Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Yes, we're probably going to be hearing a lot of this happy horseshit in the next 10 months.

Of course the Serious PeopleTM bemoaning this circumstance are going to try with all their might to avoid the obvious answer: the introduction of a general minimum wage in Germany.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Wed Feb 10th, 2010 at 05:01:39 PM EST
[ Parent ]
Theorie vom fehlenden Arbeitsanreiz macht keinen Sinn

Ich stelle den Ökonomen des Weltwirtschaftsinstituts die Frage, wie es überhaupt im Rahmen IHRER eigenen Theorie dazu kommen kann, dass sich der Abstand zu den Erwerbseinkommen so stark verringert. Oder gar auf null fällt. Im Rahmen der neoklassischen Preistheorie bzw ihrer Argumentation müßte doch Folgendes gelten:

Wenn Hartz IV eine seriöse Alternative für einen nennenswerten Teil des Erwerbspublikums darstellt, dann gibt es niemanden, der eine Arbeitsstelle für weniger annehmen wird. Zumindest wenn er rational agiert, wie es die Neoklassik ja postuliert. Wenn mir Hartz IV im Monat 1000 Euro bringt, ein Vollzeit-Job aber nur 900 Euro, dann wäre ich ja tatsächlich schön bescheuert, dem Job nachzugehen.

by generic on Wed Feb 10th, 2010 at 05:06:56 PM EST
[ Parent ]
Yep. Weissgarnix is always worth a read.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Wed Feb 10th, 2010 at 05:25:11 PM EST
[ Parent ]
Quick and dirty translation for the German-challenged, because it's an important point:

I would like to ask the economists at the Weltwirtschaftsinstitut how, according to their theories, it is even possible to diminish the gap between unemployment payments and salaries. Let alone to reduce it to zero. Within the framework of neoclassical price theory underpinning their arguments, the following must hold:

If Hartz IV were a serious alternative for any appreciable fraction of the working public, then nobody would work for less [than the Hartz IV benefits]. At least if he acts rationally, which is presumed by neoclassical theory. If Hartz IV pays € 1000 and a full-time job only € 900, then you would presumably soon give up the job.

Of course, the orthodox answer is that this is in fact what we will see: Salaries will rise, because the opportunity cost of labour will go up. However, under orthodox price theory, salaries always equal marginal productivity, this means that the workers whose marginal productivity is less than the new equilibrium price level will be laid off.

In the real world, the notion that remuneration always equals marginal productivity is, of course, not even wrong. For one thing, there is no guarantee that the marginal productivity of the factors of production will sum to the total productivity of the enterprise. For another thing, this conclusion presumes symmetric power relationships between employer and employee. (And it's based on a model of human decisionmaking that's completely off its medication...)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 10th, 2010 at 05:58:11 PM EST
[ Parent ]
Minimum wages as the obvious answer?
I disagree. Not the silver bullet IMHO.
I would opt for:
  • (Unconditional) basic income.
  • Fair distribution of work meaning lesser weekly working hours.

Ad astra, GA
by ga on Thu Feb 11th, 2010 at 09:28:19 AM EST
[ Parent ]
Actually, within the context of German day-to-day politics, a minimum wage is an obvious answer: something legislators could enact rapidly and with little legislative overhead if they felt that employment was not sufficiently attractive.

But no, it's not a silver bullet.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Thu Feb 11th, 2010 at 09:46:33 AM EST
[ Parent ]


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