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Comment by jasonhansel | Hacker News Reader

That's $18.52 an hour in today's dollars. The average pay for a janitor today is closer to $12 an hour. In fact, just a few years after 1976, janitors' wages (at least in LA) started falling sharply below the cost of living: https://socialjusticehistory.org/lalabor/workingla/archives/...

The fact that our economic system worked for him does not mean that it works for the vast majority of people in similar jobs. It's quite likely that some of his colleagues are now making less money (in real terms) than they were in the 70s.

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This was in "the late 1980s". Even if we're assuming this was in 1985, $4 in 1985 is $9.36 - $9.85 today. Sources:

https://www.bls.gov/data/inflation_calculator.htm https://www.usinflationcalculator.com/ https://smartasset.com/investing/inflation-calculator https://www.calculator.net/inflation-calculator.html?cstarti...

The article states that the job opening was in 1976.

The US has a lot more immigrants from Latin America living here than it did back then. Plus, unemployment is lower (even with the pandemic).

I would rather have 1 million people making $12/hr and 0 unemployed and in poverty than 650k people making $18/hr with 350k just shit out of luck. I can’t say the former is what we have, but with unions or tight labor market regulation, the later tends to be closer to what you get.

Fair wages and guaranteed jobs can both exist.

I agree. You can get full employment and a respectable standard of living floor through stuff like a negative income tax and universal health coverage. But making it illegal to work for what YOU consider a low wage and permitting labor cartels is counter productive.

When bargaining with a monopoly or oligopoly, don't unions just put workers on an even footing?

Market forces leave out every human factor. Unions add it back in.

Two wrongs don’t make a right. Let’s break up monopolies and encourage competition.

Is there an ETA for the break up? The trend is the other direction. We could always wait for the end of scarcity.

“Good laws can’t be passed, so we need bad laws (which we also can’t passed)”

Laws around unionization already exist.

Why are labor cartels bad but capital cartels fine?

Why must an employee bargain individually but a megacorp be allowed to bargain against them collectively?

Who here said any form of cartel is fine? If we need to regulate financial markets to prevent collusion, we should do that.

Why is a union collusive but a corporation and their HR department not collusive?

Calling unions "labor cartels" is cheap. You might just as well call democratic systems "law cartels" by that logic.

Is there any point in guaranteeing a job rather than just giving the person the money?

devil's advocate; doing a job takes time, whereas just getting paid does not. Making it harder to have an additional side-job. (it's a common belief that you need to be unemployed and looking for employment before getting a handout)

Also, whoever's "guaranteeing" those jobs can get work done, if you're into that sort of thing. e.g. digging/filling holes, or building roads to nowhere.

> I can’t say the former is what we have, but with unions or tight labor market regulation, the later tends to be closer to what you get.

This is a big claim without any evidence. Given the minimum wages in other western countries are proportionally much higher with no negative consequences AFAIK, do you have any evidence that the richest average income country could not have a higher minimum wage?

> With data from 25 OECD countries over 15 years from 2000 to 2014, we find that a higher minimum wage decreases labor demand but does not affect labor supply. Our empirical results also suggest that relatively modest increases in minimum wages have limited impacts on employment. On average, 10 percent increase in the minimum wage decreases employment by 0.7 percent, thereby increasing unemployment rate by 0.64 percent.

https://ns1.6thsigmahosting.com/pms/index.php/jrge/article/v...

This is just one paper, I don't know if it's a fact.

I can't look at that website due to certificate trust settings, however thanks for replying with data. It's pretty interesting numbers (lets assume its true).

So a raise of 25% would equate to 1.28% unemployment. A fully socialized welfare system (Centrelink in Australia) costs 14% of GDP with 6.8% unemployment. So a reversal of 25% would reduce that to 5.52%, and 11.36% of GDP (assuming overheads etc are linear, optimistic).

TLDR; if this article is correct, raising minimum wage 25% requires governments invest 2.6PP of GDP.

At least that's a decent point to have a rational discussion about where governments spend money and what your priorities are - thanks for sharing.

>no negative consequences

Meanwhile politicians tell us that double digit unemployment is the new normal.

There are people that are not skilled enough to warrant certain minimum wage. There are jobs that are not feasible at certain wage levels. When you put a floor on what people can agree between themselves that their work is worth, you price people and jobs out of the market. It is self evident when you look at it.

Now, the problems we try to solve with minimum wages are real. Cartel formation of labor demand, coercive bargaining, these are real problems. Minimum wages solve them to a degree, hut not without a new set of problems.

Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all?

Agreed that it is self evident when examined in the right light.

Minimum wage doesn't increase the wages of the lowest tier of productivity.. It outlaws it.

