I quit my job and thanks to the insurance changes in the US a few years ago, I was able to stay on my parents health insurance for a meaningful amount of time. It allowed me to take the chance of starting my own company. Unsure if I would have done the same, had circumstances been different.
> From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there -- at least its not as highly publicized.
There are a lot of startups in Europe; particularly France, UK, Germany, Switzerland and Scandanavia, and they are well publicized locally. I hypothesize they don't get surfaced to the attention of Americans for a few reasons:
1. Essentially no country in Europe provides businesses with as many freedoms as America does. American businesses have more autonomy, and a lot of basic facts about American life primarily exist within the framework of a business (e.g. healthcare). This makes it a less attractive environment for investors, so these startups don't get international attention as easily.
2. Partly as a result of #1, and also because of a reduced cost of living (and thereby labor) in much of Europe, startups in Europe typically don't pay as well as those in America.
This is to say that Europe has lots of entrepreneurialism, it just exists in a less recognizable way compred to America due to cultural, political and economic differences.
Europe provides a better social net, and this is funded in larger part by heavier taxes on companies. To encourage entrepreneurship, small companies are exempted from many taxes and regulations, which causes there to be a more prominent cliff as a company grows from small to large.
This is perhaps most noticeable in France, where a lot of stuff kicks in with your 50th employee, and so there are a great deal more companies with 49 employees than 50 employees.
I think a consequence of this is that European entrepreneurs tend not to result in as many large companies as American entrepreneurs, as you'll have more people who stop at a smaller size to avoid the penalties of being large.
And the sort of worries Americans have about healthcare stopping you from starting a business we just move those worries elsewhere to rent or whatever.
The bottleneck to highly publicized startups is investors. Investors are less likely to let people use their money if they think the government will get in the way of their growth.
> I quit my job and thanks to the insurance changes in the US a few years ago
So you're saying that you were able to take the chance to build a startup because of the safety net?
In this case, the employer is the parent's employer. Which means that the people who can take the risk to create startups is limited to "people whose parents have health insurance". Which excludes a large section of society, including for example poor people.
(also--and this might be a bit of a jump for someone just learning about inequality of opportunity--but a fun thing to research online is "why is the US the only country with employer-based health insurance", especially once you discover the answer is "slavery")!
I actually confused my facts here - it's tipping I was thinking of that comes directly from slavery. Employer-paid health care just _continues_ because of racism, as opposed to being created by it.
IMHO, universal healthcare and childcare would indirectly lead to a lot of new startups.
People factor in the assistance they expect to receive when taking a job in terms of food, healthcare, and money when they take a job that will with assistance provide them the means to live. It is not unheard of at some low paying employers to guide new employees to benefit programs to help them meet their needs.
In effect such programs reduce the market clearing price for labor at the expense of other tax payers. Such program often require that the recipients work but not for how much. At the limit sufficiently generous benefits could inspire someone to work for $1 per year and you could subsidize taco bells entire workforce but the minimum wage and the limits of federal dollars both prevent this.
Absolutely false. People will always work at the highest wage they can obtain unless they value their time above what that wage. No government assistance leads to even more people working for $1/hr because they're even more desperate.
Government benefits lower the floor so low that people literally couldn't live if they were paid solely in wages rather than wages + benefits.
I know that libertarian types like to pretend government regulations just appeared into reality suddenly, without anything provoking them. But the reality is, most government regulations were put in place to save people from unsafe conditions that the free market exploited.
- markets are efficient
- people are rational
- everyone has perfect information
- there are no power imbalances
Aside: Do you play poker? I've started to wonder if Freedom Markets™ advocates are familiar with that kind of meta thinking.
I don't know how you're even supposed to go from such a premise that is demonstrably, empirically false.
Bare survival is very cheap in America.
There are niches wherein some can survive on little because they can rent a room or stay with family, because they don't have medical issues and can go without insurance etc etc. These are situational factors that don't scale to a whole society or even the whole of an individuals life.
