They teach how the US is imperialist and how they only care about money and some other soviet stories.
To give out some money is one thing, we have that in Brazil, but to give out so much money it is better not to work is shocking.
You miss the point. It's not that welfare is so much, it's that the jobs you get that knock you off welfare don't pay enough to be able to live. America has a lot of very low paying jobs where people need to work 70 hour weeks for multiple employers to get enough to live. In a modern country it is shocking that basic employment standards are not guaranteed and that when you have a job it doesn't cover the minimum needed to live.
>Large companies are making absurd profits while paying their employees a pittance
Take a look at profit margins on some big companies. You will definitely be surprised. E.g. Over the last 5 years Walmart averaged <3% profits [1], Amazon averaged <1% [2]. Some tech companies are a lot higher (Apple, NVidia, etc.) but these are not the companies you hear about when people discuss low wages. Imagine Amazon trying to give all of their workers a 10% raise. With ~566,000 employees [3] making a median salary (sorry, could not find any mean or total amount so I'll pretend like it's the mean) of $28,446 [4], a 10% raise would amount to 566,000 * $28,446/10 = $1,610,043,600. This would more than slash their net income in half [5] and would only increase the median income by a modest $2800. Obviously these numbers aren't perfect because we don't have means or an accurate list of who earns what, but I think you can see my point here: if every Amazon employee earned a true "living wage", the company would probably go out of business pretty quickly. And that's a big deal when half a million people's lives rely on it (not to mention the millions of shareholders, many of whom likely own the stock as part of their pension plans). And that's not really in anybody's control. It's not like Jeff Bezos is the wealthiest person alive because he's making some massive salary and taking cash out of the company. His personal compensation was $1.68 million last year, most of which was the cost of his personal security team [4]. What makes him wealthy is all of his shares in Amazon, which is pretty worthless if he goes ahead and dumps all of it. Not to mention that his wealth often fluctuates by 10s of billions in a matter of days because of that.
>Migration isn't causing this but it useful for rich people with vested interests to make it seem like it is.
I can agree with you that blaming things on migration is often incorrect and used as a red herring, but the previous commenter is somewhat correct. Immigrants (both legal and illegal) often settle for much lower paying jobs or much harder labor because of how much it pays relative to what they would earn in their home country. This doesn't really cause most people to earn less money, because for the most part few "natural-born" Americans are willing to do those jobs, but it does increase the proportion of jobs that pay these tiny wages. There are certainly many American-born workers who are getting minuscule wages, but an even bigger percentage of these people are immigrants. Of course, it doesn't change the fact that people are getting paid those jobs in general, but for a vast majority of them something as simple as raising the minimum wage is just going to make their jobs go away.
[1] https://ycharts.com/companies/WMT/profit_margin
[2] https://ycharts.com/companies/AMZN/profit_margin
[3] https://www.geekwire.com/2018/amazon-now-employs-566000-peop...
[4] https://www.bloomberg.com/gadfly/articles/2018-04-19/amazon-...
[5] https://www.nasdaq.com/symbol/amzn/financials?query=income-s...
But the truth is that the US is a huge machine and the government already spends too much money.
Amazon is nothing compared to $4T a year the US spends. You need 4 Amazons a year, people don't seem to understand you can't just eat the rich.
Some concerned with the companies "absurd" profits while they are dwarfed by the US spending.
Wow, great answer btw, with sources and all.
The money comes from the fact that they have one well-paid manager per thousand employees instead of having one per five employees as a small business does, which makes getting that opportunity for advancement a one in a thousand shot for their employees instead of one in five. What you want isn't for big companies to pay more, it's for small companies to replace them.
If you pass laws like increasing the minimum wage that disproportionately impact smaller businesses "because big companies can afford it" then you make that problem worse.
If you really want better wages, make things tougher for bigger companies. Condition regulatory burdens and taxes on high total revenue. Eliminate regulations at the federal level that are typically highly complex and whose uniformity favors large interstate businesses, in favor of simpler local regulations that benefit local businesses and allow locals to carve out a profitable niche.
If laws were introduced to artificially stop this sort of efficiency, the country's productivity drops. Thus will actually cause more harm than good.
A much more sound way of redistribution is to close tax loop holes and aggressive hunting down of those who evade (piercing the veil and all). Recover lost tax revenue, and use it to improve social welfare or infrastructure.
> If laws were introduced to artificially stop this sort of efficiency, the country's productivity drops. Thus will actually cause more harm than good.
These are basically the talking points of big corporate lobbyists, but they don't bear out. Efficiency doesn't help real people unless it results in better products or lower prices. If the surplus is going to executive salaries, Wall St and foreign investors then it has no value -- or negative value, if those people then use that money to e.g. bid up real estate prices so that real people have to spend more of their income on housing.
