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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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 Posted: Tue Dec 29, 2009 7:52 am Post subject: |
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| Kuros wrote: |
| Mises has attacked the microlending phenomenon before. And I agree with him insofar as its been marketed as a panacea for poverty. But as another tool in the toolbox for bringing, say, 500 million Chinese out of the Middle Ages, I think I support it |
Microlending could be a very important and useful tool in development. To encourage microlending we need to encourage, or more importantly, allow, microbanking.
We need to deregulate banks completely in every country so that anyone can start a bank with a few dollars and an office - even a portable office. In fact, a shoe box, a notepad and a pencil is all that's needed.
A microbank can take in deposits and make loans on a small scale and a local level. It can keep its cash and backup records in a safedeposit box of a large brick-and-mortar bank when necessary. This is an easy business, it requires some intelligence, but little capital, and is one of the overregulated businesses that could be started by a single, savvy, enterprising individual, if it were legal, and would help the poor more than any government program.
There is room in America for 30,000 or more microbanks in the marketplace. The number per capia would be higher in poorer countries. Governments need to get out of the way.
(Conrad Hilton began his career when he was dirt poor, by starting a bank. If I remember correctly, it was not very successful, but it was a business a poor man could start at that time.) |
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Koveras
Joined: 09 Oct 2008
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| Posted: Tue Dec 29, 2009 7:55 am Post subject: |
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| Fox wrote: |
it's true because "conservatives" in government |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Dec 29, 2009 8:24 am Post subject: |
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| Fox wrote: |
| ontheway wrote: |
7) Overtime laws prevent workers from earning more.
Many workers are willing to work more hours at their base wage, but because of required "time and a half" laws, they are not offered any overtime. Instead they must get another part time job.
This is especially horrible for those who have managed to develop some skill allowing them to earn a higher wage. A man, "Adam," who has worked up to say $20 per hour in his trade is not able to work extra hours because his employer cannot afford to pay the $30 required.
So, Adam has to take a second job. He may be prevented from working from a competitor and may not be able to find part time work in his trade as other employers want full time workers, so he takes a lower skilled job at $8 per hour.
The stupid OT laws, instead of helping Adam earn $30 per hour for his extra hours force him to work for $8 per hour. Instead of making $10 per hour more, the government forces him to work for $12 per hour less. |
This is a really questionable situation you've created here. So we have our hypothetical person, Adam. Adam partakes in a skilled trade of some variety worth 20 dollars an hour, and has the inclination to work more than 40 hours a week. However, Adam's employers also are so financially tight that they can't afford to pay overtime, and further absolutely forbid him from working for the competition, and further presumably forbid him for working on the side in an individual capacity in said field. In addition, he's totally unable to take his skills and simply start working for himself for some reason. Finally, the only other possible outlet for Adam to work at pays him less than 50% of what he was otherwise earning.
Go ahead and prove there are more people like Adam than there are people who benefit from overtime laws. Don't claim it, prove it. I'm very interested. You claim many people work second jobs because of overtime laws; a lot of them probably work second jobs simply because their employers don't require more of their labor, and if they did work more than they are currently working, their employer would have to fire someone else. Many businesses places don't simply have unlimited possible work to do, after all. |
I have personally known hundreds of people in the situation I've described. I've never looked for any studies on this, as its obviously true, like the fact that the sun rises every day.
My university was a case in point. No one was allowed OT when I was there. I worked there as a student accountant in the business office and handled related paperwork. Anyone who worked over 40 hours in a week was immediately terminated. Each worker was responsible for punching out before 40. Several were fired, so few dared to go over. Many had to seek alternative employment. It was because of the time and a half rule. There were open jobs, pay was above minimum, and work and money was available - but "no OT" was the rule.
I also used "Adam" as an example. He was a coworker. He worked for a major corporation with over 15,000 employees and the same rule. He also took a part time job at another firm where I was an accountant. (Working in accounting and especially when you handle payroll and benefits, you become aware of a lot of personal details.)
The most extreme example was a man I knew personally had a full time job at $28.50 per hour and, due to the OT ban at his company, he worked part time for $6 per hour (still above min. wage at that time) - trying to save up for his kid's college tuition. He worked 20 hours per month at his second job and could have made more with only 5 hours of flat rate OT.
Finally, it is quite likely that the 1.5 OT laws actually help virtually no one. Any company that can hire a regular pay worker, full or part time, to replace an OT worker working for 50% more will do so.
People tend to get 1.5 OT when there is no one else immediately available with equal skills to do work that is needed immediately. These people can command higher wages in any case, through individual or collective bargaining, so no 1.5 OT law is needed.
