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I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffi

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. The static (both in the nominal and inflation adjusted sense) for minimum wage doesn't make sense imo. Minimum wage should be tied to some level of living (not necessarily a great living, but something) This guy smh

deegles 5y ago
A better method is to give everyone a universal basic income enough to afford a place to live and to eliminate the minimum wage. That way jobs would have to pay what the job is worth to people, not amounts that create a poverty trap.
- vsareto 5y ago
  The real estate industry would need significant overhauls before tying it to UBI. A minimum wage increase based on inflation would be vastly easier to get done politically in the US and even that bare minimum still hasn't happened yet.
alluro2 5y ago
Why is it such a hard question? Half of the world does it this way. If implemented right, it would be a socialist democracy and function mostly as Scandinavian countries do - free market for everything, except the stuff that is affecting basic quality of life for majority of population.
elil17 5y ago
God a one hour drive without traffic is like a inhumanely long commute Interesting thought though
- shadowgovt 5y ago
  Apparently, a little under 1 in 10 US workers have a 1-hr-plus commute time (https://www.census.gov/content/dam/Census/library/publications/2021/acs/acs-47.pdf https://www.census.gov/content/dam/Census/library/publicatio...).
  - bcrosby95 5y ago
    That's with traffic though. I live about 45 minutes from downtown LA without traffic. Which turns into 2.5 hours with traffic.
    - kbelder 5y ago
      My commute is 45 minutes without traffic... 46 minutes with traffic. (I live in Oregon.)
      - mkoryak 5y ago
        Sounds like your definition of traffic is different from my definition of traffic.
wnevets 5y ago
>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. Slightly smaller yachts for the executives.
- gruez 5y ago
  >Slightly smaller yachts for the executives. Yeah, it will result in lower real income for executives ...along with anyone that make more than 3x the poverty threshold, per CBO's report: https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States#Congressional_Budget_Office's_estimates_of_federal_minimum_wage_increases https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
  - wnevets 5y ago
    Is that using the same logic that predicted the Ford Motor Company would go bankrupt in a few years after they raised their minimum wage over a 100 years ago?
    - gruez 5y ago
      I don't know. Based on the wikipedia description[1] they seem pretty reputable by economists and other academics >Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient,[3][4] economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. There is a consensus among economists that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."[5] So I'm inclined to give them the benefit of the doubt, that they didn't make obvious mistakes in their analysis that a hacker news commenter could have pointed out. Feel free to read the report in depth and disprove that, though.
wccrawford 5y ago
That's not nearly enough detail for the setting of the wage. Companies would simply assume that they always eat the cheapest food, buy the cheapest transportation, never go on vacation, no luxuries at all, etc etc. If you don't factor all that in, they'll factor it out.
- TaylorAlexander 5y ago
  > Companies would simply assume This could be defined by local governments with additional standards not written in to this internet comment.
  - aksss 5y ago
    Nothing stops a local government, to my knowledge, or a state government from raising minimum wage for the unique conditions their locale faces and the ideals they want to reflect. People too often think about federal minimum wage, but think about how diverse the environments are that federal minimum wage affects. If you live in a city/state where the minimum wage is lower than you think it should be, you'll probably have better luck changing local conditions rather than trying to boil the ocean that is the US with 350m people and an enormous landmass consisting of the densely urban and sparsely rural, the rich coastlines and wealthy mountain resorts to the impoverished hill countries.
    - tssva 5y ago
      A large number of states don't allow local governments to set local minimum wages. Many of those states are as diverse as you describe the US. Trying to adjust the minimum wage may not be trying to boil an ocean but is trying to boil a sea or the great lakes.
    - TaylorAlexander 5y ago
      Indeed in California where I live we have our own minimum wage, and I believe cities like San Francisco have their own too. But when someone says > I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. Then "nothing stops local government from doing it" seems to me to lack the aspect of wonder the parent had intended to evoke.
bo1024 5y ago
A universal basic income would have some advantages over a minimum wage. Minimum wage interferes with supply and demand in the labor market, which is why some economists dislike it. UBI moves the supply curve to a different place, but it allows those principles to function.
- bogwog 5y ago
  UBI could allow the elimination of minimum wage entirely, along with a ton of other scattered welfare programs that have lots of administrative overhead and the typical middleman industries that leech off of government programs. It’s a no-brainer!
