Sure, divide and conquer is the prerequisite to allow the non-working-class to exploit actual labor.
I say human dignity is non-negotiable. So there should be a legal minimum wage which is automatically adjusted to the living prices of wherever the person you hire is expected to work.
If you are unable (or worse: unwilling) to pay people enough to survive of your work, you are irresponsible and a leech on society that should be out of business anyways.
I understand that some have been brain-washed into believing that leveraging your education, inherited wealth or position of power to exploit others is a sign of being smart or some sort other conclusion that coincidentally justifies the desirable outcome — but that doesn't change the self serving nature of anybody discussing for that kind of exploitation. And as markets have shown to suck at respecting any externalities, be it nature, culture, the rights of future generations or human dignity, they have to be regulated to do so.
If your business is unable to survive that, it wasn't for the benefit of society anyways.
So the solution is to throw many of the people who currently make $10/hour out of a job and onto welfare? That's what you're proposing.
If we raised the minimum wage to $20/hour, some businesses would raise their wages, and some will fire those workers.
And once on welfare it is extremely hard to get off welfare because of claw-backs and because once you have a gap in your resume it's really hard to get a full time $20/hour job. There might be employers willing to take a chance on you for a lower salary part-time.
The solution isn't to raise minimum wage, it's to eliminate minimum wage and put in an equitable UBI/welfare system. It'll raise wages naturally, because if they have a decent safety net, most people will feel comfortable quitting / not accepting an unjustly low salary. OTOH, if companies make massive profits through paying low salaries then we should tax those profits to pay for the UBI/welfare.
I have a slightly different take: if your business is only profitable by the taxpayer subsidizing a relatively large number of employees wages with welfare benefits, you should be capped on how profitable your business is. In other words, you can be as profitable as you want but as soon as your business model relies on taxpayers to be viable, those taxpayers have a say in just how much profit is considered reasonable.
> if your business is only profitable by the taxpayer subsidizing a relatively large number of employees wages with welfare benefits
Welfare does not subsidize employers, it is a subsidy /against/ employers. Giving employees welfare increases their wages because it increases their negotiating power.
If it wasn't clear, my point was that it allows employers to arbitrarily lower their wage rate where the business is viable.
Example:
-Employee needs $15/hour to 'afford life'.
-Business is only profit-positive if it pays $12/hour or less
-Assuming the employee will only accept a job if it allows them to 'afford life', as long as the government subsidizes the equivalent of $3/hour, business is able to turn a profit. Anything less than that, the employee does not accept the position and the business is not viable.
This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.
> my point was that it allows employers to arbitrarily lower their wage rate where the business is viable.
But it doesn't do that, in fact it requires the employers to raise their wages.
Your model has a single employer (a monopsony) who doesn't need to negotiate. That's a case where minimum wages cause both wages and employment to rise.
> This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.
McDonald's (mainly) doesn't have employees, it has franchisers and those have employees. Different companies.
More importantly, if you're on the left then you should think welfare is good. It's good that they're telling people that! We should require it in fact!
If you're saying that telling someone to get welfare is bad, you're making an argument that welfare is bad. In your model signing up for welfare makes employees poorer. That doesn't make sense.
>But it doesn't do that, in fact it requires the employers to raise their wages.
Is there evidence to this claim? Even the most recent UBI studies seem to run contrary to this point.
This otherwise borders on a bad-faith post. Yes, McDonalds corporation is different than a franchise, but the profits of the former are obviously tightly coupled to the operations of the latter.
And it’s not a left/right political argument on whether welfare is “bad”. That’s an overly simplistic perspective. It’s about how a particular system is structured and whether that leads to desirable outcomes for society as a whole.
>If we apply market logic to that this would just mean that employers have to offer better deals.
I'm not sure this follows. By this logic, do you think UBI would cause employers to increase wages?
I think (given sufficient UBI), you would see some industries increase wages but many businesses fold because they are only viable by suppressing wages (which are then subsidized by taxpayers). So, yes, on one hand the remaining employers would be paying more but the overall employer base would be smaller.
