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Comment by Animats | Hacker News Reader

"I bemoaned that humanity seems to be serving technology rather than the other way around. I argued that tech corporations have become too powerful and their power must be curtailed."

That's a generic problem with corporatism and monopoly, not "tech".

It shows up in "tech" because "tech" scales so well and has such strong network effects. But the US's tolerance of monopoly is the real cause. There need to be about four major players before markets push prices down. The US has three big banks, two big drugstore chains, etc.

Tough antitrust enforcement would help. Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.

Tough labor law enforcement would help. No more "gig worker" jobs that are exempt from labor law. No more "wage shaving". No more unpaid overtime. Prorate medical insurance payments based on hours, so companies that won't pay people for more than 30 hours a week pay their fraction of medical insurance. A minimum wage high enough that people making it don't need food stamps.

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> Prorate medical insurance payments based on hours, so companies that won't pay people for more than 30 hours a week pay their fraction of medical insurance

Attaching medical insurance to one's job is a market distortion caused by government tax policy. I.e. it enables one to buy insurance with pre-tax dollars rather than after-tax dollars. Making medical insurance premiums fully tax-deductible would fix that.

> A minimum wage high enough that people making it don't need food stamps.

That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.

> Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.

Google is already in trouble because AI is disrupting their search/advertisement business model.

I'd be careful about destroying big business. The US is only part of the world. Destroying US big business means other countries will have those companies, and it's lose lose for the US. Do you want Big Tech to be American companies, or foreign companies?

> That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.

Good, a job that cannot support biological needs should not exist. It’s not a viable business.

Why should I pay a stealth subsidy to whatever business it is.

> Do you want Big Tech to be American companies, or foreign companies?

This excuse was used to start wars, trample civil rights and employment rights. It basically means we must become like China to beat China. What would be the point?

> Good, a job that cannot support biological needs should not exist.

There was a time in the not so distant past, that close to 100% of those "Minimum Wage" jobs were held by teenagers and youths with close to zero market value as employees, who needed their first few jobs to develop the skills, knowledge, resume and references so they could get an actual job.

Places like McDonalds and Summer Resorts and Amusement parks - were great places for youth to learn these skills. The real distortion is when you started having adults working in McDonalds. It was never a job to support a family - it was a minimum-wage job for kids to get started.

This is just historically inaccurate (and a regrettably common claim among older conservative-ish folk.

Those "minimum wage" jobs that you had a teenager in the 1950-1986 time period? They paid more than minimum wage does now, on an inflation adjusted basis. That $2/hr job in 1962 would be paying $21/hr if it had kept up with CPI.

That's the whole reason why adults started working in them.

Over time, federal minimum wage did not keep up even with national inflation rates, let alone regional cost of living changes. The result is that these employers, who were once forced to pay even their lowest level employees a living wage, can avoid paying even that.

all the sources I see say minimum wage should be around 12 USD where did you source the 21USD number?

$21 is an MIT-provided living wage number for many parts of the country (including Santa Fe, where I live (or close by)). There are places where that's still not enough: I think $35/hr just about covers anywhere in the US at this point.

It's also the CPI-adjusted equivalent of 1960s minimum wage numbers.

1963 @ $1.25 or 1957 @ $1.00

giving me $1.25 * (304.702/30.6) = $12.44 or $1 * (304.702/28.1) = $10.84

my sources: https://www.dir.ca.gov/iwc/minimumwagehistory.htm https://www.usinflationcalculator.com/inflation/consumer-pri...

https://www.bls.gov/data/inflation_calculator.htm

January 1962 $2 => Nov 2024 $21.03

Using $1.25 in Jan 1963 gives me $12.97 ...

I used $2 in 1962 because in the 2016 Republican primaries one of the candidates made a reference to their job working in a burger store using these numbers.

I just Googled for "1962 mcdonalds hourly wage". It was much less than $2. Minimum wage was 1.15, and a Federal Reserve study called "Employee Earnings in Retail Food Stores, June 1962" says about 1.70. Also, cumulative inflation from 1962 to today is about 10.5x.

There is no single measure of inflation. There are multiple different ones, each with their own pros and cons and suitability for purpose. CPI is a common one, and that would put $1.15 in Jan 1962 at $12.09 in Nov 2024.

I apologize - the point I was trying to make and failed, was that there were no (able bodied) grown adults working those jobs like Mcdonalds 30 years ago. These are entry-level jobs that require no prior experience and no job skills, and as such were ideal for people just entering the job market. The exchange was that teenagers would work these jobs, and that, for a modest sum, they would primarily get work experience and some pocket money.

What's gone awry in the last 40 or so years is that the labor market hasn't created enough new employment in what I could call "career" or "occupation" work - for adults, and as a result, they've started working in jobs that were never really meant for them, certainly not for doing things like paying rent, utilities, etc... and as a result - the working poor as a class has grown.

And $21/hour is not near enough to survive on in my region - (and is also a bit less than what most people in my area make at McDonalds (bay area)) - So you are in a round-about way proving my point.

Let me be as clear as I can be - "Increasing the minimum wage to be a living salary of $40-$50/hour would eliminate many opportunities for people entering the workforce who can't justify that kind of investment currently".

Leave it at the market-clearing level of $20-$25/hour, and ideally return to having teenagers/young adults working those jobs while grown-adults move onto other opportunities that our economy should be creating.

Jobs that that cannot support biological needs should exist as they are great for developing job-skills and experience in youth.

