in practice the minimum wage is on average $17.5, but differs from industry to industry.

[@GiRR007]

Nothing is stopping unions from doing the same in the US

[@ottobenthaus3349]

@@GiRR007 ha lol, unions and usa, good luck trying to get smth done with unions in the usa, there are many reasons why euorpe has usually way stronger unions but the most important is job securtity whoch doesnt exist in the usa and many other reasons

[@altvibr]

"It differs from industry to industry" I think thats what he was getting at, not a flat out universal minimum wage.

[@realmadridsi]

@@ottobenthaus3349 And what is the big difference between Europe and the US why it's possible over here and not in the US? We have big companies too that hate spending money and would pay you 1 euro an hour if they could.

[@ottobenthaus3349]

@@realmadridsi if they could, but they can't due to historic circumstances unions in Central Europe for example hold a strong position of power. The European unions weren't used for Money generation like The American unions by The mob, and The companies didn't have so insane monopolies on The economy, The unions stayed Strong in Europe due to lacking sources for erodation

[@GlutesEnjoyer]

While the minimum wage isn't technically set by the government in Iceland, I need you to know that there is, in fact, a minimum wage in Iceland. And it is set in agreement between the many unions here, with deliberation with the government and other governing bodies. I'm not sure how Sweden and Norway do it, but in Iceland there is absolutely a hard minimum wage.

[@angeleyes2c]

It's the same thing. The umbrella organizations for the employers and the employees negotiate all wages. Which doesn't apply to guest workers from outside nations like thailand, which is why they're popularly imported as cheap labour for simple things.

[@yvindvego9404]

in Norway there is a minimum wage in some professions like transport, carpentry, plumbing, electrician, etc. basically its in professions that have a higher amount of foreign labour. who would pay a norwegian carpenter 250 kr when you could pay a polish person 150 kr and with less benefits.

[@johnny_eth]

Sweden and Norway also do it by collective bargaining.

[@mrfreckles666]

I think the point remains that it’s not a flat out minimum wage across the board because wages are incredibly nuanced between professions so a blanket wage for all of them is a bit silly

[@harrybalzac7450]

“Ask yourself when was the last time you checked the price of a nice restaurant before you sat down” As someone who always checks, I feel attacked 😥

[@MicahLoRusso]

Check most of the time also

[@TheManinBlack9054]

Lol, me too

[@fireballxl5768]

Always check the price of a service or product.

[@imho7250]

My checking of prices is probably why I rarely sat down in an expensive restaurant. Lol

[@ReasonableRadio]

tbf this is very normal in a lot of countries, especially in Europe. In Canada where we're influenced by a lot of different cultures, it's a coinflip whether a restaurant has its menu posted outside, and depends on the cuisine and genre of that restaurant.

[@kuyajez8384]

"$0 minimum wage" You mean "internships"?

[@EconomicsExplained]

haha well however you want to market it

[@grahamturner2640]

🤣

[@saasda6255]

@@EconomicsExplained you know the job market is bad when free labour is hard to get

[@j.fo.v5260]

Slavery

[@dickiewongtk]

@@j.fo.v5260 Slave can't quit their jobs. Even if there is no minimum wage, you can quit yours and find a better one.

[@hanysslunzok1626]

Scandinavian countries don't have state regulated minimum wage but they have "effective" minimum wage, set by workers unions in different sectors. These unions are very strong and backed by the law and government for example in Sweden. So Scandinavians technically don't have minimum wage but basically they do. In Switzerland it's pretty similar, in industry minimum wage is mostly regulated in Collective labour agreements. Some cantons even introduced minimum wages, and they are highest in the world.

[@olska9498]

Exactly! These minimum wages due to collective bargaining of strong trade unions are even much higher than their federal mandated counterparts. I really don't understand why these minimum wages would be any less "sticky" than federal laws. After all, fast food workers in Denmark earn a minimum wage of 20$/hour, set by the trade unions.

[@MrMajani]

Which is fair. The right to organize. Unions have their pros and cons, but as long as they are joined voluntarily by their members, it's OK.

[@quintessenceSL]

This is assuming negotiation for wages only travels one way- i.e. what an employer offers vs. what an employee demands. No one is forcing business to buy labor at that price, and like everyone else in the world who can't afford a thing, they can do without (or seek alternatives). That is diametrically different than a price floor for labor.

[@hanysslunzok1626]

Labour "supply"is effectively "monopolized" by workers unions in Scandinavian countries, so it is basically the same as minimum wage

[@eror151]

@@MrMajani in many workplaces in Norway you automatically join a union through the job you're working at.

[@jaketran]

I've been featured on Economics Explained. Does that mean I've finally made it?

[@admiral_waffles533]

It just means you invited him to your CIA blacklist. But yes, it does in a way

[@Seth9809]

Oh wow.

[@TSDamiano]

Hi jake

[@EPICoutcast24]

Eyyyyy Sponge bob mi boy. Just came from you vid on lobbying. Yeah I think you made it bruh

[@cydre3401]

The KZbin crossover I never thought I needed

[@joshuacollins385]

"When was the last time you checked the price of a restaurant before you sat down?" Pretty much always. Do restaurants not have menus visible outside the door where you live? I love the idea that restaurants are hostage situations where once you're in you can't leave without at least buying the cheapest main on the menu.

[@jeremyanderson3819]

Uh, mcdonalds is NOT a restaraunt.

[@joshuacollins385]

@@jeremyanderson3819 I agree, and McDonald's is pretty much the only place locally I can think of that obscures their prices. Do restaurants there really not have their menus stuck to the inside of the window or inside a waterproof box on the outside?

[@nurainiarsad7395]

agreed. here even posh restaurants have a menu left outside so you can see what they’re offering before ever walking in. sometimes i don’t even consider a restaurant that doesn’t have their menu *outside*. coz... there are other options who remove that little bit of doubt for me, they’re... ten steps away?

[@mwbgaming28]

@@joshuacollins385 the only place you can see prices at McDonald's in Australia (at least in Adelaide anyway) is on the self service screen, or in the drive-thru The screens above the counter no longer show the menu, now they just show ads and other pointless garbage It's actually impossible at my local maccas to place an order via human to human interaction unless you're in the drive-thru (literally there's no eftpos terminal or anything on the counter, it's either use the screen, or use the drive-thru)

[@aravind787]

I don't know any person who doesn't care about prices in a restaurant. In a lot European Restaurants the entire menu is placed outside so people can decide if they can afford it.

[@Quickonomics]

EE: "If a company was to charge $5000 for their new phone, nobody would buy it." Apple: "Am I a joke to you?"

[@ericnipas49]

They actually sell a phone without a charger and their fanboys still find a way to justify it... "it's better for the environment"... lol

[@osl5686]

The Ipad is like a Big iPhone so yeah. Apple played their hand right

[@rexmann1984]

Yes you are Apple.

[@economicsinaction]

**Tim Cook liked this comment**

[@manueloctaviomartinez3173]

@@ericnipas49 money doesn’t flow to non productive companies. Cry all u want but if they’re rich it’s because of something

[@benjaminfortune2707]

7:00 I swear to god, every time on this channel when the question is asked, "When was the last time you...?" my answer is always "this week"

[@Olivia-W]

True. Though I generally don't go to restaurants, because eating out is usually more expensive. When I do eat out, it's most likely a promotion at Mcdonald's and I know exactly how much I'll be paying before I ever step foot inside.

[@TheKyrix82]

I'm starting to think this channel may be a little out of touch...

