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I understand the incentives argument here, but supply and demand is still a real thing. If you can’t hire people, offer more money. Is as simple as that. Your c

I understand the incentives argument here, but supply and demand is still a real thing. If you can’t hire people, offer more money. Is as simple as that. Your competition is working under the exact same rules you are.

rualca 5y ago
It's also not really about the money. It's about quality of life. If you're the kind of boss that starts whining because you are no longer able to coerce victims into working for you then perhaps there are plenty of things other than hiking wages that are at your reach that could have a profound impact on your ability to retain employees. I'm sure slaveowners also complained when they suddenly were not able to whip people into working.
paulpauper 5y ago
but small employers have to compete with the government also offering money
- apozem 5y ago
  Sounds like good public policy! Considering real wages for most Americans have been stagnant for decades, the government should drive wages higher. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
  - throwkeep 5y ago
    It's not that simple. Higher labor costs is good for corporations because they can afford it, while it wipes out their competition. Small businesses don't have the benefits of scale and are already in survival mode. Also, increased labor costs necessarily means higher prices for goods. Which affects the poor more than the rich. Does it matter to the rich if a gallon of milk or gas goes up 2x? No, they won't even notice. But the poor sure will.
    - rStar 5y ago
      everything in this society is good for corporations because they own the politicians and write all of the laws. so it’s a competition between corporations who all want to pay below a living wage. in this case the employees are rational actors waiting for what they consider value. corporations can either not have employees, pay their employees what it costs to get them to walk in the door in the morning, or declare war on humanity and search out the least self respecting people on the planet to be wage slaves on their race to the bottom.
    - mijamo 5y ago
      I don't think that's true. Small business usually have less salaries because there is no corporate overhead and a big part of the staff is the owners who are not paid through salaries but dividends. Also small business often pay more than big corporation for low level jobs because they cannot afford the same turnover, and salary increases tend to be proportionally higher for the very lowest salaries than those just above (you go from 10 to 12 for instance, but only from 12 to 14 which is relatively smaller increase).
  - hackeraccount 5y ago
    There's something wrong with the logic though right? I mean, imagine the Government offered everyone a job doing nothing for $100,000.00 a year. What would happen? Forget about inflation (imagine we import everything and the world never becomes tired of dollars). Why would McDonald's raise wages to that amount? Why would anyone offer a job that earned the job creator less the 100,000? It seems like the most likely outcome would be that lower paying jobs would disappear not that they would suddenly start paying out more. Either that or the amount of productivity from those jobs would go above that 100,000 amount - which seems functionally the same as saying the jobs would disappear because if you're working at a restaurant generating that much revenue you're doing something far different then the summer job I had.
- blacksqr 5y ago
  "but small employers have to compete with the government guaranteeing a minimum of human dignity" Fixed it for you.
- falcolas 5y ago
  Its a damned shame all that underpaid, err, unskilled labor has a choice, ain’t it? Also, government PPP small business loans are a thing.
simonh 5y ago
Your competition is a welfare cheque that's paying people to channel surf from a sofa. That's not the same exact rules. I'm not against safety nets in principle. Check my comment history, my last but one comment was a diatribe against Marxism. But even so if Banks can get bailed out, why not sick labourers? The problem is not safety nets, it's incentive structures. That's why I like the idea of a negative income tax over basic income. The less you earn working the more you get in benefits, but as your income rises your benefits decrease. You are always better off working, and always better off earning more that way. If the incentive structure was better I think the opposition to benefits would melt away.
- yellowapple 5y ago
  > That's why I like the idea of a negative income tax over basic income. The less you earn working the more you get in benefits, but as your income rises your benefits decrease. I suspect you'll find that to be less effective at encouraging people to find jobs for the simple reason that it incentivizes people to work the bare minimum, if at all; when the income sources are mutually exclusive, there's no incentive to work unless the pay exceeds some threshold. Contrast with UBI, where the alternate income source is constant. Since UBI is by definition not conditional on whether or not someone is fully employed, that someone has no incentive to not work, whereas the compensation for voluntary work (i.e. wage/salary) remains. This ultimately means that - provided it's indeed a universal basic income - you no longer need minimum wage laws, since it's no longer the employer's job to ensure its employees have enough money to survive (and on the flip side, workers have a safety net while they find jobs that actually pay fairly - or else create their own jobs by founding startups). That is: > Your competition is a welfare cheque that's paying people to channel surf from a sofa. Only if it's actually competition, which would be the case for a negative income tax, but wouldn't be the case for UBI.
  - PragmaticPulp 5y ago
    In practice, negative income tax and UBI are the same thing. UBI funds would be paid out of the federal budget, which would be funded by taxes. Above a threshold, earners would receive UBI but their taxes would increase by more than their UBI. It would still be called "universal" but it would be erased (and then some) for anyone earning more than a relatively low amount. Negative income tax basically skips the distribution and collection and gets straight to the point. The money must come from somewhere.