So, with a 1.5 OT law, people get less work and make less.
Finally, by reducing the hours workers can work at their maximum wage, these workers are denied the chance to maximize their annual earnings. This reduces the average working wage of the country and reduces the portential output of their employers. Reducing the output of the employer reduces the earnings and investment that would create even more jobs or more work for present employees. It also reduces the potential consumption and/or Investment based on saving of from the individual's higher income, which in turn reduces the economic output of the entire nation and thereby reduces the living standards of everyone else.
This kind of law is one example out of thousands of how bad laws make everyone poor. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Tue Dec 29, 2009 10:54 am Post subject: |
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| Fox wrote: |
This is a really questionable situation you've created here. So we have our hypothetical person, Adam. Adam partakes in a skilled trade of some variety worth 20 dollars an hour, and has the inclination to work more than 40 hours a week. However, Adam's employers also are so financially tight that they can't afford to pay overtime, and further absolutely forbid him from working for the competition, and further presumably forbid him for working on the side in an individual capacity in said field. In addition, he's totally unable to take his skills and simply start working for himself for some reason. Finally, the only other possible outlet for Adam to work at pays him less than 50% of what he was otherwise earning.
Go ahead and prove there are more people like Adam than there are people who benefit from overtime laws. Don't claim it, prove it. I'm very interested. You claim many people work second jobs because of overtime laws; a lot of them probably work second jobs simply because their employers don't require more of their labor, and if they did work more than they are currently working, their employer would have to fire someone else. Many businesses places don't simply have unlimited possible work to do, after all. |
Fox, retail companies do this ALL THE TIME. One friend used to work for Fry's Electronics as a cashier and sales person. The most hours one would get is 35 hours. Why? Two reasons: 1. Fry's doesn't have to provide benefits because that person is "part-time" 2. Keeps the company from having to pay overtime. Even if there is an emergency and they need her to work, they have that 5 hour window. Ditto for a friend that used to work for a fast food chain as an assistant manager.
And a warehouse? You know what they do? The one I mentioned earlier, 75%+ of its workstaff was provided by a staffing agency. If they needed more labor hours, they'd just ask the staffing agency to provide another body. Overtime? Ha, yeah right, waste of money, especially when unemployment is so high and people will take any kind of job these days.
Just ask any of your friends that have worked in retail. I'm sure they've all had funny scheduling crap, and probably none of them have worked significant hours of overtime. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Dec 29, 2009 6:58 pm Post subject: |
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| bucheon bum wrote: |
| Fox, retail companies do this ALL THE TIME. One friend used to work for Fry's Electronics as a cashier and sales person. The most hours one would get is 35 hours. Why? Two reasons: 1. Fry's doesn't have to provide benefits because that person is "part-time" 2. Keeps the company from having to pay overtime. Even if there is an emergency and they need her to work, they have that 5 hour window. Ditto for a friend that used to work for a fast food chain as an assistant manager. |
Bucheon Bum, what you just described is not an example of what ontheway described. The person working at Fry's Electronics:
1) Is capable of working for the competition.
2) Is capable of earning equal wages at other jobs.
As such, he isn't losing money by taking a second job at all, he's just inconvenienced by having to take a second job if he wants to work more hours. Ontheway is talking about people actively and unavoidably losing substantial money as a result of overtime laws. Remember, his example was Mr $20/hour who wanted to work more hours but could only make $8/hour at other jobs because he couldn't work for the competition. Nevermind that Mr. $20/hour isn't poor, and this is a discussion about how laws affect the poor.
It's also worth noting that in the scenario you described, benefits probably play a much larger role than overtime pay in the company's decision. Overtime pay is ultimately a fairly small cost, because you only pay it on the hours worked in overtime. As soon as you start paying someone benefits, the costs immediately go up substantially. If your company pays benefits for anyone who works 40 hours a week, the difference in your expenditures on an 39 hour/week employee and a 40 hour/week employee is very substantial. On the other hand, the difference in pay for a 40 hour/week employee and a 45 hour/week employee due to overtime is fairly small, especially when considered from a pay/hour perspective.
In response to ontheway's post, I don't see the proof I asked for, so I'm not sure why you bothered responding. Your anecdotes are meaningless to me, and your rhetoric is meaningless to me. If you have data that proves more poor people lose money annually because of overtime laws than gain money, I'll review it. If it shows a significant disparity, I'll even agree with you it's a problem. But that's all that will convince me: data. The moment you started making claims like your hypothetical Libertarian society having 0% pollution rate and resulting in a 10 fold increase in standard of living, your rhetoric lost persuasive capability. |
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