[@QuestionEverythingButWHY]

"If all the economists were laid end to end, they would not reach a conclusion." --George Bernard Shaw

[@tiaandeswardt7741]

You can pretty much say the same for any form of profession. The lack of a consensus on something also isn't automatically bad. I don't really know what the point of the quote is

[@christopherellis2663]

@@tiaandeswardt7741 G B Shaw was a public figure and playwright, and was expected to exude witty aphorisms.

[@tiaandeswardt7741]

@@christopherellis2663 Even those that are nonsensical after thinking about it for a moment?

[@jstpsgthru]

@@tiaandeswardt7741 Please explain? Isn't it just an observation about the complexity of economics; that it is as much an art as a science? It is an idiom that helps us normal people understand the world.

[@ninety1nethagawd]

youre going over heads here. they believe that economists have already concluded things and that its up to us to fill in the gaps they leave.

[@oskarljung2201]

you cannot mention Scandinavia's lack of a state-mandated minimum wage without mentioning the role of unions in the labour market. because that is the only reason that no minimum wage works in the first place

[@jbyrne8977]

Yeah, this channel feels pretty biased. Either this guy doesn't understand economies, or is being disingenuous about the market... Bit sad to see

[@crow2989]

@@jbyrne8977 this guys whole career is understanding the economy

[@TheRandCrews]

@@crow2989 yeah but it’s still flawed and incorrect

[@adamcraft9118]

@@TheRandCrews you’re assuming economics is a hard science. It’s definitely not.

[@flyingspinners1]

They also understand that they have to pay a certain minimum otherwise nobody would buy their products/services due to lack of money

[@TheZatrahc]

You’re right, it’s been over a year since I checked the prices of a restaurant before I sat down. . . It’s also been a year since I sat down in a restaurant

[@yottamg]

The whole situation with minimum wage in Switzerland is very different from how it was referred to in this video. First of all, minimum wages here are not introduced on a federal level, rather some cantons have them (like Jura, Neuchatel with 20 CHF/h and Geneve with 24 CHF/h - roughly a 26.5 USD/h - the highest minimum wage in the world). And although there are no federal requirement for a minimum wage directly, there are other regulations for a minimum payment to a full-time employee, such as that employee wouldn't be under a poverty line (which would be around 40000 CHF/y in ZH making an effective minimum wage for a full-time employee in the region of 18 CHF/h).

[@BMXaster]

Very true and also Geneva is hella expensive. Probably more than Zurich. And 18usd/hour in zurich is actually a pretty hard fight already. You will look at that 1 week italy holiday per year 3 times if you really can afford it

[@Kenionatus]

There are also federal minimum wages in certain sectors which are notorious for bad wages, such as cleaning services.

[@EconomicsExplained]

Zero dollar wages and Beets... I feel like this video will summon a Dwight.

[@samryder6129]

Ahahha

[@simulping4371]

kzbin.info/www/bejne/g6uWfpyVhL-MpNE

[@sudhanvakashyap297]

@@simulping4371 @furrypolice

[@ben927]

@economicsexplained You mention that the nordic countries do not have government set minimum wages. What you did not mention is that these countries have very strong national unions who negotiate for an unofficial minimum wage

[@Vid_Master]

When will you do a video on Goose Grease cost inflation???

[@bubblewrapmonster8801]

Case for 0$ minimum wage Jeff Bezos: You have my attention

[@EconomicsExplained]

oh boi don't give him any ideas

[@bubblewrapmonster8801]

Lol you started it😂 love your content, I’m studying hard on my economics degree at uni!

[@michal5642]

@@EconomicsExplained BOI

[@livethefuture2492]

how bout some automation for good measure, don't need to pay the machines... effectively 0$ wage, just initial price, and cost of electricity.

[@AlecMuller]

Once you have a lead in automation (which Amazon does), it's a lot easier to crush your competitors with a $15/hr minimum wage than a $0/hr one. With good enough automation, a $25 or even $40/hr minimum wage will still give Amazon fat profits along with an edge over competitors.

[@GlutesEnjoyer]

15:31 totally disagree. I think you underappreciate the human's capacity for apathy. If they are going to be paid 20 cents an hour, there are inevitably going to be a percentage of humans that will deliberately remain unemployed until they are paid what they feel they are worth. Thus unemployment will never be zero.

[@colto2312]

make more picking up pop cans on the side of the road

[@arieroskam4000]

He means 0% unemployment in the sense that it would be now be theoretically possible due to the removal of inhibiting laws, not that literally every man, woman and child would be working at McDonalds.

[@Jose-gc8rl]

Why would I or anyone on a developed nation ever sell the scarse time of our lives for a meagre 0.20 cents an hour, it'd be like working 50 hours for a Netflix subscription, basically a long week's worth of work, it is simply ridiculous.

[@Ikneeslp]

This. I’m at the point in life where there is zero chance I’d work for less then 20$ an hr. That is just the minimum my time is worth

[@aravind787]

Exactly! This video is misleading on many accounts.

[@grantschwartz5015]

Really well done. There is one point at the beginning I think you may have looked at incorrectly though. You mentioned how in perfectly competitive markets beet farmers would continue to undercut each other until they did not make a profit. However, farmers would cut prices until they make 0 economic profit not accounting profit - meaning including the opportunity cost of doing something else plus their monetary profits. Therefore, farmers will still be making $ profits. Of course markets are never completely perfect but I think the idea of economic profit vs. accounting profit is super relevant and often overlooked. Super minor thing and love the videos!

[@ayarzeev8237]

Wait, wait, wait. You're just going to drop all those European countries as examples of limited minimum wages without going into the the other protections and systems those countries have to keep it from being too exploitative? At least tell me you're going to make a follow video on that.

[@pijuskri]

Especially when those "no minimum wage" countries literally have min wages just set by unions

[@dereknalley]

Yeah, I felt that was pretty disingenuous as well. Clearly someone as well informed as this channel would know WHY they can have zero minimum wage. Hint: They have incredibly strong anti-corporate powers in the country.

[@olska9498]

Right?! These nations might not have federal mandated minimum wage laws, but minimum wages due to collective bargaining of strong trade unions. How would these minimum wages (which are even much higher than their federal mandated counterparts in the USA) result in any less of "sticky prices" than federal mandated minimum wages?

[@TheBard1999]

If you watch rest of his videos, you will see that he never goes deep into his arguments. Only talking about most basic things, without even bringing any numbers to support it.

[@blackgold2589]

@@TheBard1999 I mean it’s supposed to be for uniformed people going in-depth isn’t something this channel is for

[@Elbrasch]

* looks at some of his coworkers * No, some people have a negative hourly wage, i.e. they cost the company more money than they bring, even when their wage is 0. That is one of the reasons why charities don't take on unlimited volunteers.

[@ArtumTsumia]

This is certainly true; more employees does not necessitate more productivity. At the very least, it increases managerial overhead and particularly poor employees can cause problems for more experienced workers in the form of training or time lost to fix mistakes. That's of course assuming that such things can be tracked to some extent, in which case a manager can send them home early or such (I've commonly done this, and these employees don't usually mind even if they are paid hourly). That's not even taking into consideration some of the more complex work environments I've been in where even "productive" workers can cost the company huge amounts of money by creating bottlenecks and such for other employees which would not be remedied simply by that worker earning no wage.

[@EternalKernel]

Love those "I'm better than all of my coworkers, and likely everyone everywhere in any similar position" They always fail upward.

[@Elbrasch]

​@@EternalKernel Part of it was overemphasizing stereotypes to refute the videos point that free labor is always desirable. Something that has nothing to do with being better or malice is inexperience. Often, for example in Software engineering, it can take up to 6 month till a new employee is producing more value than they have cost up till then, including time spent vetting all the candidates and teaching the new one the difference between engineering and craftmanship.

