10 ms·

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have.

whateveracct 6y ago
> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?
- macspoofing 6y ago
  I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.
  - __blockcipher__ 6y ago
    Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
    - ClumsyPilot 6y ago
      The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
    - willcipriano 6y ago
      If you made a minimum wage that was significantly above the prevailing wage I'd expect to see inflation in a economy like the US. My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. We might not call that inflation in the economy generally as after all stocks would "deflate" during that time but in terms of living day to day it would be. Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers. That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.
      - macspoofing 6y ago
        >My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. OK ... but if the money supply stays the same, then all you're doing is just shifting the demand curves from one set of products (stocks) to another (TVs?). Put anther way, some things will go up, and some things will go down because spending habits changed. This happens now. It's not inflation just because the price of roses goes up in February.
        willcipriano 6y ago
        I agree it isn't inflation in the classic sense, I'm not sure of a great term for this effect. A thought experiment, if I printed up a dollar for each one in circulation then put them in a vault that shouldn't cause inflation even though the money supply has doubled, similarly if in a thousand years someone opens the vault and puts those dollars into circulation inflation happens even though the money supply has unchanged. My thesis is dollars that go between hedge fund to hedge fund are "in a vault" compared to dollars that are buying food at the local Walmart. If some of those hedge fund dollars ends up in the hands of a individual (say a minimum wage increase causes firms to halt buybacks and direct that money toward payroll) that would cause inflation of consumer goods as now we have more dollars chasing the same output.
    - machiaweliczny 6y ago
      Im from EU and I think that minimum wage is basically negotiation with employer on your behalf. Obviously the lowest earning people don't have resources to negotiate salary well. IMO it's probably better to define it on more granular lvl that federal. If someone earns less it should be considered gig not work and basically non even taxed.
    - jayd16 6y ago
      >you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. B does not follow from A if demand is elastic. Minimum wage proponents assume enough labor demand is elastic.
    - whateveracct 6y ago
      > But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation. Inflation is a boogeyman. I heard a friend of mine not wanting any sort of covid stimulus checks because it would make his and his family's savings depreciate.
      - kyuudou 6y ago
        Huh? Inflation is very real. The dollars I saved from 20 years ago buy a lot less across the consumer spectrum. Prices don't go up, the money's purchasing power goes down. That is not a "boogeyman", it's theft by the inflation tax.
        whateveracct 6y ago
        yes it's very real, but it is used as a black-and-white "any and all inflation is bad" thing like in my example, especially when discussed on its own instead of holistically combined with things like economic growth and interest rates and other things.
  - machiaweliczny 6y ago
    Minimum wage just forces some ppl to do more productive stuff. It will take away some jobs but you probably dont want such jobs in developed country. It's just better to allow more part-time work IMO. I would like some opinion of Dutch ppl on their part time work law, which seems interesting to me.
    - NortySpock 6y ago
      "probably dont want such jobs in developed country" You don't want cashiers, wait staff, grocery baggers or call center staff? All of these jobs are generally minimum wage.
      - machiaweliczny 6y ago
        Yeah if you arent willing to pay them living wage you probably don't. I'm fine with paying little more than handling it myself. I think amazon Go style shops will get popular. These people probably can transition to different parts of service economy well. Low skill call centers are total waste of human time, that's why most of it is outsourced. UX just can get improved instead.
        macspoofing 6y ago
        >Yeah if you arent willing to pay them living wage you probably don't. What if they are willing to work for less because it serves their purpose (like a foot in the door in the industry, or something else that you and I can't even think of). For example, we allow unpaid internships because we see the value of it. What about an internship that pays a little? Isn't that better for all? The problem is you're taking choice away from people who may want it or need it. Why do you think you know better what's good for them than they do?
        machiaweliczny 6y ago
        Yeah, foot in the door to work in McDonalds so you can what? Be manager one day and afford to have family? Foot in the door as cleaning lady to be hired as secretary? Maybe. Basically min wage should be defined as basic needs for individual. I don't think that many people will chose to go for lower than that for future personal gain. Anyway that's what democracy is for :)