MIT claims that about $35/hr would be a living wage in almost every part of the USA. So that's our "high" point for thinking about this. Currently, it gives $23.06 as the figure for my nearest city (Santa Fe), $28.08 for NYC and $20.16 for Manhattan, KS. I've seen people disagree with these numbers.

https://livingwage.mit.edu/

Do I think there should be jobs that would only be done in the context of parentally- or other-provided housing, food and clothing? I'm not sure. I lean towards the answer being no, but could be convinced otherwise.

I still don't agree with your 40 year take on this. When "fully grown adults" started flipping burgers, it was because you could live on the income that provided. Now you cannot (and ditto for lots of other minimum wage jobs). It was not the case that these jobs were "teenager only" and people took them even though they were impossible to live on, 60 years ago. They took them (slowly, over a period of time) and they gradually changed from teenager only work into "real jobs", and over a slightly longer period of time no longer acted as viable living wage work.

That said ... sure, the income levels for the lower 4 deciles of the population haven't kept up with things (until very, very recently at least), and this means in part that new jobs at appropriate (lower, but still livable) wages have not been created at sufficiently high rates.

> "Increasing the minimum wage to be a living salary of $40-$50/hour would eliminate many opportunities for people entering the workforce who can't justify that kind of investment currently".

Firstly, as I indicated above, I don't think it has to be that high. Secondly, I think that if there are "opportunities" that cannot afford to pay a living wage, I'm not sure anyone is foregoing much by them not existing. To be clear, what is meant here by a living wage is something that a full time job pays roughly 3x the local rental rate for an appropriately sized studio (perhaps 1BR) apartment in reasonable quality.

> Leave it at the market-clearing level of $20-$25/hour

"Currently, 34 states, territories and districts have minimum wages above the federal minimum wage of $7.25 per hour. Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour."

There is not a single state that has the "market-clearing level" you mention, so "leaving it" there seems impossible. Tukwila, WA is the only city in the country with a minimum wage above $20.

> for an appropriately sized studio (perhaps 1BR) apartment

I had a roommate when I started out and could not afford an apartment. At the time one could also rent someone's spare bedroom. Government zoning also got rid of boarding houses.

> haven't kept up with things

The increasing share of the economy that the government vacuums up comes from somewhere.

I am specifically arguing that full time minimum wage jobs should allow you to live independently in what would currently be considered "normal". Sure, the definition of "normal" can change over time, just as the ownership and use of portable mobile computing devices or gigantic flat panel displays or cars have changed.

I also started out with a roommate when I had my first computing job, which was with a massive multinational. I could not have afforded my own apartment in Cambridge (UK), though that was caused by post-grad student debt than the salary level. I went on to rent a house with someone else until I emigrated to the US.

The fact that there are actually multiple pathways through life doesn't mean that we can't, as a society, draw up our own guidelines for what working for 40hrs a week ought to make possible, even if some people choose to (a) not work 40hrs a week (b) live differently.

Total government revenue as a percentage of GDP has been remarkably flat since the end of WWII (actually distressing to my preferred narrative in which it has declined and should not have).

> the point I was trying to make and failed, was that there were no (able bodied) grown adults working those jobs like Mcdonalds 30 years ago.

I think you made that point. The other posters point was that this point is patently untrue. And it's very obviously untrue just by thinking about it for a few minutes. Peak hours for fast food restaurants (and most restaurants) are lunch hours where most teenagers would be in school.

They also tended to be open late night. The hours that teenagers can work are and have been heavily regulated for a very long time. No highschooler is working the 11pm - 4am shift at wendy's.

They were very obviously mostly employing adults.

And if you want a little anecdotal evidence, my father supported my family for a number of years working in fast food in the early to mid 80s during the oil crash

if you want further anecdotal stories, when in high school I worked retail. There were other highschoolers that worked there, but the vast majority of my coworkers were in their 30s.

When in college I worked graveyards at a certain 24 hour breakfast establishment. I was by far the youngest. Everyone else on that shift was in their 40s and had kids and families they were supporting.

We also literally have tropes about the old lady who's been working at the diner for 1000 years... "what do ya want hon?"

That trope didn't just come out of no where.

Exactly. My boyfriend’s mom is that waitress trope. She sure was happy when he got an EE degree though. Hard work to do forever.

>and a regrettably common claim among older conservative-ish folk.

This is an excellent way to tell everyone you’re comment is just political garbage and can readily be dismissed. It completely drowns any possible signal out with a huge red flag.

You mean that the fact that this mistruth/lie/distortion is predominantly told by people with a particular view of the world should simply be ignored?

It’s irrelevant to your point, so yes.

You’re either making a statement about conservatives or you’re talking about actual ideas. You can’t have a meaningful conversation about ideas if you’re doing tribalism.

and yet the history of ideas is shaped by and often labelled according to "tribalism".

i am talking about an actual idea. an actual idea that happens to fit much more nicely into one political worldview than another. an idea that is repeated much more often by people who hold that worldview than by people who do not. an idea that is more or less demonstrably false.

so i am talking about both the (false) idea and the fact the it is an idea that continues to be talked about (despite its falsehood) by a particular group of people. that can be a meaningful conversation even if you don't like it.

"The introduction makes me feel insulted or uncomfortable, therefore your conclusion must be false."

Nope, the introduction is unfounded flame bait. So I assume someone using that is not engaging with any intent to have a meaningful discourse.

It has nothing to do with feeling uncomfortable, it’s a statement about held beliefs being associated with a particular group and there is no evidence to back it up.