[@Elbrasch]

Also, I was part of a team that fucked up the architecture of a software product. We burnt a lot of money over a year and it took another team half a year to unfuck it all. Main reason we identified afterwards? Almost all of us were in stretch roles, i.e. it was the first time we had this kind of position. We definitely produced negative value there.

[@richardboesen7423]

@@Elbrasch YOU didn't produce negative value, the people ABOVE YOU who set the conditions INCREASED THE COST without factoring that into the Price received for the product supplied. You're much too young to remember ( at the Top of your reflection ) but it's "The Peter Principle" writ Large and ALWAYS Denied by "those at the Top" 😒

[@sunsparkda]

Oddly enough, your hypothetical example is exactly what my company did at the start of the pandemic. And rather than seeing it as you suggest - as a signal to flee the company - it was universally seen as a good faith effort to preserve jobs in the face of serious economic turmoil. It probably helped that the owners and managers took a bigger pay cut percentage wise at the same time, we're in a well off industry (IT consulting) so there was room for the pay cut to not be TOO painful, and it was explicitly temporary until conditions improved.

[@WorthlessWinner]

EconomicsExplained needs to take his own advice and think about human psychology,. not just what models would predict :Y

[@EPICoutcast24]

Shoulda commented below you, but yeah it depends what the leaders value more, community, or the individual pursuit of profit. Short term gains of greed are eclipsed by long term profits through relationships

[@sorsocksfake]

@@EPICoutcast24 It's a false contradiction, as illustrated by the (in my opinion disgusting, but accurate) term "human resources". Or "human capital". Relationships, reputation and so forth are very real assets and most business is well aware of their value. This is part of their profit calculation. In the long run such companies ought to self-destruct through unethical practices, removing the problem from the long-term calculation. Unfortunately workers and consumers likewise often act out of greed (if defined as short-sighted profit), which is how companies like Amazon can continue to profit.

[@99Cafer99]

​@@sorsocksfake I believe that Amazon will fail in the long run, at least in Germany. When the poorer neighbour countries will be better of, were currently all longtime Amazon delivery employees come from, their whole employment system will collapse. As no German would work and is actually working at the conditions Amazon currently offers for their drivers. They would have to increase wages so much, that the traditional stores will be way cheaper again. Because working in an store is currently paid better, with better working conditions, as you e.g. don't have to be in bad weather conditions or lift heavy stuff without machinery, and you have clearly defined working hours. So Amazon would need to pay an significantly higher salary to an delivery driver than an cashier earns at Aldi to have enough employees. Even now, were non-German speaking people with no comporable working opportunity in their homeland are working there, they are always hiring and never get all positions filled. Combine that with the higher personell usage of delivering a few items to your home to sitting at an register and just scanning items and their Online-retail business will collapse. Lucky for Amazon that they make most of their profits elsewhere.

[@sethjones-mettie9411]

A video about trade unions and whether or not they’re good for economies would be killer!

[@jeremyquentin42]

EE: Without a minimum wage, there would be no unemployment. Victorian era England: I beg to differ.

[@angeleyes2c]

Yeah that's complete bs that never worked.

[@littleman6950]

People aren't going to waste any hours of their day making money for someone else if they themselves will still end up homeless and starving anyway.

[@Stszelec01]

The supply and demand needed only couple generations and threat of socialism to back of a little great system

[@andretsang7337]

@@littleman6950 they literally do that right now anyways. Plenty of people work poverty wages and are living out of their car.

[@speedroidterrortop3171]

@@littleman6950 Well then the supply of workers would go down and businesses who need workers will be forced to up their wages… duh 😂 Maybe you should’ve thought about the video for more than 2 seconds before commenting 🙄

[@XOPOIIIO]

In nordic countries minimal wage isn't set by law, but it still exists in contract with labor unions.

[@skepticcat2443]

yes, here in Denmark we do not have a minimum wage law but we have very strong labor unions that negotiates the wages for each sector.

[@oentoleas]

@@skepticcat2443 Yeah, you basically have the only true pro-market way (combating the natural, unbreakable oligopsony of the employers with an artificial oligopoly of the unions), which sets a much fairer and market-cleared price(=wage). The fact that any neoliberal or capitalist would be against this crucial, market-induced balancing of the job market (against the unions) is proof of the level of self-contradicting, rich-leaking morons they are.

[@tonycatman]

Not everyone belongs to a union. For as long as there are people who are not in an union, those who are worth less than the MW can get a job. In effect, if the MW doesn't apply to everyone, it doesn't apply at all.

[@robconstant797]

I'm not sure hpw it works in Sweden, but in the Netherlands we have what are called Collective Labour Agreements which bars any employer who has signed it or is part of an industry association which has signed it from hiring anyone at a price which is lower than the specified wage. I suspect it might work the same in those countries.

[@AxeBearWhoCares]

Which I, as a right wing federalist, would prefer far more than a national minimum wage.

[@PieterMulder]

I would honestly not go into any restaurant if I don't have at least an idea of what their prices are beforehand.

[@mli3793]

I have actually walked out of resturants after getting seated. It has been resturants with outrageous prices and i just get annoyed at how they tried to use this cultural shame to their advantage.

[@davidml1023]

I'm seeing more restaurants leave the price off drinks. That's on a whole next level of douche baggary.

[@grizzlednerd4521]

It's also becoming easier to check the menu and pricing online before you book. Just today my work Friday lunch changed proposed venue because of online menu/pricing.

[@heatherswanson1664]

Usually after they already serve me water, I don't feel bad for wasting their time because they wasted mine

[@jaymzx0]

If I'm worried that a restaurant is out of my price range, I usually ask for a menu at the front desk under the guise that I'm not sure if I'm in the mood for whatever they're serving.

[@fernandouseodysee5027]

I have leaved restaurants too for the same price. People needs to understand that they are the ones that are paying for being treated well. If the restaurant tries to shame me then I will never consider them again and that's it. Still I have never been tried to be shamed by any restaurant.

[@Xidnaf]

This video completely lost me. It gives all kinds of examples of real-world market inefficiencies and sticky pricing, and especially about how the labor market has some of the stickiest prices of all, and then goes on to say that a zero-dollar minimum wage would lead to zero unemployment? As if the labor market is perfectly efficient? Did I misunderstand something???

[@tnk4me4]

Now you understand how I feel when you ramble about Dipthongs. Still a fan though.

[@letiede9094]

That assumes 0% unemployment is the objective, not good living standards. You have no guarantee that your wage would be a living wage. The specifics of how "$0 minimum wage" countries manage is handwaved (scandinavian countries have high involvement in labor unions and a good welfare state for example). But sure, if you look for a job, someone will be ready to pay you for less than the price of the sandwich you eat during your lunch break.

[@Xidnaf]

@Atharv Relekar I still don't think I misunderstood. You and the video are saying "we COULD have 0 unemployment if we eliminated minimum wage, but 0 unemployment isn't the only goal." I'm not addressing the part second part of the claim because I don't think you OR the video sufficiently back up the first part of the claim: that eliminating the minimum wage would lead to 0 unemployment.

[@stevenecoson8378]

No you’re perfectly correct. This vid was incoherent. This guys is not good at economics or doing the research for it.

[@desbowman9497]

The example of pricing in restaurants not mattering is clearly false, eating out is a repeated purchase for the majority of a restraints customers. When deciding where to go out a couple may well choose the more reasonably priced of the two options based on their past experience of the resultant a pricing

[@asharak84]

yeah it's an interesting case where the difference between repeat custom and one-off walk-ins comes into play, along with reviews and word of mouth and so on. Still an interesting talking point, though the conclusion was fairly flawed.

[@mynameisben123]

If I go to a restaurant and the prices surprise me, I probably won’t walk out - but I will definitely factor this in when deciding to return, or when recommending restaurants to people I know.