The poor often go largely without healthcare. Their health deteriorates severely, but it's better than just starving to death. A lot of people have very long bus commutes to work because they can't afford a car or housing close to their workplace or to the best public transportation. Their credit score is probably no good, so they can't get a loan on a "cheapish" car. So if they do get a car, they're stuck maintaining a beater.
They may not have living parents who can help them, or their parents may be just as poor as they are.
Your assumptions are all based on a middle-class individual from middle-class upbringing. That doesn't make any sense when we're talking about the plight of the poor, who are the ones most affected by government assistance, minimum wage, etc.
Indoor shelter isn't necessary for survival. Motor vehicles aren't essential for survival. And you go to the ER and get emergency care if you're in trouble.
The base line for survival is pretty low. It's just "continue to not be dead".
All of this is just to say that, empirically, I have seen the following to not be true in the sense that you mean it (required to live being short for "required to live a decent standard of living"), though it is true in the literal sense that I described it:
> In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.
It makes sense with a system like a universal basic income.
Where we stand now, society is expecting everyone being supported by one or more (self)employed jobs, so underpaying people is unacceptable.
I'd argue a change like UBI should come first before lifting the need for companies to pay their employees better.
So why not just remove all the money from the economy? I personally find Walmart's business model of chronically underpaying people then making them dependent on a huge bureaucracy to make up the living wage pretty repugnant. Whereas paying them an extra $6.00/hr means they no longer have to spend time waiting in line and on the phone during their off hours. They don't have to look specifically for landlords who accept section 8 vouchers.
The living wage removes a huge amount of hidden labor involved in living off of minimum wage and that's what you're missing here.
Now, you're upset about the residual $z-$y coming out of your pocket. But you might instead be grateful that Walmart is kicking in $y-$x to support your extravagant political demands. That's the subsidy.
> it's much better for me to be making up the hidden costs of chronically underpaid workers
Those workers are only underpaid according to your notions of fairness. You think _Walmart_ should be tasked with implementing _your_ moral vision at _their_ expense. I think _you_ should be tasked with implementing _your_ moral vision at _your_ expense.
The notions of private property and free markets are about moral vision and fairness. They are enforced with the threat of violence, and they benefit members of society unequally. Some people like to pretend that they’re natural, that they’re a given, and that challenging any component of them is imposing one’s own morality on some God-given system.
That is false. No economic system is more or less about morality and fairness than any other. You believe in letting the capital retain more of the earnings than the labor because you think that is moral. It has nothing to do with some supposed position of neutrality.
And if we consider all of the locally owned retailers that have gone out of business due to Walmart's (admittedly efficient) business practices, then saying something like "Walmart doesn't need to exist" really isn't that all that crazy.
Or redesign those stores to not depend on as much human labour.
I don't directly begrudge a company or CEO their profits and paycheck, but if corporate profits are at all time highs while investment in infrastructure, education, healthcare, etc. are inadequate, that points to an imbalance that isn't being solved by the labor market.
Of course legislation could - and should - go after Amazon in other ways. But it makes the point that you don't want lawyers trying to define corporate taxation policy, because too few lawyers have the first clue how to define policy with no loopholes and real teeth.
Means-testing causes huge bureaucracies in the US. The rules around the means-testing make it very difficult for the social programs to actually provide anything in a reasonable amount of time. Or if they do they have byzantine requirements like you have to make X number of job-seeking contacts during the week, you have to interview, and you have to take classes from people who haven't searched for a job outside of the public sector in 20 years. Or for food stamps you're limited to only a few sections of the store.
Right now employers get a discount for pooling their employees together for insurance, and as an employee you either take that discounted plan (which your employer pays part of) or go out on your own which is almost always significantly more expensive.
Getting rid of the bundling and pooling would actually make the insurance market competitive and give people a choice. It would also mean that having good health care is no longer something your employer holds over you, increasing your ability to change jobs, walk out of a bad employment situation, or go out on your own as a freelancer/contractor.