It doesn’t matter who he thinks holds that view. Discuss the idea and refute it directly or shut up. Drop the appeals to tribalism

The idea has been refuted by others over a period of several decades.

At this point, it is more interesting that one political worldview still seems quite attached to the idea than the idea itself, which has been clearly shown to be false.

It's quite analogous to trickle-down theory aka the laffer curve. Shown to be false multiple times over the last few decades. Still promoted by people of one particular political worldview and not others.

That's the story here. The idea has been refuted, why are people still talking about it?

> The real distortion is when you started having adults working in McDonalds. It was never a job to support a family - it was a minimum-wage job for kids

Nonsense: Fast-food chains never had a business model of closing during school hours! They remain open, and that shows each role has always required some adult employees with adult budgetary needs.

One can argue minimum-wage jobs are only for kids in school, or one can argue that a regular-businesses-hours company can have min-wage positions, but both together is incoherent.

Indeed, in what universe were all these store front businesses open only from 4pm-9pm when high schoolers were available.

> Good

It's not better to have people have no jobs and require 100% assistance.

> subsidy

Regardless of how you define terms, you'll being paying much more to help them when they are jobless.

> become like China

China has a largely state run economy, with the resulting problems.

> It's not better to have people have no jobs and require 100% assistance

It is actually. Former employees are free to learn new skills or do charity instead of being busy surviving a game they can’t win.

You are also subsidising an economically wasteful activity that cannot cover its own true costs - if fast food joint can’t pay a wage, it does not cover the negative externalities from extra traffic on the road, carbon emissions and people getting fat.

Business will be forced to innovate and invest in automation

>>Good, a job that cannot support biological needs should not exist. It’s not a viable business.

>>Why should I pay a stealth subsidy to whatever business it is.

I think a lot of the argument around minimum wage is a disagreement (or misunderstanding?) about minimum wage workers.

Let's say you have a $10/hr minimum wage, and some company BigCo hires people and pays them $10/hr. Now, the disagreement: is BigCo actually getting $10/hr of value out of those workers? Or is it $20/hr, or $50/hr, or $5/hr, or $2/hr? Because I think that's a critical question both in terms of "should we subsidize those workers/BigCo" and "should we raise the minimum wage".

Some people do not currently, and may never, have skills that are worth $25/hr in terms of value produced in our economy. I think we need to make sure those people still have an acceptable standard of living, but I don't think setting the minimum wage to $25/hr is likely to do that.

> Now, the disagreement: is BigCo actually getting $10/hr of value out of those workers? Or is it $20/hr, or $50/hr, or $5/hr, or $2/hr?

I think this is the wrong question and it’s not our job to solve that.

Example - suppose I have a diamond mine, I can hire anyone with zero skill - homeless, drug addicts, criminals - pay them $5 an hour and they will dig up $1,000 of diamonds a day. What is the answer your own question - how much value is the business getting?

What we should consider instead is this - there is a certain cost for civilisation to continue. Workers must be born, educated, and then create the new generation. If they are not paid enough to continue the cycle, we will not let the country collapse, will we?

I as a taxpayer will end up picking up the tab in one way or another - whether it’s through food stamps, or in immigration or something else.

These jobs could be a total net loss once you account for carbon emissions and other externalities.

I would rather get these people to do charity work or plant trees instead.

>Good, a job that cannot support biological needs should not exist. It’s not a viable business.

And "biological needs" are an ever-increasing target, just beyond minimum wage. When minimum wage increases so does the target. Why? Because it's not about biological needs. It's about relative wealth dressed up as "basic needs".

I do think the US should have a minimum wage increase, but the discussion around it seems so disingenuous.

Is there some evidence that big american companies are less negative than big [insert adversary of the decade] are?

Companies are not bound by morals, national identity, or any interest other than self-perpetuation. They are a virus that we harness to do good. When the virus overwhelms its host, its time for medicine.

> That just makes those people unemployable, and will need food stamps even more.

This doesn't actually bear out. Minimum wage increases really don't have a history of making minimum wage employees unemployable, or destroying the companies affected. In fact, the opposite tends to happen, as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.

> Do you want Big Tech to be American companies, or foreign companies?

I'd argue that you can't just airdrop these companies into another country and have them be as successful as they are. Even with much stricter monopoly laws, there is a LOT about America that incentivizes these companies to locate there, and frankly I'm not convinced they'd move.

And as a Canadian, I don't even want Big Tech to be American. =) The US is only part of the world, as you said, but your lax and corrupt legal system is polluting the world with these dangerous megacorps.

Don't get me wrong, we're none better, our system would allow for nearly the same abuse, were it not for the fact that our whole country is smaller in population that California. But the point remains that there's a lot of the world that is looking on in horror at these rampaging monster companies and is not in any way assured by the "at least they're American" defense.

> This doesn't actually bear out. Minimum wage increases really don't have a history of making minimum wage employees unemployable, or destroying the companies affected. In fact, the opposite tends to happen, as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.

It's not nearly that settled

https://www.youtube.com/watch?v=Wvr0NhYfkO4

https://www.youtube.com/watch?v=8H4yp8Fbi-Y

I'll give you the economist as an acceptable source... but reasontv has a habit of omitting easy to access data that's detrimental to the argument they started with. While that lack of candor might not be disqualifying, it's dishonest when you also present yourself as a journalist.

It's not "settled" not because it isnt true - Dube, Lester, Reich proved that conclusively that it is.