Which is why McDonalds has no employees in Australia or Switzerland? It's not self evident at all looking at higher minimum wages in the 25ish countries with higher HDI than the USA and higher minimum wage.

> Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all?

That's not true at all for example Switzerlands minimum wage is not dictated at the federal level but its equivalent to 25 bucks an hour in Geneva. [1].

> There are jobs that are not feasible at certain wage levels. > It is self evident when you look at it.

That's not self evident at all. People still work at unskilled jobs countries like Switzerland or Australia. How do you think the cleaning and fast food industries work?

[1] https://www.businessinsider.com/switzerland-geneva-introduce...

Where I used to live, they pay this mentally disabled girl at a grocery store to get shopping carts. She would be wholly incapable of doing anything remotely mentally challenging. But with this, she can take some of the burden off her family to care for her, she can have something of her own going on in her life, and she is a human being and I'm sure feels from time to time like she is a burden and gets down about it, so she probably gets some dignity from it. She would probably be out of a job if minimum wage got raised to 15 an hour. She would be priced out of the job market and that job would not be worth paying anyone to perform.

You'll notice that when wages are artificially increased, unemployment rises. Which jobs do you think were destroyed? Which workers do you think were let go? It is self evident. When wages are raised by decree, some jobs and some people are priced out of a labor market. Just because there are still low skill jobs and low skilled workers does not mean there was not a reduction in those jobs.

$12/hr is living in poverty too.

The problem is that $12/hr is still "in poverty". You've set up a false dichotomy between everyone out of poverty vs most farther out of poverty, but some still in poverty.

There's literally nowhere in the US where a single minimum wage job can rent and "affordable" (defined as <-30% income) two bedroom apartment [1]. And it's not even a close thing like two incomes could afford that. The calculation is that you'd need to work 127 hours per week at minimum wage for an affordable two bedroom apartment.

And it gets even worse in expensive metro areas. The poverty line in san francisco is $117,000 for a family of 4 and $82,000 for an individual. Meanwhile minimum wage in SF is $33,425.6 per year (16.07 * 40 * 52).

[1]: https://www.cnbc.com/2019/06/26/minimum-wage-workers-cannot-...

I could survive just fine off a full-time minimum wage job in my state of Michigan. That's 9.45/hour or about $1500/month. I rent a pretty nice place in a college town for $550/month (across the street from campus, middle of downtown, utilities included). I eat mostly pasta and canned soup, but that's just because it's easy and cheap, and I do go out to eat with my girlfriend once or twice a week. let's say another $700/month for money, phone bill, gas, and walking-around money. Just to round it out let's add $200/month to put into saving for unexpected expenses and $100/month for car insurance or anything else I forgot.

I'm on my parent's health insurance, I think if that were not an option it would really complicate things. Google says the average annual health insurance premium is $15,500, which would basically be my entire yearly pay. I think when you work more than 30 hours your employer is supposed to pay some of that, and maybe there's subsidies too for people on low income, I'm not really sure how it works.

So basically, the current minimum wage is fine for me. For a single parent with 3 kids, it would obviously not be nearly enough. But also, I'm not sure I'm capable of doing any work that's worth a living wage for a single parent with 3 kids, so raising the minimum wage that high would probably put me out of a job. Maybe the minimum wage should be set as high as it can be without costing too many jobs, then the government should give everyone the support they need to feed their families and not be homeless.

Dude, I’m from Michigan. It’s getting expensive there fast. If you think you’re immune to what is happening everywhere else you are in for a rude awakening.

Before my wife and I left in 2014 or so we looked at a decent bungalow in Kalamazoo for roughly 40,000. Now you can’t find a house in that neighborhood for under 150k- and it will be a dump.

I bought a house there around a year ago before deciding it wasn’t a good fit and I still made like 15k after 10 months. It’s insane.

Mind you a good job in Kalamazoo pays 60-80k tops? Sure remote work is a thing but it’s a leash.

Traverse City or Ann Arbor are bordering on Portland prices and there are limited job prospects in either place relative to Portland.

This would’ve been unacceptable to our parents but they’re making a killing off of their investments so they don’t give a shit.

I don’t know what is happening but housing is getting expensive everywhere and fast.

I expect that the solution to that problem is to directly address it via zoning or price controls, not indirectly by raising the minimum wage

They tried that in San Francisco and it only got worse.

Even on your parents insurance if you only had yourself it will eventually get very complicated.

co-pays, out of network doctors taking care of you while you are under after a bout of appendicitis goes wrong, cars breaking down, parents randomly needing help to make ends meet because of all of the same.

Speaking from 20+ years of adulthood nearly half of which was below the poverty line there are more poverty traps than you can possibly imagine that minimum wage or even much more doesn’t even come close to avoiding. The available recourses to you when those events occur are grim.

