8 ms·

Which is why instead of mispricing labour through minimum wage you can have a negative income tax which makes up the difference. The nice thing is that it will

Which is why instead of mispricing labour through minimum wage you can have a negative income tax which makes up the difference. The nice thing is that it will apply to everyone -- working or not, sick or not, on mat leave or not, can't work because of covid or not. You top-up people's income and that's paid for through taxes. You take the benefit of efficiency and productivity from the entire economy and return it to the people at the bottom. You don't have a right to a job, or a particular income. You have a right for society to not leave you dangling when in need. Your ability to get a job or have more income should be determined by market forces. Put a negative income tax in place and ensure a minimum level of funds for every citizen and see how quickly Amazon's treatment of its warehouse workers improve. Far more than any union could provide.

Retric 6y ago
Having a negative income tax is reasonable without removing minimum wage as they deal with different things. Removing the minimum wage is effectively a subsidy for companies and industry’s that would then pay below the old minimum wage. Considering how often people in the US make below minimum wage even when it’s illegal, it seems like a bad idea. Instead even higher minimum wages can be used to drive automation.
- zanny 6y ago
  I don't think a minimum wage is ethically justified in a minimum standard of living society unless that value in progress through automation is justified. The arguments for minimum wage are always to insure it provides a livable wage, but economists generally rightly dislike it for limiting labor opportunities to ones above that wage threshold. In the absence of a minimum standard of living you rightly should cling to minimum wage laws like the lifeboats they are for the working poor. Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law. I think I'd rather see UBI / NIT and have progress towards the singularity slowed for lack of a high minimum wage to pressure automation than the status quo of extreme unhappiness and poverty (and the corresponding social unrest, drug abuse, crime, mental illness, physical ailment, etc). Of course if we can have our cake and eat it too that would be great... I'm just saying to leave the minimum wage on the bargaining table, insuring survival seems like the more important goal.
  - michaelmrose 6y ago
    We have no shortage of resteraunts even when servers, dishwashers, and cooks are all paid $15 an hour. Arguably most competent endeavors are capable of paying minimum wage. Cratering the truly incompent is a service to the market and reallocates resources to more capable players and retaining a minimum wage fosters automation and forces capital to give a larger share to labor. Either is desirable. I understand the concerns you have about automation. They are potential not fate. > I don't think a minimum wage is ethically justified in a minimum standard of living society The owner class does not make decisions based on what is ethical they act to secure their own benefits everyone might consider doing the same. > Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law. In a democracy we ought to be able to vote our own interests as soon as enough people see the merit of the idea. Fuck negotiations. If democracy remains in truth eventually inequality will make selling this idea a trivial sale beforehand its unlikely to come to pass here in the US.
- bravo22 6y ago
  Minimum wage creates distortions. For example industries that are labour heavy are impacted disproportionately to others that are more automated.
  - Retric 6y ago
    Automation is not a fixed thing. Many industries look to be people heavy but can rapidly swap, ie taxi cabs in a driverless car world. Speeding that up seems like a net social and economic benefit if we don’t need to worry about structural unemployment.
nojokes 6y ago
I do not think it would help workers. What is more likely to play out is that assuming that when currently minimum pay for a hour is $10 and tax 0% then with negative tax X and no minimum the pay would become $10 / (1-X/100). The worker will get the same (hopefully) and the company will pay less.
- usefulcat 6y ago
  It could also happen that more people decide not to bother with work, reducing the supply of labor and increasing the cost of labor (aka wages).
- zanny 6y ago
  Getting paid less is a fine outcome assuming the NIT fulfills its purpose of guaranteeing a minimum standard of living. It means the worker has voluntarily participated in selling their labor, even if its for a lower price than they would have made before, and they would always have the option to stop doing it and do something - anything - else. If the NIT is insufficient to provide the necessities of life than its institution failed in its primary objective, albeit I would still argue any NIT is better than none because it raises the poverty floor some amount above zero.
madeofpalk 6y ago
I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?
- svachalek 6y ago
  This is more or less what happens with tipping so I would assume it also happens here.
  - madeofpalk 6y ago
    Yeah, I don’t think extending that is a positive thing. It’s like taking the worst part of “tipping in the US” and running with just that’s.
  - edgyquant 6y ago
    A lot of states regulate tips so the employer has to compensate an employee whose tips equal less than the minimum wage for the hours worked.
  - dragonwriter 6y ago
    > This is more or less what happens with tipping The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT. If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.
- Dylan16807 6y ago
  The fact that everyone will get the negative tax even if they stay home (or volunteer, or work on a passion project). If you're only going to pay an extra dollar per hour, nobody will take the job.
- dragonwriter 6y ago
  > I’m not all that educated on negative tax rate Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.) (EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.) > what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference? People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)
jiscariot 6y ago
Agreed. You also get the benefit of not pricing low skilled workers out of the labor market. It is much better for the government to subsidize a person at 40% while they are obtaining skills and building their social network, than subsidizing them at 100% while they are on their couch. Your point on mispricing labor is often overlooked. It is important that society knows the real value of a specific skill/labor. This is important information that will drive innovation/efficiency as well as giving young people or those going through transitions in employment more guidance in decision making.
hajile 6y ago
> Put a negative income tax in place and ensure a minimum level of funds for every citizen and see how quickly Amazon's treatment of its warehouse workers improve. Far more than any union could provide. We ALREADY have negative income taxes. 20% of the population are given more in refunds than they paid in. 40% pay zero taxes. When you add in government benefits and programs, 60% of households take in more from the government than they pay in. https://taxfoundation.org/60-percent-households-now-receive-more-transfer-income-they-pay-taxes/ https://taxfoundation.org/60-percent-households-now-receive-... The point here being that hourly wages from these companies ALREADY account for theses factors. We could abolish these programs and raise wages, but that would be unpopular among a decent portion of the country. A more interesting discussion is Consumption taxes -- taxes on spending your money. Consumption taxes account for 17-18% of all taxes. These taxes kinda slide under the radar for most people despite accounting for a huge portion of the taxes they pay. These are also the MOST IMPORTANT taxes because they affect goods and services directly (corporations pay attention even if most individuals do not). A lot of states still charge sales taxes for things like food, diapers, and personal hygiene products (most at a reduced rate). These taxes definitely disproportionately affect the poor and should be abolished. Likewise, most states exempt prescription drugs, but still tax OTC drugs which also adversely affects the poor who are less likely to visit a doctor and/or have healthcare coverage. Taxing services to "improve or repair personal property" exists in almost half of states and is also a bad idea. It disincentivizes maintaining things and all the important things like cars, property, buildings, etc are already taxed (and most are subject to tax increases based on improvements). Then they ALSO tax the person doing the improvement service effectively taxing one improvement THREE times. This is especially important when looking at small businesses or contractors who have to pay extra overhead to deal with the additional accounting. The most egregious part is that only two states tax white-collar jobs because the white-collar workers are rich enough to lobby while blue-collar service jobs like janitors or construction workers cannot afford such luxuries. Finally, I'd love to see vehicles under $10,000 be tax-free (value as assessed by the state). Reducing vehicle costs for the poor would drastically increase their access jobs and offer an easier way to leave impoverished areas. In contrast, the electric vehicle incentives are almost entirely tax breaks for the well-off and disappear before the vehicles are cheap enough for the less well-off (if battery prices ever drop low enough for that to happen).