It's "debated" because raising the minimum wage hikes usually come out of profit margins: https://cepr.net/documents/publications/min-wage-2013-02.pdf

If there's one thing the business community and the econ think tanks it funds can all agree upon it's that any policy that involves sacrificing profits is Bad. Global warming denial and this both come from the same source.

it's debated because it's impossile to settle. Otherwise set the minimum wage to $5000 per hr. See how it works out

That's not a convincing rebuttle. Saying that "drinking water is healthy" is controversial because "drink 1000 litres in a day and see how that goes" does not help the conversation.

That’s a perfectly fine response when the entire counter argument is “raising minimum wage is fine because everyone magically does better business to support it”.

That’s ridiculous on its face because there isn’t any higher level of productivity so someone in the economy is eating that loss.

I don't think it is that clear-cut, though. People who are well-fed, well-rested, free from stress and have good healthcare do tend to be more productive.

You're ignoring all the people that lost their jobs and had their hours shortened. If 1000 people earn minimum wage, raising it, some of them make more money, some lose money because their hours are shortened, some lose money because the jobs disappear. Whether that's a net positive overall is what's debated.

>You're ignoring all the people that lost their jobs

Because Dube, Lester, Reich says that they don't exist. Businesses pay for almost all hikes by dipping into their profit margins. A small % raise prices. A negligible number let people go.

Is there no truth to the California fast food restaurant closure wave I heard about when they raised fast food minimum wage to $20/hour?

It’s not really clear. First, a lot of the criticism that restaurants are closing are from restaurants that would have closed anyway [1].

> The biggest expense Rubio’s has been facing is debt — a burden that has grown since the chain was acquired in 2010 by the private equity firm Mill Road Capital

There’s an argument to be made that maybe the number of jobs in the fast food sector has decreased. But that’s also a myopic view since we need to know the labor situation statewide. Someone not in a fast food job might have found employment elsewhere which isn’t a bad thing, especially since the workers who do have those jobs are being paid a livable wage.

https://www.latimes.com/business/story/2024-06-12/the-fast-f...

It's legal for employers to offer these benefits.

It is a convincing rebuttal.

Same for your water example. At some point, water stops being healthy, without knowing at what point, you can't just ask people to just drink more water, otherwise they may die. In fact people have died for that reason.

At some point, increasing minimum wage will cause unemployment and destroy companies. Maybe we are at that point, or maybe not, without a bound, there is no way to tell.

Well we're not at that point right now, and in 2009 $7.25/hr also wasn't at that point either. So surely we can bump to $10.83 pretty darn safely since it's the same in real dollars.

On the other hand, experiments with $20+ minimum wages in places like Seattle are creating an unsustainable drop in revenues for a lot of restaurants and the tips that employees expected.

It is a curve, and price discovery is definitely a thing that the government can’t ignore. In Seattle they are in the awkward phase where the politicians admit the problem but walking back the minimum wage policy, which ratchets upward every year, is not something they want to consider politically.

I have close friends in the food service industry in Seattle that have become quite against the minimum wage increases (which they earn as base pay) because it is costing them a lot of money in real terms and they foresee future reductions in employability, which puts them at risk economically.

This coming from an era when competent service employees were so in demand that employers would make concessions that even tech employees don’t get. They weren’t paid as much but they were given flexibility that most people would envy.

Hey. Remember that time a bunch of economists and politicians got together and decided we'd brick domestic manufacturing and switch to a service economy? Well this is what a service economy looks like.

None of which is relevant to my point.

Segments of the working class who would have in decades past done modestly well for themselves in the industries we're currently missing are now stuck trying to get by on jobs that were intended to give teenagers something useful to do. Seems pretty relevant to a discussion of minimum wage. That is what we're talking about, right?

In the UK, that "new economy" was even explicitly motivated by strong unions in industrial labor, and Thatcher really hated unions. It's not that far-fetched that something similar happened in the US.

I doubt your friend base is predominantly min wage. Mine is, and universally, every single person’s opinion has been gratitude bordering on disbelief that as gen Z we can get by. “They were given flexibility that most people would envy”…then you leave tech to work at McD’s. Yes the restaurants are expensive but they haven’t been for the working class since the automat anyway.

Is this evidence of a bubble predicated on suppressed wages though?

When lending costs were near-zero, housing was doing "great". That doesn't mean it's a smart or sustainable policy, even if we had gotten used to that as the norm.

I sometimes wonder if the same applies to restaurants. Consumers got used to lower prices predicated on lower labor costs. Many got used to eating out very often and to a certain extent the economy responds with more restauranteurs. But it couldn't sustain that once the service cost "bubble" popped. Maybe those low labor rates are not the norms we should accustom ourselves to.

IIRC, retail and restaurants are way overbuilt in the USA. Plus, disposable income is declining. Plus, decline in revenue and inflation is causing a die off. (Of course, labor has to be scapegoat.)

Also, holding up restaurant workers as the token reason for opposing living wages for all workers is a bit disingenious. Like using family farms to argue against inheritence taxes.

>as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.

Then why not just make minimum wage $100/hour?

Because among other things that would make the oligarchs sad and trigger massive capital flight. Whether the emotional and financial well-being of the richest 150-ish people on the planet should be a credible concern is TBD.

That's absolutely nothing to do with it. The problem with it is it would just cause massive inflation, driving up prices, and cut any jobs that aren't absolutely essential.

I see what you're saying, but you're overlooking the fact that some of the best funded pacs out there aggressively lobby against minimum wage increases. I submit they aren't spending that money out of boredom.