Another way to think about it is that as forms of welfare go up like disability, those workers tend to fall out of the labor market. They are using that as a tool for negotiating higher wages. (granted, there many complications in this point)
I don't think that adds much to the conversation. That says nothing of the existing (and profitable) restaurants that exist and still pay people wages that qualify them for taxpayer subsidies. You can easily reword my point to say "your business plan should not rely on paying people a wage that requires them to be subsidized by taxpayers without additional oversight". I also don't think the point needs to be constrained to restaurants.
Your point still makes no sense. Everyone is subsidized by taxpayers to some extent. We all receive a variety of government benefits, tax credits, etc.
As for a "business plan", that's a total joke. In the real world most small businesses have no real plan. They just make it up as they go and try to survive another day.
If you think that unskilled workers should be paid more then how much exactly? Please be specific. And if paying that much would cause the business to go bankrupt and leave those workers with no jobs, is that a preferable outcome?
I worked in a restaurant for a while as a youth and made minimum wage. It sucked and I hated it, but that was good motivation to learn some actual job skills.
>If you think that unskilled workers should be paid more then how much exactly? Please be specific.
This is one of those pushbacks you see on social media that is used like a gotcha but it’s fairly useless because you and I know it can’t be encapsulated into a forum-sized answer any more than the question “what should a company charge for it’s product, and be specific.” The answer is it depends.
At the risk of sounding as glib as your question, I’ll refer back to earlier comments: an amount that allows employers to “afford life”. That means these two things should not be happening at the same time: 1) a relatively high percentage of the employees rely on the taxpayer to “afford life” in the form of welfare benefits and 2) the company is turning a relatively high profit. Now I know “relatively” needs to be defined, but that’s what crafted policy does, and a forum like HN probably isn’t the place to get into those kinds of weeds. It can probably be pegged to CPI in some way, or limiting executive pay as a multiple of median employee pay when they do rely on taxpayers, as a starting point for the discussion.
It’s odd to me that you want to give a business a free pass for incompetence for lacking a viable plan, and then holding the employees to a high level of responsibility/accountability to “motivate” themselves to “just do better”. What you’re advocating is a kind of semi-permanent underclass since your understanding ignores all kinds of social and psychological barriers that prevent some people from getting “actual job skills.”
The estimated living wage in Manhattan is about $43 per hour. So are you proposing that restaurants in Manhattan should be required to pay that much for unskilled labor, regardless of the value they generate?
Where someone works != where someone lives. If I work remotely for a SV firm, I don’t necessarily have to be paid SV wages. I’m proposing Manhattan restaurants should not be subsidized by taxpayers when they don’t pay a livable wage in order to make a profit. What I’ve said before is that profits should be capped to a reasonable amount if taxpayers are subsidizing a business to a reasonable degree through welfare benefits. That doesn’t require paying $43/hr unless the owners want uncapped profits.
To use your own turn of phrase, get some “actual skills” at creating a profitable business.
> So the solution is to throw many of the people who currently make $10/hour out of a job and onto welfare? That's what you're proposing.
It's not an either / or. If the US were to invest more in education and developing the economy everywhere, there would be more jobs beyond low paid "unskilled" labour. That is, at the moment there's too much demand in low paid jobs, too little in e.g. college or uni level positions, and too much supply of people desperate enough for a job to take something below the standards of living.
Compare with my country, which during the pandemic saw a large amount of people in the service industry change jobs, because during the pandemic a lot of restaurants and the like were closed. When those opened up again, they found themselves with a shortage of staff, leading to the ones that still worked in the industry to be in a strong negotiating position and have their wages increased significantly.
Take away the supply - by increasing supply of higher-paid and diverse jobs everywhere - and low wage jobs become higher paid jobs automatically. In theory.
>It's not an either / or. If the US were to invest more in education and developing the economy everywhere, there would be more jobs beyond low paid "unskilled" labour.
I don't know how far this extends, though. I live in an area where nearly anyone who wants to can get an affordable college education (and, I'd venture to guess, very close to free in most cases). And yet the graduation rate is abysmal. The fact is the higher ed path is a round hole and many people are square pegs. We can't just turn everyone into a highly educated skilled worker. I agree with the other posters that a wealthy country should have a dignity threshold for the members of their society, but I'm come to realize education may not be the main pathway to get there.
