That someone would argue against every job being enough to afford a roof over your head just due to their own need for validation of their importance is frankly sickening.
1. Get rid of single-family-home zoning for large swathes of the bay area. 2. Incentivize developers to build more units per site, rather than fewer - https://www.sfhac.org/state-density-bonus-arrived-san-franci...
How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag.
Also, jobs should pay what they are worth to the business and nothing more. Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right.
Maybe we should be talking about realigning education to give people valuable skills instead of pushing for the non-skilled to get an artificial raise that evaporates in meaning due to inflation.
EDIT
I'm really surprised by the push back on this from a community of entrepreneurs. Anyone who has run a business will tell you that you can't just raise salaries without increasing costs. It's Econ 101 but apparently that's not the general sentiment here. I hear a lot of complaints about how things "should" be and what's "fair" but the math and reality isn't there to support that. Some jobs just don't have much economic value and pretending that's not the case isn't going to solve anything. It's nice to imagine a situation where janitors and fast food employees can have a middle class lifestyle but who is supposed to pay for that? When the costs of good raise dramatically, their additional pay will get sucked up by inflation. Again, Econ 101.
This doesn't make sense to me. If it were possible to raise the price of that burger, why wouldn't it already be raised, regardless of operational costs? A business's costs to produce a good typically does not have much to do with the price customers are willing to pay for it.
If salaries increase, the business will literally have to raise the price of goods sold or go out of business. That's different than raising the price to achieve a higher margin (and opening your self up to competition from people who can operate with a lower margin).
Raising the minimum wage would raise it across the board, thereby allowing McDonalds to raise prices and remain competitive.
The issue isn’t as simplistic as people seem to imply.
This seems like an obvious outflow of monetary policy as economic driver, as per the liquidity trap analogy of the Capitol hill babysitting coop. (https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op...)
The solution to the "but the market" is governmental action -- when market forces create an undesirable situation, its totally reasonable and rational to have a super-market entity enforce rules. This is not even a generally disagreeable point, we see it all the time, environmental laws, natural monopolies (eg: civic infrastructure), etc. The only question is where do we draw the line?
The problem with a lot of libertarian type arguments is people seem to put the primacy of the market as an inviolable fact above human dignity.
No, it results in a lower quantity of labor supplied assuming labor supply (the function mapping price to quantity supplied) is unchanged.
Essentially you are ignoring price elasticity — which of course varies depending on the product.
Unless you are advocating for age discrimination in pay, the fact that a "high school student" can be the one working at McDonalds is irrelevant. McDonalds employees an extremely wide age range of people. Does the 60 year old working the cash register (I've seen countless of these lately) who can't get a job anywhere else deserve to live on the street because you don't think they are important enough to rent?
When a Big Mac sets you back only $4 in a nearby city, however, the idea of charging $14 becomes an intractable problem.
Is it reasonable that a family of 4 is entitled to a 2 bedroom house? America is 5% of the worlds population but consumes 25% of the worlds resources because what we consider to be poverty in the US is wealthy or at least middle class living to much of the world.
My inlaws had 4 families in a single family home (Approximately 2500 sq ft). Each family had at least two kids (one had 3). Plus their grandmother lived there. They grew some of their own food, never ate out, cooked everything from scratch.
There was always an adult (or older kid) to watch the kids, so no daycare costs. All are well adjusted. When someone lost their job, there was a tremendous amount of support and no one ever had food insecurity, was homeless, had to leave their kids alone etc.
The kids grew up in a fun household and the place was very clean and kept up.
2 of the families saved enough to move out so now there are 3 families left, and the grandma moved back to their originating country. The two oldest kids left for college.
My point there is no consistent definition of "reasonable".
Nobody deserves anything. People get unlucky, I get that. That doesn't change econ 101.
However, it is not so simple as a society. Even if we had a magic wand that could suddenly make everyone in the world an expert on every subject, we would still need people to work at McDonald's flipping burgers.
We don't have enough highschool students to fill those jobs. There are going to be adults supporting themselves and their families that are going to be working those jobs.
Improving the skills of people doesn't suddenly change the makeup of what work needs to be done in a society. Sure, in the long run, we can use those advanced skills to improve automation and make obsolete more of those lower skilled jobs, but that isn't going to happen overnight.
While I think a Universal Basic Income or stronger welfare is a better solution to the problems of homelessness and poverty, raising the minimum wage is a step in the right direction and one that is far more likely to be accepted by our lawmakers.
If this is your argument, you’re going to have to explain why business owners are entitled to the surplus value created by their workers’ labor.
This arrangement seems to be currently enforced with all kinds of threats of violence and deprevation(loss of healthcare, housing, etc), all of which are barbaric by the standards of any other developed country.