Retric 6y ago

Having a negative income tax is reasonable without removing minimum wage as they deal with different things. Removing the minimum wage is effectively a subsidy for companies and industry’s that would then pay below the old minimum wage. Considering how often people in the US make below minimum wage even when it’s illegal, it seems like a bad idea. Instead even higher minimum wages can be used to drive automation.

zanny 6y ago
I don't think a minimum wage is ethically justified in a minimum standard of living society unless that value in progress through automation is justified. The arguments for minimum wage are always to insure it provides a livable wage, but economists generally rightly dislike it for limiting labor opportunities to ones above that wage threshold. In the absence of a minimum standard of living you rightly should cling to minimum wage laws like the lifeboats they are for the working poor. Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law. I think I'd rather see UBI / NIT and have progress towards the singularity slowed for lack of a high minimum wage to pressure automation than the status quo of extreme unhappiness and poverty (and the corresponding social unrest, drug abuse, crime, mental illness, physical ailment, etc). Of course if we can have our cake and eat it too that would be great... I'm just saying to leave the minimum wage on the bargaining table, insuring survival seems like the more important goal.
- michaelmrose 6y ago
  We have no shortage of resteraunts even when servers, dishwashers, and cooks are all paid $15 an hour. Arguably most competent endeavors are capable of paying minimum wage. Cratering the truly incompent is a service to the market and reallocates resources to more capable players and retaining a minimum wage fosters automation and forces capital to give a larger share to labor. Either is desirable. I understand the concerns you have about automation. They are potential not fate. > I don't think a minimum wage is ethically justified in a minimum standard of living society The owner class does not make decisions based on what is ethical they act to secure their own benefits everyone might consider doing the same. > Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law. In a democracy we ought to be able to vote our own interests as soon as enough people see the merit of the idea. Fuck negotiations. If democracy remains in truth eventually inequality will make selling this idea a trivial sale beforehand its unlikely to come to pass here in the US.
bravo22 6y ago
Minimum wage creates distortions. For example industries that are labour heavy are impacted disproportionately to others that are more automated.
- Retric 6y ago
  Automation is not a fixed thing. Many industries look to be people heavy but can rapidly swap, ie taxi cabs in a driverless car world. Speeding that up seems like a net social and economic benefit if we don’t need to worry about structural unemployment.