PragmaticPulp 5y ago
> Your competition is working under the exact same rules you are. In this case, that's not true. If your competition can pay people the median US income to stay home and do nothing and offer them a tax break on that free income, it's going to be difficult to convince them to come work 40hrs/week for you even if you offer them 10-50% more money. The key is to look at the marginal increase in income. Unemployment (plus limited federal additional benefits) can pay out similarly to the median US income for doing zero work. Anyone looking at a job will subtract those zero-work payments from your salary offer and only consider the marginal rate. If someone can only go from $30K on unemployment benefits to $50K working for you, your job really only pays them $20K/year.
- mywittyname 5y ago
  People on unemployment aren't dumb: they know unemployment going to end, and that that this past check may be the last one they will see. As is the case with many government services, people who've never used it always assume it's much easier and laid back than it really is. In reality being on unemployment suuucks. Anyone who is remotely employable will get a shitty job thrown at them and their unemployment benefits stopped. They literally say, "if you're offered a suitable job, then you must accept it." And what constitutes suitable, is pretty much any job, even if it pays less, is in a different field, and the commute is significantly longer. Source: i've been on unemployment before. > If someone can only go from $30K on unemployment benefits People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening. It varies by state, but in my state, benefits are 50% of your wage (plus a bonus for dependents) up to a maximum of ~$700+$300 (fed bonus). The thing is, that maximum is only available to a person making around $72,000 a year with three or more qualified dependents, and only for 39 weeks, and only if nobody offers the person a job. And a person earning $72k is pretty much guaranteed to get a job offer. Source: used my state's unemployment estimator.
  - PragmaticPulp 5y ago
    > People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening. The average, including the federal bonus, is currently around $32K/year equivalent. You can get the statistics here: https://oui.doleta.gov/unemploy/claimssum.asp https://oui.doleta.gov/unemploy/claimssum.asp (Select US Total). Comes to a little over $310/week average for recent months. Add $300 federal and you get $610/week, which is equivalent to $31.7K per year. I'm not making up numbers. I'm just using the government-reported averages. Your initial disbelief underscores why this conversation is so difficult: Most people don't realize that the current average unemployment payments have reached equivalence with US median incomes. > and only for 39 weeks, and only if nobody offers the person a job. The federal changes have extended the unemployment benefits well beyond the 39 week limit. Again, the current situation can't really be compared to traditional unemployment. Also, being offered a job doesn't automatically end unemployment benefits because job offers aren't registered with the government. This only occurs if the UI beneficiary self-reports that they declined a suitable job, or if the company that offered them a job is suspicious and motivated enough to report the person to the unemployment office. The latter scenario would only occur if the employee admitted receiving unemployment and the hiring manager was motivated enough to seek revenge for declining the job offer. It can happen, but it's not like it's happening frequently. > People on unemployment aren't dumb: they know unemployment going to end Likewise, employers are not dumb. They know this extended unemployment is going to end and they're not interested in competing against it for the remaining few months that it will be active.
listless 5y ago
Your competition gives away free money. That’s, hard to compete with. Also, I’m not sure what people think the margins are in most industries, but there isn’t a lot of wiggle room to raise wages unless you are Walmart. If you want wages to go up, costs need to be passed on to consumers and thus you have the that nasty “inflation” word that gets thrown around a lot.
- pwinnski 5y ago
  Take a look at a 25-year chart of corporate profits[0]. While there was a dip in 2020 due to the pandemic, corporate profits are otherwise at an all-time high. There's no need to pass on higher costs to consumer, companies could accept, say, 2010-level profits instead. Or even 2000-level profits, and really boost wages! There are undoubtedly some companies operating at very low margins, but by and large, there has been a dramatic increase in profit-taking by companies, without corresponding increases in wages. 0. https://tradingeconomics.com/united-states/corporate-profits https://tradingeconomics.com/united-states/corporate-profits
  - prepend 5y ago
    There’s no need for anything. But good luck figuring out a way to reduce corporate profits. Consider that your graph is just the for profit companies and there’s lots of nonprofits and gov-run orgs already. It’s a tough problem to try to have companies raise wages and reduce profits. Not sure of any legislative examples. Minimum wage laws tend to result in higher prices and fewer positions. Companies have business models with existing margins and any changes are hard given capital markets and competition. Look at what happened with insurance profits when the ACA introduced payout requirements. [0] Costs increased and so did profits. Profits weren’t decreased and bonuses weren’t decreased, insurers just raised costs to the level to support the profit and bonus levels. This did not reduce costs nor insurance profits, instead it increased costs. [1] [0] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/
    - 5y ago

rualca 5y ago

It's also not really about the money. It's about quality of life. If you're the kind of boss that starts whining because you are no longer able to coerce victims into working for you then perhaps there are plenty of things other than hiking wages that are at your reach that could have a profound impact on your ability to retain employees. I'm sure slaveowners also complained when they suddenly were not able to whip people into working.

