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Comment by marcus_holmes | Hacker News Reader

Except that repeated experiments have found that raising wages and improving working conditions raises productivity and efficiency. Costs of good sold doesn't go up, so there's no need to raise prices.

People who are able to focus on their work because they can pay their bills, have good working conditions, are healthy and able to care for their families work better. Big surprise.

Of course there's an upper limit to this - if you're paying your apple pickers more than the retail price of the apples then you're going to be in trouble. But in those cases, the price of apples needs to be higher so that apple pickers can have some basic human dignity. Apples should cost more, but we have created an evil system that destroys apple pickers' lives so that the rest of us can have cheap apples. Let's not do that any more.

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I know my accounting degree is getting a little dusty but in what version of the world do you think you can "raise wages" while "costs of good sold" doesn't go up?

If wages become a smaller portion of COGS, then there’s no contradiction. Eg if you buy equipment to make the process more efficient, you can amortize that equipment into COGS and the labor component can remain flat or even decrease even with higher wages for staff.

Or your competitor can invest in equipment just the same and keep wages flat, and beat you on price. So nice sleight-of-hand but that's just an accountancy trick. Prices are still higher than they would otherwise be with stable wages.

Price isn't determined by input costs but by supply and demand..

That's a very naive take on the economic realities. Supply is very often determined by input costs. If it costs more to provide a product or service, supply drops driving up prices, which in turn can lead to a drop in demand. Depending on market elasticity, one common way the market gets out of this negative feedback loop is by compromising on quality in order to hold down prices.

You can see this in the current economy as restaurants and packaged foods suppliers in some sectors reduce the size of portions.

When the supply of goods goes up too, the marginal cost of labour goes down or the percentace of product cost of labour is small.

All of those become more and more true (and are already true for a large class of products) as mechanization and automation increases.

Those things are happening anyway. They might reduce the magnitude of the effect, but prices will still go up as wages go up. Also as automation increases productivity, leading to a wealthier economy, workers move into service sectors which are labour intensive.

You can't just say, well, just reduce the amount fo labour to keep costs down. That labour still needs to be employed doing something.

I think GP is arguing that increasing someone's hourly rate will proportionally increase their work output per hour. (I don't believe this to be true.)

https://s1.q4cdn.com/806093406/files/doc_downloads/2019/05/P...

it is in fact disproportionate, raising wages raising productivity by a greater amount.

Given the evidence, do you now believe this to be true?

The cost of video cards didn't go up despite everyone getting $2000 checks! I mean, you can't actually buy one unless you want to wait in line at a Microcenter for three days, but they are still the same price.

When you only raise it for a minority of a populace. While UBI is "universal" it gets clawed back via taxes for majority of populace. So prices really only raise for the products/services that are dominated by the marginal labor rates of those whose wages are net-increased. AFAIK, that is primarily the lower-end of the restaurant industry and the non-mechanized segments of agriculture (mainly squishy fruit/veg).

In the world of 'repeated experiments' ostensibly. Perhaps some should go wreck that world's economy and leave ours alone.

> Except that repeated experiments have found that raising wages and improving working conditions raises productivity and efficiency.

Source?

>Apples should cost more, but we have created an evil system that destroys apple pickers' lives so that the rest of us can have cheap apples. Let's not do that any more.

What if raising the price of apples lowers demand, causing less jobs to he available? Presumably apple picking is the best job those workers can get, so the likely consequence is that they'll be unemployed and we'll have to substitute 100% of their income (rather than 50% or whatever if they were picking apples). That seems like a poor allocation of labor/resources.

https://s1.q4cdn.com/806093406/files/doc_downloads/2019/05/P...

No large scale experiment exists for UBI.

But the experiments that have been done support it.

There's this set of objections to UBI based around "yes, ok, it works in the small scale, but it'll never work on a large scale".

If we did a large scale experiment, and it confirms that it works, the objections will move to "sure, OK, but it'll never work on a national level".

So let's just implement it and see if it works. If it doesn't work, we can always just go back to letting people starve.

> But the experiments that have been done support it.

They really, really don't. All the experiments on a small scale show is the trivial conclusion that if you give people some central government funds for a year or two, they tend to be slightly less poor at the end. None of them come remotely close to suggesting that people are so much more productive that they can cover the costs of UBI to people already out of the labour force by choice, never mind those that may choose to exit it in future.

> If it doesn't work, we can always just go back to letting people starve.

Elderly people already get a UBI in the form of Social Security, and that's politically impossible to cut regardless of whether it's a good or bad idea.

Once you turn it on and people get used to it, you can never turn it off in a democracy.

> If it doesn't work, we can always just go back to letting people starve.

Only if the country still has the ability to change and the economy isn't permanently damaged.

I think we can always manage to let people starve.

Disingenuous argument which completely ignores the ramifications of severe economic downturn on a global stage.

That's a vacuous statement. No large scale experiments have been done, so it proves nothing for or against UBI.

Small-scale experiments have been quite successful though.

> Small-scale experiments have been quite successful though.

And are absolutely useless to study the very important effects that these kinds of systems have on a nation's economy.

I'm not a fan of UBI. I agree with you that the small scale experiments are worthless.

I've looked to history for examples of actual real world attempts to guarantee some minimum quality of life for all citizens of a particular group. They consistently do well for some self selected and committed initial group and then go badly when the doors get flung open to include everyone.

One result I recall hearing about is instituting policies like "You don't work, you don't eat" in order to prevent freeloaders from utterly killing the whole system and taking everyone down with them.

>”You don’t work, you don’t eat”

Tale as old as time:

> For even when we were with you, we gave you this rule:“The one who is unwilling to work shall not eat.”

https://www.biblegateway.com/passage/?search=2%20Thessalonia...

>>Except that repeated experiments have found that raising wages and improving working conditions raises productivity and efficiency.

>No large scale experiment exists for UBI.

Non sequitur.

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