Morgan Warstler wants to auction the unemployed

I think his plan would work great . . . in Denmark.

The Danes would run it at the county level, both in terms of financing and distribution of benefits.  Very few would cheat.

Even in the US it would probably be better than the current system.

I’ve favored replacing “welfare” and the minimum wage with low wage subsidies ever since I was in grad school back in the 1970s.  It just seemed so obvious.  It’s interesting to see Germany doing well with wage subsidies and no (national) minimum wage.  They were the “sick man of Europe” back in 2003.

I’ll let Morgan defend the plan in the comment section.

PS.  I’m pretty sure Morgan would agree to combining it with NGDPLT at 4.5%

PPS.  Here’s the basics, but read the whole thing for details:

The Basic Plan

Using the Paypal and Ebay platforms, the US govt. should establish a Guaranteed Income of $240 per week. Anyone who wants to work registers, receives a Paypal Debit Card, and each Friday at 5PM has their GI deposited.

All GI recipients have their labor weeks auctioned online.

Job offers begin at $40 per week ($1 per hour).  Offers increase by .50 cents per hour ($20 increments).

At $40 per week, there’s no able bodied / able minded person that some rational returns bidder won’t find use for.  The 70 yr old woman in a wheelchair who wants to work to keep busy?  Plenty of teleservice operators have work for her to do from home for $1 per hour.

Note: I solve for the criminally lazy.  Identifying and fixing them is one of my plan’s advantages. I’ll get to it a bit later in the What Abouts plan.

So minimum take home cash under GI is $7 per hour or $280.  $240 is the social commitment paid out of taxes and $40 is the winning job offer.

To perfectly align incentives, for each $20 per week offer increase over $40, the govt. gets back $10 of our $240 social commitment, and the auctioned employed keeps $10.

So, on a offer of $100, the govt. is paying $210 and the auctioned receives $310.  A offer of $200, hits the govt. for $160 and auctioned receives $360.

The system ends at $10 per hour.  The maximum offer allowed in the GI Auction is $280 and the govt. is still kicking $120 netting the auctioned $400 per week.

Here is the actual schedule I’m suggesting:

Winning BID        GI paid by govt.              Payday: GI + BID
$40                      $240                               $280
$60                      $230                               $290
$80                      $220                               $300
$100                    $210                               $310
$120                    $200                               $320
$140                    $190                               $330
$160                    $180                               $340
$180                    $170                               $350
$200                    $160                               $360
$220                    $150                               $370
$240                    $140                               $380
$260                    $130                               $390
$280                    $120                               $400

At this point people tend to have lots of questions.  Since I’m writing this to woo progressives let’s starts here.  Companies like WalMart will now  need to pay more than $400 a week, to keep workers from choosing GI.

Here are the basic rules:

  1. Recipients can choose to take lower paying jobs.

  2. Recipients cannot be made to work outside a radius of 5 miles.  This is a guesstimate.

  3. Bidders must also establish their real identity and deposit money into system before they bid.  No more craigslist roofing scams paying after the fact.

  4. Bidders and auctioned cannot be related or cohabitating.

  5. Bidders must accurately describe the job (check boxes) and cannot add to it after winning bid or require work not checked.

  6. Feedback will be given both ways. If you are familiar with Ebay buyer / seller feedback, you understand what this accomplishes.  It makes it the whole thing work.   If you are not familiar with Ebay, get familiar with it before you state your opinion on this plan.

  7. There are no taxes paid by employer or employee.  There are basic workplace protection requirements. Umbrella insurance is sold on Ebay for folks bringing labor into their home.

  8. Upon meeting some fair criteria, the criminally lazy can be suspended from GI program. Perhaps 6 weeks as first suspension.

  9. Only individuals and incorporated SMBs earning less than $3M per year can bid.   This is not subsidized labor for Fortune 1000.  Under this plan, their labor costs go up.  I am proposing Internet based #Distributism.


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60 Responses to “Morgan Warstler wants to auction the unemployed”

  1. Gravatar of Michael Michael
    11. March 2013 at 18:22

    OK, I’ll play.

    Why wouldn’t this destroy the market for low wage jobs?

    In the current economy, there are some workers who earn, say, $8-10 dollers per hour. Many “big C” Conservatives would have us believe that all of these workers are ZMP folks who are the next thing to welfare recipients, but I don’t think it is a major stretch of the imagination to assume that a good many of the workers who make $8-10 per hour are productive enough to be worth $8-10 per hour.

    But under Morgan’s scheme, instead of paying one guy $8 per hour ($320 for a 40 hours of work), I can hire four guys for half the price (I spend a total of $160 for a week and for that I get 160 hours of work, while they are paid $280 per week). Granted, the people I hire will probably not be as productive, but all they have to do is be 25% as productive and my labor costs are cut in half.

    Why would this not be a concern?

  2. Gravatar of TravisV TravisV
    11. March 2013 at 18:38

    Dear Blog Commenters,

    I’m aware of the “Sumner critique.” But is there ANY conceivable scenario where an increase in government spending could have a substantial impact on U.S. aggregate demand? If so, what kind of scenario(s)?

    I previously asked that question and Prof. Sumner replied:

    “I can think of numerous scenarios where more government spending might boost NGDP, or RGDP (which are different issues.) WWII spending raised both types of GDP.”

    Could someone please help me understand the “why” a little better? For example, Market Monetarists believe that if the government increases spending today, that wouldn’t have much impact on NGDP because the Fed would offset any amount of core inflation above 2%.

    So why did government spending during World War II have a large impact on NGDP? Why not just have the Fed jack up expectations of NGDP growth? Why was more government spending essential to increasing expectations back then while it isn’t today?

    Just trying to understand scenarios where more government spending can and cannot be very effective.

  3. Gravatar of Aidan Aidan
    11. March 2013 at 19:09

    This seems like a good time to dust off Karl Smith’s “liberalization failure” idea (I actually prefer Daniel Kuehn’s definition and think it’s more applicable here, but credit to Karl for the idea).

  4. Gravatar of Cameron Cameron
    11. March 2013 at 19:10

    I’d prefer a no questions asked guaranteed minimum income (of less than $240/week however), but this is better than what we have.

    Why leave big corporations out though? Is this just to make it more attractive to liberals or are there practical reasons for this?

  5. Gravatar of Edward Edward
    11. March 2013 at 19:28

    There’s a problem for the EITC, as great as the idea is. It tends to depress the incomes of those who are on it. Employers are the ones who really pocket the difference as they pay their workers less than they would have had the EITC had not been implemented.

  6. Gravatar of Errorr Errorr
    11. March 2013 at 19:47

    This is why minimum wage is required under the EITC to force the money to the workers. As a progressive who has read alot of SciFi I can’t but help believe that some day there should be enough surplus to provide a guaranteed minimum income as the singularity approaches leaving work to those who want more.