And having less of something isn't always more efficient to begin with. The thing may be producing more value than it costs. For example, people love to go to a store and talk to a knowledgeable person about what they need. A few minutes can save hours of research or years of using the wrong product. But what if one store has that and consequently has higher prices, and another store doesn't have it but has lower prices? Customers go to the store that can answer their questions, determine what they need to buy and then compare prices and buy it from Amazon or Walmart. That isn't more efficient, it's just free riding. And when the smaller stores go out of business, "the country's productivity drops."
> A much more sound way of redistribution is to close tax loop holes and aggressive hunting down of those who evade (piercing the veil and all). Recover lost tax revenue, and use it to improve social welfare or infrastructure.
But that's just an example of what I'm talking about. The tax code is highly complex federal regulation that benefits large companies at the expense of small. Replace the complicated income tax with simple no-exceptions VAT and they can't do that anymore. If you sell something in the US, VAT is collected and it doesn't matter where the rest of your operations are. It's basically corporate income tax where the jurisdiction of "profit" is the location of final sale rather than a bunch of complex rules that international corporations can game to pay less tax than local businesses.
But you also have to make sure they don't absorb that revenue on the spending side. As soon as the feds have money to spend, large corporations devise corruption schemes like the one where government-funded research is patented and transferred for pennies on the dollar to big business, so the public is paying for it twice. Which is why spending should be local -- a billion dollars of corruption sticks out much more in a city budget than the federal budget.
There are cases where welfare will double your income, it's a lot of money for free.
Anyways, I was comparing to Brazil, where the assistance is very low, and you are way better off with a job.
Yet the propaganda there is that the US is terrible for the poor.
Google welfare cliff and you'll see people getting thousands of dollars a month.
I've known people in the US that say they can't afford to get a raise.
And when I tell Brazilians that some Americas are better off without a raise they don't believe me.
That's not what's shocking, what's shocking is that the living wage isn't high enough given costs (health care in particular). Welfare exists not out of kindness, but because people need a minimum before they naturally are going to do anything needed to survive. Welfare keeps people alive and cuts down on crime. If we don't like welfare systems, then we need to make sure that private businesses pay wages that are sufficient to afford the basics: health, housing and education.
Could you define what a living wage is? I see that a lot but I'm not sure what it means exactly. On this reddit link I see people with several special needs kids. Should the minimum wage be set to sustain a single adult? Or should it be an adult with a kid? Two kids? What if I have 5 kids some of them with special needs? That sets the minimum wage as a "living wage" super high. How could any small business or even big business compete with 6 or $10k minimum wages to sustains these families?
https://www.usatoday.com/story/money/personalfinance/budget-...
https://www.cnbc.com/2017/07/14/only-point-1-percent-of-us-m...
Unless you have severe disabilities, getting a job at McDonnald's or the tons of other low skill jobs available is not what I would call something hard to achieve.
It is possible, I've done it and so have my wife. More on that here:
https://www.reddit.com/r/AskReddit/comments/hxwby/is_it_poss...
> I hope you are clearer about what that means now.
Regardless of what your definition of a living wage is or should be, it also doesn't solve the problem of people with kids who are the most vulnerable to the welfare cliff so even by your definition, making the minimum wage a living wage would not solve the issue for most affected people.
I support welfare and free healthcare etc. to help vulnerable people at a sliding scale rather than a hard cutoff which has the strange incentives discussed in the original article.
It's not theoretical, fanciful or rocket science, for such things exist in many countries already. France and Germany come to mind.
That's not how it works.
It's the first sentence of the link guys, come on.
The U.S. welfare is multifaceted. Try to shift to a stack oriented model. The real picture should include both indirect subsidization and multiple direct benefits/subsidization. Income, rent, food, medicine, childcare, transportation, utilities. There are what someone in poverty would consider sweet spots under certain conditions.
Now, Not all welfare programs stack. Local cost of living changes the stickiness point. But, imo, the most overlooked problem is poor people get good at being poor. There are ways to exchange benefits and untaxed labor for value, even if it's not explicit or monetary.
I've lived it. I know people who are scared to lose benefit X if they earn over Y. The bigger problem is that the government can't manufacture meaning and purpose no matter how much cash they pour out. No marketable skills develop, no local capital accumulation, no gaining experience and moving up. There are no good jobs to escape to. The cliff is doing what you know. What you consider unlivable is life for a lot of people.
Also, I can give some sweet spot scenarios if you want hard numbers.
This is completely anecdotal, but olbrecht isn’t wrong. A lot of the problems with the system have only anectodal evidence, but that’s because of generations of practice playing the game.
Whoa whoa whoa. It's fine to make a general point based on personal experience but gussying it up like this just for effect is not only abusive, it's vicious. Please don't degrade HN like that.