The static (both in the nominal and inflation adjusted sense) for minimum wage doesn't make sense imo. Minimum wage should be tied to some level of living (not necessarily a great living, but something)
This guy smh
This is a very common situation in much of Latin America - both inflation being transmitted through CoL-indexed social goods, and the corruption that comes from trying to bypass that.
Any durable solution needs to address the questions of "How do we ensure that there are enough 1BR apartments within a 1 hour drive for everyone who wants one to get one?", "How do we incentivize the construction of these 1BR apartments?", "How do we maintain the desirability of these apartments once they're built?", and "How do we prevent one firm from owning all of the desirable 1BR apartments and setting whatever price they want?"
Tech needs to create a box. Literally, a hurricane proof box that that plugs into plumbing. Drop it anywhere in the world and fucking live in it. It’s the same box for everyone, like the iPhone, iPhones are not more expensive in Bay Area or NY. All this nonsense over the fact that we all simply need to live in a box somewhere.
And remote work really won’t change rents much for normal people. People want to live where their family and friends are, where some good restaurants are, where some good weekend activities are, where some nice nature is an hour or two away, where a good hospital isn’t too far, and where grocery stores stock good food. Any one of these and landlords decide it’s okay to raise prices 30% a year.
People theoretically have a choice, but every landlord everywhere is doing this. People leave one town with rapidly increasing rents and go to the next, and those landlords do the same while the people in the already expensive town never lower prices. There is no escape or alternative.
Techies just don’t want to live in just boxes.
Bitcoin advocates say good money (Bitcoin) will return the value of all other assets to their utility value because the best passive store of value will be the money itself (which due to a fixed supply would be deflationary).
In that world, people would rather sell assets they don't use to accumulate bitcoin (or money x) because only useful activities will produce more yield than the money itself. This frees up housing, land, precious metals,... and all other resources that are artificially scarce due to hoarding for wealth preservation.
I've heard people estimate, under a Bitcoin standard, the actual utility value of a house would be approximately 5-10% of current prices.
"Pay your fair share" to the "rent seekers" if it is a place to live that you are seeking...
I can't square a landlord running empty properties when the economy colludes to keep people from buying properties.
Homes should not be straight up financial instruments.
The same was true in pre-industrial times too. The cities have always been population sinks, and failed to reproduce naturally. They have always been supplied by the constant stream of people from countryside.
That's still okay, though, as during the process (and even at the end point in your scenario) much better lives and opportunity have been provided to much greater numbers of people.
If people like the QoL benefits of density, we should do what we can to provide it, even if it causes the same sort of CoL squeezing down the road with whatever optimizations we can put in place. It will still benefit more people, and maybe we can come up with yet more optimizations.
Uh, he's not?
> Marx's Capital
Oh, that kind of "economics". Never mind then.
Paraphrasing Henry George: "Malthus model that food grows arithmetically and population grows geometrically is as arbitrary as saying a dog grows arithmetically and his tail grows geometrically"
> Oh, that kind of "economics". Never mind then.
What is that "kind of economics"?
Next you zone for type of housing, where you only allow a certain percentage of the most profitable 1BR apartments to be built, and require those to be above certain size thresholds so that a variety of life situations can actually live in your city.
You don't need to "incentivize" construction, the people that do that already make enormous amounts of money.
The apartment directly under mine is used as an office. Down and to one side is a psychiatrist. Ground floor is a cafe and a pizza takeaway. The apartment opposite me has a grocery store on the ground floor, an office on the second, a dentist on the third, and it looks like the rest of the units are residential. I may be missing something important about the rules here because I can’t read German well enough, but it feels self-balancing.
America… well, this is a tourist perspective, but I didn’t realise how realistic SimCity was before I visited.
Ah yes, the "ban return on investment and ban certain construction" method of promoting construction. Works 100% of the time, every time. See: SF, Seattle, etc.
If you dont change any of this, a new "affordable 1br apartment will probably cost 700K.
There are places in California where you can get a single family home, let alone a 1br apartment, for around $200k. Let’s not kid ourselves and substitute California for when we really mean LA or the Bay Area (places where people want to live, as opposed to susanville, where most people don’t want to live).
Places that don't want to grow have to shed jobs and force them to go elsewhere.
We need fewer people in the market and that means less availability of large loans and taxes on commercial real estate loans. You can't have so many people competing to buy real estate to rent to you and pushing out people who want to buy.
And people need to be comfortable when a region doesn't want to grow, force them to curtail their commercial zoning, and people just need to leave and go somewhere else. There's plenty of space elsewhere.
If more people want to live in your city than you currently have housing for, then it's not simply a matter of "balancing zones" anymore. Your plans no longer match reality, and one of four things can happen:
- Your zoning remains static and housing prices rise according to demand, pricing people out of the market
- You hope businesses leave so that you can convert some of the commercial space to residential
- You decide to allocate existing zones on some criteria other than willing price paid
- You zone for higher density and allow existing homeowners to make money by making room
The first option is gentrification. The do-nothing option. The one that we're trying to avoid because we find it distasteful. If we don't fit more people in the city then it becomes a playground for bored rich people as the market will kick everyone else out.
The second option usually doesn't happen - residential demand drives commercial demand because most businesses want to be close to people. If businesses are leaving, that usually means that people are leaving, too. This also means that balancing zones isn't really a thing you need to actually do. The problem isn't that the space is being used inefficiently; the problem is that there isn't enough space to go around.