  7. Gravatar of Cameron Cameron
    11. March 2013 at 20:13

    Edward,

    “Employers are the ones who really pocket the difference as they pay their workers less than they would have had the EITC had not been implemented.”

    Think of the EITC as a partial subsidy for companies to hire low skilled/non-motivated workers then. Nothing wrong with that. Surely some of the benefit goes to workers though.

  8. Gravatar of Mike Sax Mike Sax
    11. March 2013 at 20:18

    Morgan on a first look I’m quite intrigued. Of course, trusting soul I am I’m looking for anything that’s wrong with it but overall I like a lot about it-it’s much more developed than what you talked about in the past.

    Effectively not only have you implemented a $7 minimum wage-as we have now-but you’ve also guaranteed everyone $280 a week. Which is a better deal. Now you get $7 an hour but only if you can find a job. Then even if you find a job you probably won’t get 40 hours a week if it pays minimum wage-you’ll be lucky to get half that.

    You’ve also raised the effective minimum wage for Walmart, et. al. to $10 an hour. There may well be holes in it but I’ll need more time to think about it.

    The one thing I wonder is about what the difference is between your plan and the MMT Job Guarantee (JG).

    Their idea is the government guarantees everyone a job who wants one. Not all the jobs are necessarily government jobs. There are actually 3 classes of jobs-government jobs, private sector jobs, and nonprofits.

    If anything they’re less generous as they envisage that these JG jobs pay say $8 an hour and this wage doesn’t rise with the rate of inflation-they believe that this JG wage will be a nominal anchor for prices-the JG is sort of like their NGDPT as well.

    I don’t say this to make their case for them or defend them. I just really would love to hear either you or them explain what the difference is between the two of them.

    Minsky-who is a kind of father of the MMTers wasn’t a big fan of welfare-though he thought it was better than simply letting people die in the streets.

    Ideally he wanted what Clinton called “workfare”-though of course Clinton didn’t deliver that, though I think he wanted to-where everyone who wants a job can have one.

    It seems that this what you’re talking about too. If so I’m all for it.

  9. Gravatar of Mike Sax Mike Sax
    11. March 2013 at 20:26

    Ok Morgan. Having read your full post I see now where there could be some contention:

    “Herein, I’ll explain the way it works. There’s only one way it works. Deviations on the idea without the private sector auction ruin it immediately.”

    “Milton Friedman walked away from a Negative Income Tax because it wasn’t a full replacement for social safety net. This is that exact situation. We either do it my way, or it won’t work, and isn’t worth doing.”

    Why is the private sector auction vital? As it is you’ve called for a bigger government subsidy than anything around now-as the govt would guarantee $6 out of $7 per hour. If you’re going to have a red line at least explain it.

  10. Gravatar of Saturos Saturos
    11. March 2013 at 20:27

    I like the idea, wouldn’t it make headroads against sticky wages? But I don’t understand why it has to cap at $400; are the unemployed not allowed to get real jobs through the program?

  11. Gravatar of Rob Rob
    11. March 2013 at 21:46

    Umm why does it cap at $10? I really can’t get the logic, what if the person being auctioned is worth more than $10 to multiple bidders? Why disincentivize people to develop a good reputation? Also why prevent corporations from bidding? If they bid the highest, presumably they have the best use for the persons labor, does the author dislike allocative efficiency? I like the idea in general (although its political feasibility is quite low) it just seems like the author wants to put some rather odd restrictions on it.

  12. Gravatar of Prakash Prakash
    11. March 2013 at 23:39

    First I would like to state that I really like Morgan’s idea. We may need something like this when the robots make us useless.

    Trying to really red-team it, I would suggest these “attacks”.

    Bidders not being cohabitors – I would workaround this by setting up “I scratch your back and you scratch mine” schemes. Lets say I bid for my neighbour’s wife’s labour and he bids for my wife’s labour. We pocket the differences.

    For the revenue cap limit, I would use franchising. But I guess that is a positive of its own, by having more business owners in the community, so not really a total attack.

  13. Gravatar of Mike Sax Mike Sax
    12. March 2013 at 03:02

    I don’t know that the cap disincentivizes workers. This is just the cap on what a worker can get from GI job.

    Indeed, this actually bumps up the effective minimum wage to $10 an hour. A worker may well be motivated to get a non GI job.

    You have to cap it out at some level by this logic-otheriwse it competes too much with non GI jobs. As it is th e non GI jobs have seen their labor costs rise considerably.

    So I don’t know that this is where the objection lies. Even MMT’s JG only pay $8 an hour or so-Morgan’s is more generous than their’s if anything as JG jobs pay $8 period, a flat rate.

  14. Gravatar of Mike Sax Mike Sax
    12. March 2013 at 03:05

    IF you imagine a worker who’s lost his job and needs to get back to a real job to be able to afford the standard of living he’s become accustomed to it seems that this is quite a bit of incentive. He won’t have to work for $8 at Wallmart they have to pay at least $10 as would McDonalds

  15. Gravatar of david david
    12. March 2013 at 03:56

    I’m going to hire ten thousand people for $40 per pax to each dig this hole, fill it back up, and give me the $50 they find there.

  16. Gravatar of david david
    12. March 2013 at 04:07

    (that scheme isn’t as unrealistic as it sounds, by the way: the real-life version is leasing a “license” costing $50 to employees, who are then tasked to “go out and earn a commission on sales of worthless widgets. If that employee then hands in half his welfare check and then goes off for lunch, well, that’s hardly provable to be the employer’s fault now, is it)

  17. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 04:09

    I hate to toot my own horn but… toot, toot.

    Funny story to start, Matt Busigin, a lib who considers himself a labor specialist

    http://www.macrofugue.com/

    He wanted a full plan post from me and had it ready to publish on his site, when I objected to his calling my plan “government run” in his intro, and when I explained to him how clearly small government this plan is… he literally had to reread my plan to wake up, he freaked and told me to publish it on my own site.

    What a bad reader. What a wimp. Don’t fall into the trap, in terms wonks can understand READ THE BILL, or GTFO.

    People who really read it… @rortybomb he’s on board. So is @interfluidity (waldman). Basically ANY progressive who’s first true focus is the plight of the lowest, and not the public sector. Because my plan delivers one benefits at the expense of the other.

    You won’t see this mentioned by Matty or Ezra or PK, (not yet) or anyone who calls themselves wonks, because this does exactly what they claim to want, but doesn’t do what they really want – this plan make technocrats and those who think of themselves as technocrats lower social status.

    I’m taking all comers! I’m slapping it on the table and daring anybody who claims to do econ to match me.

    Expect crickets.