I look at four of my relatives who started a Salesforce consultancy, especially my younger older brother who started the whole ball rolling. Though a full-time Boeing 757 pilot for a major airline, he got a software degree, specialized in Salesforce work, started working with others, hired an initial team, and introduced several family members to the whole gig. The relatives founded a partnership and had around 40 billable, very good, consultants working with them, and had committed to longer term real estate leases. They had some marquee clients and a good reputation. Then they hit what hits a lot of family businesses -- intractable personality conflicts. (I'd joined this partnership briefly in 2013 but then bowed out after several months since I guess SFDC consulting isn't my thing and greenfield software constructing/craftsmanship is, and mostly because I sensed those personality troubles brewing.) So ... my younger older brother and younger brother both were left winding down this once-promising consultancy, taking low pay, risking a bunch of collateral (e.g., homes) they thought they would lose at one point, and eking out a low, but at least in the end positive, return. They each would have done significantly better just working on their own for the four years ... and I benefited financially by sticking with the startup world.
So ... I'd like to take a flyer some day on starting my own business one of these years, and I won't feel bad about taking some outlandish returns. If things turned out real well I think I'd pay "my team" more than had been promised them. But I've seen the risks founders take and admire that, and they deserve their gains.
They arent.
Because they are the ones taking the risk. People love to demonize companies, but they fail to acknowledge the thousands of companies that have failed, taking the owner’s capital with it. There is a survivorship bias because all of the companies we hear about are generally making a profit, but there are countless companies that have failed.
So why should the owners get the surplus? Let’s ask another question, why should owners have to suffer loses? Owners are on the hook for loses, why shouldn’t they benefit from the surplus?
Technically owners aren't on the hook for losses, LLC structures and LLC-like structures (C-corps) limit the loss possible.
They are only risking what they put up - presuming they don't break the law - and nothing more.
Another system would penalize investors and owners of companies for all potentially likely damages downstream of their activities.
Before you argue the world is like this, let me just ask you why do superfund sites exist then? Because of limited liability.
The vast majority exist because the operations predated environmental regulations. Also, a significant number are a result of government activities at various levels.
In many cases the companies aren't around, but the investors, and the investor's estates are.
The point being that LLC has shielded people from the consequences of their actions.
External forces like starvation are not "threats of violence".
What you seem to be suggesting is that government setting of prices would improve things. This has been shown time and again to not work because only the parties involved can correctly evaluate the value.
Raising minimum wage slightly only has slight negative effects. If raising minimum wage really had no negative consequences you could raise minimum wage to $100 and it would be wonderful.
Where government has shown itself to be effective is being a third party that enforces the agreements made between parties, setting the limits of those agreements (e.g. no voluntary slavery), and making sure that the rules are consistent enough that people can make business decisions and rely on the outcomes.
The government just ruled that labor cannot collectively sue in a class action for wage violations. This is an incredibly bad decision, in that people should be able to group together and pool their bargaining as long as they are doing it freely.
My workers didn't put their names on the loans necessary to start the business. My workers are free to walk away from the business if someone else gives them a better pay rate, or if they just decide they don't want to do the job anymore. They don't get stuck holding the bag if someone's sick or has a personal emergency.
I want to pay the folks working for me well and appropriately, but if the whole thing blows up in our faces, the worst they have to deal with is finding a new job, where an owner has to find a way to pay off any outstanding loans and whatnot. Obviously it's not right to fleece your workers and pocket giant gobs of cash, but at the same time they did not take the risk in opening the business and thus the owners should get more. If they want the extra surplus value of their labor, then I would encourage them to start their own business.
On minimum wage you cannot even afford a room in the bay area.
The economy is driven by demand. Economic prosperity is the result of EXACTLY the same thing that causes inflation. Dollars wanting to get spent on things that don't exist yet.
However, I will say that the problem is more easily solved by simply building more housing, but everyone who owns property resists that because shortages drive up the price of the thing they own. Imagine if there was a shortage of food, and the people with good refrigeration units and lots of stored grain were drafting and passing legislation against growing new crops. That is the housing situation in the bay area.
Lets say you have a single family home worth $2 million and you replace it with an 8 plex. You can sell each unit for $1M and still make a killing while also dramatically increasing the affordability of the area.
The answer is simple, but the NIMBYs are stopping it due to "neighborhood character"
Historically speaking, the interstate commerce clause of the constitution was eviscerated as part of the new deal for exactly this reason.
<<An Ohio farmer, Roscoe Filburn, was growing wheat to feed animals on his own farm. The US government had established limits on wheat production, based on the acreage owned by a farmer, to stabilize wheat prices and supplies. Filburn grew more than the limits that he was permitted and so was ordered to pay a penalty.
In response, he said that because his wheat was not sold, it could not be regulated as commerce, let alone "interstate" commerce (described in the Constitution as "Commerce... among the several states").
The Supreme Court disagreed: "Whether the subject of the regulation in question was 'production', 'consumption', or 'marketing' is, therefore, not material for purposes of deciding the question of federal power before us.... But even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as 'direct' or 'indirect.'"[5]>>
Then on the weekends the engineer wants to have fun with her family and goes out to eat at a fast food place, gets a lawn service so they don't need to do their own yardwork. Those people may be getting paid minimum wage.
So these people who are making the lifestyle you have possible, should not be allowed to afford a place to live because what they do is not valuable? Is that what you're saying?
People will get paid what the market will bear. Supply and demand and all of that. There is no "should", it doesn't enter the equation and as you can see with minimum wage, any attempt to out smart the market will result in inflation/deflation...