  - njarboe 5y ago
    Most people working for minimum wage (and probably most people in general in the US) work pay check to pay check (like the Applebee's manager stated in the article). They max out their available credit so that the interest takes up all of the possible slack in their income. Under UBI how to you prevent people from now borrowing more money (spending it on a vacation, clothes, fancier car, etc.), paying all the UBI as interest and ending up back in the same financial situation they were before. I don't think UBI solves peoples financial problems. I think Thomas Paine's idea of getting a large lump sum when reaching the age of maturity has some merit. Maybe a manditory two year service in the military or other government org after high school and then they receive a large chunk of money to start their life ($200k or something like that). The person could spend it on school, start a business, down payment on a house, wedding, etc. Having classed in high school discussing what one should do with that money would be a great way for students to think about the future and in a positive way.
    - dragonwriter 5y ago
      > Under UBI how to you prevent people from now borrowing more money (spending it on a vacation, clothes, fancier car, etc.), paying all the UBI as interest and ending up back in the same financial situation they were before. Don't make UBI subject to garnishment/attachment to pay debt and exclude it from income considered available when determining bankruptcy terms. Lending behavior under those conditions will prevent the use of credit you are concerned with, and bankruptcy itself will resolve problematic cases to the extent that lending behavior does not prevent it.
boredumb 5y ago
Would probably look like everyone working for the same dozen companies.
Grollicus 5y ago
There'll be a bunch of cheap singular apartments spread all over the US - let's for convenience's sake assume they're about a one hour drive apart from each other but that's a totally random number of course. You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? Probably the owner lost their keys or something and then lawyers can argue for years if the owner is actually required to hand over the keys. Or maybe the apartment has no way to enter and lawyers can now argue for years if an apartment needs to have a door? At least that's what I can imagine would happen.
- tshaddox 5y ago
  > You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? I mean, presumably in this hypothetical situation we wouldn't want to simultaneously dissolve basic renter's rights.
  - wedowhatwedo 5y ago
    You obviously don't live in Indiana....to think there are basic renter's rights. That would be a huge win. I'm only slightly kidding. The Indiana legislature was "too busy" to consider a renter's rights bill this year. They were busy trying to "solve the problem" of transgender kids playing on sports teams in schools. That's obviously way more important than lower income people having affordable, safe places to live.
  - glenstein 5y ago
    Yeah, and this is the trouble with trying to get people to engage with hypotheticals on the internet in thoughtful ways. The usual formula for any engagement with hypothetical ideas is for it to be reflexively dismissed with a "that'll never work" response. Most of the time I think this is the instinctive friction we feel at being asked to engage with a new idea, and saying that'll never work for [insert reason] is intended not to express a counter-argument so much as it is to reject the invitation to participate in the exercise. But even in the genre of "that'll never work" responses, this one is uniquely strange. Normally the "that'll never work" response suggests that there's some obstacle that arises as a consequence of the change to the status quo. But here, it's just a list obstacles that aren't connected to any underlying principle. It doesn't even feel like the usual "that'll never work" response.
quantum_magpie 5y ago
>two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. My immediate reaction to this statement was.. it's insane? In my opinion it should read 'a single person able to afford a 1 bedroom apartment within an hour of public transport commute.' Otherwise it sounds like you don't think anyone should be able to live anywhere reasonable without roommates?
- namecheapTA 5y ago
  He didn't say that no one should live reasonable places without roommates. He said that the few percent of people making the lowest wages in the country might have to have roommates.
- srjek 5y ago
  That was also my first reaction, but an alternate reading is that it's two people living on the (minimum) wages of one person.
- monkeybutton 5y ago
  Perhaps the assumption is of a couple living together? Also known as: shack up and produce offspring/future worker bees.
  - endisneigh 5y ago
    Yes, that’s what I was assuming here
- shafyy 5y ago
  Exactly. Even the mindset of thinking in "driving" vs. walking or public transport shows a lot.
  - XorNot 5y ago
    It is however realistic given the the US's urban layout and population preferences. Also nowhere has succeeded in keeping essential, low paid workers living near where they work - gentrification forces them out.
johnrob 5y ago
Without debating the merits of said concept, the effect would be to (finally) boost the supply of housing, and find a way to transition (decouple?) stored wealth from real estate assets to something else.
gruez 5y ago
> I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. More labor being "outsourced" to cheap counties, for one. Rather than a restaurant making meals on site, they'll do most of the prep work 50 miles away where the CoL (and minimum wage) is cheap and truck it in.