    (crickets)

    This plan is too important for anyone who’s talking about future of labor, or unions, or robots, or inequality to NOT TAKE SERIOUSLY. if you do those things and dont take my plan seriously, then you are not serious.

    For Kee-ryst’s sake, it also, oh by the way, just as a side benefit solves illegal immigration.

    Pay no attention to the guy with the silver bullets, because he’s gonna go all Unforgiven on our town.

    Thanks Scott, you said expect cheating cheating, if you think so, PLEASE give me a real example that you’d expect to be rampant, and lets see if Ebay hasn’t already solved.

    Please give me a real gamed out one Scott.

    Incidence of cheating will be lower then credit card fraud, and it will be very hard to sustain. I’m personally fine with paying bounty for proof of cheating like in Asia, but it isn’t necessary… this is Ebay + Yelp + provable human identities, it is has a level of real meat space reality that no online service has ever achieved. Far more potent than Facebook, and the leve of civility there is much higher.

    Michael and others:

    “In the current economy, there are some workers who earn, say, $8-10 dollers per hour. Many “big C” Conservatives would have us believe that all of these workers are ZMP folks who are the next thing to welfare recipients, but I don’t think it is a major stretch of the imagination to assume that a good many of the workers who make $8-10 per hour are productive enough to be worth $8-10 per hour.

    But under Morgan’s scheme, instead of paying one guy $8 per hour ($320 for a 40 hours of work), I can hire four guys for half the price (I spend a total of $160 for a week and for that I get 160 hours of work, while they are paid $280 per week). Granted, the people I hire will probably not be as productive, but all they have to do is be 25% as productive and my labor costs are cut in half.”

    This is wrong.

    1. Guys, it is better to imagine yourself as a job seeker, to understand the outcomes here…

    To the avg. seller, think blue collar men with high school education, it doesn’t ever feel like an auction. You log in and see TONS of standing job offers for $40 ($280), likely just as many for $80, and even $280 ($400) for guys with skills to do light construction.

    Compared to the status quo, the horror show we have today, you are choosing from a feast of job offers, week after week.

    As labor goes, you have real hedonic benefits, real psychic happiness that spikes and stays up, for the rest of your life.

    Bosses now have to perform for you. You have a feast of choices. If you have a some friends you enjoy their company, you all like working together, this system make that possible.

    The average blue collar high school guy, at $280/$400, to the outside world, you are a $7 per hour handyman. Society has an immense demand for a $7 per hour handymen. That’s a new housing boom. That’s a lower cost of rehab, a lower cost of rents, that’s ghettos that no longer have broken windows.

    Imagine what 2M $7 per hour handymen can do to improve 130M households year after year.

    Add in another 1M $6 per hour for landscaping, personal organic gardening, pool cleaning.

    For you city dwellers, think what happens to the price of Uber or Sidecar. In an appified world, there is is push button low cost get it when you need it local muscle.

    2. DISTRIBUTISM

    “I’d prefer a no questions asked guaranteed minimum income (of less than $240/week however), but this is better than what we have.

    Why leave big corporations out though? Is this just to make it more attractive to liberals or are there practical reasons for this?”

    Because Big Business = Big Government. 100% of the time, if you get Big Business, you get cancer and die.

    So our first policy concern is to encode smallness. Policies that do not favor the small over the large are unacceptable. This is our prime directive.

    The Internet ENDS the traditional argument for vertical integration in corporations, we must reap those gains and drive towards a world of networked small guys. This is called P2P in software. It is called States Rights in constitutional structure.

    We all understand the 80/20 rule in our future society. The top 20% will work 60+ hours a week do 80% of the work, and the bottom 80% work 40 or less and serve as the support structure for the top 20%.

    Our #distributist goal is TO SPREAD THE $$$ AMONGST THE TOP 20% far more evenly. Then there is a much larger set of customers for specialized support services from the 80%. 1,000 millionaires buy more yoga than one billionaire.

    Today, every week, we have 30M unused work weeks that would be millionaire entrepreneurs cannot unlock because after all the taxes and insurance the cost of labor – they have to generate returns of $15 per hour – and those 30M aren’t worth it.

    But with real total costs on those 30M at $1-7, we’ll have another million millionaire entrepreneurs running local appified franchises with push button services for us all to enjoy.

    Those new million millionaires stand shoulder to shoulder against the tyranny of Corporatists. They are rock rubbed entrepreneurs. And since we limit access to this market based on your income, we are truly spreading the wealth around. We are just doing it int he first position, as the prime directive, so we don’t need complicated after the fact stuff… overnight we can deeply reduce inequality.

    Prakash,

    Thanks for this! I think the machine quickly catches wife swaps. And I’m not even sure I’d be against them, would you?, but we could stop them if we wanted to. If we wanted to stop them, its just about punishing the buyer with prison, and the seller with temporary GI suspension.

    I agree with you on franchising. That’s a feature, not a bug.

    Sax, see if you can list WHY this isn’t like MMT, that’s a really valuable little exercise. I dare ya. This is about competitive technocracy. There’s no “big idea” WPA labor supply left for technocrats, instead we’re letting the top 20% that PAY ALL THE TAXES, direct the excess capacity that is available.

  18. Gravatar of Brian K Brian K
    12. March 2013 at 04:34

    Morgan – How does Obamacare fit into this? Who pays for that?

  19. Gravatar of ssumner ssumner
    12. March 2013 at 05:25

    Cameron, I oppose paying people not to work.

    Edward, You said:

    “There’s a problem for the EITC, as great as the idea is. It tends to depress the incomes of those who are on it. Employers are the ones who really pocket the difference as they pay their workers less than they would have had the EITC had not been implemented.”

    That sounds more like a solution than a problem–a solution for high unemployment.

    Morgan, I haven’t given this as much thought as you have, but wouldn’t any cheating have to involve a sort of collaboration between small firms and employees–creating fake jobs? Not saying it would be a big problem, but any wage subsidiy scheme has at least the possibility of cheating.

  20. Gravatar of Nick Rowe Nick Rowe
    12. March 2013 at 05:28

    Could a “criminally lazy” worker accept a very low-paying but very cushy job offer, turning down a higher-paying job that required more work? If so, some of the “jobs” accepted wouldn’t really involve working. “Pay is $1 per hour to be ‘on call’ to work (but I promise I won’t call you 90% of the time)”.

    Not that this is a criticism of Morgan’s plan, because every GAI plan will have this same problem. But Morgan mustn’t oversell it.

  21. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 06:00

    Nick, what is a cushy job? And who is offering it?

    Why would I pay you $40 to be “on call” what am I getting worth $40?

    Kick backs instantly make me a felon. Prison time. Hiring multiple “on call” peeps where there’s no provable work product (pics video gps etc) immediately has flags going up

    So at minimum I have to: 1) like you 2) figure my $40 is well spent – still feel I’m getting something out of it.

