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There are skills that are very valuable in society that pay very little. For example, maybe a software engineer gets married and has kids. Those kids go to school so the software engineer can go to work all day. The teachers and school staff are most likely getting paid way less than the engineer. Then one of those kids ends up with a mental health disorder or drug addiction. They see a social worker who helps them and gets paid much less than the engineer.

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?

> 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...

As an individual, improving your education and skills can help solve your employment issues.

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.

Not only high school students get paid minimum wage.

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.

Many people who own property absolutely want to put more units on. Others who own property want to stop it because of NIMBY.

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"

we do have that legislation against growing new crops today... The farm bills pay people to not grow crops.

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]>>

>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.

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?

It has nothing to do with how "important" anyone thinks it is. It's just math and the reality of running a business.

If your business can't afford to pay employees a reasonable wage it is a failed business.

Why not also a failed society?

It is both, to some degree. If our society was willing, for example, to pay $14 for a Big Mac, it's possible a McDonald's cashier working in San Francisco could be paid a livable wage.

When a Big Mac sets you back only $4 in a nearby city, however, the idea of charging $14 becomes an intractable problem.

simply not true because there is no definition of reasonable. A more applicable phrase is if you cant afford to pay employees a wage that employees that can do the job will accept, then it is a failed business.

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".

If people really wanted burger flippers to make more, then 20 dollar burgers would economically viable.

Nobody deserves anything. People get unlucky, I get that. That doesn't change econ 101.

Not everyone can be a highly skilled worker, and even people with valuable skills can and do end up jobless or working at minimum wage.

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.

> 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.

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.

You're talking about margin and fast food is definitely a low margin business (barring soda).

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).

If a rational business owner could raise prices and make more revenue, they would, regardless of what their costs are. Why would they wait for their costs (salaries) to increase?

Because your competition's costs are increasing by the same amount at the same time, and their ability to compete on price is hindered by the increase in costs to the same degree yours is.

Margins of fast food industry businesses are somewhere between 6 and 9% in the median. So ... I call bullshit on "have to raise"

Because of competition. Costs set a floor for prices, and competition pushes the price towards that floor (in a well functioning market). If you raise costs for all producers, it will raise that floor price.

I don't agree with the person you're responding to, but to answer your question, one possibility is pressure from the competition. If, say, Burger King wants to compete with McDonalds on price, they can pay their workers less. This forces McDonald's to pay their workers less to stay competitive.

Raising the minimum wage would raise it across the board, thereby allowing McDonalds to raise prices and remain competitive.

However paying workers less results in a lower demand for that job; increasing turnover and increasing operational costs. It isn’t as simple as a unilateral decision to lower wages. In fact, companies like Chick Fil A actually pay higher wages because it gives them a competitive advantage in higher quality employees with lower turnover.

The issue isn’t as simplistic as people seem to imply.

Also, there's some evidence that higher minimum wage drives more dollars thru the local economy, because minimum wage earners spend most/all of their wage, typically locally.

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.

> However paying workers less results in a lower demand for that job

No, it results in a lower quantity of labor supplied assuming labor supply (the function mapping price to quantity supplied) is unchanged.

His assumption is that Corporate Profits which are already at all time highs cannot be sacrificed in order to pay workers more and keep prices level.

It wouldn’t be raised because a competitor could charge less, so an equilibrium happens in a free market.

Essentially you are ignoring price elasticity — which of course varies depending on the product.

Given that Corporate profits have been at all time highs recently I think their responsibility to their workers is obviously being circumvented in order to increase shareholder value. You are stuck in this Corporation first mindset. You ought to get out of it.

>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.

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.

Starting a business isn't an obvious proposition, and an entrepreneur takes a lot of risk and puts a lot of startup money (their own or OPM / investors' money) on the line. I've never been that business person / VC and do resent occasionally that my software creativity and grit fuels their occasional outsized returns. However, they had the vision and so get the "surplus value" ... and I get a comfortable-enough lifestyle in return, especially given that lately I earn a somewhat-Bay-Area salary after having moved to North Carolina. If I were renting in the Bay Area I'm sure I'd be looking to get out, and since I sold our condo (unfortunately too soon, in 2013) there, I'm forever priced out of ever returning -- I won't pay the inflated rents there.

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.

> 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.

They arent.

> why business owners are entitled to the surplus value created by their workers’ labor.

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?

This is easy - because of limited liability.

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.

> Before you argue the world is like this, let me just ask you why do superfund sites exist then?

The vast majority exist because the operations predated environmental regulations. Also, a significant number are a result of government activities at various levels.

... and the original organizations aren't held liable for the sites.

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.

No one is entitled to anything, that is the point. Business owners and employees agree to a mutually beneficial arrangement. But business owners arent entitled to anything except adherence to the agreement. If the employee can get a better deal someplace else, they will. The agreement is between the parties and no one else.

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.

>you’re going to have to explain why business owners are entitled to the surplus value created by their workers’ labor

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.