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Comment by frfl | Hacker News Reader

> The chambers of commerce of all five city boroughs released a survey that found four out of five small businesses fear they’d have to lay off workers should the bill pass.

How are 4/5 (80%) small businesses operating with such low margins in one of the largest and prosperous cities that they would have to lay off people just to give them 10 days pto? Every other country major country has businesses offering more pto (see Europe for eg) and they seem to make it work is less prosperous economies

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In fairness the unemployment rate in Europe is now twice what it is in the US.

I think realistically, though, if you asked any business in any country "Would increasing the cost of employees make you more likely to have trouble paying employees" every business would answer yes in a survey.

3.5% to 5.9%. Neither is high. How much of that 2.4% is jobs with liveable wages?

> 3.5% to 5.9%. Neither is high. How much of that 2.4% is jobs with liveable wages?

While the EU's unemployment rate is 5.9%, the unemployment rate of the countries who use the euro currency is 6.4% https://www.euronews.com/my-europe/2023/08/01/eu-eurozone-un....

So if China had a 2% unemployment rate that would be worse unemployment because of the total people effected? And Greece's 12 percent unemployment is fine because it's only 1.2m people?

Edit: did you change your argument after I replied? I swear you were taking about total numbers before.

> So if China had a 2% unemployment rate that would be worse unemployment because of the total people effected? And Greece's 12 percent unemployment is fine because it's only 1.2m people?

1.412B (China population) x 2% = 28.2m people in China unemployed

1.2m people in Greece unemployed

Yes, % is statistics. The absolute number of people is the real impact.

>1.412B (China population) x 2% = 28.2m people in China unemployed

>1.2m people in Greece unemployed

>Yes, % is statistics. The absolute number of people is the real impact.

If that's the case why isn't America copying Greece's economic policy as Greece is leaving only 1.2m unemployed?

Most likely the entire 2.4% in comparison to the EU.

You shouldn't compare the unemployment rates between countries. There are different criteria for "unemployed", so measures in different countries don't measure the same thing.

Labor participation rates are more comparable. The US rate is worse than the EU rate.

I would expect labor force participation rate to go down as your society gets wealthier. More education and more retirement.

Unfortunately, in the US, the rate has been trending upwards in the retirement age bracket for the last 20 years.

https://www.bls.gov/emp/tables/civilian-labor-force-particip...

It doesn't increase the cost of employees though. It may make them less productive; or it might make them happier and more productive.

Compared to the tech world HN is obsessed with, a majority of businesses have a more direct relationship between labor and productivity.

If you run a store in NYC that needs three workers at all time to operate, there's no getting around the fact that giving every employee time off will result in less productivity per year per employee. If you run a construction or transportation business - you need a certain number of people (maybe even legally) to operate at any time.

For the tech world and other white collar jobs for which it is true that time off may help the headline above isnt as applicable. While probably still behind european counterparts, many of these jobs in the US already have real vacation time and generous remote work options.

This ignores factors such as accident, defect rate and cost of disabilities associated with not taking time off.

As an observation, one difference between US and EU PTO behaviors is that everyone in the EU tends to take their PTO at the same time around July/August. In the US, it is much more spread out even when they have equivalent amounts of PTO. It creates a different business problem in Europe because everyone stops working at the same time, effectively shutting down business, whereas in the US they can operate at the same cadence all year because use of PTO is so diffuse.

Some of this is probably closely connected to the reality that much of the US has nicer weather for much wider periods of time due to its lower average latitude.

> As an observation, one difference between US and EU PTO behaviors is that everyone in the EU tends to take their PTO at the same time around July/August.

That is very much country dependent and can't be stated as a general rule. While this may be the case in France, where some businesses close for the entire August that's certainly not the case in, for example, Switzerland where a business may close 2 weeks in February.

Most businesses don't close at all and within certain limits employees are free to take their vacation whenever it suits them.

> one of the largest and prosperous cities

because that prosperity does not follow a Gaussian distribution. The United States has a uniquely skewed distribution of national income; and Thomas Pikkety’s analysis of that data shows that the skew is growing progressively larger.

It's not unlike how more than 80% of workers would love a raise. It's all posturing until it's actually done.

Realistically though, PTO comes out of salary, just like healthcare. For the businessman, it's a matter of total costs vs labor they get. Whether it's needing to hire someone to cover for 280 days of pto of everyone else, or paying more.

What raises wages and benefits is that the employer has to pay more to have enough people that want the job and are qualified. Total wage expenses go up only when there's no other choice.

