5 ms·

These aren't employer subsidies, and calling them such is a lie. The money doesn't go to the companies. We have decided that there should be a minimum standard

by harryh 8y ago

These aren't employer subsidies, and calling them such is a lie. The money doesn't go to the companies. We have decided that there should be a minimum standard of living for people that live in the US. Paying for that decision falls on all of us, not just the companies that happen to employ those with lower paying jobs. This is essentially a special tax on companies that happen to have business models that require low skill labor. Why should companies(1) with business models that only require high skill labor get off the hook when it comes to paying their fare share of the bill for our countries social services? 1. or more correctly those companies stockholders and employees

twoodfin 8y ago
I agree the logic of calling market wages a "subsidy" doesn't hang together. I wonder where this idea originated; its frequent appearance in labor policy debates seems recent.
- dragonwriter 8y ago
  > I agree the logic of calling market wages a "subsidy" doesn't hang together. That's not what is being called a subsidy. Federal benefits to low-wage workers are being called a subsidy that reduces wage demands in the market. Other than EITC (which actually does act as a wage subsidy in a certain range), that's a problematic claim, too, but it's a different claim than that market wages are a subsidy.
devoply 8y ago
> We have decided that there should be a minimum standard of living for people that live in the US. We have decided no such thing. People need shelter food and clothing, these are necessities. We have decided a bare minimum of those necessities that people have a right to have. Either employers pay for these, or governments pay for these. Without them people don't have enough food to eat, don't have shelter to live, or clothing to wear.
- harryh 8y ago
  Yes, the minimum standard that we have decided upon today includes necessities like shelter, food, and clothing plus a bit more than that. The various welfare programs provided by our federal and state governments are how that standard is met.
dcole2929 8y ago
The problem is that we have not legally mandated that the wage that companies in America pay employees must be enough to obtain that minimum standard of living and so companies don't pay it. It's not a special tax on companies that require low skilled labor, it's a tax on companies that don't pay there low skilled labor enough to live on. I'm on the fence to whether this bill is a good idea or a bad one but to be clear this is more than just let's hit big companies in the pocket. Compare Amazon vs Costco for instance. Both require low skilled workers but Amazon, a company with a trillion dollar market cap, pays it's employees relatively peanuts for how much the company itself makes whereas Costco pays it employees so well, and provides enough perks that it is regularly cited as one of the best places to work. That's the difference here.
- fiter 8y ago
  I'd rather think about this in the context of healthcare. It would be nice if we had healthcare for all, because it would make hiring people easier, and people could have healthcare even if they aren't employed. This Stop BEZOS Act is like mandating that employers provide healthcare. Why not give healthcare to everyone and avoid the implementation cost for every businesses?
  - neon_electro 8y ago
    This is an interesting point - if we passed Medicare for All tomorrow, what would that mean in the context of this act?
- harryh 8y ago
  A minimum wage well above the market rate would also be a special tax on some employers while letting others off the hook. An employer is not your mother. Just because you go to work for someone, it does not automatically endow them with a special responsibility to make sure you can afford to live your life in the way a bunch of other people say that you should be able to. When we (as a citizenry) get together and decide on how we want to support each other we can't just pawn off the costs of that decision on a 3rd party. We have to accept those costs ourselves.
- 8y ago
TheBeardKing 8y ago
You could argue that poverty is a negative externality of a low wage business model, and business is responsible for covering that negative cost to society. It's in line with a factory paying for the costs of controlling its own pollution. But the argument really only holds true if you have a deterministic view of people's careers - are some inevitably committed to a low wage career because of external factors? Or are they stuck in those jobs by choice?
- harryh 8y ago
  I don't think that is a good argument because businesses don't create the poverty you are talking about. The poverty existed before the business was there unlike, say, pollution.
  - TheBeardKing 8y ago
    Not necessarily true. Look at Wal-Mart, which out-competes local businesses offering better salaries by cutting labor costs to the bone.
    - harryh 8y ago
      Maaaaaaaaayyyyybbbbbeeee. Empirical studies of this sort of effect are mixed at best. It's telling that Sander's proposed bill would only require "large employers" to pay up here. If local businesses were all paying higher salaries already they wouldn't need this exemption in the first place.
    - nerfhammer 8y ago
      > better salaries by cutting labor costs Wait, what?
      - lvh 8y ago
        You misparsed that sentence. The small companies offer better salaries, the large company cuts labor costs, by cutting labor costs they can compete on price, by competing on price they win market share, meaning small companies go out of business.
andor 8y ago
Of course it's a subsidy. If employees are only able to work for my company because they get food stamps, those food stamps make my business model viable. Without them, I would not be able to find employees, so either I'd have to increase salaries or go out of business. All the companies mentioned in the document make profits way higher than the "subsidies" they receive. They could easily increase wages or pay this tax.
- tylerhou 8y ago
  SNAP is not corporate welfare - in fact, it is the exact opposite! Employers have to pay their employees more because SNAP exists: since SNAP benefits decrease with more income, SNAP benefits decrease the marginal benefit to a worker for each extra hour worked. This reduces a worker's incentive to work and thus reduces the labor supply, so wages have to rise to maintain equilibrium (assuming labor demand is downward sloping). Another way of looking at it is SNAP gives workers a better alternative to working - not working - so it raises workers' reservation wages: https://en.wikipedia.org/wiki/Reservation_wage https://en.wikipedia.org/wiki/Reservation_wage If it were not for SNAP, you'd actually be able to hire more workers at a cheaper price because the alternative to working - not working - would no longer be as attractive. (Posted this comment top-level on a dupe, deleted it there and reposting here.)
tmaly 8y ago
Companies will seek more automation and less human workers if the cost of compliance and employing humans reduces profit. Take Amazon for example, if a living wage bill is passed, what is to say that they do not move towards a 100% robotic workforce in their warehouses in a few years?
- cbHXBY1D 8y ago
  You know they are already doing that, right? That is the singular purpose of Amazon Robotics. They think they'll have a fully robotic warehouse workforce in the next ten years.
  - tmaly 8y ago
    There have been books like The End of Work in 1995 that have talked about this. The big question is, what will become of the majority of the worlds population when this happens on a massive scale?