- tshaddox 5y ago
  I'm pretty sure any restaurant in the United States that prepares meals on site does so because that's a crucial part of the product they're offering, not because it's cheaper to prepare the meals on site.
  - s1artibartfast 5y ago
    If it is a crucial part of the product, some restaurants will switch products and others would go out of business.
- exac 5y ago
  Correct me if I'm wrong, but wouldn't it be better for the environment if all the produce is delivered in one trip, verse the environmental cost of 50 employees driving 100 miles / day? I'm assuming the LCOL employees live close to the factory.
- babelfish 5y ago
  Places like Applebee’s already do this…
Schroedingersat 5y ago
Nah, Make it one bedroom per adult (so 1 bed apt for one, or 2 bed for 2, whichever is more) with a 30 minute commute in peak hour (by any means), as well as enough left over for a deposit on a similar home in 5 years for 20% lvr assuming current property value growth continues.
golemiprague 5y ago
paulpauper 5y ago
there are way more expenses besides that. it will never be enough without creating problems . Rather than putting the onus on business, just fire up the brrrrinter.
- munk-a 5y ago
  I am failing to understand what that second sentence means - can you de-meme it a bit?
sokoloff 5y ago
The word “afford” is doing a lot of work there. Is paying 40% of gross income for rent “too much”? 35%? 30%? What if utilities were included vs not? 10th percentile rent? 25th percentile?
- Spooky23 5y ago
  Usually 36-40% is the standard. Around $1000 assuming $15 minimum wage and full time employment. There’s already a standard for this with things like Section 8 vouchers. It’s hilarious how many HN commenters think these are intractable, impossible problems.
  - sokoloff 5y ago
    You realize that’s got the direction wrong? “Given the affordability of housing somewhere within a pretty huge circle, what must the local minimum wage be?”
    - Spooky23 5y ago
      Not sure why this is so hard to compute. The federal government already tallies prevailing rent for every US city/county. If the policy goal was to set minimum wage to a 40% of full time gross income, and the prevailing rent for basic housing is $1000/mo, 1000/40%=$2500, or $15/hr. You can rent an apartment for $450 in the small town I grew up in. Same calculation would be $6.75/hr. Most employers use a similar methodology to set travel expense thresholds, etc. A system like this could be subsidized by tax credits on the payroll side.
wernercd 5y ago
That idea ("1 bed room within 1 hour") is simplistic when you consider places like CA that have NIMBY brigades and huge amounts of red-tape making housing needlessly limited driving up prices with bad leadership. Hard to feel super supportive of massive changes to min-wage for places that literally make affordable housing impossible. Growing population + massive regulation + NIMBY = you're gonna have a bad time. Increasing minimum wage without fixing other issues is a ticket to non-solutions.
- Spooky23 5y ago
  California is subsidized by the people living in their cars. Wage adjustment like that will drive some of the market effects that are suppressed by the inertia that unchanging property taxes creates. Grandma would move out of her 4 bedroom home that costs $300/yr in taxes if she had to pay the gardener $40/hr. Those cost increase tax would reduce property cost. In states where property tax adjusts you can see that dynamic. NYC metro area is cheap compared to California, and the depressed upstate cities feature high taxes and incredibly cheap property.
  - wernercd 5y ago
    "Grandma would move out" So gentrification? Get rid of the "undesirables" instead of building more housing... The problem isn't "grandma" (Or, I think that problem is vastly smaller than lack of new building/investment due to hostile regulations). The problem is anti-grow regulations that block what can be built (IE: must match look/feel, can't build high rises, etc)... and anti-grow regulations that demand massive investment in what can be built (IE: requiring water sprinklers in new homes, solar, etc) making new options grossly over-priced. Cars aren't more expensive just because of inflation... they are more and more expensive due to regulations upon regulations such as air bags, abs, etc. Some of which is good... but a lot of which is debatable or outright wasteful. Same for housing. Making grandma move out won't create the massive amount of new housing required for some areas. Those areas need new, affordable housing to be invested in - not getting rid of "undesirables" to raise taxes. "feature high taxes and cheap property" It's not cheap if you're taxed to death to stay there. Artificially low prices due to artificially high taxes aren't a solution any more than over regulation is. And the idea of higher wages won't solve the issue that'll end up being inflation adjusted higher prices to pay higher taxes to pay for higher prices to pay for higher taxes to...
