I am not sure how far 15 dollars/hr is going to take you in SV or NYC.
Can someone explain to me how that will Not come to pass. I implore you to please use single syllable words and simple sentence structures, because as stated formerly; I must be a half-wit to not comprehend the incandescent brilliance of this economic revolution.
1. Wages are a small portion of the total cost of everything. For example, for a place like Walmart, the bulk of their costs is the products themselves (a lot of which are not even manufactured in the US, and thus not affected by minimum wage changes). The costs of running the stores can't be all that low, either. Increasing wages to $15 wouldn't make a huge difference to prices. They might go up a slight bit, but... it's simply not going to be that much.
2. Only 2.3% of hourly workers are paid the minimum wage. [0] (Although obviously, if increased to $15, then everyone below $15 becomes a "minimum wage" worker, meaning the percentage will be a bit higher) When you talk about increasing the minimum wage, you have to realise you're not actually increasing wages for everyone, only a small portion of people. Increasing them will not increase prices all that much, since it doesn't affect that many people to begin with.
Some prices would go up a bit, yes. But a lot of companies wouldn't be affected in the slightest, and so their prices wouldn't change, meaning the overall effect wouldn't be all that pronounced.
[0]: https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm
I think by “everything” you mean consumer packaged goods? There are a lot of other things people spend money on.
The investment retail makes to obtain goods which will be sold for a profit, is Not comparable to doubling the cost of having those goods put onto the shelves.
> 2. Only 2.3% of hourly workers are paid the minimum wage.
My kids were paid about a dollar over minimum wage to scoop ice cream at their summer jobs, according to some estimates [0] this slight amount over minimum wage accounts for 30% of the workforce.
[0]: https://www.pewresearch.org/fact-tank/2017/01/04/5-facts-abo...
In terms of increasing the costs of goods because of increased labor cost, unless the human resource is the only cost, you're still better off. If you're paid $10 to make a $12 item, you need to work 1.2 hours to buy it. If you get paid $20 to make a now $22 item, you now only need to work 1.1 hours.
Regulating the demand requires making more cities worth living in; same basic ideas (create useful civil infrastructure), but harder since the money has to come from outside. Well, or we could do WWIII, an pandemic, etc, to constrain population in less pleasant ways.
15 USD/hour SHOULD be a livable wage, and the fact that it isn't reflects the insane rent-seeking, regulatory capture in all sorts of forms, and unhealthy market dynamics leading to inflation outpacing economic prosperity increases (for a majority of the population).
Says who? These numbers are arbitrary if we're slaves to inflation. $15 now seems like a goal, but the same amount a century ago was unthinkable. How long will it be before $15/hr isn't enough for even the most basic needs?
But what makes you think the government should decide either? What makes you think that the government is capable of discerning the correct number? What makes you think there must be a single number? And if you think there should be a single number, why should it be $15/hr vs $10, $20, $50, or $100?
How is it possible for a federal minimum wage to magically be "correct" for all combinations of:
* geographic location and local economic conditions * experience of worker (e.g. teenagers 1st job vs young-adult vs senior citizen) * part time vs full time * no training required, some training required, lots of training required? * time-of-day (1st, 2nd, 3rd shift) * time-of-week (5x8, 4x10, 6x6) * intangible benefits (think internships to gain experience/skills/networks)
I'm sure there are many more variables that could be added to that list.
The real minimum wage is always 0, for the workers that didn't get hired. Minimum wage laws are ultimately restrictions an individual's right to enter into a contract.
This, 100%. If I have some menial task that doesn't justify paying minimum wage, and I have a person interested in this contract, then the government's intervention is violating our rights.
We don't stand a chance bringing the homeless population back into the workforce with a high minimum wage, it's just not going to happen. People who support higher minimum wage don't seem to realize that it has negative side effects, like pushing lower-ranking employees out of the market.