[@wesleyowens4089]

I walk out or just order appetizers

[@lajya01]

@@wesleyowens4089 I hope you walk out before eating...

[@wesleyowens4089]

@@lajya01 well obviously.

[@planets9102]

17:20, You forget one massive factor in this, unions, one thing all these countries also have is very strong unions, combined with laws and regulations preventing the busting of them. You can't destroy labor protection without replacing it with labor power. All you do is create a market meltdown; as labor efficiency increases more people are fired because you can do the same with less, the labor supply increases and the price of labor drops, while more stuff can be produced but nobody can buy it, this leads to overproduction and eventually a market meltdown. Something like this played a big part in what lead to the great depression, Ancapistan would last a couple years at most. High labor power prevents this as an organized workforce can force wages to rise with productivity and make increased productivity = increased quality of life as it should.

[@Robbedem]

yeah, The reason those countries don't have a minimum wage is not because it helps their economy, it's because they don't need it in the first place. Also, they kinda do have a minimum wage since (almost?) nobody would be stupid enough to go work for less than they'ld get from unemployment benefit.

[@klogechris]

Yeah it is a combination of our strong unions and our high unemployment benefits, which makes this whole structure possible. In Denmark our system is often referrred to as “flexicurity” since it combines a very flexible labor market (easy to hire, easy to fire), which is god for the employer, with a lot of security for the unemployed, which is good for the employee

[@lek1223]

@@Robbedem The best case for taking such a job would be if there was obvious clear and likely room for promotion, Etc. start a army job as a private, good chance for a promotion to a corporal < sergeant < etc. (as a clear example) But yea, why would people take a job at a gas station at a super low wage, as there is no real opportunity to get promoted.

[@darrin7684]

@@klogechris So does Denmark have a zero wage economy?

[@klogechris]

@@darrin7684 Well officially there is no minimum wage, but, as I pointed out, this flexible system is only possible because of High unemployment benefits and strong unions, which gives the worker leverage when negotiating with the employer (the workers are not terrified of losing their job, since most of them pay a portion of their Income to something Called an “a-kasse”, which ensures That you get something like 80% of your previous sallary when you are unemploeyed). However this system Works both ways, since employers Can easily hire and fire people, so if the worker demands an outragous sallary they are easy to replace

[@hi117117]

Hey, I just wanted to point out a bit of a fallacy in the $0 minimum wage theory. Assuming the current US system (or any system with less 'welfare' than the current US system), a $0 minimum wage would not lead to 0 unemployment, and 0 unemployment would be bad anyway. There are a few reasons for this: 1) static costs to hire an employee Much like your point on sticky prices, with complete deregulation of labor pricing, an employer would still face static costs to hire an employee. Many estimates abound, but it generally would still be many thousands of dollars, even for the simplest of roles. 2) UBI's interaction with wages As you mentioned, UBI would mean that employees would only work for wages that made sense, since they could always fall back on UBI. Employees will then not take some jobs, leading to price stickiness, leading to some unemployment. 3) Quality of life drop You mentioned that welfare was not a solution due to it causing a quality of life drop, but perfectly elastic prices would also lead to a quality of life drop as wages fall, so they wind up being different forms of the same thing. 4) People are not rational actors Many will not accept these jobs due to pride/lifestyle choices. Many people define their self worth by how they work. That means falling wages would lead to falling self worth, and many would rather maintain their self worth while being unemployed than take employment at reduced wages. This is just one example of people not being rational actors, but it is a powerful one in my opinion. As for 0 unemployment being bad, there are several factors. It causes inflation and increases the static cost of hiring an employee as companies need to work harder to bring someone over. This isn't so bad for skilled labor, but for unskilled labor it would increase the cost of hiring someone to beyond the productive worth, causing unemployment as companies aren't willing to sink the static costs, even for a $0 wage employee, and you're back with some unemployment.

[@desbowman9497]

As to point 4 Mises would say this kind of decision has psychic profits bringing people back into rational actors (although lowering the value of the term)

[@buffcommie942]

@@desbowman9497 Mises doesnt have any evidence or real world examples to prove that and is just preforming mental gymnastics go justify letting poor people die

[@desbowman9497]

@@buffcommie942 you don’t need an example to argue from first principles. People value the same things differently and only a subjective theory of value can hold true given this. Economics can be applied to the monk who values no material object because he must still economise his time to that which gives him the most psychic profit, meditating vs good deeds ect.

[@iwersonsch5131]

For 2), the thing about UBI is that it is universal. Employment does not replace UBI, it adds onto it. Yes, this does mean you probably need like a flat 50% tax rate to afford it without causing rapid inflation, but it also means that working for a dollar an hour would still be a profit for you. This flows into 1). If there is no need for a job to pay more than UBI, you can easily make microjobs where employees do very little for a very low wage. The less a job distracts from what somebody wants to do in their free time, the lower their cost for not just doing that instead will be, possibly less than $10 per day for some people. 3) The main issue with welfare, as mentioned, is that it's inefficient for the economy and expensive to the state. The fact that it doesn't solve the problems for employers nor employees anyway is just to point out that it doesn't improve over the base situation. And for 0 unemployment: What you described is exactly how the economy would healthily hover around 0.01% unemployment, due to people being fired or quitting when the wage gets too high or low.

[@christianlibertarian5488]

A comment on your point 1). I would argue that before the pandemic, the US effectively had zero unemployment, and effectively a zero dollar minimum wage. The reported unemployment rate was 3.9%. This has been reported as the lowest that can be achieved, as people are always quitting jobs, or moving or some other issue having nothing to do with wages or demand for labor. Likewise, at $7.25/hr, the static costs of hiring are higher than the actual W2 costs. Effectively, cost of labor set by government was lower than the cost set by other factors. Based on this, I feel this is a partial confirmation of the assertion that zero minimum wage produces zero unemployment.

[@RajbirBhattacharjee]

all, well, unless you realize how monopolised and cartelized most sectors have become. Also the countries that you name - Sweden, Denmark etc. -also have very good social security. Also in countries like Sweden, you can't fire an employee without adequate notice - which can be upto 6 months.

[@ALittleMessi]

How common is a prolonged notice like that? That has to be a strain on some companies, even if you have smart planning

[@RajbirBhattacharjee]

@@ALittleMessi it's a legal requirement and is a function of the number of years of service. Nordic countries have very strong labor laws. Yet they do very well in terms of innovation and profits.

[@ALittleMessi]

@@RajbirBhattacharjee That's not really what I was asking though. The less flexible a company is the worse off it can be in drastic changes(i.e. last year). If you have to fire an employee 6 months ahead of time, that essentially gives no flexibility. I'd like to see what impact that has on companies

[@10010110100102Error]

@@ALittleMessi impact is not that great, it's the same in germany. there's various options, the most common being short time work. employees are sent home to remain on standby when the company needs more people again. they get less money for that time, but remain employed, which is good for their health insurance as well as their retirement. the flexibility you talk about is a myth the americans want just so they can keep the employees on edge as well as the companies not responsible for their workers. there is still the option to fire people when the company has a very bad time, but the advanced notice still remains, so it's generally those that got hired most recently that are fired first. companies also tend to have a good amount of money in the back, as they know about these requirements, so they can easily pay for that time. the worker will of course still work during the time until the employment is terminated, so he will still make money for the company to pay his wage. not doing so would be cause for termination with extreme causes, similar to the employee attacking people, willingly and on purpouse damaging expensive equipment, violating their employment contract, or stealing, so they can get fired imediately. the great benefit is, that the employees have a lot of time to search for a new workplace that thaey then can start in almost imediately after their former employment has ended, which puts much less strain on the social security net. it's far less spiradic who's employed and who requires help for a time. so, overall, it's actually much more beneficial for the employer as well as the employee and wevn the government, it keeps more money in circulation as the worker doesn't suddenly have zero income, and it offers nearly as much "flexibility" as the american system without the downsides to all parties.