throwaway0a5e 5y ago
> if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. It would implode or we would adjust our standards in every other area to make it happen. We are simply not rich enough to afford that for everyone the way things are currently structured.
sg47 5y ago
You should also add 'with one job per adult family member under 65'.
dlbucci 5y ago
Or, you know, have a Cost of Living/Inflation adjustment every year. That's such a simple idea to me and it's sort of insane to me that not only is that not something that happens, but no one seems to be even suggesting it (or at least, no politicians are campaigning on it). Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24, so just hearing that, I don't know how it shouldn't be around there today, but people talk about $15 like it's crazy.
- frumper 5y ago
  Maybe a source? I was curious and using federal minimum wages from either 1970($1.45/hr) or 1979($2.90/hr) would yield less than $12/hr. I know you can contest how inflation is calculated, or use shadow stats, but then you're getting into murky waters. The official numbers are no where near the claim of $24/hr though.
  - throwbigdata 5y ago
    [flagged]
  - astrange 5y ago
    Australia's minimum wage actually is around 21USD/hour, but it helps to be a petro state. (It's usually written $15 an hour, but IMO you should count casual loading to compare to the US.)
- jandrewrogers 5y ago
  That math doesn't work out. $24/hr is roughly the average (not median) US wage today. $15/hr is close to the median US wage. Making that work would imply extreme wage compression for everyone regardless of occupation or skill.
- metaphor 5y ago
  > Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24... Bullshit...the unqualified assertion doesn't even pass a ballpark sniff test using Department of Labor's historical federal minimum wage rates[1] and Bureau of Labor Statistics' CPI inflation calculator[2] against Feb 2022 buying power. | Eff Date | Rate | Today | |----------|------|-------| | Jan 1970 | 1.60 | 12.01 | | May 1974 | 2.00 | 11.68 | | Jan 1975 | 2.10 | 11.44 | | Jan 1976 | 2.30 | 11.74 | | Jan 1978 | 2.65 | 12.03 | | Jan 1979 | 2.90 | 12.05 | [1] https://www.dol.gov/agencies/whd/minimum-wage/history/chart https://www.dol.gov/agencies/whd/minimum-wage/history/chart [2] https://data.bls.gov/cgi-bin/cpicalc.pl https://data.bls.gov/cgi-bin/cpicalc.pl
PhileinSophia 5y ago
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imgabe 5y ago
Mass confusion. Every location has to have a custom minimum wage based on the local real estate market? How are you going to enforce that? How about people figure out how much money they need to afford the lifestyle they want and then get a job that pays that much?
- all2 5y ago
  The US Department of Defense already has a Cost of Living Allowance (COLA) calculated for most of the United States, large parts of Germany, and large parts of Korea. The work is already done.
  - imgabe 5y ago
    That takes into account the specific set of apartments within a 1 hour drive of each individual work location in the US and automatically updates as apartment rents fluctuate?
    - Wowfunhappy 5y ago
      If this was a real law, lawmakers would definitely need to flesh out the requirement beyond what an HN commenter presumably spitballed in a couple minutes or less, yes. As written, the requirement also doesn't account for factors like public transit. But I do think the idea has merit.
  - nathancahill 5y ago
    Even further, the US State Department has a COLA for any city it has an embassy or consulate in the world. But it's for a diplomatic lifestyle, not for minimum wage workers in the US.
- gunfighthacksaw 5y ago
  > Every location has to have a custom minimum wage I think the federal structure of the USA lends itself nicely to that problem. There would be an issue in extremely heterogeneous states like Washington or California, where the big cities on the coast are known for being expensive while the interior is often cheaper, less desirable and subject to snobbery, as in the case of Bakersfield which I have never heard anything good about.
deleted 5y ago
[deleted]
thepasswordis 5y ago
>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. It would look like both minimum wage, and rent/real estate prices going directly to infinity.
kube-system 5y ago
It would look like somewhere between $7.25 - $725/hr, depending on their circumstances.
tenebrisalietum 5y ago
>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. A lot of stuff would be automated or simply not exist. I don't see how high minimum wage can "work" to solve social issues if companies can choose between not hiring people and paying a high minimum wage.