    So you the criminally lazy worker, what is it you do for me that I think is worth $40 and can job out in check boxes that fits within the bell curve of provable work rates?

    Meaning if 95% of construction jobs are all getting $5+ bids, I can’t click construction and still type in $1, the machine won’t take less than $3. This is the equivalent of a reserve not met bid in Ebay Motors.

    So my options of $40 jobs to try and give you is limited, and you still need to prove you are working. You can’t be a lazy work from home teleservice call rep, because if I have to expose my twilio call logs and you aren’t making taking calls, I’m a felon.

    Long ago, when is was doing hollywood and p2p software stuff, one of the things you learn is that sets are actually finite. There’s are VERY FEW songs. There are even fewer movies. I’m sure you get this, its just helpful when thinking about end agents working together.

    There are very few types of jobs. New ones are invented sure, but far less than songs, maybe movies…

    So for each type of job, you quickly get normalized (likely regional) pricing, proof or work, you probably in local markets, get “known” players on both sides. Things are fuzzy, but the 80% of normalized behavior quickly has a common shape.

  22. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 06:10

    Brian, you’d get downstream productivity effects. Lower cost daycare, makes for lower cost of nurses, and lower cost of going to nursing school.

    On direct effects, If you really want to get into healthcare as prevention, low cost labor running an app service where drivers are simply checking in on and making sure your grandma is taking her meds, getting to the mall walk, and gets to the doctor.

    This does that. I’m not sure this has the pay offs everyone who preaches prevention and lifestyle suggests, but I do know that having 1M roving delivery runners changes lots of things including health and senior care.

  23. Gravatar of Mike Sax Mike Sax
    12. March 2013 at 06:18

    Morgan you say both Interfludity and Rortybomb are on board? Have they written anything?

    I’m going to write a post about this later-probably before I go to work at 2:30.

    I guess the only objection I’d have to getting rid of the MW and UI is I’d feel like I want to see proof it works first.

    Obviously if it works like you think it will this won’t matter as you’ve essentially given the poor a $7 MW anyway; in fact you’ve given us a two tiered employer structure, with non GI jobs for $10.

    It’s not for me the biggest worry necessarily but arguably if we cap out those who can hire in the GI auction those with less than $3 million that this could lead to rent seeking: if you’re a company close to making that amount there’s real urgency to try to have your income be less than this magic number. After all one company with 2.9 million will be having much lower labor costs than another with just $100,000 more in income. Lots of businesses will want to be declared SMB.

    I guess the only possible issue I can see for now is not ethical but technical-I’ll defintely be thinking more about it.

    Your assumption is that there is all this pent up demand for workers to do work for $1-6 an hour. However, what if there isn’t? Is it possible that you overestimate this? What if they ran an auction and there wern’t many bids?

    I mean if you as a SMB have work that you aren’t willing to pay $7 an hour is it possible that this work isn’t very important to you? I mean if you are willing only to pay $1 an hour for it, maybe it’s not very important to you-and you can do without it.

    Again I’m not saying this is what would happen but it’s not implausible.

    See many progressives like me assume that the minimum wage doesn’t hurt employment much if at all but we see it as reducing poverty.

    Now I know there are many who think it does hurt employment. However, it seems to me that this is a core assumption of your whole premise. Is there really so much work that could be done if only people could be paid for in a range of $1-$6 an hour rather than $7.

    I don’t think that labor guy was so off base in calling this “government run” in that you effectively now have transferred $1-$6 of the $7 minimum wage that businesses pay to the tax payer. If the govt is putting up $120-$240 a week for wages, I can see why some-on the Right particularly who woudln’t like your plan-would want to call it government run.

  24. Gravatar of StatsGuy StatsGuy
    12. March 2013 at 06:27

    Travis:

    “But is there ANY conceivable scenario where an increase in government spending could have a substantial impact on U.S. aggregate demand?”

    Of course there are:

    1) The government spends money in a productive manner. That is, the program they invest in generates real growth (either short or long term). This could be by solving a collective action problem, addressing a major externality, etc. For example, many argue (and I would agree) that basic research funding for long term R&D is underfunded by the private sector for many reasons. You can google “government basic R&D economic growth” or some variants for several articles on the topic. There is some decent evidence, but many anti-government types will declaim the effect (while, oddly, simultaneously arguing that military funding is pro-growth). Go figure.

    Several other programs could increase long term growth (for example, pollution controls to reduce employee morbidity/mortality due to illness, or resource management like the alaska fisheries management council).

    In other words, if a govt. program spends money well enough to compensate for the marginal deadweight loss imposed by taxes and/or debt (or seignorage), it increases GDP. There is a plausible argument that the THRESHOLD for judging a govt. program is lowered in a recession because the nominal interest rate is lowered (money is cheaper, so now is the time to make major capital investments, like public infrastructure…)

    I actually dislike the keynesian rationale for govt. spending (we should spend just to spend, who cares if govt. spending is inefficient?). It steals thunder from the real reasons govt. should spend money (to get stuff done), and excuses lousy oversight and bad programs (at least it created jobs!), often leaving in place cruddy programs (TSA anyone?) that absorb future spending.

    2) Government spending will increase AD if the spending is of sufficient magnitude to overcome the flat portion of the SRAS curve. This is the WWII case. In this case, even if people expect the future money supply to dwindle, the CURRENT raw demand from the government overwhelms slack capacity, and forces an immediate increase in prices (or, alternatively, some sort of rationing), no matter what the Fed tries to do. Moreover, awareness of this could overwhelm the Fed’s ability to impact expectations about future monetary policy. However, this is an extreme case – something much more significant than a ‘small’ stimulus package.

    3) The Fed is politically constrained. This was the argument in 2009ish. That is, the Fed could not engage in the magnitude of action required due to political reasons, but it did have the political lattitude to accommodate an increase in fiscal expense. Hence the “Fed can’t carry this burden alone” argument that Bernanke at times put forward.

  25. Gravatar of Nick Rowe Nick Rowe
    12. March 2013 at 06:28

    Morgan: “Meaning if 95% of construction jobs are all getting $5+ bids, I can’t click construction and still type in $1, the machine won’t take less than $3. This is the equivalent of a reserve not met bid in Ebay Motors.”

    But there’s a difference between selling my car and selling my labour.

    If I’m selling my car, all I care about is the money I get. So I would never accept a $2,000 offer if someone has already offered me $3,000.

    But if I’m selling my labour I care about lots of other attributes of the job, as well as the money. I might turn down a $30 per hour job and accept a $20 per hour job, if the lower-paying job is better in other respects. (In fact, I would think that almost all of us have done this at one time or another).