paulpauper 5y ago

but small employers have to compete with the government also offering money

apozem 5y ago
Sounds like good public policy! Considering real wages for most Americans have been stagnant for decades, the government should drive wages higher. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
- throwkeep 5y ago
  It's not that simple. Higher labor costs is good for corporations because they can afford it, while it wipes out their competition. Small businesses don't have the benefits of scale and are already in survival mode. Also, increased labor costs necessarily means higher prices for goods. Which affects the poor more than the rich. Does it matter to the rich if a gallon of milk or gas goes up 2x? No, they won't even notice. But the poor sure will.
  - rStar 5y ago
    everything in this society is good for corporations because they own the politicians and write all of the laws. so it’s a competition between corporations who all want to pay below a living wage. in this case the employees are rational actors waiting for what they consider value. corporations can either not have employees, pay their employees what it costs to get them to walk in the door in the morning, or declare war on humanity and search out the least self respecting people on the planet to be wage slaves on their race to the bottom.
  - mijamo 5y ago
    I don't think that's true. Small business usually have less salaries because there is no corporate overhead and a big part of the staff is the owners who are not paid through salaries but dividends. Also small business often pay more than big corporation for low level jobs because they cannot afford the same turnover, and salary increases tend to be proportionally higher for the very lowest salaries than those just above (you go from 10 to 12 for instance, but only from 12 to 14 which is relatively smaller increase).
- hackeraccount 5y ago
  There's something wrong with the logic though right? I mean, imagine the Government offered everyone a job doing nothing for $100,000.00 a year. What would happen? Forget about inflation (imagine we import everything and the world never becomes tired of dollars). Why would McDonald's raise wages to that amount? Why would anyone offer a job that earned the job creator less the 100,000? It seems like the most likely outcome would be that lower paying jobs would disappear not that they would suddenly start paying out more. Either that or the amount of productivity from those jobs would go above that 100,000 amount - which seems functionally the same as saying the jobs would disappear because if you're working at a restaurant generating that much revenue you're doing something far different then the summer job I had.
blacksqr 5y ago
"but small employers have to compete with the government guaranteeing a minimum of human dignity" Fixed it for you.
falcolas 5y ago
Its a damned shame all that underpaid, err, unskilled labor has a choice, ain’t it? Also, government PPP small business loans are a thing.

simonh 5y ago

Your competition is a welfare cheque that's paying people to channel surf from a sofa. That's not the same exact rules. I'm not against safety nets in principle. Check my comment history, my last but one comment was a diatribe against Marxism. But even so if Banks can get bailed out, why not sick labourers? The problem is not safety nets, it's incentive structures. That's why I like the idea of a negative income tax over basic income. The less you earn working the more you get in benefits, but as your income rises your benefits decrease. You are always better off working, and always better off earning more that way. If the incentive structure was better I think the opposition to benefits would melt away.

yellowapple 5y ago
> That's why I like the idea of a negative income tax over basic income. The less you earn working the more you get in benefits, but as your income rises your benefits decrease. I suspect you'll find that to be less effective at encouraging people to find jobs for the simple reason that it incentivizes people to work the bare minimum, if at all; when the income sources are mutually exclusive, there's no incentive to work unless the pay exceeds some threshold. Contrast with UBI, where the alternate income source is constant. Since UBI is by definition not conditional on whether or not someone is fully employed, that someone has no incentive to not work, whereas the compensation for voluntary work (i.e. wage/salary) remains. This ultimately means that - provided it's indeed a universal basic income - you no longer need minimum wage laws, since it's no longer the employer's job to ensure its employees have enough money to survive (and on the flip side, workers have a safety net while they find jobs that actually pay fairly - or else create their own jobs by founding startups). That is: > Your competition is a welfare cheque that's paying people to channel surf from a sofa. Only if it's actually competition, which would be the case for a negative income tax, but wouldn't be the case for UBI.
- PragmaticPulp 5y ago
  In practice, negative income tax and UBI are the same thing. UBI funds would be paid out of the federal budget, which would be funded by taxes. Above a threshold, earners would receive UBI but their taxes would increase by more than their UBI. It would still be called "universal" but it would be erased (and then some) for anyone earning more than a relatively low amount. Negative income tax basically skips the distribution and collection and gets straight to the point. The money must come from somewhere.