- munk-a 5y ago
  If automation was free it'd be here already. Automation creates high skilled jobs to manage the automation - it can be a significant labour save but the way healthy economies work that freed labour is going to find some other service to offer.
  - tenebrisalietum 5y ago
    So how does taking low-wage jobs away affect or inprove "finding some other service to offer", or conversely, how is the presence of low-wage jobs preventing people from finding these services?
ALittleLight 5y ago
I think there should be an exception for people who are financially dependent on someone else. If you're a teen living at home you should be able to work for whatever someone will pay.
- bobro 5y ago
  why?
  - munk-a 5y ago
    To distort the labour market and make it harder for adults to actually bargain with their employers for a reasonable wage - I'd assume.
  - ALittleLight 5y ago
    Why would you hire a teenager for a relatively large amount of money?
    - ThatPlayer 5y ago
      Are they not producing the same amount of work as anyone else?
      - ALittleLight 5y ago
        No? They have less experience and education on account of being young. Some teens may be geniuses who are better than anyone else, and business owners would be well advised to hire those genius teens at market rates, but some teens will not be as productive as their older counterparts and they shouldn't find themselves forbidden from working just because their labor cannot sell for more than minimum wage.
        ThatPlayer 5y ago
        Age does not equal experience and education. There are jobs where you don't need any experience and education anyways. The ones that are typically considered minimum wage jobs, like cleaning or restocking shelves. Employers shouldn't be able to hire teenagers for cheap just because they're younger, especially since a teenager isn't going to be less productive than an adult with those types of jobs.
mrfusion 5y ago
You should include traffic in it.
brightball 5y ago
I know this won’t be popular but minimum wage shouldn’t exist. Basic income, sure but not minimum wage. Every discussion of minimum wage blames employers for something that is completely out of their control: inflation. When the price of gas, housing and food rises the business where you work doesn’t suddenly have more money to hand out. If anything their costs have gone up too reducing what they can afford to pay out. It blows my mind that people continue to act like rising costs are the fault of their employers, who have no control of it at all. No doubt, this exec in particular was a moron who deserves to be fired for even suggesting what he did but the overall sentiment just doesn’t jive for so many businesses that are getting squeezed harder and harder everyday.
- tssva 5y ago
  Hmmmm, how could a business possibly compensate for increased costs including labor costs?
  - brightball 5y ago
    By raising prices and further cementing inflation across the board, which will be passed on to other people and other business to persist the effect even further if they don’t lose customers because of the price increases. It sounds so simple to just raise prices, but if it were that simple it would have happened long before. Especially on the lower end of the consumer goods and services market the price sensitivity of people is sky high. In grocery stores companies chose to shrink their products and hope people didn’t notice rather than increases prices for that exact reason. It gets passed along somewhere and in the end the more people who decide to “just raise prices” the worse the problem gets.
  - tick_tock_tick 5y ago
    Go under and close?
- deleted 5y ago
  [deleted]
- account42 5y ago
nostrademons 5y ago
Inflation, probably followed by corruption. Minimum wage would rise to the point where a person could afford a 1BR apartment within a 1 hour drive without traffic. Then the rents of those 1BR apartments would rise to capture that new minimum wage. Then minimum wage would rise to afford the new rent, and so on. Eventually someone's going to say "Hey, I own an apartment block downtown, I'm supposed to rent it out to the hoi polloi, but I'll let you live there rent free if you work for me and do exactly as I say, wink wink". This is a very common situation in much of Latin America - both inflation being transmitted through CoL-indexed social goods, and the corruption that comes from trying to bypass that. Any durable solution needs to address the questions of "How do we ensure that there are enough 1BR apartments within a 1 hour drive for everyone who wants one to get one?", "How do we incentivize the construction of these 1BR apartments?", "How do we maintain the desirability of these apartments once they're built?", and "How do we prevent one firm from owning all of the desirable 1BR apartments and setting whatever price they want?"
- dv_dt 5y ago
  If the rent pricing exceeds the production or maintenance cost of the apartments by too high a profit margin, then a government or regulated private entity should be formed to build them at a reasonable margin, thus controlling the minimum wage growth. Alternately a large enough ratio of government controlled units within a market could be managed to provide a market weighting to reasonable prices. (you can see that in play in some European cities).