  - JumpCrisscross 6y ago
    > it isn't inflationary. You're not creating new money Nitpick. We have no evidence minimum wage increases are inflationary. (We have evidence it is not [1][2].) But something doesn't have to create new money to be inflationary. Increasing money velocity causes inflation as much as printing bills. The poor spend their dollars in the real economy (as opposed to the wealthy, who buy GameStock calls). That increases demand for those goods and services, which can result in a price spike. Again, we don't have evidence of this happening. But theoretically, it's sound. (And less theoretically, it's why central banks can print pots of money while still fighting deflation.) [1] https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf [2] https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf
    - macspoofing 6y ago
      OK .. so when price of flowers goes up prior to Valentine's day, that's inflation?
      - JumpCrisscross 6y ago
        > when price of flowers goes up prior to Valentine's day, that's inflation? No. Inflation is a "a general rise in the price level in an economy over a period of time" [1]. A single product pricing up is not a "general rise," and a temporary spike before Valentine's Day isn't "over a period of time." [1] https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation
        macspoofing 6y ago
        OK! Fair enough!
- ihsw 6y ago
  There is only so much money for businesses to allocate towards labor, it is not infinite. Eg: $15K per month for staffing translates to $3750 per week, which translates to $125 per hour at 30 hours per week on average, which translates to ~10 staff at $12 per hour. At $15 per hour that is reduced to 8 staff. Alternatively the hours for 10 staff would be reduced from 30 hours per week to 24 hours per week. The money doesn't come from thin air, raising minimum wage for 10 staff at $12 per hour to $15 doesn't mean there will be no layoffs or reduction in hours. Increasing prices of products sold or services rendered would result in a reduction in products sold or services rendered. Again, the money doesn't come from thin air -- either prices are raised or staff costing is reduced through cut hours or cut headcount. Who gets cut is another question too -- more than likely it is tied to appearance, education, likeability, or seniority. Who gets hired is another question too -- if the bar is too high for an uneducated black youth then they will simply not get hired. An increase in the minimum wage can result (and has historically resulted in) in higher unemployment among black youth.
  - RobertoG 6y ago
    I'm in awe that you managed to make your case, about this complex subject, without mentioning business profit anywhere.
  - Jochim 6y ago
    This only holds true for places where there's no room to increase the staffing budget. There are some industries where it might have an effect, restaurants/coffee shops in particular. But I wouldn't expect mass produced goods/foodstuffs to increase much if at all, simply because of how efficiently the labour is utilised. There are also be potential productivity gains from having workers in a more financially stable position.
    - anewaccount2021 6y ago
      > This only holds true for places where there's no room to increase the staffing budget. Amazon. Enjoy your monoculture.
- missedthecue 6y ago
  If someone's skills do not justify $15/hr, they will get locked out of the labor market, keeping them in poverty. Many municipalities enacted the minimum wage as a way to keep blacks out of the workforce. It is literally an example of codified systemic racism.
evan_ 6y ago
people living in poverty don’t have “savings”
- macspoofing 6y ago
  Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.
  - api 6y ago
    Very very few Americans do this. They should, but they don't. Everything in the culture encourages people to spend.
    - macspoofing 6y ago
      It's a perplexing attitude. OP just threw it out there as if it's an obvious fact that "people living in poverty don’t have “savings”". That is such a blatantly false statement. Poor people in developing countries have savings. I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did. Poor people aren't idiots. They think about the future. They plan for the future. If they need to save, they will save.
    - war1025 6y ago
      Further, if you tell them it's possible they will attack you for suggesting such a thing could even be possible.
      - nickpp 6y ago
        Especially if you point out to them that they are carelessly wasting the one resource they have that is more valuable than money: time.
    - sudosysgen 6y ago
nickpp 6y ago
Also destroyed is the value of one's work if worth under minimum wage: she will be rendered unemployable legally. My first job I got as a poor student is now illegal. Had a chat with that business owner (we still keep in touch) and he only can only afford to hire experienced people now. That job pretty much launched my career and life. I was woefully unprepared for it, but I was cheap.
deleted 6y ago
[deleted]
xirbeosbwo1234 6y ago
Are you suggesting that raising the minimum wage will increase inflation? That seems theoretically plausible to me, I suppose, but I haven't seen any evidence for it happening in practice. We have had plenty of natural experiments where one region has raised the minimum wage while its neighbours have not. Do you have any information about what happened to inflation in those cases? I am entirely convinced that an increase to the minimum wage (perhaps not as high as $15/hr) will have no major effect on employment. That idea is contradicted by all the empirical evidence we have. I have not seen enough evidence to draw a conclusion on inflation.