The basic problem is the highly publicized poverty rate from the Census bureau excludes huge amounts of assistance (trillions of $$). Which leads to this perverse cycle:
1) observe poverty rate based on income is x% 2) argue successfully to increase assistance that won't be counted as income 3) observe that the poverty rate based on income hasn't changed 4) GOTO 2
Here is a good summary of this dysfunctional situation:
https://www.manhattancontrarian.com/blog/2018-10-14-nice-to-...
Either way, this is besides the point anyone was making. We can look at French poverty rates, healthcare costs, or income distribution and see that they are outperforming the US in many areas. Their labor regulations are likely one of the reasons.
http://www.econtalk.org/extra/where-have-all-the-busboys-gon...
If a minimum wage is too high, then sure, its a bad thing because companies can't afford to hire workers for menial tasks which stops workers from working.
But simultaneously, if it's too low, it leads to dangerous precedents exactly like you've described - menial tasks being farmed out to people desperate for any kind of cash, leading to them having to work inordinate number of hours to make a living wage - this is not a society I want to live in, and having to work exceedingly large hours due to my job not giving me enough money is also a "violation" of my human rights - that of a "just and favourable condition of work".
The trick is of course balancing the minimum wage with it's downsides of being too high - and there is fair argument that the US has let this slip below livable wage.
>This, 100%. If I have some menial task that doesn't justify paying minimum wage, and I have a person interested in this contract, then the government's intervention is violating our rights.
USA already has a problem with wealth inequality, and in the current system, removing minimum wage entirely would overall exacerbate this, not help, as now you're having minimum wage workers compete with no income workers - and the argument is that - increasingly - minimum wage workers already have trouble making ends meet. Minimum wage in this context is as much a Violation of rights as the context you are suggesting - and in my opinion, an odd choice of words to use in this context.
Edit - Can you explain why I'm being downvoted? I don't think I've broken any rules here.
Your point of view is that people who are willing to work for less are being exploited, but you fail entirely to see how real legally legitimate paid work would actually help underprivileged populations obtain success, as opposed to their current $0/hr wage.
> now you're having minimum wage workers compete with no income workers
You've said it yourself, dropping minimum wage would allow underprivileged workers the ability to compete for jobs. Maybe minimum-wage workers are scared that they'll lose their job to someone who's actually desperate for work.
I don't want to return to the days where people would have to work 60+ hours to keep a roof over their head with bare necessities. We are closer to that reality than that of wealthy menial workforce in my view.
I'm fascinated that people can see this far, but can't see that if you stop people's best way out of this¹, they're in an even more desperate position.
¹ The sub minimum wage job that they'd take if allowed
The default position in the US system is that the government does decide these things - you're arguing against the status quo here, which is fine, but the way you are positioning this seems like you think this is an aberration from the norm.
>What makes you think that the government is capable of discerning the correct number?
The economists and advisers they (hopefully) listen to, they don't pluck it out of the air, they base it on a significant body of research that they deem to be the most correct (at least in a perfect world, ideology and the complexity of it complicates this of course).
>And if you think there should be a single number, why should it be $15/hr vs $10, $20, $50, or $100?
>How is it possible for a federal minimum wage to magically be "correct" for all combinations of: <snip>
This is a fair point, a living wage in NY is very different to a living wage out in the middle of nowhere. You could argue that if people are so desperate for work they should be willing to move across the country for jobs in a cheaper place to live, but life is usually not that simple of course.
Ultimately, one minimum wage that is deemed a living wage across the USA is better than the alternative in my view. But I'd definitely be amenable to arguments as to how better to base the living wage depending on the area. (Though no doubt that'd have its own difficulties).
>The real minimum wage is always 0, for the workers that didn't get hired. Minimum wage laws are ultimately restrictions an individual's right to enter into a contract.
I mean, sure, contracts have laws around them based on what is legal, what is regulated etc. That's par the course for a government/legal system.
I can't just add arbitrary things into a contract that have been deemed to be illegal. Positioning it as a "restriction" does not make this particularly negative. I'm not sure I get the point here.