    So, suppose construction pays $11 per hour. I could offer you a job, called “construction supervisor” that pays $1 per hour, where you sit around and watch other people work, and one hour in 10 you are required to actually dig holes. So I get your hole digging at $10 per hour, and you get a cushy job which is what you want because you are lazy. No kickbacks. We both gain.

  26. Gravatar of Vivian Darkbloom Vivian Darkbloom
    12. March 2013 at 06:43

    How is this plan better than the following, which strikes me as politically more feasible and bureaucratically less complicated:

    1. Eliminate the minimum wage;

    2. Amend the EITC so that a guaranteed income is provided according to hours worked.

    Wouldn’t the current labor market adjust wages to the proper level without the auction mechanism? Would the auction mechanism make it easier to detect possible collusion, as Sumner and Nick Rowe have warned about?

    Either way, I don’t see this solving the problem of the “criminally lazy” as Morgan has termed them. Other safety net programs would need to be adjusted to ensure that those who opt out of working can’t get equivalent benefits from other schemes. There would need to be a mechanism, presumably an administrative agency to adjudicate disputes, set up to determine who is legitimately disabled rather than “criminally lazy”. The current social security disability process is just a hint of what one could expect this process would entail. We might be creating a huge bureaucracy the costs of which outweigh any benefits. If this goes the way of SS disability, the number of persons *permanently* out of the labor force could skyrocket.

    I can imagine that there are more than a few persons who would be worth less than zero to almost any employer. A tele-service employee paid $1 can probably turn away a lot of business. What happens to these folks? Are state and local governments coming in to bid for their services as trash collectors? Is the necessary enforcement mechanism needed to document their “work” and get them just to show up worth the cost?

  27. Gravatar of Nick Rowe Nick Rowe
    12. March 2013 at 07:05

    As for the difference between MMT plan and Morgan’s plan:

    I’m not 100% certain on this (plus maybe the MMT guys are less than 100% in agreement on this) but:

    The MMT plan would (could be interpreted as) say that the “GI paid by Government” in Morgan’s schedule would be financed by printing money, and that the “$240 per week” in Morgan’s plan is NOT indexed for inflation (but it could be made to rise at a fixed (say) 2% per year).

    The “$240” then becomes the nominal anchor in the monetary policy, replacing Morgan’s NGDPLPT of 4.5%.

  28. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 07:30

    Nick,

    You keep jumping out of the plan. I’m being very specific. Please really stick to the menu. First, the top bid is $280 paying $400, I expect this is where all of real manual labor jobs end up.

    Because….

    You hire ten guys at $40 to dig holes. $400 for week

    They all each dig hole for 1 hour during a 10 hour day – you get basically one guy’s labor for $400. Take a kick back and you are a felon.

    You overpaid where you could have gotten 1.5 real guys for the same price, and you had to deal with all this junk AND you could have made another $280 on your own in the system.

    What economic reason do you have to do this?

    More to the point, you think in $20 vs. $30, and you more discriminating amongst high price things.

    I want you to think in terms of, you live in Detroit, where under this plan the PPP of your money is really high, you get $2 hair cuts, and $50 daycare, and cheaper vegs at farmers market, all around you the cost of services are subsidized because half your community is on GI and bid out at $3 per hour.

    I think the extra $100 a week you earn by really working, it translates a big bump in your lifestyle.

    —–

    Teleservice is super easy to verify you can actually listen to the calls. Are there people who are better doing other things? sure.

    —–

    The govt. cannot bid. But the govt. can hire SMBs that privatize govt. services. Picking up trash, subways, parks, etc. The same kind of jobs your neighborhood would hire them for.

    —–

    Vivian, this is DIRECT APPEAL to the GOP, the top 33% that pay most of the taxes, this is provable and immediate – MAN DID I GET A GOOD DEAL on my lawn care, childcare, labor services.

    The pitch to them is “hey you are the good people paying to cover these folks nut you ought to get to use the labor for truer market rates.”

    Vivian, Ebay WILL NOT create a huge bureaucracy. I’m privatizing this. 4 weeks of you no showing, is 4 different bidders all making same complaint 4 weeks in a row. You are SUSPENDED. Is it 5 weeks or 6 weeks? who cares.

    Maybe if 80% of your employers rank you as “did not try” “was combative” there’s another comes to justice. Again, this is the Internet, there are real buttons to push, there are real rules based on those buttons, and the rules are set to reduce the total level of cost / complaint to an acceptable level. And there is next to nobody in between.

    Look, if you really want to figure out how to catch cheats, you literally turn it into a low end service, like in Asia, you let people inform and get cash payments. I favor this.

    —–

    Folks we got 30M+ workers sitting idle. Let’s say 10% a truly lazy.

    The plan FINDS the 3M truly lazy.

    The plan makes their lives very uncomfortable, because the 27M HATE THEM.

    The plan gives a huge choice of jobs. The plan cuts them off if they don’t try.

    Or you say the 30M are all truly lazy, at which point you have no argument, you support my plan as a science experiment.

    —–

    Anybody want to argue it doesn’t solve for illegal immigration.

    Anybody got a plan that does that?

  29. Gravatar of TravisV TravisV
    12. March 2013 at 07:36

    StatsGuy,

    Thank you very much, man!!!

  30. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 07:49

    Nick, the MMT thing is junk.

    It is junk because they want to DIRECT the jobs done by the 30M. That is the immediate NO. MMT is dirty hippies, and we are under no circumstances letting dirty hippies DECIDE where the labor resources get put.

    I’m the technocrat who ruins technocracy for all the lesser wannabe technocrats.

    My plan lets the folks who pay the income taxes put the 30M labor to work towards their own ends…. to make the income tax payers more productive. It let’s the entrepreneurs in ghettos have a real local resource to tap and profit from.

    There doesn’t need to ever really be QE. You attach this to a 4.5% NGDPLT path, and you will get a virtuous cycle.

    The public sector will be get privatized / appified, which is a productivity gain, as their GDP output stays relatively the same, but the labor force shrinks.

    And the private sector is reaps early productivity gains

    You can of course run low rates to offset deflationary forces, but generally you’re dealing with true increases in RGDP, that cause a much tighter Fed over the long term.

    Overnight there is full employment. Overnight everyone at low end of work force, including current minimum wage WalMart types, they ALL HAVE CHOICES.

    I get all the hedon-happiness advantages, of each worker self selecting.

    I get all the lower PPP benefits in the ghetto.

    I get FAR LESS government – this prove to everybody we ought to privatize more.

    I solve illegal immigration.

    This thing has nothing to do with MMT. They hate it, it does what they CLAIM to want, but it doesn’t give them what they REALLY want.

    Dirty hippies do not get to decide.