PragmaticPulp 5y ago

> Your competition is working under the exact same rules you are. In this case, that's not true. If your competition can pay people the median US income to stay home and do nothing and offer them a tax break on that free income, it's going to be difficult to convince them to come work 40hrs/week for you even if you offer them 10-50% more money. The key is to look at the marginal increase in income. Unemployment (plus limited federal additional benefits) can pay out similarly to the median US income for doing zero work. Anyone looking at a job will subtract those zero-work payments from your salary offer and only consider the marginal rate. If someone can only go from $30K on unemployment benefits to $50K working for you, your job really only pays them $20K/year.

mywittyname 5y ago
People on unemployment aren't dumb: they know unemployment going to end, and that that this past check may be the last one they will see. As is the case with many government services, people who've never used it always assume it's much easier and laid back than it really is. In reality being on unemployment suuucks. Anyone who is remotely employable will get a shitty job thrown at them and their unemployment benefits stopped. They literally say, "if you're offered a suitable job, then you must accept it." And what constitutes suitable, is pretty much any job, even if it pays less, is in a different field, and the commute is significantly longer. Source: i've been on unemployment before. > If someone can only go from $30K on unemployment benefits People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening. It varies by state, but in my state, benefits are 50% of your wage (plus a bonus for dependents) up to a maximum of ~$700+$300 (fed bonus). The thing is, that maximum is only available to a person making around $72,000 a year with three or more qualified dependents, and only for 39 weeks, and only if nobody offers the person a job. And a person earning $72k is pretty much guaranteed to get a job offer. Source: used my state's unemployment estimator.
- PragmaticPulp 5y ago
  > People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening. The average, including the federal bonus, is currently around $32K/year equivalent. You can get the statistics here: https://oui.doleta.gov/unemploy/claimssum.asp https://oui.doleta.gov/unemploy/claimssum.asp (Select US Total). Comes to a little over $310/week average for recent months. Add $300 federal and you get $610/week, which is equivalent to $31.7K per year. I'm not making up numbers. I'm just using the government-reported averages. Your initial disbelief underscores why this conversation is so difficult: Most people don't realize that the current average unemployment payments have reached equivalence with US median incomes. > and only for 39 weeks, and only if nobody offers the person a job. The federal changes have extended the unemployment benefits well beyond the 39 week limit. Again, the current situation can't really be compared to traditional unemployment. Also, being offered a job doesn't automatically end unemployment benefits because job offers aren't registered with the government. This only occurs if the UI beneficiary self-reports that they declined a suitable job, or if the company that offered them a job is suspicious and motivated enough to report the person to the unemployment office. The latter scenario would only occur if the employee admitted receiving unemployment and the hiring manager was motivated enough to seek revenge for declining the job offer. It can happen, but it's not like it's happening frequently. > People on unemployment aren't dumb: they know unemployment going to end Likewise, employers are not dumb. They know this extended unemployment is going to end and they're not interested in competing against it for the remaining few months that it will be active.

listless 5y ago

Your competition gives away free money. That’s, hard to compete with. Also, I’m not sure what people think the margins are in most industries, but there isn’t a lot of wiggle room to raise wages unless you are Walmart. If you want wages to go up, costs need to be passed on to consumers and thus you have the that nasty “inflation” word that gets thrown around a lot.

pwinnski 5y ago
Take a look at a 25-year chart of corporate profits[0]. While there was a dip in 2020 due to the pandemic, corporate profits are otherwise at an all-time high. There's no need to pass on higher costs to consumer, companies could accept, say, 2010-level profits instead. Or even 2000-level profits, and really boost wages! There are undoubtedly some companies operating at very low margins, but by and large, there has been a dramatic increase in profit-taking by companies, without corresponding increases in wages. 0. https://tradingeconomics.com/united-states/corporate-profits https://tradingeconomics.com/united-states/corporate-profits
- prepend 5y ago
  There’s no need for anything. But good luck figuring out a way to reduce corporate profits. Consider that your graph is just the for profit companies and there’s lots of nonprofits and gov-run orgs already. It’s a tough problem to try to have companies raise wages and reduce profits. Not sure of any legislative examples. Minimum wage laws tend to result in higher prices and fewer positions. Companies have business models with existing margins and any changes are hard given capital markets and competition. Look at what happened with insurance profits when the ACA introduced payout requirements. [0] Costs increased and so did profits. Profits weren’t decreased and bonuses weren’t decreased, insurers just raised costs to the level to support the profit and bonus levels. This did not reduce costs nor insurance profits, instead it increased costs. [1] [0] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/
  - 5y ago