[@kinestatic]

"When was the last time you checked the prices at a restaurant before you say down?" .. every time...

[@RockerTopper-hh3ru]

Funny story: I’m currently pursuing a Master’s Degree in Applied Economics and just the other day in my Applied Microeconomic Theory class, one of the quotes in the PowerPoint was “all interesting questions in Economics boil down to transaction costs.” This one concept is basically the reason why firms even exist at all, and yet for something seemingly so central to the subject matter, it rarely gets much attention in the academic literature. I’m actually thinking of doing my Master’s Thesis on something related to this. Great video BTW!

[@strateeg32]

How can you even think this video is great? He did not even understand the principle of a perfect market. He confused accounting and economic profit. This is basic economics. For a master student you should have been able to see through this...

[@bachpham6862]

Applied Microeconomic Theory sounds ironic. Almost every theory in Economics assume no transaction costs and perfect access to information, when applied economics is never that.

[@tiaandeswardt7741]

@@bachpham6862 Every basic theory assumes that. So much work is done in relaxing those assumptions, through introducing frictions into the theory

[@tiaandeswardt7741]

Ronald Coase gang

[@stofan]

.

[@lekokobloomberg-brin6576]

The economics of monopolies would be good😏

[@EconomicsExplained]

Oh yeah thats one that we will probably cover soon.

[@saasda6255]

@@EconomicsExplained amazon??

[@fullyverified7491]

@@EconomicsExplainedIntel over the last decade would be a good example of that. Also their downfall in recent times.

[@jsheav]

@@saasda6255 amazon is not really a monopoly, but it is growing to be a monopsony. EE taught me that :)

[@LogicNotAssumed]

“When I was a child I thought quicksand would be more of a problem.” Monopolies are a lot like quicksand. On the other hand monopolies are easier to achieve with governments propping up big businesses and protecting intellectual property rights.

[@kallmannkallmann]

Saying Sweden has 0 minimal wage is kinda missleading. Evryone need to have a contract thats OK with the trade union that is relevant. Sure a trade union coud OK a 0 wage but that never happend. It´s abit like all diffrent trades have diffrent minimal wage that keeps on changing depending on economy etc.

[@lazergurka-smerlin6561]

I mean the thumbnail is misleading wholly because "0$ minimum wage" makes you think this guy just wants go back to the gilded age. But really he's proposing that people should have UBI + whatever amount a business is willing to offer for your work, which is significantly less crazy.

[@jamesclark209]

Those countries also have strong social safety nets and so periods of unemployment aren't as big of a deal. This makes the effective minimum wage for those countries quite high as no one would be so desperate as to work for a few dollars per hour.

[@ddannydaniel3340]

there is nothing misleading there. As far as the government doesn't mandate a minimum wage. Workers or unions can negotiate wages.

[@mustangflight]

Love your videos! However here there is an important aspect that wasn’t discussed: I don’t anyone would be able to sell much if everyone was desperately saving to survive in a market with extreme wage volatility! I would be saving like crazy, presumably like everyone else. Recessions guaranteed for all.

[@awijaya2116]

Aside from the Nordic countries, Singapore also has no minimum wage (except specific jobs like cleaners and security guards). Their reasoning is almost word-for-word what you've said. However, Singapore also has a government that has an employment credit scheme, where workers making below a certain wage get additional money from the government (like low-income benefits, except you need to be employed to get it). They also have an extensive state-supported pension program, one of the largest Sovereign Wealth Funds, and some of the highest home ownership rates in the world, so the system can work.

[@Dennis_Nijenhuis]

Nobody: ... Economics explained: B E E T S

[@EconomicsExplained]

Bears... Battlestar Galactica

[@tedarcher9120]

@@EconomicsExplained are widgets manufactured from beets?

[@Jupiter__001_]

@@tedarcher9120 I believe they are a biproduct

[@iasonkostellenos8341]

@@EconomicsExplained how much did acorn pay for all that stock footage of beets?

[@MJ-uk6lu]

Lithuanians: beet soup

[@lee_voug8357]

The last time I was this early, tulips was still in demand

[@Homer-OJ-Simpson]

Last time I was this early, tulips hadn’t peaked yet

[@Hrafnskald]

This video makes a lot of assumptions that do not apply to the American labor market. 59% of Americans are hourly, without a set salary. Most states in the US have at will employment, where there is no contract. Businesses can fire anyone at any time, and for many, there is no social safety net. Beyond that, the zero dollar minimum wage assumes infinite supply. Real world economics shows that this is not true: when the benefits of work are low, people leave the workforce rather than work for less that their time is worth. People pushed to the brink of poverty by such a program (which is regularly advocated by the Republican Party in the US without any UBI or welfare support), will turn on those who make the change. Politicians will be voted out, and any employer willing to mistreat their workers in this way will be targeted. The French Revolution was the direct result of the rich trying to squeeze the poor through a Let Them Eat Cake mentality. The Russian Revolution, and Communism, came from the same. This kind of dangerous theory, if adopted, will lead to a violent backlash.

[@CosmicValkyrie]

Just wanted to say that there are a lot of markets other than america so some of your critiques don't really stick. I don't think everyone thinks the us is the default country on the internet anymore right?

[@Hrafnskald]

@@CosmicValkyrie The second half of my critique is global: workers will not turn out for jobs that do not pay, and any attempt to eliminate meaningful salaries without replacing the income will lead to a backlash by workers and voters, who outnumber employers.

[@CosmicValkyrie]

@@Hrafnskald oh, i don't disagree with that bit. That's just inertia. People don't like big changes even if they will mostly benefit from it.

[@Hrafnskald]

@@CosmicValkyrie Workers being paid low wages is not a benefit.

[@CosmicValkyrie]

@@Hrafnskald well i had other situations in mind when i meant beneficial changes to economy. But depending on the economic conditions, wage cuts might be beneficial although it cant be too much.

[@ericmasington1833]

Wow. Mentions Sweden doesn’t have minimum wage and completely omits that they have extremely high union membership. Sketchy.

[@uedomwonyi]

Yup very sketchy

[@c63amgblack]

But he did....

[@ericmasington1833]

@@c63amgblack just watched the video again. Where did he mention the high Union membership? Unless you’re saying he contextualized it in a different way and I missed it?

[@DubsCat_]

Hey EE, good video! Only complaint is that the title is kind of click-baity. Maybe something like "The Case for a $0 Minimum Wage" or "The Case Against the Minimum Wage" next time.

[@MrSmith-gb1kn]

About the perfect beats market. There's no supernormal profits, but there are normal profits. Normal profits are all that's required for the market to persist. If there's too many farmers in the market, supply is too high and investors are earning under normal profits; investors redirect their capital to areas with >= normal profits, causing supply to fall and profits to rise towards normal.

[@bhad7787]

Yes this is the only thing i found fault in with the video. He said the profits would drop to zero, farmers would sell until they are out of stock, then the market would fail. That is not correct. Assuming rational market participants the farmers wouldnt drop their prices to zero profit levels, but instead would drop it to a level where it is still slightly worth it for their labor and inputs.

[@TlalocTemporal]

@@bhad7787 -- Or a few stalls that are confident in their superior stock sell at a decent loss, drive the other sellers out of the market, and then charge whatever they want.

