Also, I have an employee Al who lives with his parents, so he doesn't need to pay anything for housing.
Bob is single but has to pay for his own apartment.
Carol is a single mom of 4 who needs to pay for her housing and everything for her kids.
So should I pay Carol the most, Bob the 2nd most, and then Al the least, even though they're all doing the same job?
Because renting a room is cheaper than renting an apartment, because ramen for 2 meals a day will cause medical problems that show up later than hunger, because some medicine is better than no medicine, because there’s an entire gradation of misery between “paid a living wage” and dying tomorrow.
They all get the same wage. The minimum is set to be enough for a chosen living situation, and everyone gets at least that much.
(Though some subsidies to help with kids would be reasonable.)
Because they are afraid of being homeless?
- commuting from a lower cost area >60m away
- using food banks or not paying less critical bills (like utilities you usually have a few months before they start shutting things off)
- begging or selling themselves on the internet
- negotiating with their landlord who is often happy to have less money than an onerous eviction
None of these are positive things - they all have nasty negative externalities. Jobs that give money but not enough at all to live on leave desperate people in a terrible limbo.
Not having public bathrooms, but clean up shit from the streets. Not having preventative health care, but still providing legally mandated ambulance rides and critical care. Letting poor people who get an unexpected expense (say medical or car breaks down) fall into unemployment, homelessness and crime or – costliest of all – the prison industrial complex.
Paying the bill isn’t the problem. People are happy to overspend public funds, so this isn’t related to small government or just general tax aversion. The problem is simply that someone might get something they didn’t deserve. So in a perverted way, it’s a kind of a moralistic obsession with fairness.
I'll accept that inflation is a fact of modern economies, but rent and the cost of housing has gone up faster than inflation, and income has not kept pace with inflation: the US minimum wage has been stuck at $7.25 since 2009, while inflation never stopped. And minimum wage itself as it is today is broken; on the one side, it seems to be more of a suggestion anyway, given that the service industry does not need to conform to it (because the assumption is that wage is stipended by tips).
And the other thing to consider is that if an employer pays you minimum wage, they would pay you less if they were legally allowed to.
“Wouldn’t it be nice” is no way to live a life…FWIW…
A small, individual landlord has no pricing power. They’re competing in a market against all others. You’d have to control a substantial fraction of a local market to be able to raise prices above the going rates and still rent your units.
I think the most likely answer is a combination of several factors.
1) Not enough new housing being built in desirable areas (supply), cause by some combination of drastic increase in cost of labor and materials, and NIMBY regulations.
2) Actual collusion to fix prices. There have been a few recent court cases about collusion mediated by price setting software (RealPage Yield Star).
3) The appearance of “mega landlords” that control a meaningful share of supply in a metro.
At the end of the day, having the option to rent instead of own is one I think we want to have in our society, for reasons of mobility, risk aversion, etc. That necessitates the existence of either public housing, or landlords.
We can argue about the lesser of two evils, but in my mind it’s probably landlords, hopefully with some substantial regulation reform to eliminate opportunities for price fixing.
Unless there is a deficit of housing, then they don't have to compete because you pay their price or you live on the street.
With a housing crisis as in the UK the cost of housing rises to soak up everyone's income after other essentials (food, water, energy). Rents are higher than mortgages because you pay the landlord's mortgage, then pay the costs of leasing (such as the landlord's insurance and their property managers fees) and the landlord's profits. Very few want to rent, but most can't afford a mortgage (because 'I'm paying way more than that in rent' isn't proof you can pay a mortgage, apparently).
Because when there are 15 people wanting to live somewhere and only 10 places, then the lowest the price will go is higher than 5 people are able/willing to pay.
If not, then you need to ration the housing in some other means. What would you prefer? Nepotism? Lottery? Sexual Favours?
Not due to landlords, it's because the amount that people can pay for housing has increased -- higher wages, more multiple-earner households, easier credit, secondary income sources, investment gains. Plus there are more "households" competing for the limited number of available housing units.
I mean this is one of the few spaces that every economist agrees on the biggest factors in causing housing to become unaffordable are rent control and construction bureaucracy (zoning, environmental reviews, etc).
That said, in my country (Netherlands), a lot of service industry jobs (waiting, dishwashing, store restocking, etc) are jobs that people have temporarily or part-time during their studies. But it's a crooked comparison as tipping culture is still very much optional over here and staff gets paid more.
As for your update, in a free capitalist economy, no, you don't need to pay Carol more than the others, you pay her a fair wage according to laws, hours paid, etc; if that is not enough for her to cover the cost of living + raising kids, the government needs to compensate. As an employer you can support her private life by offering flexible hours, of course.
That said, in an idealized, socialist country, people can choose whether they work or stay home raising a family, and nobody has to work to make ends meet. Unfortunately, this is often not compatible with capitalism or government policies / expenditure.
Which means that other people who do go to work support those who sit around and do nothing. As someone who works, I have no desire to support people who don't work because they don't have to.
> people can choose whether they work or stay home raising a family, and nobody _has_ to work to make ends meet.
Parents who leave paid employment to raise children are far from "sit[ing] around and do[ing] nothing". If we value future conditions (even restricting that calculation only to economic productivity, though I'd argue other considerations also matter) then investing resources in raising and educating children is rational, even for those of us who don't have them ourselves.
I'm the breadwinner for someone who stays at home and she's immensely valuable. A fact I'm quite aware of as she just left for a few weeks on a trip and now I'm working and doing what she does. She does all the house chores, picks up medications/runs errands, is trying to get a business of her own off the ground (is making ~500/mo with potential to scale if she's allowed time to actually do it), etc. She also contributes a lot to making sure our household is embedded in our community, which in turn enables us to both more efficiently help others (when we can) and to receive help when we need it without relying more on the government/taxpayers. She does the work required to do things like help our parents when needed (we're siblings), which would otherwise be paid caregiving paid by, you guessed it, the taxpayers! She also makes me a way better worker because I'm the one person on my team who actually can focus on work all day and doesn't have to frequently step out for life things.
And this is without children in the home.
Not to mention students, people with disabilities (some of whom may end up being a greater boon to society if they're allowed to reskill or be pickier about jobs rather than being forced to work themselves to the bone until they can contribute nothing + their medical needs end up being worse than they would have been if they were accommodated in the beginning), etc.
The idea that the only way people can contribute to society is via paid employment is a sign of a lack of creativity.
The idea that socialism or whatever government system would mean that nobody has to do any work is only appealing to downwardly-mobile elite children, which America has a lot of, and who mainly like to live in Brooklyn, start political podcasts and do drugs.
People really actually have to grow food and clean the bathroom - the point of economic systems is to get them to do it, not to get them to not do it.