machiaweliczny 6y ago
I just started reading Pikkety and at 2010 already private owned capital was at 600% of GDP (almost reaching pre WW1 lvl). I wonder how it's now when stock rised 4x in the last 4 years (probably will rise more with next relief). They have some DB online with such info. I'm of opinion that work is no longer profitable (and I have top non-exec salary). I'm not from US but IMO federal wage is stupid but on state lvl I would urge you to implement it. I'm from Poland and I think that keeping our own currency was good for staying competitive. If we had federal EU minimum wage we would be in ruin. Actually EU mandated minimum wage recently but it's defined as 50% of average salary which we have in our country already. Gemany has min at 41% or something like that for example.
- runamok 6y ago
  That seems more sane and seems to ensure less inequality. E.g. a rising tide lifts all boats. I think that would be something like 24000 a year based on 2019: https://www.thestreet.com/personal-finance/average-income-in-us-14852178 https://www.thestreet.com/personal-finance/average-income-in... Current federal minimum is about $15,000 a year for 40 hours a week. However, I doubt the politicians will do it as it's harder to explain.
  - machiaweliczny 6y ago
    Fedeal min wage might cause demage to underdeveloped parts of country if it's too high.
bwestergard 6y ago
"talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have." This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor. But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture. https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/ https://www.theatlantic.com/business/archive/2017/01/economi...
- WC3w6pXxgGd 6y ago
  Actual Econ 101 would be understanding how setting a price floor on peoples' ability to sell their labor (aka a "minimum wage") is destructive and immoral.
  - machiaweliczny 6y ago
    Actually understanding current laws, game theory and money supply make minimum wage preferable.
    - krupan 6y ago
      “Current laws” is kinda what we are arguing against
  - rconti 6y ago
    You're fair to argue that it's immoral; I'm agnostic on the idea. Though I'm not sure that Economics has much to say about it. As for whether it's destructive, I used to strongly believe so. Now I believe that, as long as there is unemployment in the system (and my understanding is economics tells us that there will ALWAYS be unemployment), the lack of an adequate wage floor will always result in a race to the bottom and a drag on wages. In the minimum-wage-adjacent pay rates, you might have double the potential workers than the number of workers actually hired. There is therefore zero incentive to offer additional pay for additional productivity at that wage tier, because the employees can simply be replaced (yes, at some fixed cost).
JPKab 6y ago
I might be wrong, but I suspect that if this pandemic had hit before remote working technology had become widespread amongst professionals and white collar elites, there wouldn't have been such an aggressive, broad lock-down strategy. Instead, the people with power and influence, like us, felt minimal pain compared to the working classes, and marched on with our policies in bliss. Meanwhile, my family (I grew up in a working class rural family) has suffered tremendously back "home". I'm ok with what's necessary, but deeply resent the politically safe strategy of overreacting by default. If you live in California, you may be interested to learn that elementary schools are open in states like Colorado, and these states universally have lower rates of infection than CA. You may also be interested to know that a study published by the American Academy of Pediatrics (those quacks!), conducted jointly by Duke/UNC, following 100,000 students and faculty in North Carolina public schools, conclusively determined that schools can be opened safely with basic PPE and adjustments in scheduling. https://www.aappublications.org/news/2021/01/08/covid-north-carolina-schools-study-010821 https://www.aappublications.org/news/2021/01/08/covid-north-... From the study: "During the nine-week study period, the 11 districts reported 773 community-acquired infections. Typically, people in North Carolina who are infected have infected slightly more than one other person, meaning there was the potential for 800 to 900 secondary infections within the schools. However, local public health officials found only 32 in-school transmissions, according to the study. Of those 32 cases, six were in pre-kindergarten, 11 were in elementary schools, six were in middle schools, five were in high schools and four were in schools that included kindergarten through 12th grade. None of the cases involved a child infecting an adult." My daughter and son are both enrolled and attending in-person school here in Colorado, and it's gone smoothly. I'm curious as to what dynamics exist in California school buildings that would be different than my kid's school buildings, and can't think of any. Which makes me strongly suspect that California and certain other places have schools closed out of an overabundance of caution that doesn't take into account the holistic costs of keeping them closed.