  31. Gravatar of Mike Sax Mike Sax
    12. March 2013 at 07:57

    Morgan your review is in http://diaryofarepublicanhater.blogspot.com/2013/03/morgan-warstlers-bold-gambit-to-auction.html

  32. Gravatar of Randomize Randomize
    12. March 2013 at 08:05

    Morgan,

    Great idea. E-Bay is a fantastic model. A possible refinement:

    Instead of offering a nominal wage, peg GI to the poverty line ($220/week) and save us decades of bickering over inflation adjustments. You could toss in another $60/week per dependent if you wanted to go along with the povery line math but might need to cap it or something to address the scumbags that farm kids.

    Also, why cut out big business? You’d be raising the marginal cost of labor for big businesses relative to small ones, thus incentivizing businesses to be small. You said yourself in the article that larger businesses (the government) could hire these workers through a contractor but why waste the money on a middle-man? Small businesses are great but let’s incentivize them to be successful rather than stay small.

  33. Gravatar of Randomize Randomize
    12. March 2013 at 08:18

    One more thing: how is part-time labor addressed? The baby-sitter probably isn’t going to put in 40 hours/week. I may have missed something…

  34. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 09:04

    Randomize,

    On part time, there’s no I want to work 12-4am part time box to check.

    Instead you are saying I want to work part time and you are being offered, ‘I need someone M-W-F” 8-2PM and will pay $54, and the GI piece is discounted to $90 (9/20 of $200), so $144 and you take it, or maybe take two jobs.

    On Distributism, I can’t say it enough:

    Big Business = Big Government

    I believe policies must encode smallness into them, or you inevitably have a growing federal govt. it canot be stopped, unless you enforce simple quick limits on agency.

    I LOVE the idea that this plan might let devoted animal lover set up a pet food store/ kitchen thats got a single vet in it and lets a bunch of weirdo hippies make all natural dog food sell a new level of niche service dog lovers who aren’t really wealthy. Let’s them compete with WalMart.

    I can’t say that happens, but I can grok that a bunch of like minded drop outs, might just be able to market their own particular jones, within the boundaries of market forces (keeping the doors open), because they are all really ok with living on $300 a week in a break even biz that only survives because the cost of earnest but hard working drop outs only cost $2 per hour.

    I’m OK with level of subsidized happiness. The doors still have to stay open, and yes it isn’t fair to WalMart, BUT…

    I buys me smaller govt. long term and thats worth it.

  35. Gravatar of Theo Clifford Theo Clifford
    12. March 2013 at 09:07

    I’m not convinced that the political externalities are a large enough justification for massive subsidies to small businesses over big businesses. WalMart might be able to use an auctioned worker’s labour way better than a small business could – but you wouldn’t let them bid.

    And the structure and scope of the idea suggests that you aren’t worried about political effects at all.

    And yeah I think more explicit handling of part-time work would be easy and useful to incorporate into the plan.

  36. Gravatar of Randomize Randomize
    12. March 2013 at 09:33

    Morgan,

    Okay, so rather than specifying $/week pay, jobs would be spelled out in dollars and hours. That makes more sense.

    I appreciate the small-business idealism (really) but it’s probably safe to say that the politians won’t get behind it without the megacorp lobbyists’ support.

    One more thought on poverty-level targetting: If you threw in the $60/week for each dependent, you could pay for it by dropping the EITC and kill two birds with one stone; Not only would people enjoy the cash flow benefit of getting their child subsidy immediately but, by getting rid of the delay, people would associate the money with the work they just did rather than feeling like they won the lottery.

  37. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 09:37

    Theo,

    The joy of the program is workers having tons of weekly choices. WalMart needs worker continuity. They need you to be there.

    Meanwhile, I’m in this to deliver conservatives to a VERY progressive economic policy a GI. They are SMB owners. They are all wage constrained. And this system, gives them a “subsidy” that organizes them politically.

    Imagine 10M SMB owners who are now sitting at the table, because they have their rent – WalMart’s voice is smaller in DC. No way around it.

    When Big Business doesn’t not create Big Government, we can revisit the subject.

    Distributism is the optimal economic strategy because Big Government has negative externalities that are not counted correctly by economists.

    AND THEY are the folks who pay all the income taxes. I’m giving the top 1/3 of America the group that spend some time in the top 20%, I’m giving the hegemony two direct end agency benefits: 1) favor SMBs 2) End illegal immigration. I disagree with #2, but I know they will be excited that real self-deporting actually happens.

  38. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 09:42

    Randomize,

    See my note above on creating a new rent for SMB owners – I’m encoding smallness into system.

    This is Tea Party (which gets you all the GOP) and inner city progressives (the black caucus) – strange bedfellows.

    Again, the way this works is likely a deployment in say Texas :)

  39. Gravatar of Theo Clifford Theo Clifford
    12. March 2013 at 09:46

    “Economists don’t take into account the political externalities of big businesses’ power. Therefore the political externalities of the existence of big corporations are so high we should give huge amounts of rent to small business owners?”

    I don’t understand how you come to this view without any attempt to quantify the costs of big business manipulating the system. And I don’t understand why you’re even advocating this plan if the politics is so important, since it’s so aggressively unpalatable and deliberately spitting in the face of big business is not going to motivate them to support it either.

  40. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 10:09

    Don’t want their support. I want to marginalize them.

    Big government is bad. I can get the GOP to partner with inner city progressives. Thats how it passes.

  41. Gravatar of Theo Clifford Theo Clifford
    12. March 2013 at 10:16

    Considering that you’ve structured the proposal to be hard to attack logically but inherently repulsive, I highly doubt it.

    As a parallel, how is the cause of open borders doing lately?

    If big business has half as much insidious political power as you think, you’re not going to be able to pass anything resembling this policy as long as it’s deliberately set up to marginalise them.

  42. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 10:29

    I’m pretty good at counting votes. This is a 100% GOP yes. And black caucus. And all blue dogs.

    It’d go.

    Also, it’s not a inherently repulsive as you think.

    It’s just a world biggest job board, where you always have plenty of choices for what work you do.

    Again reality is its more likely as a Texas goes first thing.

  43. Gravatar of StPaulite StPaulite
    12. March 2013 at 10:35

    As far as I can tell, Mike Konczal’s support of this plan consists entirely of this tweet, where he calls it unworkable:

    https://twitter.com/rortybomb/status/272403538414534656

    It’s an interesting idea. My problems, off the top of my head, are political and legal legitimacy — not clear which authority is supposed to be running this thing. Which leads to non-compliance issues; overestimating how wired-up the populace is is another compliance problem. I have lingering doubts about 13th amendment issues too(compelled labor) but maybe it’s the rhetorical shortcut of “auctioning the unemployed” doing that.

    If it’s run at state level you run into geographic problems as many of our metropoli inconveniently straddle a state border. If it’s run at federal level, you’ve got 10th amendment probs maybe. If those matter anymore.