by harryh 8y ago

twoodfin 8y ago

I agree the logic of calling market wages a "subsidy" doesn't hang together. I wonder where this idea originated; its frequent appearance in labor policy debates seems recent.

dragonwriter 8y ago
> I agree the logic of calling market wages a "subsidy" doesn't hang together. That's not what is being called a subsidy. Federal benefits to low-wage workers are being called a subsidy that reduces wage demands in the market. Other than EITC (which actually does act as a wage subsidy in a certain range), that's a problematic claim, too, but it's a different claim than that market wages are a subsidy.

devoply 8y ago

> We have decided that there should be a minimum standard of living for people that live in the US. We have decided no such thing. People need shelter food and clothing, these are necessities. We have decided a bare minimum of those necessities that people have a right to have. Either employers pay for these, or governments pay for these. Without them people don't have enough food to eat, don't have shelter to live, or clothing to wear.

harryh 8y ago
Yes, the minimum standard that we have decided upon today includes necessities like shelter, food, and clothing plus a bit more than that. The various welfare programs provided by our federal and state governments are how that standard is met.

dcole2929 8y ago

The problem is that we have not legally mandated that the wage that companies in America pay employees must be enough to obtain that minimum standard of living and so companies don't pay it. It's not a special tax on companies that require low skilled labor, it's a tax on companies that don't pay there low skilled labor enough to live on. I'm on the fence to whether this bill is a good idea or a bad one but to be clear this is more than just let's hit big companies in the pocket. Compare Amazon vs Costco for instance. Both require low skilled workers but Amazon, a company with a trillion dollar market cap, pays it's employees relatively peanuts for how much the company itself makes whereas Costco pays it employees so well, and provides enough perks that it is regularly cited as one of the best places to work. That's the difference here.

