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I found this to be many words with little information. It largely boils down to "when Amazon increases wages, other employers follow suit, to varying extents."
by shockeychap 5y ago
I found this to be many words with little information. It largely boils down to "when Amazon increases wages, other employers follow suit, to varying extents."
There was almost nothing about the myriad of other effects, including things like inflation, effects on already higher wage earners, effects on automation, and more.
They touched on the increase in unemployment from competitors, but that was it.
- cowpig 5y agoThe article just looks like a presentation of some data, whereas the other effects you're talking about would require analysis or speculation.
- ethanbond 5y agoOr the most critical consequence: rent. Rent goes up. Landlords get richer, minimum wage earners go back to poverty. Pretty obvious cycle. High paying employer moves somewhere? Rent goes up. Normal employer pays more? Rent goes up.
- spamizbad 5y agoReally shows the power land owners have to capture upside.
- jjoonathan 5y agoThe more things change, the more they stay the same.
- cortesoft 5y agoIsn't it more about the inelasticity of housing supply? When demand goes up, prices go up?
- jjoonathan 5y agoJust who do you think relentlessly votes, lobbies, and politicks to ensure that housing supply is inelastic? The tooth fairy?
- cortesoft 5y agoAll homeowners, not just landlords?
- giantg2 5y agoI think it's more about distribution than straight supply. That distribution is largely constrained by employer location (job availability). Lots of cheap housing in Appalachia since manufacturing, coal, and steel has left. There just aren't many jobs, and employers don't want to move there to change that (vicious cycle).
- deleted 5y ago[deleted]
- edoceo 5y ago12 months pass, rent goes up.
- tinalumfoil 5y agoRent would be accounted for if they considered inflation.
- pitaj 5y agoRent goes up because of supply and demand. If a rich person moves into an area with a housing shortage, they will displace poor renters and rent will go up. But the problem is the housing shortage, a consequence of many years of terrible housing policy.
- erhk 5y agoIf you follow housing policy you might find wealthy benefactors
- pydry 5y agoIf you assume that minimum waged employees would spend 100% of their raise on rent then landlords would swallow the surplus but more likely the workers would spread it around. They do have other costs. I havent seen a study that connects the two. A quick google suggests a fair number of business-centric publications spreading FUD about it though. This article suggests it was connected to lower business rents: https://anderson-review.ucla.edu/a-15-minimum-wage-may-have-partially-arrived-but-who-pays/ https://anderson-review.ucla.edu/a-15-minimum-wage-may-have-... (The mechanism being that restaurants pass on the cost of their higher wages to their landlords)
- ethanbond 5y ago> the researchers present evidence that minimum wage changes led area restaurants to raise prices, change menu items, obtain lower rents in the high wage areas and, in some cases, caused eateries to shut down. I wonder if the units made empty by closures may have reduced price pressure on the ones that survived.
- pydry 5y agoYes, maybe. There's a definite tension between: * Restaurants being unwilling to raise prices (diners are notoriously intolerant, it can kill restaurants). * Landlords being unwilling to lower rents. * Restaurants being unwilling to tolerate < 6% profit margins. * Landlords being unwilling to lose a good, paying tenant if there isnt another around the corner. The pain has to be distributed somehow though.
- mostertoaster 5y agoI haven’t raised my tenants rent since 2018 when I bought the rental. I just had him pay what he had been paying. Maybe you should be a landlord and help break the cycle?
- vanveenada 5y agothis is an example of "price stickiness." People selling goods tend to let the price stay at whatever level it's currently at longer than is strictly rational. Because prices tend to be sticky, wage-driven inflation tends to result in real gains for wage-earners.
- ethanbond 5y ago(Temporarily)
- vanveenada 5y agoCorrect, because nothing lasts forever in this fallen world. That said: the amount of time spent in a state of wage-driven inflation -- setting up the situation where temporary moments of price stickiness result in increases of effective demand that in turn hot up the economy as a whole -- is the thing we want to maximize.