    Like I said, interesting — use the state to sever the direct wage link between employer and laborer — but implementation both politically and practically looks more or less impossible to me.

  44. Gravatar of StPaulite StPaulite
    12. March 2013 at 10:43

    Another quibble: stigma and bifurcation. Presumably most workers in system would prefer to eventually get a “real” job — I wonder if even a 5-star rating looks worse on a resume than never having to need to submit to auction in the first place.

    But given how bad the stigma issues of mass and long-term unemployment are working out currently maybe that’s a minor problem, relatively. Still, how the auction and non-auction labor markets are to interact (CLASS) is worth thinking about.

  45. Gravatar of Doug M Doug M
    12. March 2013 at 11:01

    Something about this plan reminds me of the market for day labor.

    Most cities have some location where you can hire people for a day of work. In some places it is a street corner. It could be in front of the home depot. Some towns actually have a day labor center.

    You bring your car or truck to the pick up location or the day labor center and you ask for or shout the number of workers you are looking for and the type of work. With whomever comes running, you negotiate the day’s wage, bring them to your job site, and drop them back at the end of the day.

    Day labor is particularly common work for illegal aliens as there are no backround checks or social security numbers. But there are “legal” day laborer’s, too.

    Some trades (landscpers and builders) are frequent users of day labor, so there is some value to maintaining your reputation — goes both ways.

    Morgan is essentially offering to subsidize the day labor center. If you show up at the center and are willing to work you will be paid at least $48 for the day. If you are paying a low wage, the day labor center makes up some of the difference between the cost of the worker and the wage you are paying.

    There are a few reasons not to hire day labor.
    1. What is the liability if the worker gets hurt on your property.
    2. Who will train and supervise the workers.

    Depending on the work you have, cheap labor can become very expensive.

  46. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 11:03

    I expect it to be Texas / Indiana etc. I just find it easier to describe the plan nationally, than get into DC toes thing too.

    There’s really no way around this. We’re a multi-cultural country with low trust levels, a Protestant’s deep suspicion of lazy folks, a hatred of technocrat elites, and a desire to have a welfare state.

    This is how America is different from Europe. This is the American plan.

    We’re going to see MORE people not be able to cover their nut, the fight will come down to proving they are being forced to work in non-govt. jobs.

  47. Gravatar of Morgan Warstler Morgan Warstler
    12. March 2013 at 11:26

    Doug,

    PLEASE get over the frame of desperate workers run up to truck.

    I’ve done it. I do it enough to know the routine intimately. This isn’t that. But let’s talk about what a legal day laborer would do:

    They have all have a smart phone, and after registering, and receiving debit card open it to a list of jobs they can choose to take. They’ll surely notice weekly labor pays closer to $400.

    They can read reports from other labor about the employers, they can see the kind of work that’s been done, they can see the other guys faces, mottoes, hobbies, who routinely work for this boss. They very likely know they have a standing job offer from many crews, because they do good work.

    There a real difference between painting and hanging dry wall, or doing cabinet installs. But maybe they want to learn more wood working.

    Maybe they are a crew of painters that play in a band, and want to work together.

    Maybe they lay bricks, hurt their back, and want to just paint for a while.

    Maybe his wife just ran off and they need to work from home for two weeks until their mom can get down from Tampa and baby sit their autistic son, so he’s got a bunch of ikea boxes dropped off at his house in the morning, and he’s only making $80/$300.

    This is a whole different frame.

    The fact is buyer demand changes suddenly, at $2 an hour, you can’t barely say no to Charles with a decent rating, there’s TOTALLY something you could have Charles do. He says he knows how to make a BBQ smoker with $40 in materials and can teach you a great recipe. Anybody in the top 50% of US earners is likely a potential buyer for any given Charles.

    But at $5, $6? week after week? You need a really good reason to have Charles around.

    Charles in charge (performing all week)

    Sure he wants the extra dough, but he’s got a very solid foundation, and can make choices in his life that give him FAR MORE HAPPINESS.

    Doug, I really want you to see this as a massive hedon shot to the American jugular.

  48. Gravatar of Adam Adam
    12. March 2013 at 14:02

    I skimmed the rest of the comments pretty quickly, so forgive me if this has been discussed.

    But why do we assume that there are going to be jobs for a large portion of participants? If the job is only worth, for example, $1 an hour to the employer, is it really going to be worth that employer’s time to supervise and train a new person? In particular one who has been chosen by auction rather than hired via the usual channels and thus perhaps even less likely to be a good employee? Especially as that employee will only be receiving a small portion of his compensation via the job, and his compensation will continue more or less unchanged if he doesn’t stay employed (I assume holding the job for a short period of time, say a week, would retain eligibility to participate in the program.)

    So, if there aren’t a lot of jobs to be handed out this way, doesn’t it start to get rather expensive (admittedly, I don’t know what the alternative systems are currently costing us)?

    Then, what’s the point of #9? Does narrowing the pool of potential employers help in any meaningful way?

  49. Gravatar of Morgan warstler Morgan warstler
    12. March 2013 at 15:05

    Adam, if I offered you work weeks of Americans for $40 a piece, if you aren’t able to say I’ll take ten! You simply aren’t part of the economic decision making committee for the country.

    Im continually amazed that even 10% of people who hear this plan respond with total befuddlement that if people aren’t worth $12 said and done with overhead, they aren’t worth $1.

  50. Gravatar of Morgan warstler Morgan warstler
    12. March 2013 at 15:09

    Adam, me thinks anytime someone says and then I solve for illegal immigration, and No One says no, you either read it with vigor, fully concentrating, or you just go read facebook instead.

  51. Gravatar of Chuck E Chuck E
    13. March 2013 at 12:48

    Morgan,

    I like this model.

    I’m a small business owner. Let’s say I find a worker at auction that really clicks with my team and I want him permanently. Do I have to do anything special to keep him? It looks like all I have to do is pay him more than $10/hour; yes?

  52. Gravatar of Adam Adam
    13. March 2013 at 13:06

    With all due respect, Morgan, that’s not an answer. I don’t have any doubt that there would be some demand for cheaper labor. What I’m uncertain about is how much.

    Rather than consider that question, you seem to rely on faith that surely people would hire if it was just cheap enough. Plenty of people want to believe that (because it fits their political agendas), but what evidence is there that it’s true? I’m certainly not up on all of the literature, but my understanding is that the best estimates of the disemployment effects of the minimum wage are relatively modest. Doesn’t that imply relatively few opportunities for your plan to work?

    I suppose I could hire someone to clean my condo, wash my car, or assist my secretary, but it’s disinterest in hiring someone to do those things that keeps me from doing so, not the cost. And those types of low-value tasks would necessarily be intermittent and brief.