fiter 8y ago
I'd rather think about this in the context of healthcare. It would be nice if we had healthcare for all, because it would make hiring people easier, and people could have healthcare even if they aren't employed. This Stop BEZOS Act is like mandating that employers provide healthcare. Why not give healthcare to everyone and avoid the implementation cost for every businesses?
- neon_electro 8y ago
  This is an interesting point - if we passed Medicare for All tomorrow, what would that mean in the context of this act?
harryh 8y ago
A minimum wage well above the market rate would also be a special tax on some employers while letting others off the hook. An employer is not your mother. Just because you go to work for someone, it does not automatically endow them with a special responsibility to make sure you can afford to live your life in the way a bunch of other people say that you should be able to. When we (as a citizenry) get together and decide on how we want to support each other we can't just pawn off the costs of that decision on a 3rd party. We have to accept those costs ourselves.
8y ago

TheBeardKing 8y ago

You could argue that poverty is a negative externality of a low wage business model, and business is responsible for covering that negative cost to society. It's in line with a factory paying for the costs of controlling its own pollution. But the argument really only holds true if you have a deterministic view of people's careers - are some inevitably committed to a low wage career because of external factors? Or are they stuck in those jobs by choice?

harryh 8y ago
I don't think that is a good argument because businesses don't create the poverty you are talking about. The poverty existed before the business was there unlike, say, pollution.
- TheBeardKing 8y ago
  Not necessarily true. Look at Wal-Mart, which out-competes local businesses offering better salaries by cutting labor costs to the bone.
  - harryh 8y ago
    Maaaaaaaaayyyyybbbbbeeee. Empirical studies of this sort of effect are mixed at best. It's telling that Sander's proposed bill would only require "large employers" to pay up here. If local businesses were all paying higher salaries already they wouldn't need this exemption in the first place.
  - nerfhammer 8y ago
    > better salaries by cutting labor costs Wait, what?
    - lvh 8y ago
      You misparsed that sentence. The small companies offer better salaries, the large company cuts labor costs, by cutting labor costs they can compete on price, by competing on price they win market share, meaning small companies go out of business.

andor 8y ago

Of course it's a subsidy. If employees are only able to work for my company because they get food stamps, those food stamps make my business model viable. Without them, I would not be able to find employees, so either I'd have to increase salaries or go out of business. All the companies mentioned in the document make profits way higher than the "subsidies" they receive. They could easily increase wages or pay this tax.

tylerhou 8y ago
SNAP is not corporate welfare - in fact, it is the exact opposite! Employers have to pay their employees more because SNAP exists: since SNAP benefits decrease with more income, SNAP benefits decrease the marginal benefit to a worker for each extra hour worked. This reduces a worker's incentive to work and thus reduces the labor supply, so wages have to rise to maintain equilibrium (assuming labor demand is downward sloping). Another way of looking at it is SNAP gives workers a better alternative to working - not working - so it raises workers' reservation wages: https://en.wikipedia.org/wiki/Reservation_wage https://en.wikipedia.org/wiki/Reservation_wage If it were not for SNAP, you'd actually be able to hire more workers at a cheaper price because the alternative to working - not working - would no longer be as attractive. (Posted this comment top-level on a dupe, deleted it there and reposting here.)

tmaly 8y ago

Companies will seek more automation and less human workers if the cost of compliance and employing humans reduces profit. Take Amazon for example, if a living wage bill is passed, what is to say that they do not move towards a 100% robotic workforce in their warehouses in a few years?

cbHXBY1D 8y ago
You know they are already doing that, right? That is the singular purpose of Amazon Robotics. They think they'll have a fully robotic warehouse workforce in the next ten years.
- tmaly 8y ago
  There have been books like The End of Work in 1995 that have talked about this. The big question is, what will become of the majority of the worlds population when this happens on a massive scale?