I'm arguing that minimum wage restrictions are an unwise restriction on contracts and you in turn are objecting to that argument by pointing to the fact that we do indeed have restrictions/regulation of contract terms and therefore my criticism is invalid. At least that seems what you are saying towards the end of your message.
Accepting that there are proper reasons to regulate contracts does not mean that any particular constraint is proper.
There were other parts directly disagreeing with the overall point you were making.
* the default position in the US is that the government should stay out of things (limited government), not that the government should regulate things (although we are rapidly moving away from the former and towards the latter)
* believing that "economists" and "advisors" can discern an hourly wage number that balances supply and demand across all variables is just wrong as there is no way for the central authorities to have as much information as the market has (the collective group of buyers and sellers), distributive decision making trumps centralized decision making in this regard
* Your belief that a centralized decision making process is "better than the alternative" suggests no limit to the scope of this power, this is dangerous. You also provide no justification for your preference for the centralized approach. You agree that there can't be a single number that works in all cases and yet refuse to give up on the idea that there still needs to be a single number. Why?
Limited government means that the government stays within prescribed bounds, not that it stays out of things by default. How that applies to minimum wage depends on whether we’re talking about state or federal minimums, and the provisions (and one's interpretation of them) of the applicable constitution.
We have a legal system based on blacklisting things that aren't permitted not a legal system based on whitelisting things that are allowed. And furthermore we have a meta-blacklist of things the government isn't allowed to blacklist (i.e. government can't add prohibitions that infringe on individual rights and liberty, broadly speaking)
So are essentially all laws, what's your point?
My comment was intended to illustrate that minimum wage laws not only restrict employers but they also restrict workers. The rationale for these laws is necessarily built upon the assumption that individuals are incapable of determining what is in their own best interest and must be forcibly prevented from making unwise decisions regarding their own employment. The government's centralized one-size-fits-all solution represents an infringement on individual liberty and individual rights, the exact opposite of the proper role for government.
Whether they are about contracts are not, laws restrict the right to enter contracts, because contracts that involve violations of the law are prohibited for that reason. (And, in the case of criminal law, the contracts themselves are not merely restricted but criminalized.)
> but your comment suggests an indifference to the notion that laws should be evaluated based on how burdensome they are to individual liberty.
No, it suggests that I find the observation that a law restricts the ability to enter contracts to be something that doesn't say anything meaningful about the degree or manner in which it burdens individual liberty, since it is true of most laws, no matter how much or how little they burden individual liberty.
> The rationale for these laws is necessarily built upon the assumption that individuals are incapable of determining what is in their own best interest
I disagree; the laws are adopted precisely because individuals are perceived as very capable of optimizing for their own self-interest in a way which is perceived as harmful to the general interest. It's seen as a collective action problem; in game theory terms a multiplayer generalization of prisoners dilemma with workers as the participants.
The proper role for government is to protect individual rights not to manufacture collective rights that are more important. You are arguing that the individual rights need to be subservient to the "general interest" collective rights and I don't like where that argument leads.
My problem with the minimum wage is that it's essentially UBI for the working population, that is funded via a regressive tax. Min wage workers produce cheaper products and services, and thus the cost gets passed to those who buy them, rather than those who buy more luxury goods - it's basically taxing the poor to pay the poorest. We might as well just raise the income tax - which is at least progressive (and could be much more so), and cut the paychecks from that directly.
The usual objection to that is that it's subsidizing employers, who can now pay much less because the employees already get UBI. Sure, so let's tax them as well - corporate income and/or capital gains.
What is your limiting principle then? Our social contract is based on the idea that government does not have unlimited power and that there are individual rights that can not be discarded even via majority rule. Are you unwilling to apply any sort of value metric on laws?
I'm not sure I follow your chain of reasoning on wage/UBI/taxes, but there is a part of what you say that I think I would agree with: That if we want to provide a social safety net it should be done explicitly via general taxes and a redistribution mechanism rather than micro-managing commerce.