whateveracct 6y ago

> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?

macspoofing 6y ago
I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.
- __blockcipher__ 6y ago
  Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
  - ClumsyPilot 6y ago
    The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
  - willcipriano 6y ago
    If you made a minimum wage that was significantly above the prevailing wage I'd expect to see inflation in a economy like the US. My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. We might not call that inflation in the economy generally as after all stocks would "deflate" during that time but in terms of living day to day it would be. Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers. That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.
    - macspoofing 6y ago
      >My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. OK ... but if the money supply stays the same, then all you're doing is just shifting the demand curves from one set of products (stocks) to another (TVs?). Put anther way, some things will go up, and some things will go down because spending habits changed. This happens now. It's not inflation just because the price of roses goes up in February.
      - willcipriano 6y ago
        I agree it isn't inflation in the classic sense, I'm not sure of a great term for this effect. A thought experiment, if I printed up a dollar for each one in circulation then put them in a vault that shouldn't cause inflation even though the money supply has doubled, similarly if in a thousand years someone opens the vault and puts those dollars into circulation inflation happens even though the money supply has unchanged. My thesis is dollars that go between hedge fund to hedge fund are "in a vault" compared to dollars that are buying food at the local Walmart. If some of those hedge fund dollars ends up in the hands of a individual (say a minimum wage increase causes firms to halt buybacks and direct that money toward payroll) that would cause inflation of consumer goods as now we have more dollars chasing the same output.
  - machiaweliczny 6y ago
    Im from EU and I think that minimum wage is basically negotiation with employer on your behalf. Obviously the lowest earning people don't have resources to negotiate salary well. IMO it's probably better to define it on more granular lvl that federal. If someone earns less it should be considered gig not work and basically non even taxed.
  - jayd16 6y ago
    >you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. B does not follow from A if demand is elastic. Minimum wage proponents assume enough labor demand is elastic.
  - whateveracct 6y ago
    > But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation. Inflation is a boogeyman. I heard a friend of mine not wanting any sort of covid stimulus checks because it would make his and his family's savings depreciate.
    - kyuudou 6y ago
      Huh? Inflation is very real. The dollars I saved from 20 years ago buy a lot less across the consumer spectrum. Prices don't go up, the money's purchasing power goes down. That is not a "boogeyman", it's theft by the inflation tax.
      - whateveracct 6y ago
        yes it's very real, but it is used as a black-and-white "any and all inflation is bad" thing like in my example, especially when discussed on its own instead of holistically combined with things like economic growth and interest rates and other things.
- machiaweliczny 6y ago
  Minimum wage just forces some ppl to do more productive stuff. It will take away some jobs but you probably dont want such jobs in developed country. It's just better to allow more part-time work IMO. I would like some opinion of Dutch ppl on their part time work law, which seems interesting to me.
  - NortySpock 6y ago
    "probably dont want such jobs in developed country" You don't want cashiers, wait staff, grocery baggers or call center staff? All of these jobs are generally minimum wage.
    - machiaweliczny 6y ago
      Yeah if you arent willing to pay them living wage you probably don't. I'm fine with paying little more than handling it myself. I think amazon Go style shops will get popular. These people probably can transition to different parts of service economy well. Low skill call centers are total waste of human time, that's why most of it is outsourced. UX just can get improved instead.
      - macspoofing 6y ago
        >Yeah if you arent willing to pay them living wage you probably don't. What if they are willing to work for less because it serves their purpose (like a foot in the door in the industry, or something else that you and I can't even think of). For example, we allow unpaid internships because we see the value of it. What about an internship that pays a little? Isn't that better for all? The problem is you're taking choice away from people who may want it or need it. Why do you think you know better what's good for them than they do?
        machiaweliczny 6y ago
        Yeah, foot in the door to work in McDonalds so you can what? Be manager one day and afford to have family? Foot in the door as cleaning lady to be hired as secretary? Maybe. Basically min wage should be defined as basic needs for individual. I don't think that many people will chose to go for lower than that for future personal gain. Anyway that's what democracy is for :)
- JumpCrisscross 6y ago
  > it isn't inflationary. You're not creating new money Nitpick. We have no evidence minimum wage increases are inflationary. (We have evidence it is not [1][2].) But something doesn't have to create new money to be inflationary. Increasing money velocity causes inflation as much as printing bills. The poor spend their dollars in the real economy (as opposed to the wealthy, who buy GameStock calls). That increases demand for those goods and services, which can result in a price spike. Again, we don't have evidence of this happening. But theoretically, it's sound. (And less theoretically, it's why central banks can print pots of money while still fighting deflation.) [1] https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf [2] https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf
  - macspoofing 6y ago
    OK .. so when price of flowers goes up prior to Valentine's day, that's inflation?
    - JumpCrisscross 6y ago
      > when price of flowers goes up prior to Valentine's day, that's inflation? No. Inflation is a "a general rise in the price level in an economy over a period of time" [1]. A single product pricing up is not a "general rise," and a temporary spike before Valentine's Day isn't "over a period of time." [1] https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation
      - macspoofing 6y ago
        OK! Fair enough!
ihsw 6y ago
There is only so much money for businesses to allocate towards labor, it is not infinite. Eg: $15K per month for staffing translates to $3750 per week, which translates to $125 per hour at 30 hours per week on average, which translates to ~10 staff at $12 per hour. At $15 per hour that is reduced to 8 staff. Alternatively the hours for 10 staff would be reduced from 30 hours per week to 24 hours per week. The money doesn't come from thin air, raising minimum wage for 10 staff at $12 per hour to $15 doesn't mean there will be no layoffs or reduction in hours. Increasing prices of products sold or services rendered would result in a reduction in products sold or services rendered. Again, the money doesn't come from thin air -- either prices are raised or staff costing is reduced through cut hours or cut headcount. Who gets cut is another question too -- more than likely it is tied to appearance, education, likeability, or seniority. Who gets hired is another question too -- if the bar is too high for an uneducated black youth then they will simply not get hired. An increase in the minimum wage can result (and has historically resulted in) in higher unemployment among black youth.
- RobertoG 6y ago
  I'm in awe that you managed to make your case, about this complex subject, without mentioning business profit anywhere.
- Jochim 6y ago
  This only holds true for places where there's no room to increase the staffing budget. There are some industries where it might have an effect, restaurants/coffee shops in particular. But I wouldn't expect mass produced goods/foodstuffs to increase much if at all, simply because of how efficiently the labour is utilised. There are also be potential productivity gains from having workers in a more financially stable position.
  - anewaccount2021 6y ago
    > This only holds true for places where there's no room to increase the staffing budget. Amazon. Enjoy your monoculture.
missedthecue 6y ago
If someone's skills do not justify $15/hr, they will get locked out of the labor market, keeping them in poverty. Many municipalities enacted the minimum wage as a way to keep blacks out of the workforce. It is literally an example of codified systemic racism.

