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This is the lump of labour fallacy. Edit: in the form, the set of jobs we have right now is fixed and will be the same for all time. The flow of money is circu

This is the lump of labour fallacy. Edit: in the form, the set of jobs we have right now is fixed and will be the same for all time. The flow of money is circular. If lower-paid people had more disposable income, they would spend more on things that employ other people. Services like restaurants or haircuts or yoga classes or personal trainers or personal shoppers or life coaches, the last three of which are pretty niche right now. The people providing those services would, in turn, consume other services and products. I'm sure a lot of new services and products would appear too.

fred_is_fred 5y ago
If lower-paid people had more income they would be paying down debt, buying a better used car, paying for daycare, and maybe going on a trip or to. Personal shoppers and life coaches I think kick in a lot higher than you do.
- sophacles 5y ago
  At first they would pay down debt, and buy a car that actually works, and other stuff that should have always just been available to them. Once that debt is paid off, and the car is not a constant source of worry - they have money to do those other things. For example going on a trip is the same type of "luxury" as shoppers, life coaches, etc - its spending money on something other survival.
  - SauciestGNU 5y ago
    I often think of how many ordinary working people would be able to do more than just tread water and actually begin to build some wealth if there weren't rent seekers built into nearly every necessity for sustaining human life. As a society I believe we need to re-evaluate the relationship between profit-seeking entities and public goods.
  - fred_is_fred 5y ago
    I make probably 5x US median income and I've never paid for a life coach or personal shopper and I never will. I think you may be applying some Bay Area logic to the average American.
- tuatoru 5y ago
  Yeah, those were just random examples from my imagining an alternative universe in which minimum wage had kept pace with productivity. You are quite right. Another counterargument is that a lot of household income goes into zero-sum, unproductive status signaling, a.k.a. "buying a house in a better neighbourhood", and "sending the kids to a better school". Still, some of the extra income would be spent on things that employ other people.
jrsj 5y ago
It’s absurd to assume that the opposite of this fallacy is true indefinitely though. There is a point where someone is simply not worth employing to do anything at all. There is a finite number of valuable things that can be done with little to no skill/education/training. It would take a much greater level of investment in our domestic workforce to get around this than we currently provide. And at the moment it’s simply cheaper to effectively outsource this training to other countries and bring in skilled workers on visas instead of subsidizing training for our own citizens, so that’s what we’ve been doing for decades. There’s some truth to what you’re saying but IMO it would take a lot more to get there than simply having a higher minimum wage.
- danaris 5y ago
  > It’s absurd to assume that the opposite of this fallacy is true indefinitely though. But no one is suggesting we push the opposite indefinitely. We're suggesting to push it an amount commensurate with the rise in productivity.

fred_is_fred 5y ago

If lower-paid people had more income they would be paying down debt, buying a better used car, paying for daycare, and maybe going on a trip or to. Personal shoppers and life coaches I think kick in a lot higher than you do.

sophacles 5y ago
At first they would pay down debt, and buy a car that actually works, and other stuff that should have always just been available to them. Once that debt is paid off, and the car is not a constant source of worry - they have money to do those other things. For example going on a trip is the same type of "luxury" as shoppers, life coaches, etc - its spending money on something other survival.
- SauciestGNU 5y ago
  I often think of how many ordinary working people would be able to do more than just tread water and actually begin to build some wealth if there weren't rent seekers built into nearly every necessity for sustaining human life. As a society I believe we need to re-evaluate the relationship between profit-seeking entities and public goods.
- fred_is_fred 5y ago
  I make probably 5x US median income and I've never paid for a life coach or personal shopper and I never will. I think you may be applying some Bay Area logic to the average American.
tuatoru 5y ago
Yeah, those were just random examples from my imagining an alternative universe in which minimum wage had kept pace with productivity. You are quite right. Another counterargument is that a lot of household income goes into zero-sum, unproductive status signaling, a.k.a. "buying a house in a better neighbourhood", and "sending the kids to a better school". Still, some of the extra income would be spent on things that employ other people.

jrsj 5y ago

It’s absurd to assume that the opposite of this fallacy is true indefinitely though. There is a point where someone is simply not worth employing to do anything at all. There is a finite number of valuable things that can be done with little to no skill/education/training. It would take a much greater level of investment in our domestic workforce to get around this than we currently provide. And at the moment it’s simply cheaper to effectively outsource this training to other countries and bring in skilled workers on visas instead of subsidizing training for our own citizens, so that’s what we’ve been doing for decades. There’s some truth to what you’re saying but IMO it would take a lot more to get there than simply having a higher minimum wage.

danaris 5y ago
> It’s absurd to assume that the opposite of this fallacy is true indefinitely though. But no one is suggesting we push the opposite indefinitely. We're suggesting to push it an amount commensurate with the rise in productivity.