Getting rid of the employer health insurance advantage this way, or via a more radical single-payer system, would actually boost self-employment and very-small business, who currently have disadvantages in getting or providing these benefits.
In the US insurance system your employer gets to decide what it costs for you to get medical care. The ACA cemented all the worst parts of the insurance system and made it illegal for me to choose my own insurance if I want to work for a larger company.
Meanwhile I have changed jobs once in the last 3 years but in that same timespan I have had 6 different health plans / providers because companies renegotiate their plan every year and often pick a new one because they can get a better deal or the previous plan increased in price.
Having my own chosen plan via an open marketplace that was mine and not my employers would have actually resulted in more stability.
In the same fashion society needs people that make enough money to meet their basic needs like food and medicine so that they may spend their additional funds on higher margin items that actually keep Walmart afloat.
Businesses and the wealthy people that own them are vastly the beneficiaries of such policies as maintain a healthy functional society in the same way as they benefit from roads but for any given business if they can shirk their share they can keep the difference so they are incentivized to forget.
It is strange that you consider paying their share a gift rather than a due. It seems worshiping economics is a barrier to understanding it.
A moment's thought should convince you that commerce antedates redistribution, wage floors, etc. Prosperity doesn't require a collectivist thumb on the scales.
It certainly isn't the US where in fact said thumb is presently pressed firmly on that scale via social security, food stamps, medicare, medicaid, tanif, section 8 and so forth.
Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)
These all represent your taxes going to support things that you are unlikely to benefit from personally, after all.
If you remove the impact to other people from the calculus of where you'd want tax dollars to go, then I think most people would opt to enrich themselves rather than not. But that's just not how the world works. The reality is that any given person's tax dollars are used on all kinds of things that will never directly benefit them, or even their families or even socioeconomic class.
Unfortunately right now the middle class is being stuck with most of the bill on a PER-CAPITA income basis. And considering the wealth gap between the rich and the middle class is SUBSTANTIAL, it means we're essentially having relatively poor people (middle class) pay the bills of very poor people (lower class).
When you zoom out a little (and remove irrational emotions about the topic clouding your perception), it's easier to see the disconnect.
Also no need for the line about irrational emotions - lets have some proper discourse please.
If you are a business owner and most of your income comes from capital gains, still not possible to pay anywhere near 22%. Rate on capital gains is 33.3% (20% federal + 13.3% state).
It doesn't negate your point, but for Tesla specifically, no vehicles bought in 2020 or later are applicable for the federal tax credit at all (the page you linked acknowledges this). Raising the $7500 amount wouldn't benefit any Tesla buyers.
An entirely self-interested Tesla buyer would first want the per-manufacturer limit on the tax credit removed or increased. Then maybe have that credit amount increased.
A better safety net, in addition to achieving the same immediate outcome of workers living with better conditions, also means workers have more options. It might lower the supply of potential Walmart employees and actually also increase their wages or working conditions. But more importantly it would mean they could leave Walmart and still get by. Or they could work fewer hours without worrying about things like losing their employer sponsored health insurance. More people could live more fulfilling lives rather than being so reliant on their job at Walmart.
Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it. I’m surprised there isn’t more agreement politically, the benefit obligation is a huge drain on small companies and solo entrepreneurs.
Not to mention the cost of staff needed negotiate, maintain, and explain the options to employees.
When you pay taxes for a single payer healthcare system, you're absolving the company the responsibility to provide health insurance to their employees (read: "underpay their workers"). Many societies are okay with this because the end result is actually better/more efficient for everyone.
Once everybody has an alternative job to go to outside the private sector, it no longer matters if Uber decides not to pay people and instead automates all the vehicles.
Then everybody wins due to improved productivity - Uber and the people with community jobs.
The private job then just has to be better than the guaranteed one and they will get the labour.
Where's your central planning in that?
I think UBI would function as a replacement for minimum wage, in this case. Why would anyone take a job paying less than 5?
Walmart used to have a page for employees telling them how to apply for food stamps.
Those costs should be charged back to the company.