Calculate the interest on payday loans, if you happen to need one it is exceedingly hard to stop needing them as they drive you down further and further.

Life got considerably more stable after making programmer salaries.

Minimum wage in the US is just waiting for the next big thing to push you further and further down. I was super lucky to find out I was good at this computer thing in my 20s (and that I had family to lend me 500 bucks for my very first and very bargain basement computer in that era).

It felt close to indentured servitude other than I could change jobs, but I didn’t get ahead or even tread water. No vacations, no time off when sick, and 60-100 hours of work a week for years.

I definitely would have preferred just getting a check from the government and going back to school while I got some real skills, or even that same minimum wage with a good transit network and medical care that didn’t find ways to take all my very limited savings.

In the end, unless people have gone through the sort of nightmares life can throw you it is hard to see how much money you need in the states to be stable and it takes a lot of education and knowledge to navigate all of it, which if you are on minimum wage you probably don’t have.

Something has gotta give the situation is not viable.

So what if you can’t afford a two bedroom apartment on minimum wage? Bunk up with a roommate.

okay, but as wage increases continue to lag behind cost of living, are you just going to ask people to bunk up with more and more roommates in a 2BR?

That’s a bit of a straw man saying “two bedroom apartment”. Why would a single person need to live in a 2 bedroom?

I mean, plenty of people rent a room in a shared house in SF. Are they living in poverty because they don’t live in a two bedroom?

Man I have a hard time dealing with comments like this, because people say this sort of thing and it is simply not true. When you get to brass tacks that's when all the other "necessary" expenses usually come up. Gotta have Netflix, gotta eat out once or twice a week, what is the point in life if you cannot consume products? What other ways are there to have fun?

My bills are 800 dollars a month, total. My rent is 400. I live 40 minutes from downtown of one of the largest cities in the US. Before this, they were 1200 dollars a month. I wanted to cut them so I found a way. I have everything I need, and I've got money saved in case of an emergency, I'm going to save my way into the upper middle class living this way, without a degree of any kind.

The trick is to repeat the following mantra: "bills are the devil." That's really all there is to it. Get a car with cash. If you don't have cash, save some cash by not spending all your money. A single person who can't live off 1200 bucks a month is mismanaging their finances. If you can't afford to live in San Francisco, that's not due to our economic system, it is due to how the city manages itself, and it's a way the city is telling you you aren't welcome there. Go somewhere where you can have a decent life.

The only real problem here is health insurance. I do not have it. The health insurance market has been absolutely destroyed by government intervention over the last decade. I remember when I could get a decent plan for 80 bucks a month and I thought that was expensive. It wasn't that long ago.

For families, I get that it is a lot tougher. Two incomes are a must nowadays. But historically, families encouraged their sons to establish themselves financially before having children, and communities that had children young or out of wedlock were usually impoverished. It has always been financially tough rearing children. You can't raise a family working the window at a fast food joint, and there was never a time when you could.

It may seem counterintuitive, but being able to cut your bills down like that is often a privilege. Poverty is a trap and it is hard to move somewhere cheaper when you don’t have enough money to buy a car. You can say “don’t spend your money” all you want but when money is tight you make concessions on things, and it usually leads to higher costs down the road. Cheaper products have to be bought more frequently. Bad cars bought break down sooner. This leads to debt trouble as you borrow from your future to pay for expensive costs now, leading to more fees later. The best money management still can’t predict the unexpected and when you’re barely making it month to month even the slightest setback can have rippling consequences that roll you deeper into debt.

It’s really easy to say “just move and stop spending your money lol” but it really is often more complicated than that.

It does seem counterintuitive. Would you be able to elaborate on that? What mechanism exists that makes it hard for me to live cheaply but someone else to not? I've lived very poor in my life and this argument that for some people there's no way out doesn't compute, at least not if you live in the west. I've never met a person that cannot pull themselves out of those traps that wasn't caused by discretionary spending and bad impulse control, not in the west. Ive met legitimately poor people in third world countries that are actually stuck due to societal systemic problems. But every person I've met in the US that can't seem to make their lives better, there is always some mismatched priority that keeps them that way.

Yours and the other comments below are all saying "yeah, it's fine, you can do it if you don't have kids nor health insurance". Which basically means "it's not fine". A good standard of living is not measured by how a person can live as long as she remains single and decides to forego health insurance.

I addressed that in my comment; I pointed out that raising children has always been financially more difficult than being single, and humans have always had to prepare themselves for starting a family if they wanted any chance at raising the standard of living of their children. Saying "you cannot start a family on minimum wage" is a ridiculous bar to set as justification for forcing market restrictions on entire populations.

Yeah, know what you mean. It's a real hellscape up here in Iceland with all these unions and livable wages. We aspire to become a better and more profitable American style system.

Minimum wage in LA is like $14

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