The third option is rationing. This takes many forms, and is politically popular with basically everyone. But it doesn't actually solve the problem: there are still more people who want to live in your city than houses to put them in. You're just choosing a different way to allocate those houses, and invariably it tends to be a metric that's easier to corrupt, because suppliers now have an incentive to charge rich people more to bypass the system.
The fourth option will actually fix the problem; and in fact is the only way to fix the problem. But it's also the easiest to politically oppose, because we've set the standard here in America that land is supposed to be divided entirely between large shopping centers and low-density suburbs; and that living in anything else is a symbol of urban poverty. This actually isn't true anymore - the areas worst hit by gentrification are also the ones zoned for high density or mixed use, and this is precisely because of people making it difficult to upzone property.
If we didn't have zoning, or at least had less of it[0], then the market could actually work to incentivize resupply rather than just redevelopment. Then we could talk about social housing or housing subsidies on the demand end, knowing that we have a market that actually responds to supply rather than just pocketing the wealth.
[0] e.g. Tie the planners' hands a bit and just have mixed commercial/residential zones of varying densities, with industrial land use separated out for safety/noise reasons. Japan does this.
People always want to control everything, and when there is a problem they think they can fix it by forcing everyone to do what they want. No one ever wants to consider that it is them that is causing the problem in the first place.
California has one of the lowest rates of unoccupied housing in the country: https://www.lendingtree.com/home/mortgage/vacancy-rates-stud...
Not only is your explanation of the effect a fantasy born of ideology rather than fact, but even the effect you purport to explain is such a fantasy.
I have no problem with this. If investors argue it is a shit deal, that is fine, get out of the market and let someone who wants to live there buy it.
I firmly believe that housing cannot be both an investment market AND affordable for everyone.
The reason rents and sale prices are high is that people love living in those areas.
> socialist like governments
How do you define that? Loaded terms are important to define; otherwise they become, 'whatever I think', which means different things to the writer and reader.
That sentence is absurd, and shows either someone with an ax to grind, or who has never traveled anywhere unfamiliar to what he prefers.
Alternatively you could be like San Francisco and lard on regulations "meant" to help that have the effect of reducing supply, resulting in a large homeless population, since people want to live there.
The state has all the information it needs, and anything it doesn't have it can find out by mandating businesses comply. It then figures out exactly the housing needs in a given location and build that housing. It doesn't need to be fancy and wasteful like the private market tends to build. It's meant to just house people efficiently. It would be a lot cheaper than current options and we can be sure there's enough supply. It could distribute the housing based on needs. Family of 4 gets a bigger apartment than a single person.
What could go wrong?
This is commonly expressed as a consequence of raising the minimum wage, but in the most nuanced discussions of inflation that I've been exposed to, people are mindful of the fact that inflation ripples out into different segments of the economy in different ways.
I think the most plausible outcome is that certain segments of the economy function as shock absorbers, which take the hit of inflation disproportionately as the economy rebalances itself and relieves pressures on segments of the economy that were being squeezed unsustainably hard.
And so there is indeed a ripple effect of raising the minimum wage, namely there's more money to spend, but it radiates out into the economy in disproportionate ways, and can be a net benefit to wage earners because prices on critical necessities may rise, but not in proportion to the rise in wages.
Unfortunately it rarely works the way any progressive would want it to. The "buffers" are firms in competitive markets - basically anyone who can't raise prices because there are dozens of other competitors doing the same thing and one of them is going to undercut you if you try. This includes most unskilled labor, many small businesses, small farmers, etc. It most definitely does not include the S&P 500, who got to be one of the top 500 biggest companies by having high margins, economies of scale, and pricing power. This is why the S&P 500 index is roughly double what it was two years ago, while median real wages have fallen about 5%.
There are other contributing variables exerting their influence at the same time: investing, and lending, and spending, and taxing and policy choices are significant inputs that all happen in parallel with wage increases in particular policy and economic climates that have different outcomes from country to country.
It also seems to fly in the face of reason to suppose that efficient markets don't see market-wide increases in prices. Firms don't just compete against each other but against the existential question of solvency, and if we're really talking about competitive markets, then these pressures are experienced collectively.
So neither the evidence of the stock markets nor the theory about competitive markets never increasing their prices seem to do the work that they would need to do, to suggest that people seeing wage increases are not benefiting from them.
Alternately a large enough ratio of government controlled units within a market could be managed to provide a market weighting to reasonable prices. (you can see that in play in some European cities).
My immediate reaction to this statement was.. it's insane? In my opinion it should read 'a single person able to afford a 1 bedroom apartment within an hour of public transport commute.'
Otherwise it sounds like you don't think anyone should be able to live anywhere reasonable without roommates?
I think your confusing "should be able to" with "shall be able to, enforceable by law".
I don't expect that a 15 year old working his first job as a fry cook at an Arby's should be compensated enough that he can afford to live on his own. In fact, that could be dangerously disincentivizing his hard work toward his education.
He should be able to live; that doesn’t (for me) extend to “rent the average 1BR apartment for less than 35% of his gross pay, by law”.
He's got more money, so he can afford more expensive stuff, increasing demand, which increases prices, and now your fry cook can no longer live on his salary.
