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Comment by not2b | Hacker News Reader

It's humans behaving exactly as expected when given the choice of barely enough money for survival (unemployment benefit) vs not enough money for survival (pay too low to afford daycare or rent). If anyone out there is having trouble getting gig workers or low-level employees and wants to blame very low unemployment benefits and a one-time stimulus check, I suggest offering more money instead.

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"I suggest offering more money instead" To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll. There's often little or even no profit to be made at the rate offered - should the business increase their offer to the point where a loss is guaranteed?

> To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll. There's often little or even no profit to be made at the rate offered - should the business increase their offer to the point where a loss is guaranteed?

Maybe they shouldn’t be in business.

Imho, these are effectively zombie businesses, and it would probably be better for the overall market efficiency (esp. wrt labor and asset allocation) if they closed.

I suspected that would be the response. If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do? Where do they get the opportunity to upskill?

> If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do?

They get deployed in other commercial activities that can make more efficient use of their time, and hence, pay them more.

Very good in theory. Any suggestions on how to get from here to there in the real world, without massive disruption to people's real lives? The consequences of massively & rapidly increasing the number of unemployed doesn't seem to be covered in the libertarian literature. History books do cover this though.

This is a strange argument. Are you saying that we should never raise minimum wage? It isn't even keeping up with inflation.

As for the history books, I recall we've raised the minimum wage in the past. The US still exists, so i guess the history books say its ok?

It's not strange at all, you just didn't understand the point. Libertarian theory has all kinds of bizarre reasoning about human nature, which doesn't translate into the real world. History, on the other hand, does provide a guide to how large numbers of actual people have behaved in the past, when cast on to the scrap heap of life. Human nature doesn't change rapidly. I'm not taking your bait (never raise minimum wage), but it's important to be aware that, at the margin, increasing the cost of any business input will result in business attempting to substitute that input to the extent possible - i.e. fewer jobs.

They don't, so there will be much more unrest.

Keeping zombie businesses alive for the sake of steady employment is one of the reasons that Japan has been stagnant for many years. A healthy economy needs creative destruction.

As someone who has seen this firsthand while living in Japan, I agree with your statement.

What is more, one of the things that I love about the US is that we seem to be fairly good at deconstructing and reconstructing relatively quickly and efficiently. Our system isn’t perfect (tends to favor the capital class and stick it to labor more than I would prefer), but I personally think it’s much better than what Japan has done.

But if you don't close those businesses, you get people who are one financial emergency away from bankruptcy. You get people who have no chance of bettering their lives. I do not have a solution, but that does not mean that I cannot call out what I see as the problem.

I agree with you in theory. Theory often fails to survive the first contact with the enemy (reality) though.

Reality is not the enemy here, hard life is and I'd like to think that we're all in this together & we'll help each other out. :-) I'm hoping we're becoming an advanced enough society that we'll be able to at least provide food, shelter and basic health insurance for everyone free of charge. But enough dreaming for today...

At that point the business should either pivot to a new strategy, or liquidate in an orderly fashion and return any remaining capital to investors. If your business is on an unsustainable path then there's no point in continuing.

If the only way for the business to be profitable is to pay less than a living wage, then that business is in fact _not_ profitable. I'd rather subsidize people that are between jobs rather than business owners (because I'd still have to subsidize food stamps for their employees). If the company cannot make money without exploiting workers, maybe it shouldn't exist? And then I'll happily pay the (now ex-) owner's unemployment benefit until they land a job.

Yes, if your company pays so little that your employees need state aid to eat and pay rent, they aren't on welfare, you (the employer) are.

Eh we agree on the solution, but only if the problem isn't manufactured via welfare as it currently is.

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