The chain of reasoning wrt wages is simple: when you raise min wage, it is factored into the cost of goods, proportionally to the amount of min wage labor that went into their creation. In other words, cheaper goods and services get more expensive, and people who buy them end up footing the bill. So when you raise min wage, it's subsidized more by McDonald's customers than by Starbucks customers. So we're basically providing guaranteed income for employed - that's the basic income part - but we pay for it using an implicit regressive sales tax.
I'm not sure it is useful to attempt to "rank" individual rights. I think it could be argued that the freedom to enter into contracts is just a special case of freedom of association, which I'm guessing you would agree is pretty important.
A single company can enforce it in a limited manner and that doesn't have any discernable impact on the society.
Looking at what it costs to produce the material goods required to maintain a decent (but minimal) standard of living, $15 an hour probably should be enough.
That $15 isn't sufficient can then be taken as a prompt to look at the impacts of existing policies and who they benefit and so on.
Rent is >$500 just about everywhere these days... https://www.rentcafe.com/average-rent-market-trends/us/mo/sa... ). The US relies on employer-provided health insurance, but, as a result, employers keep people working multiple part time jobs to avoid footing the insurance costs. And since most people pay for education with loans, the lowest wage workers are often also left paying for years for failed attempts to get out of the lowest economic class.
What would happen in today's climate? What has happened where I live as that has come closer to reality?
The cost of __everything__ but particularly rent and other less elastic items have risen to match and overtake any gains. The true effect is to decrease the wealth of the middle class and only the "nobles" who own more than their own living abodes benefit.
It's relatively inelastic, but not over medium terms, especially in a place like the United States that mostly has lots of room to build things.
But I think the point of "says who?" is a fair one, because livable wage in major cities is always way higher than in the smaller towns or outskirts.
I believe Roosevelt said something along the lines of business that depend on paying less than a living wage do not have the right to exist or something. A simple search brought that up. Can you cite a source that is contemporary to when minimum wage was established?
There was an article posted recently that that the average income of a 7-11 owner was less than $40K a year and just to get that most owners are working in their stores.
Small business owners are not getting rich.
The other argument I hear is if they can’t afford to pay more the store shouldn’t exist. Which is funny coming from a site where many of the posters work for non profitable VC backed companies.
It's perfectly possible to survive in NYC on $1.5k a month.
33% tax on 30K leaves about 20.1K leftover which, after 1K rent, comes to $675 per month, less health insurance, utilities, transportation costs, etc.
$15 per hour is barely livable in NYC with 1K rent per month.
(Still hard to make ends meet on $30k, not disagreeing there.)
Federal: 12k standard deduction for an individual, looks like $1969 in taxes on the remaining. New York State: 8k standard deduction, roughly $1100 tax on the rest (eyeballing it). FICA: 7.65% tax on 30k is 2295.
$1050 per month after rent instead of $675. Not saying it's comfortable... in fact I think I'd still agree with your "barely livable" description.
Federal payroll and income tax on that is about 15% total; state and local shouldn't more than double that.
The correct number (~$1000 per month) has already been mentioned above.
I still claim it is sufficient to survive in the city.
When you're making minimum wage, you're actually afforded other benefits. The kids get to eat school lunch for free and we also get free transportation. This goes all the way throughout high school. That's a lot of savings over time! On top of that, colleges offer financial aid packages that reduce the cost of college significantly. In fact, some colleges will even go as far as to give you money for going to their college.
We rarely if ever went to eat out, all our meals were homecooked. Snacks, candy, soda were rare in our house. We didn't have cable tv, just broadcast TV. We had a home with heat and air conditioning, but we were very frugal with turning it on. We didn't waste electricity if we didn't have to; if no one was in the room, don't turn on the lights. Don't leave the fan or TV on if no one was using it, etc. Despite being in the low-income bracket, we still went on an annual vacation once a year. We would join those tour buses and visit other states. The rest of the money went toward education.