Do you want to respond by raising wages again? You're in a never ending loop.
This does not necessarily follow from the previous statement, and may even be completely unrelated.
The only way you keep this person's wage down is increase supply - have lots of people with university degrees. But that's not the real world, in the real world most people are not able to get a degree.
So, forcing an employer to pay him a "living wage" makes no sense. The rationale behind that law is invalid. You can invent new rationale, as you've done here, but it doesn't change the fact that his standard of living doesn't depend on his paycheck.
Other people think that the minimum wage should only apply to adults for some reason. Thats them changing rationales. We don't have a lower minimum wage for couples or higher minimum wage for parents. And that the 15-year-old isn't spending the money right now doesn't mean he won't spend it later.
But sure, If you really want I guess you could argue that we should t let teenagers work at all. After all, they don't need the money.
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I live in a neighborhood where the median income is below the national average by about 10% and above the national average by about the same amount. This implies to me that there are is a fair bit of economic diversity.
Also, I very rarely encounter a service worker that does not live within 25 minutes of the establishments in my neighborhood unless they do so by choice to live in a much hipper neighborhood.
Part of this is a university that stabilizes the real estate prices and attracts a lot of low income students who take on service jobs, but also a big part of it is housing diversity. Within 1 block of me are a commercial district, a high rise building, many mid-rise buildings, lots of townhomes and a handful of single family homes including at least 2 I’d call mansions. This housing diversity came about due to several phases over the course of over 100 years of urban planning that specifically centered on making it possible for lots of housing desires to be fulfilled in a single place.
It’s entirely possible if there is enough will. But that will is lacking.
My brain is not parsing this sentence properly. Could you elaborate a touch?
I'm reading it as "the neighborhood median income is, at the same time, 10% below and 10% above the national average income", which is only possible if both the national average and your neighborhood median is 0. I presume I'm reading it wrong.
The secret is Japan doesn't let cities run their own zoning, because they'd just use it to ban new people but try to keep the jobs.
EDIT: That's what Henry George said. The reason San Francisco land has so much value and the land in an undeveloped part of California has nearly none is the development, meaning the work of developing it, what human hands do to the land to transform it, the construction. You can sprinkle gold on it and nothing, put a bulldozer there (capital) and nothing, send an entrepreneur or economist to look at it and nothing. It's when people work that it becomes worth something.
Here is a radical idea. Build more houses. Maybe put them on top of each other so they don't have to be so far away from jobs. American love complaining about the inefficiencies of centrally planned economies, but then make one of the most important aspects of the economy, where people can live and work, into a entirely centralized way of doing.
No disagreement here.
>American love complaining about the inefficiencies of centrally planned economies, but then make one of the most important aspects of the economy, where people can live and work, into a entirely centralized way of doing.
Are they really centralized? NIMBYs aren't some cabal of shadowy billionaires, they're a grassroots effort by local residents. By that definition it's quite decentralized.
When they don't work, it's because it wouldn't allow the household to buy more stuff on the margin - but rather than "spouse earns so much their income doesn't matter", it's more likely "they wouldn't earn enough to pay for the services they have to hire". Which is a bad thing.
As in a roommate who murders hobos or who is a hobo that murders? If a hobo becomes a roommate, are they too stationary to still be a hobo?
A hobo is a migrant worker in the United States. Hoboes, tramps and bums are generally regarded as related, but distinct: A hobo travels and is willing to work; a tramp travels, but avoids work if possible; and a bum neither travels nor works.
> A character who wanders the gameworld, unattached to any community, indiscriminately killing and looting.
https://en.wiktionary.org/wiki/murderhobo#:~:text=Noun,commu....
Think of how many people a big hospital employs, and how you'd need to organise living center if all of them had to have a reasonable living space within few minutes of commute. Now you need stores and restaurant there as well and the space to host the workers of these places too, etc. The only way is to build huge tower hosting tons of small appartements, kill all green areas to gain as much space as possible. People don't seem to like that idea that much.
Travel-to-work areas are circular-ish, and the available space for housing increases with the square of the distance. Accommodating a large hospital's workforce won't make a sizable dent in that. Compulsory tiny rabbit hutches in the sky it is not.
This is precisely backwards! Dense housing creates green areas, sprawl devours them. This should be obvious if you think for even a moment—-dense housing requires less land per person housed, which leaves more for nature.
I live in a cluster of small towns with a major regional hospital, almost exactly the situation you describe. After decades of sprawl, we’re finally starting to do an OK job of building dense housing right next to the hospital, and it’s saving a huge amount of wild space.
> Because the only way to guarantee that people have less than an hour of commute to their job is to create extremely dense population center
EDIT: in the context of applebees, i suppose there isnt an alternative hmmmm....
Think "people care" (and all the ramifications or that: babies, children, sick, elders + everything around that). All people working in stores (unless we exclusively want online shops). Transportation of goods. Building, sanitation, construction. Any job that requires specialised equipment (like factories), ... .
The whole idea that we can transition to a society where people don't have to move to get to work is an illusion. COVID gave us a false glimpse because most activities were closed or significantly reduced, so it felt like people didn't need to get to work anymore but that's just because they simply did not work. And it was not sustainable on the long run. We made the - right IMHO - choice to subsidise their income, wether directly via stimulas checks, or indirectly by helping their employers, but all that was based on the bet/assumption that we would be able to resume "normal society" and we would be able repay the debt we incurred over the next years.