evan_ 6y ago

people living in poverty don’t have “savings”

macspoofing 6y ago
Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.
- api 6y ago
  Very very few Americans do this. They should, but they don't. Everything in the culture encourages people to spend.
  - macspoofing 6y ago
    It's a perplexing attitude. OP just threw it out there as if it's an obvious fact that "people living in poverty don’t have “savings”". That is such a blatantly false statement. Poor people in developing countries have savings. I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did. Poor people aren't idiots. They think about the future. They plan for the future. If they need to save, they will save.
  - war1025 6y ago
    Further, if you tell them it's possible they will attack you for suggesting such a thing could even be possible.
    - nickpp 6y ago
      Especially if you point out to them that they are carelessly wasting the one resource they have that is more valuable than money: time.
  - sudosysgen 6y ago

nickpp 6y ago

Also destroyed is the value of one's work if worth under minimum wage: she will be rendered unemployable legally. My first job I got as a poor student is now illegal. Had a chat with that business owner (we still keep in touch) and he only can only afford to hire experienced people now. That job pretty much launched my career and life. I was woefully unprepared for it, but I was cheap.

deleted 6y ago

[deleted]

xirbeosbwo1234 6y ago

Are you suggesting that raising the minimum wage will increase inflation? That seems theoretically plausible to me, I suppose, but I haven't seen any evidence for it happening in practice. We have had plenty of natural experiments where one region has raised the minimum wage while its neighbours have not. Do you have any information about what happened to inflation in those cases? I am entirely convinced that an increase to the minimum wage (perhaps not as high as $15/hr) will have no major effect on employment. That idea is contradicted by all the empirical evidence we have. I have not seen enough evidence to draw a conclusion on inflation.