> Realistically though, PTO comes out of salary, just like healthcare.

The US seems to be one of very few countries where this is the case. It doesn't seem to be a very good model overall.

To be more precise: In some countries healthcare may be deducted from a salary. But that's usually an universal healthcare model, which is certainly not comparable.

When OP says "PTO comes out of salary," I think they mean that the company has more money to pay a person if the person takes less PTO. For example, if a company needs a janitor role filled, and a janitor gets (for sake of simplicity) 6 months/yr PTO, then the company has to hire two people to fill the janitor role. So, if the company wants to dedicate $100k to the janitor role, each person would get $50k. With 0 PTO, one person could do the role for $100k.

That is simple. They aren't in dire financial straits. They are just lying.

Yep. My own understanding of American politics became so much more clear once I realized that many people are lying about their reasons for supporting/opposing certain issues.

A lot of people take issue when someone points out lying as a likely explanation, because they think that assumes malice, but here's the thing: it's not about malice, it's about self-interest. Some folks will lie to benefit themselves. As you say, it's very simple.

Among other reasons: because we foisted a big chunk of the social safety net onto companies instead of making it an everyone-pays public responsibility.

Social security, healthcare, various insurances... In other countries, everyone pays for those and the government provides them. Here, the cost is foisted disproportionately on employers and their employees (with those between jobs excluded from those services).

> Here, the cost is foisted disproportionately on employers and their employees

There is no such thing as a free lunch. Employers and employees still pay when the money is run thru a government payor instead of a non-government heath plan. There is no magic money that appears by changing who cuts the checks to providers.

This assumes a zero-sum economy, which is not how the healthcare economy works at a national scale.

Hypothetically, competing insurance companies would push prices down. In practice, the market isn't a fair market (even before you get into issues like "People need medicine to live, so a market is a bad tool to parcel out medicine because price the patient is willing to pay is unbounded"), so insurance companies tend to add cost through paperwork, managerial overhead, accounting overhead, and cases becoming more expensive to treat as delays in preventative and early-intervention care cause issues to become chronic and urgent-care issues.

When the payer is the government, the government can say "The price of insulin is 2% above cost of materials" ... and it is. And when the money is flowing from taxes to government to healthcare, instead of employees to employers to insurance to healthcare, a company isn't asking itself "Can we afford to take on more employees right now if it's going to cause our healthcare insurance costs and employment taxes to go up," because the decision of how many people to employ is decoupled from the question of how much in taxes the company will pay.

That’s a rosy hypothetical in which people get lower costs and better service through a change in payors.

That doesn’t change the fact that the costs of healthcare will still be “foisted disproportionately on employers and their employees” because those are the revenue generating population.

Government is already the largest payor in healthcare through Medicare and Medicaid [0] (funded by taxes “disproportionately on employers and their employees”). You’d think that they would already have the market power to do whatever they’d like with prices.

0. https://www.cms.gov/research-statistics-data-and-systems/sta...

The government has quite a bit of power to set cost, but not as much as in other countries because in the United States private health insurance is a huge industry and makes up a huge alternate payer. This includes health insurance coupled directly to hospital networks, which is almost certainly double dealing itself in a way that makes the numbers meaningless.

Is your claim that the rosy picture of low transaction costs and price controls is only achievable when government payouts control 17% more of healthcare spending? The 49% already performed by federal and state govt isn’t enough? From the above link:

The private business share of health spending accounted for 17 percent of total health care spending,

That plus the private spending. So you'll be looking at a number closer to like 90, 95% of the entire market. Because in terms of how many employees companies can afford to hire, it also matters when employees are getting sick all the time because they don't have a basic standard of health care due to either the company not offering insurance or the employee being unwilling to pay the premiums; people who pay their own way for medical costs tend to defer spending on preventative therapy and wind up costing a lot more because they end up in the emergency intervention train.

Wait, the private spending number is stuff people pay out of pocket for, like OTC, deductible, co-ins, and copay, right? Those are the mechanisms intended to balance availability with discretion to not over-consume.

For additional clarity, I probably need to find the data source for what CMS describes on that link.

Mostly, rent costs and regulatory and licensing fees. Inflation sure isn't helping since this article was written in 2019.

The answer is always that Americans fall for the myth of the sole proprietor.

In NYC, the enemy is the landlord.

It's the same everywhere. Right now everyone in the chain is squeezing the level below them for as much as possible.

The coffee shop near where I work is a small business and their landlord increases the rent regardless of market conditions. At some point they either close up, putting 2-3 people out of work, or end up charging $10 per cup of coffee.