To shift to a world of "mostly" remote work in reality means the smaller population of higher paid desk workers working from home, and everyone else having to commute to in person jobs.
Worse if companies don't adjust wages to match local rates (per the protests of many tech workers) we end up with deep income disparity between the remote workers and in person ones. Bringing many of the problems of a place like SF to all the other locations.
It feels like something has to give, or the society that results is awfully dystopian.
2) Any income surplus generated by UBI is rapidly consumed by middle people and rent-seekers. That’s how we get inflation.
On #2 I think your claim needs evidence or support, I doubt that would be true for the most part (maybe to some extent).
Typical UBI proposals are funded, e.g., by additional progressive taxes, and so no actual income surplus is generated (in a first-order analysis), income is redistributed, compressing distribution.
At which point the proposal becomes a welfare system that pointlessly disburses and claws-back cash.
(1) Eliminates multiple sets of inefficient benefits/eligibility bureaucracy that duplicates functionality already performed as part of taxing authority.
(2) Eliminates a counterproductive incentives associated with typical means-tested benefit eligibility, which has clawbacks at low income levels and rapid marginal rate (sometimes exceeding 100% with marginal income when tallied across all means-tested programs; this effect creates a barrier to progress beyond a low income level. (While progressive income taxes may be raised from previous levels to fund it, when viewed as clawbacks these changes typically kick in at much higher income levels and lower marginal rates than typical means-tested benefit clawback.)
Your second point acknowledges that taxing away UBI through progressive tax rates is a clawback. As I read it, your idea is that the increased marginal taxation due to the clawback will occur at higher income levels than exist with current programs. Why not just change the existing tax rates instead of sending out cash and taxing it back?
UBI indirectly and unfairly benefits only the people who control those goods and services. If everyone made $1000 more per month, housing prices would raise up to that amount for everyone. This means the majority of the UBI raise would go into just the landlords pockets.
This is why many welfare programs are expense- or need-dependent, because it maximizes the benefit to those who need it without impacting price inflation as much.
Might as well start with:
- Removal/reduction in zoning
- Automate construction approval workflows
- Leverage eminent domain to aggregate land, and sell for profit to the builders.
Its just a win-win-win (given the views / property values would be reduced regardless without extra housing causing SF/LA/Seattle levels of homeless people):
- Homeowners get paid, by the city / local gov, at market rate or slightly above market rate.
- The city / local government has a new profit stream, to be used for more housing / services / reduced taxes. They would aggregate land, re-zone it, get approvals completed, and sell the whole package to the highest bidding developers.
- Developers reduce costs to aggregate land and due to interest payments while waiting for all the land + approvals.
- City gets to better plan the hosing market, i.e. superblocks, transit, etc.
- City dwellers get more access to housing (i.e. cheaper housing), and possibly reduced taxes. Also reduced crime and homelessness because the city is affordable for everyone.
There are ways to achieve all of the above that doesn't require destroying income-elastic priced markets. UBI is not a good solution.
Since they can afford higher prices, people will charge those higher prices. And you are back where you started.
UBI only gives everyone extra money if it is unfunded; typical UBI proposals are funded by either increased progressive income taxes or cutting other spending (which produces income to the recipient), and so is (in first order effects) zero-sum. (Typically, it replaces rapid clawbacks from means testing with slow clawbacks by progressive tax increases.)
In practice it probably depends on a lot of factors and would need empirical studies.
Of course it would. It's happening right now.
It’s a no-brainer!
Don't make UBI subject to garnishment/attachment to pay debt and exclude it from income considered available when determining bankruptcy terms. Lending behavior under those conditions will prevent the use of credit you are concerned with, and bankruptcy itself will resolve problematic cases to the extent that lending behavior does not prevent it.
Most minimum wage earners are not in poverty because they are taking too many vacations and buying too many luxury items: they are in poverty because rents are consuming 40-60% of their income, costs of essentials to live and commute to work are rapidly rising, and a single medical debt can wipe out all of their savings in an instant.
Avocado toast is not destroying the middle class - corporate greed is.
People aren't poor because they are lazy and stupid, as ultra-capitalist pundits would like you to believe to prevent you feeling empathy. America is systemically broken in a way that it is no longer 'the land of opportunity': poverty today is a trap that hardly anyone can escape by simply working hard and spending wisely.
And of course, economists don't find it has the negative effects it used to theoretically have, because throughout the 90s they switched from just making things up to actually doing real-world empirical studies. (That is, it doesn't seem to have them up to "60% of local median income" IIRC.)
I prefer sector-specific minimum wages though. Somewhere in the neighborhood of Denmark or Australia.
what are these "extremely unproductive jobs" you speak of? Is the job of a burger flipper really so bad that we should eliminate it from the economy? Is it so bad, that if someone's skills only allows him to do that job, that it's better for him to stay at home and twiddle his thumbs than to show up to work?
I was thinking of things like servants, typists, textile workers.
I don't think they were eliminated because of minimum wage. They were eliminated because of a combination of outsourcing/globalization, which set an upper bound on how much those jobs can pay (at least in the US), and baumol's cost disease, which set a lower bound on what workers were willing to accept. The two forces combined to make those professions unviable. Getting rid of the minimum wage probably won't bring those jobs back. If anything the jobs will go to more productive sectors (thanks to baumol's cost disease), rather than to the utterly unproductive ones like you mentioned.