- glenstein 5y ago
  >Then the rents of those 1BR apartments would rise to capture that new minimum wage. This is commonly expressed as a consequence of raising the minimum wage, but in the most nuanced discussions of inflation that I've been exposed to, people are mindful of the fact that inflation ripples out into different segments of the economy in different ways. I think the most plausible outcome is that certain segments of the economy function as shock absorbers, which take the hit of inflation disproportionately as the economy rebalances itself and relieves pressures on segments of the economy that were being squeezed unsustainably hard. And so there is indeed a ripple effect of raising the minimum wage, namely there's more money to spend, but it radiates out into the economy in disproportionate ways, and can be a net benefit to wage earners because prices on critical necessities may rise, but not in proportion to the rise in wages.
bun_at_work 5y ago
Unfortunately, adding complexity to legislation often makes it impassable. This is especially true now, with the increased polarization in our politics. Some variation of your suggesting is better than what we currently have for minimum wage. However, getting that through congress seems impossible, IMO.
woah 5y ago
I wonder what the USA would look like if zoning laws were defined as: Issue building permits until people can afford a 1 bedroom apartment within a 1 hour drive of work without traffic
- pvarangot 5y ago
  You need to issue building permits and also build public transport infrastructure to guarantee the 1 hour commute. Driving from all around the Valley to Big Tech campuses is already pretty bad with traffic and the highways are not bad, and the urban density is ridiculously low.
karaterobot 5y ago
Everybody is giving you theoretical answers, but I am literal minded. According to some website, Miami, FL is the most expensive real estate market in the country, and Florida has a fairly low minimum wage currently. So, I'll work with that. I assume that a 1 hour drive without traffic puts you at most around 55 miles (freeways are faster, city streets are slower, but this is an estimate). That could put you in places like Belle Glade, Florida, where the 1 bedroom apartment listings are between $400 and $650 per month. But, it could also put you in the much nicer West Palm Beach, Florida, where (according to Zillow Fair Market Rent for ZIP Code 33401) the average rental for a 1 bedroom apartment is $1274 per month. Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment. According to this other random website, the average hourly wage in Miami is $21 per hour. The minimum wage in Florida is currently $8.65 per hour. In summary, if they took the least generous interpretation of your rule set (the Belle Glade case) they could safely lower the minimum wage. If they took the most generous (the West Palm Beach case) they would need to raise it by about $2.50 per hour. The average wage across the U.S. is about $27, and 2/3rds of people make "at least" above $15/hour, so it may not affect most people at all, ceteris paribus, and making the assumption that the example region is a useful example. This is all very hand-wavey and back of the envelop, of course.
- dxbydt 5y ago
  Hey stranger, thanks for doing the math! This is very helpful. I didn't know where to begin, but you've done all the work for me. Thank you again.
- metaphor 5y ago
  > Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment. Apologies for the approximation nit and acknowledged that it was all back of the envelope, but $11.11/hr struck me as low at face value. Upping the ante a bit, let's further assume single standard deduction earner with a $1911 net monthly income requirement (because you can't actually pay with money you don't have), which roughly implies 12% marginal tax bracket. Let's also account for fixed 6.2% social security withholding, and fixed 1.45% medicare withholding. Squaring against this standard 2022 IRS Publication 15-T withholding method[1], we come to the following arithmetic expression to determine gross monthly income requirement: (grossMonthly - fixed10pc - marginal12pc - ssWithholding - mcWithholding = netMonthly) x - 85.60 - 0.12(x - 1935) - 0.062x - 0.0145x = 1911 Crunching the numbers (~$2196 gross monthly income) while using your proposed 4.3 weeks per month scalar, it's more like $12.77/hr (or $11.11 being -13.0% in relative error). To be sure, this assumes complete omission of common tax-advantaged benefits such as deferred 401(k) retirement savings and medical/dental insurance coverage. > The minimum wage in Florida is currently $8.65 per hour. Florida's prevailing minimum wage is in fact $10/hr[2], with scheduled increases at $1 every year towards a $15/hr target by 2026[3]. [1] https://www.irs.gov/pub/irs-pdf/p15t.pdf https://www.irs.gov/pub/irs-pdf/p15t.pdf ref PDF p. 59 [2] https://www.dol.gov/agencies/whd/minimum-wage/state#fl https://www.dol.gov/agencies/whd/minimum-wage/state#fl [3] https://floridajobs.org/docs/default-source/business-growth-and-partnerships/for-employers/posters-and-required-notices/2021-minimum-wage/september-2021/florida-minimum-wage-september-2021-announcement.pdf https://floridajobs.org/docs/default-source/business-growth-... EDIT: Whoops, accidentally used table values for two-or-more jobs scaling; corrected.
