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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. 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?

arrrg 8y ago
So society is supposed to subsidize Uber‘s continued existence? That‘s perverted and unacceptable.
- bhupy 8y ago
  > So society is supposed to subsidize Uber‘s continued existence? That‘s perverted and unacceptable. Of course! Why should the government provide health insurance? Doing so allows employers to shirk their responsibility to provide health insurance to their workers. I think we'd both agree that government-run health insurance obviating the need for businesses to provide their employees health insurance is neither perverted nor unacceptable. Why not then apply the same thinking to the concept of wages in general? 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. And remember, society would be subsidizing Uber/Lyft via wage floors anyway, they will continue to exist (albeit only available to richer consumers), but the rich and the poor pay equally to maintain a minimum standard of living for drivers, making it function like a regressive tax. Also keep in mind that Uber's margins are razor-thin as things currently stand, since there is effective competition in Lyft et al.
ameister14 8y ago
Because one solution passes the cost on to those people that use the service, and the other passes it on to everyone.
- bhupy 8y ago
  The same argument can be made in favor of sales taxes (which are typically seen as regressive) over income taxes. One solution passes the cost onto users of ALL services (minimum wage would apply to all labor), the other passes it onto taxpayers, who ostensibly use those same services (unless you’re somehow off the grid). The latter proportionally divides the burden by socioeconomic status (progressive taxation). In practice, nearly everyone uses services that employ humans, right?
  - ameister14 8y ago
    Yeah, but it's a lot less flexible in the case of sales taxes as they are more universally and arbitrarily applied. I haven't studied this in too long to put together a tight response to your comments - food for thought for me, gotta crack back open some books. Off the top of my head, I'd say that it's likely that increases in minimum wage resulted in a greater increase in economic performance than increases in welfare distribution, but I'm not certain and I'd have to look back into it.
    - bhupy 8y ago
      > Off the top of my head, I'd say that it's likely that increases in minimum wage resulted in a greater increase in economic performance than increases in welfare distribution, but I'm not certain and I'd have to look back into it. https://en.wikipedia.org/wiki/Earned_income_tax_credit#Impact https://en.wikipedia.org/wiki/Earned_income_tax_credit#Impac...

by bhupy 8y ago

arrrg 8y ago

So society is supposed to subsidize Uber‘s continued existence? That‘s perverted and unacceptable.

bhupy 8y ago
> So society is supposed to subsidize Uber‘s continued existence? That‘s perverted and unacceptable. Of course! Why should the government provide health insurance? Doing so allows employers to shirk their responsibility to provide health insurance to their workers. I think we'd both agree that government-run health insurance obviating the need for businesses to provide their employees health insurance is neither perverted nor unacceptable. Why not then apply the same thinking to the concept of wages in general? 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. And remember, society would be subsidizing Uber/Lyft via wage floors anyway, they will continue to exist (albeit only available to richer consumers), but the rich and the poor pay equally to maintain a minimum standard of living for drivers, making it function like a regressive tax. Also keep in mind that Uber's margins are razor-thin as things currently stand, since there is effective competition in Lyft et al.

ameister14 8y ago

Because one solution passes the cost on to those people that use the service, and the other passes it on to everyone.

bhupy 8y ago
The same argument can be made in favor of sales taxes (which are typically seen as regressive) over income taxes. One solution passes the cost onto users of ALL services (minimum wage would apply to all labor), the other passes it onto taxpayers, who ostensibly use those same services (unless you’re somehow off the grid). The latter proportionally divides the burden by socioeconomic status (progressive taxation). In practice, nearly everyone uses services that employ humans, right?
- ameister14 8y ago
  Yeah, but it's a lot less flexible in the case of sales taxes as they are more universally and arbitrarily applied. I haven't studied this in too long to put together a tight response to your comments - food for thought for me, gotta crack back open some books. Off the top of my head, I'd say that it's likely that increases in minimum wage resulted in a greater increase in economic performance than increases in welfare distribution, but I'm not certain and I'd have to look back into it.
  - bhupy 8y ago
    > Off the top of my head, I'd say that it's likely that increases in minimum wage resulted in a greater increase in economic performance than increases in welfare distribution, but I'm not certain and I'd have to look back into it. https://en.wikipedia.org/wiki/Earned_income_tax_credit#Impact https://en.wikipedia.org/wiki/Earned_income_tax_credit#Impac...