[@bhad7787]

@@TlalocTemporal This would either trigger legislation to break them up, open the door to sellers coming back in the market with normal prices, or would not be cost efficient for the sellers with superior stock unless they created some form of technology or system in which they were making the product more efficiently. Without some form of advantage they created they would not have the competitive edge to make that move

[@pontoancora]

@@bhad7787 if you bring legislation, isnt a perfect market anymore

[@InnuendoXP]

"A $0 minimum wage would mean a 0% unemployment rate" I dunno about that. When someone hasn't got a working background (whether in the job market or their upbringing), sometimes a $0 wage can still wind up being quite expensive for the company as it costs lots in other people's time to train them, and in worse cases, do the work required to correct their mistakes. And in the case of a small minority of some very unfortunate people, there is absolutely nothing they are capable of doing to be productive.

[@nicolaspinto2927]

Training should not be viewed as a cost, but an investment. This is the same mentality that has led to the overproliferation of certificates and other credentials and the awful gating of otherwise entry level positions. Trying to reduce training costs by offloading them onto the laborer is ethically suspect at minimum, and has a strong forward negative affect on future labor. If you want to know why even janitorial jobs now often require certifications, it's because at some point someone decided that all entry level pencil pushers needed a two year degree to ensure they knew how to use Excel and email so they wouldn't have to be trained up. The death of OJT has been catastrophic for laborers up and down the ladder.

[@fetchstixRHD]

@@nicolaspinto2927: Definitely agree with your point in general (and despise the rise in "certificate qualifications"), though I think the issue that OP is pointing out is with "free interns": they're a cost to the company while being trained, but by the time they're qualified to a level where they're beneficial, they'll probably leave at that point (after all, their aim is to get experience to earn money!) so really they end up being a net cost overall.

[@likestomeasurestuff3554]

"Something like a UBI should come with a 0$ minimum wage" *baited conservatives have left the chat*

[@Gotwired]

*Alaska has entered the chat*

[@appa609]

Baited progressive depending on point of view.

[@steve-harveyy]

@@Gotwired if it wasn't for the mosquito and the high price of shipping i would move there.

[@bonda_racing3579]

Wait when are conservatives against ubi? ( my inner circle of friends are economically conservative and socially liberal) just saying.

[@michaelsmith4904]

@@steve-harveyy That *one* mosquito...

[@hornzbiddle1189]

"When was the last time you checked the price of a nice restaurant before you sat down?" Between all the six-figure hypothetical salaries you talk about and comments like this, I really regret not going into the financial sector.

[@rblyle382]

For real. Teacher salary here so yeah I check prices every flipping time.

[@Foolish188]

Sticky prices is why Hershey Bars are always getting smaller. Instead of raising the price, Hershey shrinks the Bar. And then one day, Hershey decides that they have shrunk it too much and come out with the original sized bar at a new higher price. Usually with a slightly lower unit price to convince the buyers that they are getting a good deal. Then Hershey starts it all over again.

[@economicsinaction]

2:53 I knew it! I always knew EE was a kangaroo!

[@Untrimednes]

Scandinavian countries effectively do have a minimum wage thanks to massive unions and they definitely don't have 0% unemployment because their lack of minimum wage seeing as people don't like to volunteer for slave labor. Minimum wage is absolutely needed until something like UBI or generous welfare systems ensures that people don't need to work to live, seeing as if people need to work to live and there is no minimum wage then you have the beets example in reverse; people undercutting each other until everyone starves because some money is better than no money. Zero minimum wage only works without the welfare option if there is 100% employment and no immigration which would force companies to actually compete for workers but that's unlikely to ever happen either.

[@ddannydaniel3340]

they don't have a minimum wage. Workers or unions negotiate wages which is massively better than the government mandating an arbitrary minimum wage.

[@TheDhammaHub]

We could also try out Milton Friedmans idea of a "negative income tax"!

[@quintessenceSL]

Probably the best schema I've read for dipping a toe into the UBI pool was massively expanding the EIC. Doesn't get you the lessened overhead of UBI though.

[@SangoProductions213]

@@quintessenceSL It was already tried in the US though, to less than stellar results.

[@SangoProductions213]

@MrFishbone111 lol. Yeah. 50 Cent coming out and saying he didn't want to be 20Cent was pretty funny.

[@quintessenceSL]

@@SangoProductions213 "These EITC dollars had a significant impact on the lives and communities of the nation's lowest-paid working people largely repaying any payroll taxes they may have paid. The EITC is one of the most effective social welfare programs in the United States.[11] The Census Bureau, using an alternative calculation of poverty, found that EITC lifted 5.4 million above the poverty line in 2010."

[@TheDhammaHub]

@Brian Abisdid The same way you pay for any welfare system with the difference that people have the opportunity to acquire skills since they have to work

[@kingjames4886]

even with a minimum wage inflation means it needs to be increased every few years because employers aren't willing to do so on their own...

[@benjamino.7475]

Working Poor: “Allow us to introduce ourselves”

[@iwersonsch5131]

Maybe people only hate taxes because the taxes aren't good enough to abolish the working poor with UBI?

[@iwersonsch5131]

​@Matt Olivier You will have to explain to me why you think that taxes are theft. It's probably not worth your time, though, as all it will do is motivate me to sit down and explain to you why they are not.

[@tongpoo8985]

@@iwersonsch5131 every penny of your taxes that gets spent on dumb bullshit or bloated bureaucracies is theft. The proportion of that depends on where you live

[@iwersonsch5131]

@@tongpoo8985 That's something I'm a little less opposed to than making sure everyone can afford food, shelter, and medical treatment, and that your city's lighting, roads, teachers, and democrazy are funded. Still, I would like to hear your definition of "theft" and why it applies here.

[@tongpoo8985]

@@iwersonsch5131 taxes are meant to fund the public good. Any amount of your taxes that do not go toward creating societal value is theft. The definition of theft in this case is money that you're compelled to pay by law and doesn't get put towards any of the sort of things you mentioned or a portion is swallowed by excessive bureaucracy or inefficiency.

[@toscirafanshaw9735]

Germany didn't have a minimum wage until 2015. Why wasn't their unemployment rate 0%?

[@18Jaws1989]

Because some people simply just don't want to work, can't work or nobody wants to hire those people. Also, the welfare state pays you your apartment and gives you money so you can buy food, water and pay other expenses. So to put it simply the mindset of some of those people is: I rather stay at home and get social welfare than to go 40 hours a week to work for the same outcome. You are even allowed to have a side job up until 400 € a month next to your social welfare.

[@eror151]

workers rights besides minimum wage. and who would even take a job that's not profitable enough to sustain your living costs?

[@danpolyukhovich5291]

I really hope this is a bait and not a genuine question

[@carlosMartinez-fy4pz]

0% unemployment is impossible. I guess he meant that unemployment would be the lower besides the NAIRU (natural rate of unemployment). There would not be "artificial" unemployment.

[@leftaroundabout]

Perhaps more to the point: why is unemployment in Germany lower after it introduced MW than in ever the 20 years when it didn't have this?

[@64standardtrickyness]

The beet analogy doesn't work because the beet seller also values their time effort and risk and no farm would reduce their price below this!!!

[@gravityhypernova]

If there was a corporate farm which has profits in other regions that can make up for it, they can afford to undercut all of the independents: so much that it makes the rest of the ones without such deep pockets get forced out of the beet game.

[@64standardtrickyness]

@@gravityhypernova Yes but that is besides the point. Actually it's precisely BECAUSE of inefficiencies entering an industry because otherwise there wouldn't be any point in taking a loss to drive a competitor out as once you tried to profit other companies would come in to challenge you.

[@SumBrennus]

The last time I valued my time and effort I lost my job, home, health, and sanity.