No, it’s because it would mean restaurants would cost $400 to eat at for a basic sit down meal which would drive them all out of business.

There are tons of things people will just immediately stop doing if the prices go up to support labor that expensive.

> Making medical insurance premiums fully tax-deductible would fix that.

They more or less are, for those who pay for their own health insurance.

Why would have the same rule for those who receive health insurance as part of an overall W2/labor-based compensation contract?

No, the insurance premiums aren't tax deductible.

Line 17, Schedule 1: "Self-employed health insurance deduction"

https://www.irs.gov/instructions/i1040gi#en_US_2024_publink1...

"You may be able to deduct the amount you paid for health insurance (which includes medical, dental, and vision insurance and qualified long-term care insurance) for yourself, your spouse, and your dependents. "

"One of the following statements must be true.

    You were self-employed and had a net profit for the year reported on Schedule C or F.

    You were a partner with net earnings from self-employment.

    You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.

    You received wages in 2024 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2.

> "Self-employed"

I.e. it's deductible for your business.

My point stands.

We had some ambiguity here about what "paying for your own health insurance" actually means, so I am not sure either of our points really stand. Or maybe they both do ...

On the one hand: health insurance premiums are entirely deductible if you have schedule C income that exceeds their value. This covers more or less all self-employed people, who are the largest group paying for their own insurance.

On the other hand: health insurance premiums are not deductible if you do not have schedule C income that exceeds their value (and/or are eligible for an employer subsidized insurance policy), which means there is still a sizable and significant group of people paying for their own insurance and not able to deduct it.

I am sure you know my own preferred answer: convert all health insurance premiums into taxes that fund a single payer system, so that there is no difference between self-employed "self payers" and non-self-employed "self payers".

Given that we're unlikely to see that before I'm pushing up daisies, I would agree that either any health insurance premium paid by the insured should be tax deductible or none of it should be, to level the playing field. I think I slightly prefer the none solution, but I'm not actively against the all version.

> We had some ambiguity here

It's clear you know what I meant.

Not to me. I did not consider the situation of employed people who still had to pay for their own insurance in my initial response.

And the reason employed people can't choose their own insurance is that they don't get tax deduction then, so they are left at the mercy of their company.

That's misleading. If the company doesn't provide insurance, they can choose whatever insurance they want (it will not be tax deductible, which may impact its affordability).

It's not misleading or ambiguous. As a bystander to this discussion I'm shaking my head wondering whether you are doing this on purpose.

The vast majority of employed people have a single reasonable choice: to take their employers insurance. Anything else would be much more expensive because of lack of deduction. When they change jobs, they are again at the mercy of their (new) employer. Sure there are self-employed folks, and it's different for them, but this thread is not about them. And of course most people with their own insurance choice are self employed precisely because everybody else doesn't really have a choice, which is the whole point.

So, can we please stop with this smoke screen? My popcorn reserves are running low.

I don't agree with your premise regarding "what this thread is about".

It's obvious that you don't, and that's why a number of people have pointed it out to you.

You’re on an unrelated tangent about self employed people and the thread is about people tied to their employer through health insurance. This thread is not about self employed people.

> Attaching medical insurance to one's job is a market distortion caused by government tax policy

Here in the US, FDR had a wage freeze as part of his policies [1] to deal with the continuing Great Depression that WWII had not stopped yet by 1942. Because of that, companies needed to get inventive about ways to increase benefits but not illegally increase wages. Companies started offering insurance plans.

That's where the employment/insurance coupling started.

1. https://en.wikipedia.org/wiki/Stabilization_Act_of_1942

That's correct.

> Attaching medical insurance to one's job is a market distortion caused by government tax policy. I.e. it enables one to buy insurance with pre-tax dollars rather than after-tax dollars.

Also the ACA Employer Mandate[1]. Get rid of that and maybe figure out some sort of "nutrition label" style thing to make it easier to compare offers that are more cash vs more benefits.

[1] https://www.irs.gov/affordable-care-act/employers/employer-s...

> Making medical insurance premiums fully tax-deductible would fix that.

...or alternatively, removing deductions for medical insurance.

It’s not that simple. Pretax premiums could be wiped out with the stroke of a pen.

I worked at an entity with 300+ thousand employees and Probably another 200k retirees… I was able to pay full cost to retain my health insurance from them.

The benefits and out of pocket costs are incredible - my current CEO asked me why I do that rather that use the company insurance and I walked through it with him. It’s not possible to buy that coverage, between the legacy insurance plan and huge risk pool, only the largest entities can have the best insurance.

The “simple answer” is pretty easy. Put a 10% payroll tax with a $5M income cap, and build out Medicare with whatever benefits are doable under that cost structure. Let the market compete for extended benefits, which would work like a traditional insurance market.

The doctors and medical industries would be happy. People would gain newfound job mobility and freedom. Most people would save money vs the payments they make today. Rich people would be sad because taxes.

> People would gain newfound job mobility and freedom

Something tells me the people in charge most definitely do not want this at all…

It is sad how many allegedly and vocally "free market" capitalists don't actually want a liquid and free labor market. The shame is that most of them also don't know what "free market" technically means anymore.

I think they do know and that's why they don't want it.

“Free market” means freedom to exploit resources without government oversight. It’s not in any way related to fairer labor regulations (those are usually undesirable for free market absolutists, by definition)

That's a fun "modern" twisted definition intentionally skewed from how Adam Smith, among others, would define "free market":

> For classical economists such as Adam Smith, the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.