Of course everyone gets UBI…
…except the polluters …and CO2 emitters …and meat eaters …and porn watchers …and weed smokers …and tobacco smokers …and alcohol drinkers …and maybe it’s distributed on a curve, depending on race
It could be corrupted so easily. And it’s a single point of failure.
Unfortunately, non-cash welfare has tons of the manipulation you describe. You can get kicked out of public housing for using drugs and food stamps have all kinds of arbitrary limitations on them based on what the state legislature thinks you should be eating.
Uh, no, it's not.
The byzantine structure is because of (and in part to disguise the way that) every component of the system is agenda driven, and often by an agenda rather divergent from the overt purpose of the programs.
UBI is the epitome of a cocktail party idea: https://danluu.com/cocktail-ideas/
...aside from how it's funded.
>along with a ton of other scattered welfare programs that have lots of administrative overhead and the typical middleman industries that leech off of government programs.
That sounds great in theory, if everyone is the type of person that can take care of himself for $15k (or whatever) a year. But what about people with special needs? eg. people with mental health problems or medical conditions requiring expensive therapy? Unless you think we should let those people fend for themselves, you'll still need welfare programs to help those people, which mean all the "administrative overhead and the typical middleman industries that leech off of government programs" that you're so against.
Speaking from experience, such people already have to fend for themselves...so nothing really changes.
Do you really think this is what is causing inflation? Perhaps there are other facts, such as trillions of dollars of almost zero interest money injected since 2008, massive tax cuts for highly profitable companies (eg AAPL) that result in great payouts to people who are already paying low taxes (long term capital gains), complex interacting forces that moved the cost of a barrel of oil from a low of $20 to over $100?
I'm not sure how I see how spending a ton more money (UBI) will help with inflation at this point. 100% debt-to-gdb is already a lot.
Currently private investors are refusing to invest in oil even without environmental factors in the picture - they think it's a temporary spike and are insisting the oil companies pay them back dividends instead.
I'm critical of UBI but using a global pandemic with millions of deaths as an example isn't what UBI is.
Calling it a failed experiment is ridiculous - it was infrequent and an order of magnitude too small.
According to some website, Miami, FL is the most expensive real estate market in the country, and Florida has a fairly low minimum wage currently. So, I'll work with that.
I assume that a 1 hour drive without traffic puts you at most around 55 miles (freeways are faster, city streets are slower, but this is an estimate).
That could put you in places like Belle Glade, Florida, where the 1 bedroom apartment listings are between $400 and $650 per month.
But, it could also put you in the much nicer West Palm Beach, Florida, where (according to Zillow Fair Market Rent for ZIP Code 33401) the average rental for a 1 bedroom apartment is $1274 per month.
Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment.
According to this other random website, the average hourly wage in Miami is $21 per hour. The minimum wage in Florida is currently $8.65 per hour.
In summary, if they took the least generous interpretation of your rule set (the Belle Glade case) they could safely lower the minimum wage. If they took the most generous (the West Palm Beach case) they would need to raise it by about $2.50 per hour.
The average wage across the U.S. is about $27, and 2/3rds of people make "at least" above $15/hour, so it may not affect most people at all, ceteris paribus, and making the assumption that the example region is a useful example.
This is all very hand-wavey and back of the envelop, of course.
Apologies for the approximation nit and acknowledged that it was all back of the envelope, but $11.11/hr struck me as low at face value.
Upping the ante a bit, let's further assume single standard deduction earner with a $1911 net monthly income requirement (because you can't actually pay with money you don't have), which roughly implies 12% marginal tax bracket. Let's also account for fixed 6.2% social security withholding, and fixed 1.45% medicare withholding.
Squaring against this standard 2022 IRS Publication 15-T withholding method[1], we come to the following arithmetic expression to determine gross monthly income requirement:
(grossMonthly - fixed10pc - marginal12pc - ssWithholding - mcWithholding = netMonthly)
x - 85.60 - 0.12(x - 1935) - 0.062x - 0.0145x = 1911
To be sure, this assumes complete omission of common tax-advantaged benefits such as deferred 401(k) retirement savings and medical/dental insurance coverage.
> The minimum wage in Florida is currently $8.65 per hour.
Florida's prevailing minimum wage is in fact $10/hr[2], with scheduled increases at $1 every year towards a $15/hr target by 2026[3].
[1] https://www.irs.gov/pub/irs-pdf/p15t.pdf ref PDF p. 59
[2] https://www.dol.gov/agencies/whd/minimum-wage/state#fl
[3] https://floridajobs.org/docs/default-source/business-growth-...
EDIT: Whoops, accidentally used table values for two-or-more jobs scaling; corrected.
You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? Probably the owner lost their keys or something and then lawyers can argue for years if the owner is actually required to hand over the keys. Or maybe the apartment has no way to enter and lawyers can now argue for years if an apartment needs to have a door?
At least that's what I can imagine would happen.
I mean, presumably in this hypothetical situation we wouldn't want to simultaneously dissolve basic renter's rights.
The usual formula for any engagement with hypothetical ideas is for it to be reflexively dismissed with a "that'll never work" response. Most of the time I think this is the instinctive friction we feel at being asked to engage with a new idea, and saying that'll never work for [insert reason] is intended not to express a counter-argument so much as it is to reject the invitation to participate in the exercise.