[@64standardtrickyness]

@@SumBrennus Clearly when I said value I meant just above $0. A Mcdonalds employee "values" their time and effort at minimum wage. Each beet farmer in this analogy values their time at value whatever else they can do with their time. So those who have the best alternatives to beet farming leave the system until the system balances out. *of course real world has unseen...

[@SumBrennus]

@@64standardtrickyness Alas, that was the last time I valued my labor at $0. I tried to pay off a bill by trying to get them to hire me to work for them to pay it off...

[@harktheheral]

"Check the price of a nice restaurant before you sit down?" Literally always. Depending on the occasion when going out, my wife and I will set search filters on Yelp, including price bands, and then we'll preview the menu and see what the options are and prices. We're willing to pay for a given range, or say "we still want to try this" or what have you, but we know in advance what we're going for and are interested in. Guess we're weird.

[@pegoe7784]

You aint going to a nice high-end restaurant, brokie, lets be honest.

[@techguy651]

“Companies will pay a premium for workers of higher quality.” Hahahahaha! That’s funnier than all those jokes about grad students being on the bottom rung of society.

[@jesdadotcom]

It's absolutely true if you're actually great at what you do and keep yourself available to the labor market. If you believe sticking with one company forever will achieve this, then no.

[@MrHocotateFreight]

If you're like me in a part time job, then no wonder your views of pay are cynical op. But if you have a real career and your actually proper qualified, a company will look at your lessers before you when firing

[@skyranger1366]

@@MrHocotateFreight And then offshore your job to China because slave labor is cheaper. Companies are like crocodiles you can feed your coworkers to it hoping it eats you last. But eventually you run out of people to sacrifice and then you are the one being devoured.

[@skyranger1366]

@@roamingthereal4060 Conversely why would I ever work for a company that doesn't think I'm worth being paid a living wage.

[@Stszelec01]

They don't pay premium for quality workers they can eat dirt they only pay premium for workers that are hard to replace

[@TriWaZe]

I consider a company scummy when it pays minimum wage. Its like openly saying I would pay my employees less if I wasn’t forced to pay them this amount.

[@atomsmasher9411]

Or would own slaves if it were allowed. Actually, I suspect that slaves would incur more cost than minimum wage workers do.

[@scifirealism5943]

Yep.

[@mwam1985]

Up next... The economics of stock footage!

[@cianoconnor6081]

This is much more entertaining if you replace the word “farmer” with “rapper”.

[@MysterCannabis]

Haha most of them do make beats for absolutely no money

[@tcironbear21]

Oh, Economic Explained!!! You just lost SOOO much cred with this one. You made a remedial mistake on supply vs. demand. In a free market, price would not fall to the accounting profit, it would fall to the point of the economic profit. Accounting profit = Total Revenue - Total Cost Economic profit = Total Revenue - Total Cost - Profit from Most Profitable Opportunity that an Agent Did NOT Take (Opportunity Cost) So even in a free market, individuals could be making positive accounting profits so they can stay open.

[@macattack5863]

So is the idea here that risk vs reward will incentivize growth.

[@tcironbear21]

@Aaron Turner Close, but the group of not positive numbers in not just negative number. The group of not positive includes all negative numbers AND ZERO (capitalized to emphasize, not belittle) A business will not go bankrupt if it is making 0 economic profit. They COULD still service debt and pay dividends with the accounting profit of a company making 0 economic profit. Meanwhile no one will want to jump into the market because they see it is making 0 economic profit for firms The businesses that are there will stay and operate, but no one will join and no one will invest more. I put a big emphasis on COULD there because it really depends on what the opportunity cost. Like for example in the real world, a high school drop out with no prospects might have an opportunity cost near 0. Meanwhile a world renowned surgeon could have an opportunity cost of 500k. Also a the model of a "free market" or "competitive market" assumes that it is costless to enter and leave the market. So that means no one goes bankrupt in this market. They come and go as they wish. So the closest thing to a competitive market in reality would be the one for blowjobs. Everyone can give one and it is costless to enter or leave. But the reason not everyone is in this market is not because you can't make an account profit doing it, but because every potential producer faces different opportunity costs and different non-monetary costs. Also no one goes bankrupt giving blow jobs, they just stop giving blow jobs because it is not worth it to do it.

[@Wozunubi]

Replying to give this comment visibility, curious about his response

[@iampennochio]

"When was the last time you checked the price of a restaurant before you sat down?" I looked in the window at the furniture. Then i knew whatever price they had for their food was too high!

[@SupLuiKir]

The minimum wage debate takes on an entirely new meaning when you consider that minimum wage was originally a method of protectionism in order to keep Irish immigrants from being employed and crashing the labor market. If the minimum wage is above what a low-skill worker is worth, they are effectively prevented from working.

[@Randomguydrm]

Minimum wage is the best way to explain good Intentions and bad results.

[@lorenzoeli2939]

@@Randomguydrm more like good intentions, potentially good outcome then corrupted and exploited by bad companies and individuals

[@paulcoleman5512]

@Martin P It was somewhat but nowhere near like it was towards the Irish migrants coming in.

[@nevermindthedoves3950]

Where did you get this idea from? Do you have a source? As far as I can tell, the first statewide minimum wage laws were enacted in 1912, a half-century after the heyday of Irish immigration to the United States.

[@arieroskam4000]

The fact is, as vaguely pointed out in this video, that a minimum wage will always increase unemployment.

[@bengoacher4455]

Last time i was this early I didn't live in a centrally controlled economy

[@fatpotatoe6039]

@Rappa Kalja You

[@colto2312]

this

[@bastian7323]

17:22 Germany also didn't have a minimum wage until a few years ago and it literally didn't hurt anyone when it was introduced.

[@witoldschwenke9492]

that's utter bullshit!! incredible that you'd think that. It didn't "hurt" anyone, you've got to be kidding me. No all they did was either close their business and numerous people had to, or pretend they pay minimum wage without actually paying it and that's what the rest are doing. How do i know this? my dad works together with several people who own various businesses, a lot of them cut the official work hours and pay minimum wage but the employees just work for free for a few hours or they resort to completely cutting out the government.. ..

[@robertaylor9218]

I was waiting for the caveats. Yes there are conditions where a minimum wage of $0 doesn’t make everything monumentally worse. Those require either a robust support system for citizens and/or mandated collective bargaining that provide an industry (or regional) specific minimum wage.

[@anteeko]

Singapore and sweden have no minimum wage.. Singapore is not what you would call a union country yet wage are very high

[@FireDarkness39]

@@anteeko singapore has a very high level of income inequality. The top wages are high.

[@ralphr-c7156]

Whilst this channel is ok for some light economics content, I would urge anyone new to economics to be skeptical of more meta analysis such as this. There's a continuous trend of contradiction in these videos that lead to some really ropey conclusions.

[@formula1340]

I knew there is something wrong about this video the moment I saw the title that lead me reading the comments first before watching the video lol.

[@zorphias0]

While I would urge everyone to be skeptical of ALL content, contradictions in videos like these make me trust the author more, not less, because topics like economics are inherently messy and there is usually no right answer.

[@GhostEmblem]

That argument against perfect markets has so many holes -_-

[@adamsfusion]

I'm not an economist, care to explain a bit more?

[@blimpgaming8534]

Ye please elaborate am interested

[@carlosMartinez-fy4pz]

@@blimpgaming8534 @avfusion His example is about 100 farmers that are competing for customers, so they will be willing to lower prices in order to get more customers. So, the cost of being a farmer would not be profitable in the long run; making everyone poorer The problem with that example, is believing farmers just compete in prices. But he himself says later that you may be incline to go to X farmer instead of Y farmer, in order to get more nutritious beans, even when they could have higher prices. So, he is admitting that those farmers not only compete in prices, but in product, services, quality, etc... His example shows the limit of perfect markets competing under just one variable (which no market would be like), not perfect markets themselves.