Employer-defined healthcare creates troughs of economic privilege, builds monopolies with respect to laborers, and enforces artificial scarcity in the supply of labor. It removes liquidity in the labor market if laborers aren't free to bid their labor to the highest bidder at any time simply because they can't risk their own health care. It's not a "free market" determined "solely" by supply and demand when the supply is artificially limited by the rent seeking inherent to employer-defined healthcare, no matter whether or not you think the solution is fairer labor regulations or how much you claim to hate government oversight. That's a market failure.

So the only entities who might contribute to a less free market are governments? Nobody else?

A free market is maximally competitive. The giant corporations of today are planned economies run to maximize returns to shareholders by eliminating competition.

Shareholder return is not a free market function, in fact for most businesses it’s in the interest of the shareholder to have zero competition, as competitive forces require expenditure in labor and dollars to improve the product at lower margin.

Apple is the best consumer example of this. In segments where there are no competitive forces, say Mac displays, they ship high margin, mediocre products for an extended lifecycle. You can buy a shitty LG for half the price of a mediocre Apple model. The same thing happened in the pre-retina cheap MacBook Air - that thing lived 3 years too long because where else are you gonna go?

What’s not “free” about the PC display market? Who’s preventing competition on it?

No one said anything about “fairer labor regulations”, only a “free and liquid market in labor”. Free movement of labor is, as much as free movement of goods and capital, a component of a free market. Restrictions on labor movement are market restrictions which make a market non-free.

A free and liquid market in labor has some overlap with what people concerned with fairer labor market regulations want, but in other areas is diameteically opposed to what they want.

Free markets are unrealizable abstractions that lots of people like to appeal to vaguely, but very few consistently favor as more than a rhetorical device.

Very few people seem to understand what a free market is, although it is very clear what it is.

> Rich people would be sad because taxes.

Something tells me the people in charge most definitely do not want this at all…

> only the largest entities can have the best insurance

Exactly. The bigger the better.

I'm still baffled why local and state govts aren't easing into a public option.

Ditto the largest (self-insured) employers. It'd be so easy to extend benefits to their partners, local supporting businesses (eg daycares), and so forth.

> I'm still baffled why local and state govts aren't easing into a public option.

That's easy enough to answer: lobbying efforts by major insurance companies (and insurance company adjacent companies) prevented it. In many states such lobbying efforts prevented it entirely in the legislature adding direct laws and some state constitutional amendments that states explicitly weren't allowed to build a public option as a part of their healthcare exchanges. It was a big part of the uproar when the ACA was passed at the federal level, a big part of why many states' healthcare exchanges were sabotaged and broken on Day One, and a large part of why the ACA itself made too many compromises in how it established the state-driven healthcare exchanges.

Hmmm. If you happen to know any one or org working on this, I'd greatly appreciate it. TIA

Most lobbying problems root cause analysis some way or another to the great need for Campaign Finance Reform [1]. (A problem the US has been overtly struggling with since 1828. Made so much worse and deeper in the 2010 Citizens United Supreme Court decision and the rise of the "Super-PACs".)

[1] https://en.wikipedia.org/wiki/Campaign_finance_reform_in_the...

> I'm still baffled why local and state govts aren't easing into a public option.

Because socialism is well known for unsustainable costs and poor service.

Right, like how Walmart and McDonald's are subsidized by taxpayers.

Businesses like Walmart and McDonald's should pay their own costs without relying on the crutch of the public purse.

If these businesses are so inefficient that they can't survive without handouts then it is good and proper and correct that they die off and be replaced by more efficient businesses.

Further: All wealth is the result of governmental largess. Who benefits -- oligarches or the middle class -- is the neverending food fight.

h/t economist Kevin Phillips.

Larger health insurance pools are better. Regardless of societial structure.

First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.

But let's put that aside. What we have now isn't amarket distortion caused by using pre-tax dollars for employer insurance. It's that an employer can collectively bargain for insurance in a way that an individual never can.

If you have 100,000 people in a group then statistical norms come into play of how often you'll need to do a transplant or [insert expensive procedure here]. Plus you have the negotiating power to get better coverage at a lower price than an individual ever can.

So individual insurance can never work regardless of tax policy. Tying insurance to employment is bad for pretty obvious reasons. And this is how we return to "private insurance shouldn't exist".

>First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.

Some other countries have private insurance as an option. For example, you can buy private insurance in the UK and some provinces of Canada if you want. Some people obviously feel it is worth it to them to do so (faster time to treatment, private versus shared hospital rooms, etc.). The difference from the US system is that there is a public system available without this expense.

It can be problematic even as an option. Now doctors have a conflict of interest because they make more money from private insurances than within the public system. It also needs to be finely balanced otherwise too much of the spending is through private companies, starving the public system of funds.

It can work, but it needs to be very carefully regulated.

Americans will consider anything other than a proper public health system. Like a hare-brained scheme of pro rating insurance premiums to hours worked, whatever the fuck that means. Or making insurance premiums tax deductible. Just utter stupidity at every turn.

The majority of Americans would favor a public health system[1]. The difficulty is transitioning from what we have now to one. We aren't starting from a blank slate.

[1] https://www.pewresearch.org/short-reads/2020/09/29/increasin...

> That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.

You're subsidizing those wages with your tax dollars. You're paying billions per year to make those low incomes livable. In the end it's just corporate welfare:

https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...

https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...

https://laborcenter.berkeley.edu/a-downward-push-the-impact-...

It's not the case that they wouldn't employ people. They're not employing people now out of the goodness of their heart.

