5 ms·
This article is just a thin veil around advocacy for an $15 minimum wage, which is typical nonsense peddled by well-meaning people that simply don't understand
by core-questions 7y ago
This article is just a thin veil around advocacy for an $15 minimum wage, which is typical nonsense peddled by well-meaning people that simply don't understand economics well enough to be writing for a prestigious paper.
I understand the sentiment, but the problem is that a rising minimum wage is guaranteed to result in rising prices for staple products, while the majority of the people purchasing them aren't earning any more.
Facile example: as a middle class guy, I can pay $5 for a box of blueberries and just have them in the house. $10 pushes it to be a treat that I would buy ten times less often. $20 makes it a luxury I buy once a year at most.
If we increase the minimum wage, and fight for people working illegally under the table for less than the minimum (which has to be part of the plan if you intend to have any honesty in your approach), the result is necessarily that the price of blueberries will rise. If this pushes the cost of blueberries to the point where normal people won't buy them anymore, the business model becomes unsustainable.
As the wage rises, during the process, we'll see worker conditions deteriorate, an increased turn to illegal labour (and a commensurate demand for illegal immigrants to do it, which furthers that problem), and eventually either farms folding, changing crops to something more profitable, or perhaps subsidies coming in. Of course, we should have learned from corn what happens when we oversubsidize crops; at the very least price discovery is somewhat removed from the market and so things are priced cheaply that shouldn't be, people overconsume while tax dollars make up the difference, etc. One can probably argue that staple crops (wheat, etc) should be subsidized, but blueberries aren't quite as critical, are they?
To make an example more germane to this particular issue: if the minimum wage increases and all of the people involved in the chain leading to these food delivery drivers costs too much, when the potential consumer sees that ordering food is simply too expensive for them, they'll just give up. Entire industries that function because intelligent people have carefully budgeted around wages and expenses to eke out a living will be negatively impacted, and parts of them will fail.
And yet, we'll survive it. But let's not kid ourselves: the standard of living for the poor isn't going to get any better by changing this number. Instead, what happens is that the middle class effectively earns less (try calculating your salary as a function of the minimum wage - if you made 3x before, maybe you make 2.5x now; if you made 1.25x before, maybe you make 1x now....) while the rich don't even notice the change. For brief periods of time while the market settles, those at the minimum wage line will have an advantage, but once the price of goods and services finishes rising to compensate, it's back to square one. The purchasing power of the dollar simply drops to match.
- swiley 7y agoIMO the best thing we can do to help the poor is fix the housing price insanity.
- droithomme 7y agoHousing is cheap in 95% of the country.
- curioussavage 7y agoSo what? Most of the population lives around the coast. Who cares if it’s cheap in flyover states.
- sdinsn 7y ago~95% of the country by area. Not by population. I could buy a house in the middle of nowhere for pennies, but it doesn't matter since there are no jobs there.
- chronic7382 7y ago> IMO the best thing we can do to help the poor is fix the housing price insanity. Not everyone has the right to live in the Bay Area or NYC. These are top cities. If you're not top financially, then go live somewhere else.
- sdinsn 7y agoThe Bay Area and NYC are not the only expensive areas...
- core-questions 7y agoAgreed to some extent, but we need to stop pretending that living in a top tier city is some fundamental human right. It's possible some folks simply don't produce enough value to sustainably live in an expensive city, and should go and move somewhere less in demand where real-estate is cheaper. Plenty of such places exist, and really, considering the potential for remote work plus the ease of ordering online, we should be seeing a resurgence of small towns....