Hacker News Reader

Comment by giantg2 | Hacker News Reader

The problem is that this has been policy for decades. Their job losses mostly affect the lowest earners. Giving us higher income inequality. They need to figure out policies so that they don't just negatively impact the bottom.

View on HN

The bottom is where most people are. The spending of the 1% isn't really driving inflation of consumer goods and food, it's the spending of the bottom 80% who have extra cash from recently higher wages and stimulous checks. There isn't a job around here that pays less than about $15/hr now, even entry level McDonalds is paying 16 year-olds that. That's a lot more, almost double what they were paying pre-COVID.

yeah, let's take it away from the poor so the rich can buy more stuff at lower prices!

You can't run away from the real economic value of goods, services, and labor. If the working poor are now making more than they used to for doing the same work, prices will inflate until they consume about the same percentage they did before, because the economic value of their labor has not changed.

If you want to help the poor in the long run, you can't just pay them more money for the same work, you have to find ways to make their labor worth more.

that's just sounds like excuse why we should take money from the poor

"we'll have to take away your pay bump and any hopes for better pay, because the market decided you're not actually worth it"

"our billion dollar/year company can't afford to pay more without increasing prices for end-consumers"

You're begging the question with your assumption that the previous price of labor reflected its true value and the new price is excessive. What if it was previously undervalued and the new price is correct?

Then we'd have been in a recession in 2019 and wouldn't have high inflation right now.

That doesn't follow, and you're forgetting the golden rule of value:

A thing's value is the what two people agree to transact for.

A thing's value isn't dome statistical hand wave. It's a statement of fact. A dependent variable with a huge multiplicity of inputs.

If a laborer is not will ing to sell their time, which arguably, a great deal of American laborers probably shouldn't be right now given the rates many employers are offering and exploitive business models in use, Then the value is not defined.

Businesses can essentially name their price because there is a capital management complex that overall colludes to create an emergent that as a happy side effect for the actors within, leads to members being generously enriched.

The glorious absurdity to it all though, is that group is in part primarily empowered by us The enemy here, is us.

What about corporate profit margins? Why can’t they go down too? Powell and the Fed would never suggest reducing corporate margins. Much better to destroy jobs.

Low skill job wage buys you about the same amount of housing regardless of whether you're making $25/h in the Bay or $12/h in Arkansas. It buys you about the same amount of restaurant food, conditioned on buying from a local restaurant instead of a national chain. It buys you the same amount of a mechanic's work.

You can't escape basic economics. The supply of low skill labor is vastly greater than the demand, ergo real wages are low. The supply of housing is vastly smaller than demand, ergo real rents are high.

Yeh but the problem is collectively the low paid don’t earn enough, so they’re bot significant drivers of inflation so suppressing their wages doesn’t make a difference

Raising billions from the rich on the other hand might

"The bottom is where most people are."

I'm not sure what metric you're using, but most of them don't work that way (percentiles, etc generally have an equal number in the top and bottom. I wouldn't call the bottom 80% the bottom - and that's not where the impact is. The outsized impact I'm talking about is in the bottom 25%. Those are the people seeing the brunt of it. Me being in the 80% as a software dev isn't nearly the same.

$15/hr is a problem? Let's be honest, McDonalds isn't scheduling full time. They would make maybe $22k per year at 30 hours a week. Now subtract taxes, gas, car insurance, etc. Look back at real wages and see where that falls.

I'd argue they know pretty well who it impacts and who it does not. It's not ignorance that leads the fed to take actions which affect the lowest earners more than the higher earners.

Reply on news.ycombinator.com