But even in the genre of "that'll never work" responses, this one is uniquely strange. Normally the "that'll never work" response suggests that there's some obstacle that arises as a consequence of the change to the status quo. But here, it's just a list obstacles that aren't connected to any underlying principle. It doesn't even feel like the usual "that'll never work" response.
And you are back where you started. Or you have to raise prices again, in a never ending loop.
I suppose you can hand out ration cards for food and housing, so those never have a price, just a government supply. That's the only "out" I can think of to keep the loop from happening.
Different segments of the economy can function as shock absorbers that bear the brunt of inflation, while other segments of the economy see their prices rise more slowly then the increase of wages.
Different sectors of the economy face different degrees of surplus and strain, and the relations between those structures are always up for renegotiation as new money enters the system.
I'm only slightly kidding. The Indiana legislature was "too busy" to consider a renter's rights bill this year. They were busy trying to "solve the problem" of transgender kids playing on sports teams in schools. That's obviously way more important than lower income people having affordable, safe places to live.
> [imagined nonsense rules-layering]
That won't happen for two reasons:
1. It requires a massive conspiracy.
2. Any law like the GP describes would most likely be written to block off the exploits that it took you five minutes to think of. Exploits that are missed can be addressed in subsequent laws.
Practically, a minimum wage defined like the GP's would require a detailed census of actually-paid one bedroom apartment rents, which would be immune to your exploits.
GSA does the same thing for travel expenses. You can determine lodging and per diem expenses for every county in the US.
It blows my mind that people continue to act like rising costs are the fault of their employers, who have no control of it at all.
No doubt, this exec in particular was a moron who deserves to be fired for even suggesting what he did but the overall sentiment just doesn’t jive for so many businesses that are getting squeezed harder and harder everyday.
It sounds so simple to just raise prices, but if it were that simple it would have happened long before. Especially on the lower end of the consumer goods and services market the price sensitivity of people is sky high. In grocery stores companies chose to shrink their products and hope people didn’t notice rather than increases prices for that exact reason.
It gets passed along somewhere and in the end the more people who decide to “just raise prices” the worse the problem gets.
Interesting thought though
I live about 45 minutes from downtown LA without traffic. Which turns into 2.5 hours with traffic.
I'd be here for using the same standards as rental agencies do though so it's actually possible to get a place: 3x the rent of 1 bedroom for one full time job. And make it within 30 minutes during peak hour (by whichever means is fastest). Also if they cite a train as their fastest, then no car or license requirements on the job and no penalizing anyone if the train is late.
If they want to be feudal lords, they can at least have the bare minimum responsibilities that actual feudal lords had.
This could be defined by local governments with additional standards not written in to this internet comment.
But when someone says
> I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.
Then "nothing stops local government from doing it" seems to me to lack the aspect of wonder the parent had intended to evoke.
A lot of stuff would be automated or simply not exist. I don't see how high minimum wage can "work" to solve social issues if companies can choose between not hiring people and paying a high minimum wage.
Slightly smaller yachts for the executives.
Yeah, it will result in lower real income for executives ...along with anyone that make more than 3x the poverty threshold, per CBO's report:
https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
>Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient,[3][4] economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. There is a consensus among economists that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."[5]
So I'm inclined to give them the benefit of the doubt, that they didn't make obvious mistakes in their analysis that a hacker news commenter could have pointed out. Feel free to read the report in depth and disprove that, though.
Bullshit...the unqualified assertion doesn't even pass a ballpark sniff test using Department of Labor's historical federal minimum wage rates[1] and Bureau of Labor Statistics' CPI inflation calculator[2] against Feb 2022 buying power.
| Eff Date | Rate | Today |
|----------|------|-------|
| Jan 1970 | 1.60 | 12.01 |
| May 1974 | 2.00 | 11.68 |
| Jan 1975 | 2.10 | 11.44 |
| Jan 1976 | 2.30 | 11.74 |
| Jan 1978 | 2.65 | 12.03 |
| Jan 1979 | 2.90 | 12.05 |
Even at a 100 year range it comes out to: ($1.00 = $16.89) https://www.in2013dollars.com/us/inflation/1922?amount=1
BUT, these numbers may not yet be taking into full account some of the most recent upticks in inflation. SO, there may be some room for error yet. But $24... sorry pal, but nope. Not quite there yet.
And for the Canadians out there: It's pretty much the same deal. I think last I checked, it was at $15.65 for 1$ @ 100 years range.
(It's usually written $15 an hour, but IMO you should count casual loading to compare to the US.)
That being said, I 100% agree with minimum wage being 3x the median cost of a 1-bedroom apartment for 1 person working 20 hours a week. Why 20 hours a week? Companies LOVE to only give folks part time hours. Of course, in my area that equates to $42/hour, however, note that even at 40 hours a week you are looking at $21/hour. Also, why 3x? When you apply for a mortgage OR sign a lease you typically need to earn 3x the housing cost in order to qualify. Mortgage companies and landlords alike typically want to see housing take less than 33% of your pretax income.
Minimum wage goes up -> everything costs more -> minimum wage needs to go up some more.
So labor expense grows and grows, while expense for "stuff" becomes a smaller and smaller part of that.
So how do you make that stuff? You can't hire anyone - too expensive. So either automation, or buy things from other countries. This means firing people.