How would you propose to increase the supply of higher-paid and diverse jobs? The USA already spends enormous amounts on education subsidies and Keynesian economic stimulus. And what is a "diverse" job anyway?
The USA and many other countries already have a surplus of people with college degrees that have no real value from a job skills perspective (elite overproduction). Future job growth is likely to be concentrated in skilled labor fields as we re-industrialize. We should probably shift some funding away from universities, and towards community colleges and trade schools.
> When those opened up again, they found themselves with a shortage of staff, leading to the ones that still worked in the industry to be in a strong negotiating position and have their wages increased significantly.
> The solution isn't to raise minimum wage, it's to eliminate minimum wage and put in an equitable UBI/welfare system. It'll raise wages naturally, because if they have a decent safety net, most people will feel comfortable quitting / not accepting an unjustly low salary.
This is not an accurate description of the empirical evidence for either minimum wage or UBI.
The evidence is that minimum wages do not reduce employment up to 60% of local median wage and can increase employment - so there's no reason to get rid of it. And UBI doesn't have much effect in either direction - so it's not really that important and the main reason to do it is that it's much simpler than welfare alternatives.
Anyway, UBI isn't an alternative to minimum wage because the point of UBI and other welfare systems is to support non-workers, namely children and the elderly.
No that is not what I am proposing. I have lived through the introduction of minimum wage in 2015 in Germany. Maybe you lived through more such transitions, but I did not observe what you (maliciously?) claimed to be for.
Sure the US is always different (and solution working elsewhere can't possibly be applied to it), but granted: a UBI might be a better choice ultimately. But the question is if that is really within the set of realistic choices. A UBI is a hard sell even in comparably "socialist" countries in Europe. In the US it would be dead on arrival. Consider that maybe this is the idea.
You know, a bit like what the Hyperloop did for intercontinental trains, proposed by a guy who wanted to sell more cars.
This makes the assumption that all workers require a living wage. When I worked as a teenager and throughout college, I didn't need to make a living wage since I either lived with my parents or with roommates (admittedly funded by a combination of work and student loans). During that phase of my life, I didn't require a living wage. I just needed some extra money, and so I was willing to accept lower paying jobs that wouldn't necessarily support every expense. Someone who required a living wage couldn't have worked those jobs, but they were perfect for me, so I was glad they existed at the time.
It doesn't matter if you require the living wage or not — there will always be people who don't strictly need it in any society. Just like there will be people on the beach who won't ever need a life guard. Everybody needing a thing is not a precondition for it making sense to exist.
If we want a society without exploitation the simple fix is to lift the minimum wage beyond any value that could be considered exploitation within the given context. Not being able to live off your full time job is certainly exploitation.
If you don't need that much e.g. because you have the luck of having your parents support, don't work the full job then. Easy. Less hours worked, more time to study.
To the GP point, though, if it's unilaterally applied there may be unintentional consequences. Their example was working as a teenager; relatively high minimum wages may end up cutting most teenagers out of the workforce. If an employer has the choice between a 35 year old and a 15 year old for the same pay, they are generally going to hire the 35 y.o. That isn't to say minimum wage can't be raised for heads-of-households or some other administrative distinction, but a one-size-fits-all approach may cause a bunch of other issues.
That's what I consider the correct way to think about this. So do you have thought on what metrics you'd use to measure the net effect?
One of the nagging facts that bothers me is that, even as we see increases in minimum wage, there seems to be certain segments of society (particularly young men) who are disproportionately dropping out of the labor pool.
>If you don't need that much e.g. because you have the luck of having your parents support, don't work the full job then. Easy. Less hours worked, more time to study.
What if you are a lonely oldster who'd love to slowly sweep away dust and cigarette butts in front of the local store for 5$ an hour. It doesn't seem obvious that outlawing this is good for society.
I mean, there are ways to go about this without being an employee. You can start an LLC and contract yourself out if you really want to. I'm just not sure keeping that option open as an employee is a net-positive given all the downsides for people who don't fall into such a narrow example.
We could establish UBI, and then we wouldn't need a minimum wage. We could decide as a society that we want everyone to have a baseline level of support, rather than doing it indirectly (and less effectively) by forcing the nonexistence of low-paying jobs.