If they paid living wages (as they should) you'd pay less. Good businesses pay their costs.

But as it is, the likes of Walmart and McDonald's are privatizing their profits and socializing their costs.

> You're subsidizing those wages with your tax dollars.

Under your proposal I'd be paying even more tax dollars to those rendered unemployable.

> It's not the case that they wouldn't employ people.

People who produce less value than they cost become unemployed.

So, straightforwardly, you believe Walmart operates the stores it does, employees the people it does, and has the profit it does because of taxpayer subsidies. And you're happy to take on the cost of that welfare even if you don't shop at Walmart because Walmart is so inefficient that without state subsidies it would no longer operate or employee anyone. And you must protect Walmart from its own incompetence and distort the market so Walmart doesn't have to pay its true costs and so it can survive.

You probably don't think of yourself as a socialist but socialism is what you're wholeheartedly advocating for here.

And the welfare state you're supporting the worst kind of socialism: corporate handouts for privatized profits and socialized costs.

Actually, they're called by a different name. Shareholders.

>That just makes those people unemployable

Or, put differently, it makes the profits of the companies who hire them unsustainable. IMO allowing an non-livable wage in order to subsidize profits isn't a great policy.

When the company has an unprofitable business model, it goes out of business.

You missed the point with an overly simplistic take. They shouldn’t be (more) profitable by essentially having the government subsidize the wages of their employees. That means we, the taxpayers, are subsidizing their profits. I’m pro-capitalism, but not the type that requires tax dollars to maintain profitability and margins. If their only means of profitability is to pay non-living wages, I generally don’t want them in business because it creates an underclass as a means to profit.

(To add some nuance, I think it’s ok in some cases for short duration, like subsidizing new industries or those related to national emergencies, if it doesn’t become a long-term strategy. In general, those that pay extremely low wages are not part of those categories)

I guess a more pointed question is: do you think companies with a model that pays sub-standard wages should have their profits propped up by tax dollars? That's not my personal ideal of well-functioning capitalism.

Not true. The way you can stay in business is by socializing your costs. The more handouts and subsidies you can get from government, the longer you can stay in business despite the inefficiencies of your business.

Walmart and McDonald's are good examples of this.

>Do you want Big Tech to be American companies, or foreign companies?

So true - imagine an iPhone made in China - the horror.

I think an under-discussed issue is how companies are allowed to own sub-companies that don't need to necessarily disclose they're owned by a larger conglomerate. Like I don't know how you necessarily solve this, but I think if people, for example, knew the sheer number of snack brands owned by Nabisco, there would be a lot more discussion about corporate consolidation and monopolies.

> sheer number of snack brands owned by Nabisco

Also Yum and Roark, which, together, own much of fast food.

> That's a generic problem with corporatism and monopoly, not "tech".

There is a general problem with corporatism and monopoly, but there are also specific problems with "tech". Oil & gas monopolies don't broadly carry everyone's private interactions. Sports monopolies generally can't expose political dissidents.

>Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.

I admire the general spirit of your comment, but this specific example seems off to me. Search and browsers, for example, don't make sense as independent businesses. Rather, they are products based off of Ads.

Maybe the idea would be for Ads to pay Search to include their ads, and for Search to pay Browsers to be the default search engine?

Apple should also be broken up into hardware/os, app store, services, payments, media

Your car shouldn't decide who you can do business with nor should it get a fee from every store you drive to. It shouldn't push it's own payment system for all purchases. And neither should a pocket computer do these things

Antitrust enforcement is so hit-or-miss, contingent upon risky prosecution in court and a DOJ willing to undertake it, and with no ability to scale. It has made me wonder whether a statutory approach may be better, where companies past a certain [relative] size threshold would need to split up. Then it would be no surprise to shareholders and consumers wouldn’t need to be harmed for years before maybe regulators would dare step in. I think it would do a lot for the US competitively, too, to ensure the market remains dynamic. Sustained vigorous competition seems likelier to serve us better in the long run than boosterism of our largest companies.

> corporatism and monopoly, not "tech"

Yes and: Corporatocracy

> strong network effects

Yes and: aka Preferential attachment leading to winner-takes-all.

It's just math. Not some kind of weird moralistic blather.

The tendency towards concentration necessitates some counter balance, backpressure, redistribution, whatever.

> need to be about four major players before markets push prices down.

Yes and: I believe, but cannot prove, unifying markets (nationalization, globalization) accelerated monopolization.

Alas, I don't have any ideas on how to put the toothpaste back into the tube. Clearly, we're not reverting to regionalism or localism any time soon. Economically or politically.

> "I bemoaned that humanity seems to be serving technology rather than the other > way around. I argued that tech corporations have become too powerful and their > power must be curtailed." > That's a generic problem with corporatism and monopoly, not "tech".

If you wound enjoy a deep and rigorous treatment of this subject, I strongly recommend Martin Heidegger's "The Question Concerning Technology."

He argues that modern technology is fundamentally different from historical technology, and that corporatism and monopoly are the inevitable result of technology.

The US cellular market has T-Mobile, Verizon, AT&T and a bunch of mvnos. Dish is starting out and a few years back we had Sprint before it merged with TMobile.

I wouldn’t say the competitiveness changed all that much and I would say it’s more competitive than Canada with also 3 and less competitive than France with 4. However the competitiveness in France now is specifically because a low cost provider Free entered and started stealing all the costumers rather than because of the number of competitors.

