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Why is passing on the cost of transportation to the consumer considered the optimum solution? Why not instead advocate for expanding the EITC so that the govern

by bhupy 8y ago

Why is passing on the cost of transportation to the consumer considered the optimum solution? Why not instead advocate for expanding the EITC so that the government fills in the gaps caused by lower wages? At the end of the day, we as a society (rightly) demand a minimum standard of living for everyone, and we collectively pay for that one way or the other. Either we pay taxes to fund a welfare state, or we pay inflated prices for goods and services to maintain wage floors. I'd argue that paying taxes for welfare is more progressive, as the burden falls on richer people. Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor. What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price (ignoring for a moment the need to make sure externalities are included in the price via congestion taxes). This is good for consumers, since the good/service is now accessible to people lower on the socioeconomic ladder. If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money?

CharlesColeman 8y ago
> Why is passing on the cost of transportation [minimum wages] to the consumer considered the optimum solution? I don't, but I think it's more politically achievable and a lot more optimal than the status quo. > What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price ....This is good for consumers....If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money? One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government.
- AnthonyMouse 8y ago
  > One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. They only get to pocket the money if they lack effective competition. Uber can't charge higher fares while paying lower wages and not expect Lyft or someone else to eat their lunch.
- bhupy 8y ago
  > I think it's more politically achievable and a lot more optimal than the status quo. That's not necessarily true, EITC is an existing program. "Increase EITC" requires just as much political will as "Increase the minimum wage". > One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. You could apply this argument against any form of welfare. Why should the government provide health insurance? Doing so allows employers to shirk their responsibility to provide health insurance to their workers. At the end of the day, we agree as a society that there's a minimum standard of living that everyone ought to enjoy, and welfare is our way of ensuring that. That there are some professions (like rideshare drivers) in which the pay is too low to maintain a minimum standard of living sounds like a welfare problem.
  - CharlesColeman 8y ago
    > You could apply this argument against any form of welfare. Only welfare that you can collect while employed. I personally feel that the welfare costs incurred by any employed person should be billed back to their employer (except in some special cases like otherwise unemployable disabled people). > That there are some professions (like rideshare drivers) in which the pay is too low to maintain a minimum standard of living sounds like a welfare problem. It is, though I think welfare solutions become taxation problems, and the people who should pay the most tax also those who are most sophisticated at avoiding it.
    - bhupy 8y ago
      > Only welfare that you can collect while employed. You're right, and I'd personally advocate for removing the employment requirement for the EITC (closer to a negative income tax or even a UBI), but expanding the EITC is more politically tenable in the near term, and becomes a stepping stone to achieve the latter. > the people who should pay the most tax also those who are most sophisticated at avoiding it Are you suggesting that welfare and progressive taxation don't work? Or are you arguing that regressive taxes are more optimum/more effective?
robocat 8y ago
> or we pay inflated prices for goods and services to maintain wage floors. [snip] Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor. Not regressive if the poor are earning more because of a widely deployed wage floor (with obvious caveats).
- bhupy 8y ago
  > Not regressive if the poor are earning more because of a widely deployed wage floor It's a leaky system because the unemployed (as well as minors and retirees) don't benefit from this and still end up paying higher prices. Wouldn't it be more effective (not to mention simpler) to let the market drive down the cost of labor to its minimum possible price, and then letting richer people subsidize poorer people through progressive taxation and redistributive welfare?
  - robocat 8y ago
    Yes, driving wages to zero is obviously progressive taxation! Until the US becomes a member of the EU... Then it would be OK to tax the US poor, because that would be progressive taxation (because the US poor are much richer than the EU poor, tax the "wealthy" US citizens to pay the poor EU citizens?)
    - bhupy 8y ago
      It absolutely is. We use the market to drive the price of goods to zero (this is why milk, bread, and clothing is so cheap). We are simply applying the same thinking to the price of labor as well. Humanity is collectively better off for it. We should absolutely aim to drive wages to zero. Why artificially inflate them? In the (perhaps distant) future, all goods and services are provided by automation and machinery, and humans wouldn’t work. All wages would essentially be zero by then.

by bhupy 8y ago

CharlesColeman 8y ago

> Why is passing on the cost of transportation [minimum wages] to the consumer considered the optimum solution? I don't, but I think it's more politically achievable and a lot more optimal than the status quo. > What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price ....This is good for consumers....If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money? One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government.

AnthonyMouse 8y ago
> One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. They only get to pocket the money if they lack effective competition. Uber can't charge higher fares while paying lower wages and not expect Lyft or someone else to eat their lunch.
bhupy 8y ago
> I think it's more politically achievable and a lot more optimal than the status quo. That's not necessarily true, EITC is an existing program. "Increase EITC" requires just as much political will as "Increase the minimum wage". > One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. You could apply this argument against any form of welfare. Why should the government provide health insurance? Doing so allows employers to shirk their responsibility to provide health insurance to their workers. At the end of the day, we agree as a society that there's a minimum standard of living that everyone ought to enjoy, and welfare is our way of ensuring that. That there are some professions (like rideshare drivers) in which the pay is too low to maintain a minimum standard of living sounds like a welfare problem.
- CharlesColeman 8y ago
  > You could apply this argument against any form of welfare. Only welfare that you can collect while employed. I personally feel that the welfare costs incurred by any employed person should be billed back to their employer (except in some special cases like otherwise unemployable disabled people). > That there are some professions (like rideshare drivers) in which the pay is too low to maintain a minimum standard of living sounds like a welfare problem. It is, though I think welfare solutions become taxation problems, and the people who should pay the most tax also those who are most sophisticated at avoiding it.
  - bhupy 8y ago
    > Only welfare that you can collect while employed. You're right, and I'd personally advocate for removing the employment requirement for the EITC (closer to a negative income tax or even a UBI), but expanding the EITC is more politically tenable in the near term, and becomes a stepping stone to achieve the latter. > the people who should pay the most tax also those who are most sophisticated at avoiding it Are you suggesting that welfare and progressive taxation don't work? Or are you arguing that regressive taxes are more optimum/more effective?

robocat 8y ago

> or we pay inflated prices for goods and services to maintain wage floors. [snip] Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor. Not regressive if the poor are earning more because of a widely deployed wage floor (with obvious caveats).

bhupy 8y ago
> Not regressive if the poor are earning more because of a widely deployed wage floor It's a leaky system because the unemployed (as well as minors and retirees) don't benefit from this and still end up paying higher prices. Wouldn't it be more effective (not to mention simpler) to let the market drive down the cost of labor to its minimum possible price, and then letting richer people subsidize poorer people through progressive taxation and redistributive welfare?
- robocat 8y ago
  Yes, driving wages to zero is obviously progressive taxation! Until the US becomes a member of the EU... Then it would be OK to tax the US poor, because that would be progressive taxation (because the US poor are much richer than the EU poor, tax the "wealthy" US citizens to pay the poor EU citizens?)
  - bhupy 8y ago
    It absolutely is. We use the market to drive the price of goods to zero (this is why milk, bread, and clothing is so cheap). We are simply applying the same thinking to the price of labor as well. Humanity is collectively better off for it. We should absolutely aim to drive wages to zero. Why artificially inflate them? In the (perhaps distant) future, all goods and services are provided by automation and machinery, and humans wouldn’t work. All wages would essentially be zero by then.