Right now there is no market counter force against the rent increases. There are many empty units but the landlords keep the rent high to keep the value of the building high. There is no penalty for keeping the unit empty even if there is demand for the unit at a lower price point.

Oh yeah, at the national level politics has weaponized tax policy to be a transfer payment to real estate interests.

For small time shitty owners, they run off the books and write down “losses” while letting property crumble. In the legit economy, it’s like a variant of the Great Eskimo Tax Scam.

It’s going to get crazier too - hundreds billions of dollars of real estate is underwater in NYC alone, and banks hold 60-70% of the paper.

80% of them fear they would have to lay workers off in a survey. Do we know if they are telling the truth or trying to using the survey results manipulate people?

Capitalism breeds competition, and the simplest way to compete is on price.

I suspect that each of these owners is likely speaking in good faith, and at their current margins they probably would have to lay-off other people. But what I think they are failing to account for is that this will effect their competitors as well, so they may be able to compete across the board after a price increase.

It's probably a naive thought

Businesses don't usually compete on price. They're price setters in general and people are price takers.

In this case, the potential employee would be setting the price of their labor and trying to sell that to the employer. While typically the employer does make the offer, it is akin to going to a market and advertising that I(employer) would like to buy tomatoes(labor) for $.50/lb. The seller of tomatoes is still setting the price if they decide to sell.

> Capitalism breeds competition, and the simplest way to compete is on price.

Only if there is proper regulation, which there is less and less of. Otherwise you end up with price fixing and oligopoly.

Capitalism naturally tends towards monopoly. The idea that it breeds competition is a nice fairy tale, but doesn’t reflect reality.

Why would you say that? It seems that the majority of monopolies ever created have had substantial government intervention.

Assuming you mean a business that is monopoly for say a decade and not a few years.

Part of the problem is that commercial rents in places like NY are untenable unless you're somehow managing to squeeze every last dollar out of your employees and customers.

But with surveys like this, I also have a hard time believing the responses if they're not backed up with hard data. So unless business owners want to open up their books for all to inspect, I take statements like 'fear they'd have to lay off workers' with multiple cups of salt.

I still have little sympathy though -- if your business cannot survive without exploiting people, it shouldn't survive, no matter what the cause of your business needing to exploit people.

Commercial rents aren’t fixed in stone, either.

I think its a bit like interest rates, if you raise the floor rate then some investments become unviable

Yeah, but the vast majority of the jobs we’re talking about are in the non-tradable sector. New York City isn’t exactly the place to locate labour intensive manufacturing industries for goods exported to the rest of the US, or internationally.

Businesses tend to actually survive their first year in the US. The same cannot be said for the EU.

You seem misinformed.

Alongside what everyone else mentioned, I believe a part of it is that the margins are being spent on frivolous; Instead of putting the money back into the business it is hoarded or spent on personal goods and services by those that control the company/business/corporation. There is is inflationary reasons but we don't want to accept this fact or think about it at all. And yes giving employees proper wages and time off is an expense a business should pay and this is where a lot of wealth is being taken out of from the middle class.

Those business owners are also being exploited by larger businesses. They're also accustomed to a certain slice of pie and hate accepting it diminish.

As a self-employed developer, I've had the same discussion with people that hire me and want to change my rate, "My rate is set by the market and I'm not willing to undercut the people behind me. If I were to set my rate, it would be greater and not less. Hire someone that takes less and best of luck to you, I might not be the right fit."

I'm all for growing the pie instead of changing the slices but that's a concern of things many orders of magnitude beyond myself. I thought rising interest rates might be good for the industry but it turns out the industry is pretty clueless and they don't actually seem to know what they're keeping and what they've dropped, accordingly some people that seem like dead weight technologically are basically untouchable to the people that make the budgets and decisions.

Things have been divorced from economic realism for so long, I'm not sure we can even reach the bottom before we run out of breath.

> Those business owners are also being exploited by larger businesses

They aren't being "exploited." If they need so desperately to exploit workers, they can and should just go out of business instead. It's that simple. It's called a market and this is how it works. Business owners love to describe themselves as risk-takers but they whine like babies when they have to pay the price. They are dishonest and generally pathetic people in my experience.

Don’t forget what happens when they do fail. They get bailed out by the government thanks to all the lobbying they do. The 2008 bank bailouts, PPP loans to business owners. The government will bend over backwards for business owners but god forbid it helps regular people. Socialism for the rich, rugged individualism for everyone else. And they’ll still brag about how they’re “self made” and call themselves fiscally conservative.

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