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Ignoring whether the study's assumptions are accurate, one problem with this sort of rhetoric is that "the US economy" isn't a political constituency. There's j

Ignoring whether the study's assumptions are accurate, one problem with this sort of rhetoric is that "the US economy" isn't a political constituency. There's just people, and their claims on the economy in terms of personal wealth and income. It's sort of like when you say "NAFTA grows the US economy but $1 trillion" and the guy who's job was outsourced to Mexico ask "Okay, but how does that help me make rent or buy groceries for my family?"? Basic Income (and other welfare schemes) are like that too, except for the rich. They're absolutely worse off if the economy grows 10% but their personal wealth and income declines by 20%. Personally I'm a fan of UBI, but I sell it as (1) welfare is the right thing to do, and (2) UBI is the most efficient way to do it. I'd probably start with something less than $1,000/month though. I'd offer a package deal to employers and the rich that looks like this: the government will pay healthcare costs and provide $500/month to each adult and $250/month for each child, and in return we abolish the minimum wage.

oneplane 9y ago
Minimum wage isn't just "you have to pay workers enough to survive", it's also "you have to acknowledge that workers are worth amount X".
- LyndsySimon 9y ago
  Alternatively, it's "you cannot hire employees who are less valuable to you than this arbitrary threshold." If someone wants to work for $1 / hour and someone else wants to hire them for $1 / hour... what right does a third party have to prevent them from doing business with each other?
  - WorldMaker 9y ago
    The problem is that the labor market has never been "liquid" enough to be truly competitive. There are far too many externalities in play in labor for that ever to be the case. (Location, ability to work, skill levels, are all basic externalities that keep labor markets from being liquid. In the US market because health care, retirement, and other basic are employer-connected, those further externalities prevent liquidity for labor.) If people had the right not to work, you'd have a more liquid labor market. If people's basic necessities were met before needing to work, you'd have a more liquid labor market. Until that day, minimum wage are basic hacks to try to present some of those labor externalities as a basic deserved negotiating position.
  - malyk 9y ago
    Coercion, basically. People need money to live. Some of them need money more desperately than others. Some are willing to work long hours under shitty conditions for almost anything. So, if you have 1 job, and 2 people need to work to survive, then the salary for that job will approach zero because those people have no other choice. We, as a society, realize that is a bad outcome for everyone, and so we say "Look, I know you /could/ hire someone to clean your toilet for $1 an hour, but that isn't the true cost of toilet cleaning because we don't live in a truly free market and there are larger factors that might force people to accept that wage against their will. Therefore, we're going to say that $X is the lowest you are allowed to pay to overcome the inherent coercion in jobs." One of the beauties of UBI is that, at least theoretically, low wage jobs will have salaries that actually come closer to the true market clearing price of the job itself. To be clear, it is likely that the true cost of toilet cleaning is closer to $3 or $4 an hour, but people with no options would take the job for $1...and there are a ton of those people out there. Under UBI there might not be people that desperate any longer and so they would only take the toilet cleaning job if it paid more...closer to the true market value of having clean toilets.
    - bmcusick 9y ago
      Yup, good summary. The coercion angle is one more reason why maintaining "full employment" is a pro-labor policy. By keeping the number of job openings larger than the number of people looking for work, you create bargaining power for workers to increase wages. The UBI angle works both for and against worker negotiating leverage. On the one hand, workers know that their entire income isn't on the line if they quit, so they have more leverage. On the other hand, they know that they're getting X from the government, and while they need Y to live, they'll accept work at Y-X.
- bmcusick 9y ago
  Are they worth X though? What if they produce X-1 in value? Would you hire someone who cost more than they produced? Someone's wage has an absolute ceiling at the level of "this is how much value I produce per hour". No one will hire you for more than that. And currently, there are some people who cannot be hired at minimum wage. A UBI (and national health insurance) would help a lot with wages though. With less fear of losing their job, employees would have more bargaining power. They'd also have more resources to spend on commuting or time off work for interviews. By expanding the number of potential employers a person has access to, you indirectly allow them to bargain for higher wages, even without explicitly setting a minimum wage.

oneplane 9y ago

Minimum wage isn't just "you have to pay workers enough to survive", it's also "you have to acknowledge that workers are worth amount X".

LyndsySimon 9y ago
Alternatively, it's "you cannot hire employees who are less valuable to you than this arbitrary threshold." If someone wants to work for $1 / hour and someone else wants to hire them for $1 / hour... what right does a third party have to prevent them from doing business with each other?
- WorldMaker 9y ago
  The problem is that the labor market has never been "liquid" enough to be truly competitive. There are far too many externalities in play in labor for that ever to be the case. (Location, ability to work, skill levels, are all basic externalities that keep labor markets from being liquid. In the US market because health care, retirement, and other basic are employer-connected, those further externalities prevent liquidity for labor.) If people had the right not to work, you'd have a more liquid labor market. If people's basic necessities were met before needing to work, you'd have a more liquid labor market. Until that day, minimum wage are basic hacks to try to present some of those labor externalities as a basic deserved negotiating position.
- malyk 9y ago
  Coercion, basically. People need money to live. Some of them need money more desperately than others. Some are willing to work long hours under shitty conditions for almost anything. So, if you have 1 job, and 2 people need to work to survive, then the salary for that job will approach zero because those people have no other choice. We, as a society, realize that is a bad outcome for everyone, and so we say "Look, I know you /could/ hire someone to clean your toilet for $1 an hour, but that isn't the true cost of toilet cleaning because we don't live in a truly free market and there are larger factors that might force people to accept that wage against their will. Therefore, we're going to say that $X is the lowest you are allowed to pay to overcome the inherent coercion in jobs." One of the beauties of UBI is that, at least theoretically, low wage jobs will have salaries that actually come closer to the true market clearing price of the job itself. To be clear, it is likely that the true cost of toilet cleaning is closer to $3 or $4 an hour, but people with no options would take the job for $1...and there are a ton of those people out there. Under UBI there might not be people that desperate any longer and so they would only take the toilet cleaning job if it paid more...closer to the true market value of having clean toilets.
  - bmcusick 9y ago
    Yup, good summary. The coercion angle is one more reason why maintaining "full employment" is a pro-labor policy. By keeping the number of job openings larger than the number of people looking for work, you create bargaining power for workers to increase wages. The UBI angle works both for and against worker negotiating leverage. On the one hand, workers know that their entire income isn't on the line if they quit, so they have more leverage. On the other hand, they know that they're getting X from the government, and while they need Y to live, they'll accept work at Y-X.
bmcusick 9y ago
Are they worth X though? What if they produce X-1 in value? Would you hire someone who cost more than they produced? Someone's wage has an absolute ceiling at the level of "this is how much value I produce per hour". No one will hire you for more than that. And currently, there are some people who cannot be hired at minimum wage. A UBI (and national health insurance) would help a lot with wages though. With less fear of losing their job, employees would have more bargaining power. They'd also have more resources to spend on commuting or time off work for interviews. By expanding the number of potential employers a person has access to, you indirectly allow them to bargain for higher wages, even without explicitly setting a minimum wage.