I disagree. It's a problem with tech because even if regulations exist, new tech moves much faster than regulation. And technology is too seductive to be used properly so people indeed end up serving tech just as drug addicts live for their habit. Many more details are explained in "The Metaphysics of Technology" by David Skrbina or "The Technological Society" by Jacques Ellul.

Technology has a tendency to overwhelm and transform everything for the sake of technology.

It is an even more generic problem than that since it also applies to bureaucracy and by extension the government.

While I agree with you on the basic issue of monopolies, I think the biggest monopoly problem is the U.S. government. It's so massive that it absolutely dwarfs all other monopolies, like Google.

I would therefore like a solution that does not, in any way whatsoever, increase the power of the US government.

Empires tend to have defining characteristics that are both the reason they become empires in the first place and ultimately what is their undoing.

The British Empire was the drug dealer empire (first tobacco then opium).

The US is the arms dealer empire, at least since WWI.

The point here is that I believe that any sufficiently large company in the US eventually becomes a defense contractor and thus aligns itself with US foreign policy [1].

So we have Amazon selling cloud services to the CIA, Google selling cloud services to the military and Israel, Meta cooperating with military uses of AI and so on.

[1]: https://newrepublic.com/article/153044/big-techs-unholy-alli...

> The US has three big banks

? I thought we still had the big four? Chase, BoA, Citi, WF? And if you're talking about just consumer banking, US Bank is only ~30% behind #4 (Citi).

The US also has a relatively huge amount of small banks that are specialized in financing niches. It’s actually a huge competitive advantage. If I want a bank that specializes in loans for PNW fishing boats, that exists, and they are able to competitively price a loan that BoA won’t even consider.

The flip side is that big banks are great at driving down costs for standard operations (when there are enough of them to be competitive). If all I need is a business checking account as a consultant, I can access that for no cost via one of the giants.

> If I want a bank that specializes in loans for PNW fishing boats, that exists, and they are able to competitively price a loan that BoA won’t even consider.

What's the specialty here, risk assessment?

Niche risk assessment. Or more generically knowing the industry.

Small banks with a specialty will have loan officers that deeply understand the industry they specialize in and are able to parse a bad deal from a good one.

If a fishing captain comes in and wants to borrow $75k to replace an engine, that could be a great loan to make or a terrible one depending on factors that require knowledge of boats and the fishing industry. If this captain was paid out $150k last season, the hull has a clean survey and this season has a higher harvest quota, it’s a good deal. If the hull is a floating wreck, and the fishery is likely to be closed or contract this season, don’t make the deal. Bank of America does not have a loan officer who knows how to read a commercial vessel hull survey, or who understands local fishing payout customs, nor is it really worth their time to find that person.

A bank that has that knowledge has a competitive edge over banks that don’t. The captains in the fleet all know of that bank, and so do the diesel engine dealers.

In the US, for many industries, there is a bank that maintains that competitive edge, and most of the time it is a bank that you have never heard of.

This isn’t hypothetical, if you want the loan I’m talking about you probably will end up on the phone with these people: https://www.peoplesbank-wa.com/business/loans-lines-of-credi...

Makes sense, thanks for the explanation.

Wells Fargo, maybe.[1]

And we need Glass-Stegall back. Banks and brokerages should be separate. There is no good reason that Goldman Sachs should be a bank, other than for bailouts, which is why they became a bank.

[1] https://www.macrotrends.net/stocks/charts/WFC/wells-fargo/to...

The Treasury Department’s capital “stress tests” seem to have been a good thing, though?

Can you explain why you think that commercial and investment banks should be separate? To be clear: Amoung highly developed nations, this is universally allowed now -- all of them allow commercial and investment banks within the same company.

Also, Goldman became a nationally regulated bank to get access to the Federal Reserve window. So did Morgan Stanley.

Because "too big to fail" produces moral hazard. Followed by bailouts. Like 2008.

> There need to be about four major players before markets push prices dow

Not at all sure that prices are the problem here, nor that markets can solve the actual problems.

This is a Gish Gallop of completely unrelated things.

Tech companies can become very powerful without holding a monopoly. All it takes is being big enough to have political sway either through being a big employer or just by straight up lobbying.

The US has a few big banks and then hundreds of regional banks. It’s trivial to bank without using the big ones.

Prohibiting a post breakup Google from contracting with each other is completely idiotic. Either they make sense as standalone businesses or they don’t. Why wouldn’t Google search be allowed to use GCP but be allows to use AWS? If they are different companies they will use what is best for the company and regulating that they use something worse is bad for everyone.

Min wage unrelated

Gig job unrelated

Medical insurance unrelated

The hyperfocus on shareholder returns is also worth mentioning. It's tangentially related to a monopolistic trajectory. Instead of a company being really good at solving problems in a particular domain they attempt to serve many mediocre solutions in a variety of domains. Shareholders, VCs, and the like encourage this lack of focus on quality and replace it with a focus on margins. The solution for low margins is lower head count and greater diversification of SKUs. For many companies, it's a recipe for enshittification and spirals into mediocrity. Not to mention, when a company enters this phase the lives of employees begin to suffer greatly.

What's that got to do with corporatism?

> Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.

Why Google? Every single day there are articles here on HN with many comments explaining that Google is done due to LLMs replacing search.

Google market cap: $2.3 bn

Microsoft market cap: $3.2 bn

Break up Microsoft. And for good this time.

You mean trillions, not billions

Monopolies in US? Which bad product you are forced to buy because there's no competition at all?

Having monopolies is not a symptom of government negligence. It's the system working as intended.

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