Your proposal will lead to mass unemployment.
But it gets worse, since you've tied your numbers to the cost of housing, and cities have the most expensive housing, people won't be able to live in the city (no jobs available that pay enough).
So mass migration to places with lower housing, until the cost of housing in a city goes down. What's you've done is incentivized everyone to kind of spread out in a diffuse way to keep down the cost of housing.
But where are the jobs in these places? There are no service jobs, since services are too expensive for anyone to buy. You'd have to drive more than an hour to find a job.
People will respond by demanding rent control, but that also means less housing is available.
So not only did you cause mass unemployment, you also caused mass homelessness.
https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007
https://take-profit.org/en/statistics/wages/chile/
Half the median wage is obviously the simplest answer, but some studies have suggested other numbers.
Now you're probably wondering: what does the median wage have to do with a "level of living"? It's simply the presently existing normal "level of living"! The median wage reflects various aspects of the local economy, and is responsive to things like housing prices.
More labor being "outsourced" to cheap counties, for one. Rather than a restaurant making meals on site, they'll do most of the prep work 50 miles away where the CoL (and minimum wage) is cheap and truck it in.
It would implode or we would adjust our standards in every other area to make it happen. We are simply not rich enough to afford that for everyone the way things are currently structured.
How about people figure out how much money they need to afford the lifestyle they want and then get a job that pays that much?
What if your lifestyle consists of:
1. pay off student loans in 10 years
2. be able to take transit to work (can't afford a car)
3. save at least 5% of take home pay to get a used car
4. eat ramen and salad
5. maybe see a movie once a month, or go to a bar twice a month
6. internet & cell phone
7. try not to starve or get evicted
8. avoid more than 2 roommates
9. have Obamacare catastrophe-ony health insurance (bare minimum)
And the only job you can get doesn't even pay for that?
That's pretty much the lifestyle of every 30 something I know who is struggling. That's also why this and student loan debt is being called a crisis, because it is. It's not like people honestly want a lifestyle that involves a McClaren and weekly trips to Bali.
Then the solution is to make yourself capable of getting other jobs.
You think everybody with a job paying more than minimum wage is doing something they love?
College as a "necessary tool" to get work is seriously broken. I've considered hanging up my "programming" hat and becoming a fabricator (welder, machinist, etc). Not because of the money, but because I know 1) I could make a decent wage and 2) I would enjoy the work more.
The work is already done.
But I do think the idea has merit.
And if it's too much of a hassle for the employer, just pay your employees substantially above the minimum.
Some of them, certainly
> it's important they remain that way for freedom
How exactly does deciding on your own desired housing budget force anyone to remain poor?
All markets change because people buying something and people selling something have changing ideas of what it is worth when they trade. Business owners are subject to fluctuating prices for everything they buy and sell as well, labor, energy, materials, product... and real-estate of course.
The complaint I assume is about transactions affecting someone who is not party to it. I'm not sure how valid that is -- a region based minimum wage effectively already exists due to different costs of living so presumably it could be made to follow some region based formula like the one proposed that is updated every few years...
I don't know enough to know whether it would be workable or not, but your force employees argument is not a justification for it.
I think the federal structure of the USA lends itself nicely to that problem.
There would be an issue in extremely heterogeneous states like Washington or California, where the big cities on the coast are known for being expensive while the interior is often cheaper, less desirable and subject to snobbery, as in the case of Bakersfield which I have never heard anything good about.
In other words: why should landlords be allowed to capture the majority of value created by society? There are plenty of examples of successful affordable housing -- case in point, Vienna:
https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...
Hard to feel super supportive of massive changes to min-wage for places that literally make affordable housing impossible.
Growing population + massive regulation + NIMBY = you're gonna have a bad time.
Increasing minimum wage without fixing other issues is a ticket to non-solutions.
Wage adjustment like that will drive some of the market effects that are suppressed by the inertia that unchanging property taxes creates. Grandma would move out of her 4 bedroom home that costs $300/yr in taxes if she had to pay the gardener $40/hr.
Those cost increase tax would reduce property cost. In states where property tax adjusts you can see that dynamic.
NYC metro area is cheap compared to California, and the depressed upstate cities feature high taxes and incredibly cheap property.
So gentrification? Get rid of the "undesirables" instead of building more housing...
The problem isn't "grandma" (Or, I think that problem is vastly smaller than lack of new building/investment due to hostile regulations). The problem is anti-grow regulations that block what can be built (IE: must match look/feel, can't build high rises, etc)... and anti-grow regulations that demand massive investment in what can be built (IE: requiring water sprinklers in new homes, solar, etc) making new options grossly over-priced.
Cars aren't more expensive just because of inflation... they are more and more expensive due to regulations upon regulations such as air bags, abs, etc. Some of which is good... but a lot of which is debatable or outright wasteful. Same for housing.
Making grandma move out won't create the massive amount of new housing required for some areas. Those areas need new, affordable housing to be invested in - not getting rid of "undesirables" to raise taxes.
"feature high taxes and cheap property"
It's not cheap if you're taxed to death to stay there. Artificially low prices due to artificially high taxes aren't a solution any more than over regulation is.
And the idea of higher wages won't solve the issue that'll end up being inflation adjusted higher prices to pay higher taxes to pay for higher prices to pay for higher taxes to...