Minimum wages are good on their own and do not appear to have downsides in practice. You don't need to "not need" them.
Basically think of it as banning wasting people's time by offering them really bad jobs. (This is the "search theory" explanation, but there's also the "monopsony theory" explanation, which is that they can increase employment!)
Of course, wage boards and sectoral bargaining systems are probably better since they're more flexible.
Minimum wages are not "good on their own"; they're a solution to a specific problem: making sure people can survive with at most a relatively reasonable amount of work, though they're currently failing at that goal. If we stop having that problem we stop needing a solution to it. Making it so people don't need to work to survive is strictly better.
And if people have a guaranteed level of support, then yes, there is a downside to saying "you're not allowed to exchange sub-self-supporting amounts of work for money". You don't need to ban wasting people's time; if people don't have to work to live, the uninteresting or unpleasant jobs will be having to raise pay to get people to work them, or figuring out how to automate them when previously it was cheaper to pay minimum wage.
Meanwhile, there are plenty of things people might want to do that aren't valued enough by society to pay even subsistence wages for. In a minimum wage world, those things either don't happen or they happen as side hobbies for people with other means of support. If you have UBI, you create the perverse situation of "I might do that for free because I don't have to work to live, but I can't take any money for it unless I can get someone to give me a lot of money for it".
> the uninteresting or unpleasant jobs will be having to raise pay to get people to work them
They do /eventually/, but because working takes time, working a bad job reduces the time you have available to find a better one, which has the effect of giving everyone less than ideal work situations. That's why it's called search theory.
With UBI, people don't have to worry as much about lining up the certainty of a better job before quitting a worse one, and people aren't likely to take those worse jobs in the first place unless offered substantially higher pay than they'd have settled for if they needed the job. That and other factors seem likely to make search theory around the minimum wage boundary much less of a problem with UBI.
Sure, that would also be a way to address the problem. Quite frankly I haven't read up on the UBI enough to give a qualified answer about it, but given the observation that many places appear to try it out we will probably have very conclusive data soon.
OpenResearch's recent UBI example didn't appear to be a resounding success. While people receiving the higher income appeared to have more interest in starting a business or continuing education, it didn't actually significantly translate to those getting accomplished.
> This makes the assumption that all workers require a living wage. When I worked as a teenager and throughout college, I didn't need to make a living wage
So you want a dying wage. How can a dying wage exist? Two ways:
1 - someone else is subsidising the business, I.e. parents are paying the rent/mortgage, and food of the teenager
2 - the person is literally slowly dying, living in a caravan or a tent as ‘working homeless’ unable to afford healthcare or racking up debt, and it’s only a matter of time until they literally kick the buckets and cease to function. Or they will become birdedfor the taxpayer, with food stamps and other kinds of aid.
A business needs to pay for its inputs, labour is one of them. The cost of labour is whatever is costs to take care of basic needs of a human, the exact number is debatable but it does exist.
If we are going to provide subsidies, why don’t we subsidise healthy food, or planting trees or solar panels for example, for both businesses and individuals? Why should my tax money subsidise cheap labour, often for corporation that avoid paying tax themselves?
And that's fine; the problem is that a lot of people don't have a choice, because there's not enough jobs at their level of education, their willingness to work, etc.
I'm thinking of a reddit post copied off facebook describing college or uni graduates in biology who could only get a job at Starbucks because there wasn't enough demand for their specialism.
I say human dignity is non-negotiable. So there should be a legal minimum wage which is automatically adjusted to the living prices of wherever the person you hire is expected to work.
If you are unable (or worse: unwilling) to pay people enough to survive of your work, you are irresponsible and a leech on society that should be out of business anyways.
I understand that some have been brain-washed into believing that leveraging your education, inherited wealth or position of power to exploit others is a sign of being smart or some sort other conclusion that coincidentally justifies the desirable outcome — but that doesn't change the self serving nature of anybody discussing for that kind of exploitation. And as markets have shown to suck at respecting any externalities, be it nature, culture, the rights of future generations or human dignity, they have to be regulated to do so.
If your business is unable to survive that, it wasn't for the benefit of society anyways.