  53. Gravatar of Bill Ellis Bill Ellis
    13. March 2013 at 15:56

    One thing about this” auction off the unemployed” stuff … We already auction off the unemployed. Right ? Our markets just do it badly. Sticky wages and all.

    So you guys think labor is priced too high… that if it were cheap enuff we would have full employment. Sure. OK.
    And you recognize the hitch is that we can’t reduce wages (even if it were better to do so in the long run ) with out driving a ton of people into poverty. Right?

    So the problem is… how do lower the price of labor AND provide a living wage. Your answer… Auction the Unemployed !

    But why formally auction off the unemployed ? It is crazy complex and exploitable.

    Why not just directly subsidize payrolls for Employers? Like Minimum wage is 10 buck an hr… but Wal-mart gets 8 bucks an hr back from the Gov. ? ( just picking the numbers out of the air here. ) Doesn’t basic econ say that everyone who wants a job could have one when labor is priced right ?

    ( Idea… The subsidies could be progressive based on business size. )

  54. Gravatar of Bill Ellis Bill Ellis
    13. March 2013 at 16:08

    Scott says… “Since I’m writing this to woo progressives let’s starts here. ”

    If you want to woo progressives First thing… STOP calling it “auctioning the unemployed”.

    Call it GUARANTEED JOBS. Sell it as fulfilling an Americans RIGHT to a job.

    (I wonder if putting it in liberal speak chills you guys as much as the phrase “auctioning the unemployed” reflexively bothers liberals ? )

  55. Gravatar of Morgan Warstler Morgan Warstler
    14. March 2013 at 09:38

    With all due respect Adam, for $1 per hour, I’ll take 10.

    There are 30M, there are 50M+ like me. I’m just saying that if you don’t grok the overwhelming virtually unlimited demand at $1 per hour – it hard to see how this turns labor markets upside down.

    Bill, on the first part, you should really read my plan at the site.

    On the second part, I tend to agree with you.

    It isn’t technically an Auction, but it has this one characteristic, the excess capacity, the empty airline seat, the empty hotel room, the man week – SOMEBODY gets to use it, no matter how low the price, it is going going gone!

    To the employee, it is a giant list of job offers on a smart phone for Bill to investigate and choose from, and he doesn’t get the GI $240 unless he takes one and puts in the hours.

  56. Gravatar of Morgan Warstler Morgan Warstler
    14. March 2013 at 09:40

    Yes Chuck, altho if you are a SMB owner making under $3M who routinely pays far more, you could use this system to identify new talent hires, do training etc.

  57. Gravatar of Bill Ellis Bill Ellis
    14. March 2013 at 17:33

    Morgan, I hope you don’t mind if a play a bit of…” be careful what you wish for. ”

    I think your plan might create a new welfare class. I am old enough to remember how living on welfare became a way of life for some in America. Parents who lived on welfare their whole lives having kids who only knew living on welfare.
    The best intentions turned out horribly.

    Maybe it would be no big deal if a whole cohort of the population ended up living on the “auction”… but I think it would.

    The dynamics of the Auction make it so the jobs can’t be too demanding.

    To quote you….”What about the scumbag slave labor boss?
    They are quickly exposed. No one sells their labor to them. Your real name. Your real reputation. If you want to get “subsidized” labor, you better keep most of your hires happy.”

    You’re are right. Most people who are getting labor at this price are not going to be hard ass bosses. People who live on the auction will not be pushed to better themselves by their bosses. I think a lot of people will find life on the auction too comfy to leave.

    And once you create a new economic class you create a new political class that will try and take your dream and turn it into some liberal big government beast.

    UNIONIZE THE AUCTION. :-)

  58. Gravatar of Adam Adam
    15. March 2013 at 07:35

    Morgan, you’re assuming that labor markets clear if prices can fall far enough. I don’t understand why.

    Lots of other markets, like, say the market for “money” don’t necessarily clear even at zero or slightly negative prices. Why is the labor market magically guaranteed an above-zero market clearing price?

    As for these ten people you would employ at $1 an hour, I’d say prove it. What are you hiring them for and how long can you afford to keep them on the payroll?

  59. Gravatar of Morgan Warstler Morgan Warstler
    15. March 2013 at 08:26

    Bill,

    You assume the worst of people. I assume I can change even the worst.

    I know a secret. I learned it when I was 16 and being recruited by Wake Forest to debate there. I said I had no interest in policy debate, the coach Alan Louden replied, “people are interested in things they know about, and they know about things they are interested in, thats why most people don’t know shit and aren’t interested in anything”

    Life is simply about putting yourself or other people into a thing you have no interest in, and over time, it becomes a self-perpetuating engine of interest and growing knowledge.

    The reality is out of 30M+ entrants:

    1. there are going to be MILLIONS of decent $6 per hour bids in the construction trade, that without any previous experience learn on job, and become craftsmen overtime. These guys will have good days and bad days, but thru even osmosis, they will learn to LOVE being craftsmen.

    2. there are going to be fewer and fewer people who can avoid becoming interested in anything, because they have to get up and go to do something everyday.

    3. there are going to be some holdouts, who will be trying to game the system, but the system is relentless in getting better and better at pushing people into #2.

    4. Unions: this system plus my appified government will end the silly concept of public sector unions once and for all.

    Adam,

    You don’t understand why because you don’t imagine yourself BUYING LABOR WEEKS.

    It is that simple. There’s NO human being out of 30M that guys like me won’t find use for at $40 per week. And there are tens of millions of guys like me. I know plumbers like me. I know excavators like me. I know yuppie wall streeters like me. I know single moms like me.

    I honestly can’t grok why you don’t grok this.

    Be honest, really think thru your own self – you wouldn’t hire a full time personal chef? You wouldn’t hire someone to mow your lawn? Someone to build and install cabinets? To answer the phone for your office? To call your 1000 doctors offices and get their pricing procedure codes?

    There is NOTHING you’d use cheap labor for?

  60. Gravatar of Morgan Warstler Morgan Warstler
    15. March 2013 at 08:36

    Adam, I currently want to do a YELP for doctors for HSA users (which will be EVERYONE soon enuff), getting the procedure prices from each is a very labor intensive process. It means doing things a certain way to try and crowd source that function. To an investor hearing the idea, the “how long does that take” question is a real serious issue, the company would need to run for X months, have overhead, we’d have to pay the team the devs, the management.

    If there are fifty home bound teleservice operators that can be had for $80 + we pay their broadband bill, the amounts at risk decrease, the amounts of equity sold decreases, the time to market decreases, the ROI increases, the easier it is to find management since there is more equity to give them….

    I can pretty much do this all day, most everyone I know in life is an entrepreneur, a born problem solver, an itch scratcher, etc.

    30M people at $1 per hour is LITERALLY money laying on ground to those people, if you aren’t those people, thats ok, you just have to ask yourself, would you pick up money on ground?

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