nojokes 6y ago

I do not think it would help workers. What is more likely to play out is that assuming that when currently minimum pay for a hour is $10 and tax 0% then with negative tax X and no minimum the pay would become $10 / (1-X/100). The worker will get the same (hopefully) and the company will pay less.

usefulcat 6y ago
It could also happen that more people decide not to bother with work, reducing the supply of labor and increasing the cost of labor (aka wages).
zanny 6y ago
Getting paid less is a fine outcome assuming the NIT fulfills its purpose of guaranteeing a minimum standard of living. It means the worker has voluntarily participated in selling their labor, even if its for a lower price than they would have made before, and they would always have the option to stop doing it and do something - anything - else. If the NIT is insufficient to provide the necessities of life than its institution failed in its primary objective, albeit I would still argue any NIT is better than none because it raises the poverty floor some amount above zero.

madeofpalk 6y ago

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

svachalek 6y ago
This is more or less what happens with tipping so I would assume it also happens here.
- madeofpalk 6y ago
  Yeah, I don’t think extending that is a positive thing. It’s like taking the worst part of “tipping in the US” and running with just that’s.
- edgyquant 6y ago
  A lot of states regulate tips so the employer has to compensate an employee whose tips equal less than the minimum wage for the hours worked.
- dragonwriter 6y ago
  > This is more or less what happens with tipping The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT. If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.
Dylan16807 6y ago
The fact that everyone will get the negative tax even if they stay home (or volunteer, or work on a passion project). If you're only going to pay an extra dollar per hour, nobody will take the job.
dragonwriter 6y ago
> I’m not all that educated on negative tax rate Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.) (EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.) > what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference? People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)

jiscariot 6y ago

Agreed. You also get the benefit of not pricing low skilled workers out of the labor market. It is much better for the government to subsidize a person at 40% while they are obtaining skills and building their social network, than subsidizing them at 100% while they are on their couch. Your point on mispricing labor is often overlooked. It is important that society knows the real value of a specific skill/labor. This is important information that will drive innovation/efficiency as well as giving young people or those going through transitions in employment more guidance in decision making.

hajile 6y ago

> Put a negative income tax in place and ensure a minimum level of funds for every citizen and see how quickly Amazon's treatment of its warehouse workers improve. Far more than any union could provide. We ALREADY have negative income taxes. 20% of the population are given more in refunds than they paid in. 40% pay zero taxes. When you add in government benefits and programs, 60% of households take in more from the government than they pay in. https://taxfoundation.org/60-percent-households-now-receive-more-transfer-income-they-pay-taxes/ https://taxfoundation.org/60-percent-households-now-receive-... The point here being that hourly wages from these companies ALREADY account for theses factors. We could abolish these programs and raise wages, but that would be unpopular among a decent portion of the country. A more interesting discussion is Consumption taxes -- taxes on spending your money. Consumption taxes account for 17-18% of all taxes. These taxes kinda slide under the radar for most people despite accounting for a huge portion of the taxes they pay. These are also the MOST IMPORTANT taxes because they affect goods and services directly (corporations pay attention even if most individuals do not). A lot of states still charge sales taxes for things like food, diapers, and personal hygiene products (most at a reduced rate). These taxes definitely disproportionately affect the poor and should be abolished. Likewise, most states exempt prescription drugs, but still tax OTC drugs which also adversely affects the poor who are less likely to visit a doctor and/or have healthcare coverage. Taxing services to "improve or repair personal property" exists in almost half of states and is also a bad idea. It disincentivizes maintaining things and all the important things like cars, property, buildings, etc are already taxed (and most are subject to tax increases based on improvements). Then they ALSO tax the person doing the improvement service effectively taxing one improvement THREE times. This is especially important when looking at small businesses or contractors who have to pay extra overhead to deal with the additional accounting. The most egregious part is that only two states tax white-collar jobs because the white-collar workers are rich enough to lobby while blue-collar service jobs like janitors or construction workers cannot afford such luxuries. Finally, I'd love to see vehicles under $10,000 be tax-free (value as assessed by the state). Reducing vehicle costs for the poor would drastically increase their access jobs and offer an easier way to leave impoverished areas. In contrast, the electric vehicle incentives are almost entirely tax breaks for the well-off and disappear before the vehicles are cheap enough for the less well-off (if battery prices ever drop low enough for that to happen).