machiaweliczny 6y ago

I just started reading Pikkety and at 2010 already private owned capital was at 600% of GDP (almost reaching pre WW1 lvl). I wonder how it's now when stock rised 4x in the last 4 years (probably will rise more with next relief). They have some DB online with such info. I'm of opinion that work is no longer profitable (and I have top non-exec salary). I'm not from US but IMO federal wage is stupid but on state lvl I would urge you to implement it. I'm from Poland and I think that keeping our own currency was good for staying competitive. If we had federal EU minimum wage we would be in ruin. Actually EU mandated minimum wage recently but it's defined as 50% of average salary which we have in our country already. Gemany has min at 41% or something like that for example.

runamok 6y ago
That seems more sane and seems to ensure less inequality. E.g. a rising tide lifts all boats. I think that would be something like 24000 a year based on 2019: https://www.thestreet.com/personal-finance/average-income-in-us-14852178 https://www.thestreet.com/personal-finance/average-income-in... Current federal minimum is about $15,000 a year for 40 hours a week. However, I doubt the politicians will do it as it's harder to explain.
- machiaweliczny 6y ago
  Fedeal min wage might cause demage to underdeveloped parts of country if it's too high.

bwestergard 6y ago

"talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have." This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor. But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture. https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/ https://www.theatlantic.com/business/archive/2017/01/economi...

WC3w6pXxgGd 6y ago
Actual Econ 101 would be understanding how setting a price floor on peoples' ability to sell their labor (aka a "minimum wage") is destructive and immoral.
- machiaweliczny 6y ago
  Actually understanding current laws, game theory and money supply make minimum wage preferable.
  - krupan 6y ago
    “Current laws” is kinda what we are arguing against
- rconti 6y ago
  You're fair to argue that it's immoral; I'm agnostic on the idea. Though I'm not sure that Economics has much to say about it. As for whether it's destructive, I used to strongly believe so. Now I believe that, as long as there is unemployment in the system (and my understanding is economics tells us that there will ALWAYS be unemployment), the lack of an adequate wage floor will always result in a race to the bottom and a drag on wages. In the minimum-wage-adjacent pay rates, you might have double the potential workers than the number of workers actually hired. There is therefore zero incentive to offer additional pay for additional productivity at that wage tier, because the employees can simply be replaced (yes, at some fixed cost).

JPKab 6y ago

I might be wrong, but I suspect that if this pandemic had hit before remote working technology had become widespread amongst professionals and white collar elites, there wouldn't have been such an aggressive, broad lock-down strategy. Instead, the people with power and influence, like us, felt minimal pain compared to the working classes, and marched on with our policies in bliss. Meanwhile, my family (I grew up in a working class rural family) has suffered tremendously back "home". I'm ok with what's necessary, but deeply resent the politically safe strategy of overreacting by default. If you live in California, you may be interested to learn that elementary schools are open in states like Colorado, and these states universally have lower rates of infection than CA. You may also be interested to know that a study published by the American Academy of Pediatrics (those quacks!), conducted jointly by Duke/UNC, following 100,000 students and faculty in North Carolina public schools, conclusively determined that schools can be opened safely with basic PPE and adjustments in scheduling. https://www.aappublications.org/news/2021/01/08/covid-north-carolina-schools-study-010821 https://www.aappublications.org/news/2021/01/08/covid-north-... From the study: "During the nine-week study period, the 11 districts reported 773 community-acquired infections. Typically, people in North Carolina who are infected have infected slightly more than one other person, meaning there was the potential for 800 to 900 secondary infections within the schools. However, local public health officials found only 32 in-school transmissions, according to the study. Of those 32 cases, six were in pre-kindergarten, 11 were in elementary schools, six were in middle schools, five were in high schools and four were in schools that included kindergarten through 12th grade. None of the cases involved a child infecting an adult." My daughter and son are both enrolled and attending in-person school here in Colorado, and it's gone smoothly. I'm curious as to what dynamics exist in California school buildings that would be different than my kid's school buildings, and can't think of any. Which makes me strongly suspect that California and certain other places have schools closed out of an overabundance of caution that doesn't take into account the holistic costs of keeping them closed.