- ethanbond 5y agoTotally! We can also go ahead and tax away all the gains captured by landlords on the unimproved value of their land (definitionally price movement that is not due to them).
- vanveenada 5y agofound the Georgist!
- InitialLastName 5y agoIf your tenant moved out and a new one moved in, would you charge more? Macroeconomic shifts seem like they would be biased towards transient transactions, and resisted by steady-state.
- dimitrios1 5y agoAmerica is 3,531,905.403 square miles large, and the majority of us choose to live in under 100,000 of it. Maybe that too also contributes to these issues. You may fashion yourself to be virtuous enough to not charge more when you so easily can, but we shouldn't assume everyone will be.
- xxpor 5y agoRight, we should build enough housing that the market takes care of keeping housing cheap.
- sokoloff 5y agoWho is the “we” in that sentence that should allocate their money to something with a weak or non-existent promise of seeing a return on that money?
- shockeychap 5y agoThe "we" is everyone who wants to build dense, multi-unit housing based on their own assessments of how it will perform, but can't because of single-family zoning laws. Expensive housing in many areas is a result of laws that keep would-be developers from increasing the supply, fueled by the toxic NIMBY mindset.
- ethanbond 5y agoHave you considered that people are more productive when they are working together? This higher productivity is what allows for rent to be high (the land is more productive), but that does not necessarily imply that the increased productivity should go into the hands of people who merely hold land and are not themselves producing anything on it.
- adventured 5y agoIt also does not imply the owners of that land - that had to take a risk in allocating their funds to acquire it - do not deserve to benefit from it (given they also very likely pay taxes on that ownership, which is true in the vast majority of the US; and property taxes are a very important government funding source in the US). "Producing something on it" is a wholly subjective standard. I can just as well proclaim the opposite, that not producing anything on it is the standard that should determine ownership.
- StefanWestfal 5y agoCould you explain? I would assume that only a part of the increase in wages would go to rent. I live in Norway where the minimum salary is high. Rents are too but the average person has to spent less time working to pay for housing. Do you think the hours a person needs to work to pay for housing would stay the same if the wage increase?
- pnutjam 5y agoThat's just another guy trying to sabotage the working class, ignore the FUD about rents.
- matsemann 5y ago(just a nitpick, but we don't have a general minimum salary / minstelønn in Norway. Unions however, have managed to establish rules binding everyone in certain industries to some minimum)
- vidarh 5y agoTo add to that: About half the Norwegian workforce is unionised (which is the lowest of the Nordic countries, but higher than all other non-Nordic countries in the OECD than Belgium), and something like 3/4 of all workers are covered by sectoral agreements (tariffavtaler), which is why there's not much demand for minimum wage laws.
- ethanbond 5y agoRoughly yes. How are we still working 40hrs/week just to put a roof over our head and feed our families when we are equipped with technologies that have exponentially increased the productive output of each individual? The answer is that land has gotten more expensive, so everything on it has gotten more expensive. The solution is not to avoid wage increases, as this “FUD” accusation assumes, but to raise wages and tax the daylights out of landowners (like myself) so society can recoup the benefits of its productivity!
- vanveenada 5y agoYes, but because prices (including rents) are sticky -- it takes a while for them to adjust upwards to soak up the additional effective demand produced by increased wages. So long as wages are what's driving inflation, working people tend to reap the benefit. Workers only fall behind when prices grow faster than inflation, as in, for example, the oil shock back in the 1970s. Even the small capitalist class benefits from the heated-up economy, because the increase in wages results in money being siphoned up from the pre-existing stockpiles of the wealthy, which is where money tends to fall when left to its own devices. When money gets siphoned out of stockpiles and up to people who have to spend it to live, the rise in effective demand makes it valuable to invest in providing more supply, instead of just sitting on the money and collecting interest. The one major downside to wage-driven inflation is that it hits people living on fixed incomes in the shorts, since it makes pensions and government-provided supports less valuable. This is not a reason to support a heated-up, wage-driven-inflation-powered economy -- it's a reason to support government measures to increase funding for the elderly and disabled in order to match the new value of money.