You can play as many games as you like, but if people aren’t able to generate enough value to justify their pay, Stein’s Law will bring things to an abrupt halt.
Even in Manhattan two working adults could easily afford a 1BR apartment on a combined income of $30/hr. If you extend that out to one hour in any given direction it drops to as low as $24/hr.
Some variation of your suggesting is better than what we currently have for minimum wage. However, getting that through congress seems impossible, IMO.
Make it one bedroom per adult (so 1 bed apt for one, or 2 bed for 2, whichever is more) with a 30 minute commute in peak hour (by any means), as well as enough left over for a deposit on a similar home in 5 years for 20% lvr assuming current property value growth continues.
It would look like both minimum wage, and rent/real estate prices going directly to infinity.
using your standard, against the current average 1 bedroom apt rent in my area, factoring housing as 1/3 of the budget. I come at $11.00-11.75 as minimum wage for my area...
There’s already a standard for this with things like Section 8 vouchers. It’s hilarious how many HN commenters think these are intractable, impossible problems.
The federal government already tallies prevailing rent for every US city/county.
If the policy goal was to set minimum wage to a 40% of full time gross income, and the prevailing rent for basic housing is $1000/mo, 1000/40%=$2500, or $15/hr. You can rent an apartment for $450 in the small town I grew up in. Same calculation would be $6.75/hr.
Most employers use a similar methodology to set travel expense thresholds, etc.
A system like this could be subsidized by tax credits on the payroll side.
We already have something like that - the earned income tax credit. It just needs to be expanded. Every administration before Trump - both Republican and Democratic supported expanding it.
It does take into account the difference between my 18 year old son living at home and a single mother.
The government should collect taxes and implement social policy - not private business.
See also - health care.
In general the US government is very bad at handing out benefits to its population. The closest thing that it can do with consistency is task the IRS with debits and credits on a yearly basis, a task that hasn't changed in decades. Until the US gov't can get better at this kind of work, any benefit scheme is bound to fail.
2. Make it illegal to reduce hours in an attempt to reduce pay due to higher wages; with out some legitimate reason that pertains to the employee's conduct and not external forces. If the employer has to increase prices to make this work, then fine. Do it. But make sure to not skimp on the cheese, etc. Customers who get annoyed over price raises will ruin you if you are just an ass. And at that point, rightfully so. Fines for something like this should be something like forcing them to pay all their employee's extra $$ per hour every time they do it. This way the money goes to those who need it, and not those who don't; cause lets be real here, lawmakers and governments don't need every penalty paid put into their pocket. Theirs is a crime against the people who work for them, so therefore they should get that cash.
3. Enforce not exactly a minimum wage, but something that might be referred to instead as a 'balanced' wage. Not a living wage, cause that's basically what we are already talking about. No, instead we should just accept that not every job is worth X$/hour. But a person still needs to get the money they need to get by. So what to do? You base it off that persons budget and potential future expenses vs the job they will be doing. If the employer and employee cannot come to terms on what is appropriate, then the employee probably needs to find a different job worth that much instead. Personally, I have no issue with this idea not because it is my own; but because I wish we took this kind of approach more often, instead of 'trying people out' just to fire them. This would reduce that, while being more beneficial to things like income equity, instead of equality, because again... not everything is the exact same. Not all jobs are worth X$/hr.
Basically the premise of 3 is ultimately to enforce fair pay, instead of minimum pay. Minimum makes it into a benchmark. If you meet that benchmark, you are considered an okay employer, even if you're a p.o.s. We need to do away with that, without ruining people's lives at the same time. I think this is the best step forward for that, while being reasonable to all sides needs and demands. Also, things like wage ceilings and gaps and etc would essentially disappear as a notion, since at that point it's up to every single person on a equal front to determine their ideal pay for each job. It's not longer just up to the employer, but also the employee. Some may say it's already like this, but it really isn't. Not like I am explaining. Then again, it also may be a factor of what kind of work a person is in. Like many, I'm currently service industry. Even as I fix computers on the side.
4. All employees should essentially be treated like contractors in terms of taxes. It may be convenient to never have to think about it, but having automatic income taxes and other payroll taxations occur just embolden governments to spend that money however they like. Instead, we should be creating a system that better understands just how much a person uses or contributes in regards to society, and tax them according to both that and their current income based annually; but with each month in a separate table as well for better context.
I think if done right, most people would prefer this system, since it would only ever be taking what you should actually be having to pay for in the first place. That said, rebates will probably not ever be a thing anymore, since they don't have the automatic tax base to fund it all with.
Tit for tat, right?
Either or, these 4 things I think would mostly solve our pay problems. Or at least help us get onto a better path again.
I was impressed with the Trump cheques though. Did not think the US would just helicopter drop money into the economy like that.
One guy I work with has 8 children. Another is married to a partner in a law firm and lives in a home likely worth >$5M. I don’t pay them any different.
If there was no exception to hiring people who are financial dependents you wouldn't be able to hire on such a person for a small rate. You'd either have to overpay, discouraging you from hiring them, or not hire them because you couldn't justify the expense.
Perhaps such labor is uncommon in your profession, but there are many professions where it is common. The kid at the mechanic's who answers phones and gets things for people may not actually be all that valuable compared to a wage high enough for two people to live off of. The job may be really valuable to the kid though giving experience and a bit of money.