[@blimpgaming8534]

@@carlosMartinez-fy4pz Thanks

[@GhostEmblem]

@@blimpgaming8534 Well even assuming that the products are exactly the same down to the nutrional value his example ignores ignores price equilibrium, supply doesnt keep reducing. If demand remains the same while the suppliers reduce there wont be enough supply to satisfy demand and people will start paying more for access. It ignores cost of production, people wont reduce the price below the production cost. It also treats supply as infinite, each supplier can only produce so much else the basic economic problem would be solved and the example would be worthless for economic demonstration. It assumes that suppliers will undercut eachother instead of matching prices. There are many things wrong with it and I'm sure others could point out more.

[@clevermcgenericname891]

KZbin Economics Dude: makes well thought content to teach people about economics. Economics Professors: TO EACH ACCORDING TO THEIR ABILITIES TK EACH ACCORDING TO THEIR NEEDS

[@grahamturner2640]

🤣🤣🤣🤣

[@dtkedtyjrtyj]

I even like the spelling mistake, it conveys the correct amount of unhingedness.

[@IslandHermit]

A $0 minimum wage would NOT result in zero unemployment. Once the wage drops below the level at which a worker can survive that worker will seek an alternative to employment, such as charity or crime. Having a backstop such as a universal basic income is not just desirable in a $0 minimum wage economy, it's an absolute necessity. For a channel which is supposed to specialize in economics I'm surprised by how often they get even basic concepts wrong.

[@survivalistboards]

Sounds good in theory, but in the real world we need some type of minimum wage. I have seen numerous instances going back to the 1980s where factories in a given area closed, thousands of people laid off, which created a surplus of labor. The surplus labor drove wages down to half of what people were making earlier. The job I have now, over 500 people applied for it. With surplus labor companies pay whatever they want and the employees have to deal with it.

[@Think_Inc]

I only found this channel a month ago and I’m already addicted.

[@philippe0001]

do a video about Argentina, some crazy things are going on there!

[@j.fo.v5260]

The previous government took a huge loan which the current government cannot pay back.

[@cacho9148]

@@j.fo.v5260 not only macri, in 2001 argentina defaulted and macri had to pay the debt, he got in debt to pay debt

[@johnkeefer8760]

In 1900 Argentina was one of the strongest/largest economies in the world. Today, not so much. I would love this video

[@jordan-ho7gt]

@@j.fo.v5260 the previous government has the current vice president seat.

[@kirstyjjamieson]

Every time before even booking a table at a restaurant I check their menu and prices. I suspect I’m not alone or even that unusual.

[@justzach253]

After 18years I finally moved away from that small town that sells beets. Couldn't take it any more.

[@gavinyeomans]

The main reason they don't need a minimum wage in the Nordic countries is strong union membership. Over 2/3 of workers are in unions in most of these countries, giving them enormous bargaining power to set their wages with employers without needed the govt to enforce minimum wages. Union membership in the US is extremely low in contrast (and it's harder to form a union) so workers have much less power bargaining.

[@lance8996]

Hey, love your videos. I would like to suggest you make a video on the Irish economy, it’s surprisingly interesting.

[@BMXaster]

That passive agressive surprised "Hmmm" at the end got me hahaha

[@Vaikarona]

Not the title i was expecting on an economics channel

[@EconomicsExplained]

haha well hopefully it got your attention if nothing else.

[@saasda6255]

@@EconomicsExplained would the stock market be a perfect market? Or is this different

[@Jylakir]

So yea, 0$ minimum wages works in countries with big social programms. Shocking! So you have either a minimum wage or big social programm to protect your workforce from the comapanies.

[@kullingen6909]

Do social programs include the unions you did not mention?

[@Jylakir]

@@lain7758 I would not use Singapore as an example which all states can follow. Sure we can talk about which side of the coin might be best. But my statement was, taht its not wise just to make 0$ minimum wages wihtout any more counter measurements.

[@taihung7912]

incredible!!! and hardwork, Anmol Singh does alot more to make sure such level of profit is generated... its just pure natural intuition

[@kostaskolkaitso2433]

I study economics and I love this side of youtube thanks ee for those amazing videos

[@incentiverse]

Dwight Schrute watching this video : "write that down, WRITE THAT DOWN"

[@FL0D0S]

I love how the situation of an economic downturn is inevitably blamed on employees: they either become lazy when their pay's cut, they jump ship when their pay's cut, or they demand their pay isn't cut and then it's their fault their workload increases. Won't someone please think of the corporations?!

[@Luredreier]

Regarding the lack of minimum wage in Norway. That's a truth with modifications... It's still illegal to pay salaries significantly smaller then the ones negotiated for in a sector. So for instance people working in a hotel or restaurant might benefit from lower wages right now rather then losing their job and companies might be desperate for cheaper workers and they will indeed be cheaper then in other sectors like say programming jobs not as impacted by the virus. So the unions for hotel workers etc will agree to lower wages in return for other concessions, be they higher pensions or less work hours/time off/vacation or even controlling votes in the board of directors of the company. The company stays afloat. But lets say that a company finds someone cheaper available? Someone new trying to get hired to a hotel job might want to undercut the others available but there's a limit to how low the hotel can go without breaking the law. Not a fixed minimum wage set by the government or the same as in a totally different industry, but rather a fixed percentage of the negotiated wage in that particular industry. So hiring someone for 5% or even 10% less wage then those that's unionized may be possible. But if you find someone from another country moving in willing to take 25% less then you still have to pay significantly more then that because paying them that sum *would* be breaking the law. Essential we *do* have a minimum wage. It's just that companies and unions takes part in setting that minimum wages together with the government only enforcing it and helping out if there's a stale mate or if too much harm comes to society at large. (So nurses may go on strike but only if there's zero doubt that no lives are at risk)

[@kyle784]

If a restaurant doesn't require a reservation, I will sit down and look at the menu. Nothing of interest at the price offered means I walk out. Even if the price is comparatively cheap, if it has nothing I'd want to eat it doesn't matter much. Sometimes I will order just a drink or an appetizer or a dessert, it depends what looks good.

[@yevgeniygrechka6431]

4:44 This is incorrect. In the theoretical case of a beet market adhering to the perfect market conditions that are laid out, the price would not drop to the "at cost price", it would drop to: "at cost + opportunity cost price", and since everyone has different opportunity costs, the last beet supplier standing is one who has the least opportunity cost, or in other words, one who is most specialized in producing beets. Furthermore, if we assume that everyone has the same opportunity costs, these opportunity costs are not zero, so the suppliers will continue to make profits selling their beets. So the beet production will in fact go on under these conditions.

[@lukeskyrunner95]

This EE guy has all sorts of misconceptions of free market principles. I’ve stopped watching his videos because they made me too frustrated. He’s a sophist.

[@yesid17]

lol that bus at 11:46

[@economicsinaction]

Well spotted!

[@_armoricat_]

@@economicsinaction hippity hoppity trafic is now my property

[@JoHuGi]

I've checked the price of every meal I've ever had since I was old enough to read.

[@safarijokie]

I believe we can benefit highly from a progressive minimum wage that’s depending on the revenue of the company. Could you do a video on those economics? love the videos man

[@maxellethebragon7478]

Huh... so each worker gets equity, it's kinda like a weird, roundabout co-op, except without any board seats.

[@ngallardo1994]

Good video except your point about people not checking menu prices until they’re seated. As a working class person from America, we nearly always check menu prices online first unless it can be reasonably assumed the restaurant has affordable prices.

[@sampotter4455]

You've never heard of employees taking a pay reduction? Good grief! It happened a lot in the 2008 downturn here in the US.