- tastyfreeze 5y agoThe only way the government can increase benefits is to take more from everybody else.
- vanveenada 5y agoFortunately, when there's wage-driven inflation there's enough effective demand in the economy to produce enough supply to provide enough taxation headroom to offset the effects of wage-driven inflation on people with fixed incomes.
- tastyfreeze 5y agoThat is not how this works. First off prices increasing is the result of inflation not inflation itself. Inflation is an increase in money supply. Wages increasing is part of the process of inflation working its way through the economy. Increasing the number of dollars floating around does not give more tax headroom. Taxes are strictly a percentage of the quantity of dollars pie. Making the pie bigger means everybody gets a bigger piece and everything increases in cost to match. Wages that do not increase result in the earner getting a smaller piece of the pie. So, the cost of labor increases as people refuse to work for an amount that doesn't pay the bills anymore. But, the percentage of the slices are exactly the same after the lag period of 12-18 months. The lag period is how long it takes an increase in money supply(inflation) to be reflected in the markets of goods and labor. https://www.johnlocke.org/the-myth-of-wage-push-inflation/ https://www.johnlocke.org/the-myth-of-wage-push-inflation/ https://www.lancaster.ac.uk/staff/ecajt/inflation%20lags%20money%20supply.pdf https://www.lancaster.ac.uk/staff/ecajt/inflation%20lags%20m...
- malfist 5y agoI don't think it's as obvious or causal as you imply. If every wage increase resulted in a corresponding increase in rent to force people back into poverty it would never make sense to increase minimum wage, or even wages at all. But that's not the case is it? Wages stagnate, increase or decrease all the time without changes in rent. Rent goes up without changes in wages all the time. Sure, a local across the board increase in wages might drive up demand and might cause some portion of rent increase, but it's also just as likely to drive up housing prices as people get out of the rental market. Throwing up your hands and saying "we can't pay them more because landlords will take it all" is disingenuous.
- ethanbond 5y agoI’m saying we should pay them more and tax the daylights out of landowners so they don’t capture upside they had literally nothing to do with.
- spoonjim 5y agoMy solution: All rental contracts are illegal unless they include a 1% ownership transfer per year. That way if you rent for 25 years you own 25% of the property.
- Hammershaft 5y agoA reductive take. Where is the evidence that rent increase = wage increase?
- ethanbond 5y agoI'm claiming the opposite. Wage increases yield rent increases. Evidence: Where is rent high? Whoa! Right there were wages are high. What happens when you add a high-paying employer to a region (e.g. Amazon HQ2)? Whoa! Rent goes up and prices the people who live there out. Obviously the reverse is not true. Increasing rent would not make more capital available for wages, it just puts enterprise out of business and individuals out of their homes.
- chrismcb 5y agoBut does rent go up because the tenants have more money, it did it go up because the cost of everything goes up? When wages increase, the costs of the landlord also goes up. Repairs costs increase, labor in the front office, and the landlord's personal costs increase.
- b33pr 5y agoOf course! So all the skyrocketing rents across the country have been caused by all the minimum wage increases! Like when that last increase in the federal minimum happened… when was that again?
- BurningFrog 5y agoTo be fair, the myriad of other effects are unknown, and to some extent unknowable.
- datavirtue 5y agoSky is blue. Details at 11.
- q1w2 5y agoIt's an advocacy piece. It's meant to push a certain point - not to educate the reader on anything.
- jcranberry 5y agoI do not agree. It is very few words (maybe one page's worth?) with high information density. There is no rumination or explication whatsoever. It would be very difficult to make this article any shorter without removing information.