bloaf 5y ago
Employers would pay apartment owners to keep a below market apartment "available" but turn down all applicants, then use that below market price to justify arbitrarily low wages.
ars 5y ago
Think about the positive feedback loop you are proposing here: Minimum wage goes up -> everything costs more -> minimum wage needs to go up some more. So labor expense grows and grows, while expense for "stuff" becomes a smaller and smaller part of that. So how do you make that stuff? You can't hire anyone - too expensive. So either automation, or buy things from other countries. This means firing people. Your proposal will lead to mass unemployment. But it gets worse, since you've tied your numbers to the cost of housing, and cities have the most expensive housing, people won't be able to live in the city (no jobs available that pay enough). So mass migration to places with lower housing, until the cost of housing in a city goes down. What's you've done is incentivized everyone to kind of spread out in a diffuse way to keep down the cost of housing. But where are the jobs in these places? There are no service jobs, since services are too expensive for anyone to buy. You'd have to drive more than an hour to find a job. People will respond by demanding rent control, but that also means less housing is available. So not only did you cause mass unemployment, you also caused mass homelessness.
scarface74 5y ago
“Minimum wage” is different for a single guy and a single mother. Business shouldn’t be responsible for making sure everyone has a “livable” wage. If you believe that should be a policy -and I agree. Then that should be the responsibility of the government. We already have something like that - the earned income tax credit. It just needs to be expanded. Every administration before Trump - both Republican and Democratic supported expanding it. It does take into account the difference between my 18 year old son living at home and a single mother. The government should collect taxes and implement social policy - not private business. See also - health care.
- Karrot_Kream 5y ago
  EITC is too little too late. I agree that this is the job of the government, to make sure everyone has livable wages, but basing something on an optionally claimable tax credit which most low/moderate income people are only dimly aware of and gives you a net payment from the IRS doesn't help when the cost of living rises suddenly and you face the question of eviction. In general the US government is very bad at handing out benefits to its population. The closest thing that it can do with consistency is task the IRS with debits and credits on a yearly basis, a task that hasn't changed in decades. Until the US gov't can get better at this kind of work, any benefit scheme is bound to fail.
  - scarface74 5y ago
    And you expect every private business to do it?
    - Karrot_Kream 5y ago
      No? I expect the government to do something that isn't a yearly tax credit.
      - scarface74 5y ago
        Simple, the government can send money to recipients every month instead of yearly.
parkingrift 5y ago
The minimum would be way, way lower than $15 per individual in an extreme majority of areas. An hour from a job will get you well out of most every urban center. Even in Manhattan two working adults could easily afford a 1BR apartment on a combined income of $30/hr. If you extend that out to one hour in any given direction it drops to as low as $24/hr.
syshum 5y ago
I commend you for actually defining a "living wage"... using your standard, against the current average 1 bedroom apt rent in my area, factoring housing as 1/3 of the budget. I come at $11.00-11.75 as minimum wage for my area...
trentnix 5y ago
The US would import lots more illegal immigrants (because they aren’t subject to wage laws, being illegal and all that), unemployment of unskilled labor would go up, and everything would cost more. And whoever owns Boston Dynamics would get really, really rich. You can play as many games as you like, but if people aren’t able to generate enough value to justify their pay, Stein’s Law will bring things to an abrupt halt.
deleted 5y ago
[deleted]
whyenot 5y ago
I think that may be aiming a little too high. How about defining it as the minimum you need to be able to feed yourself, have a roof over your head, and healthcare without needing food stamps, medicaid, or other basic government assistance.
sjmm1989 5y ago
1. You tie it to always being set about 5% higher than current inflation. Minimum. It's not that great a pay raise when the inflation goes up, but seeing as how they don't even do this all the time in every area... it would be a start to get them all on the same page between Canada and the USA. (All meaning provinces and states.) The only grace period that employers should retain, is 1 month to change their pay accordingly. And without reducing hours. On that note. 2. Make it illegal to reduce hours in an attempt to reduce pay due to higher wages; with out some legitimate reason that pertains to the employee's conduct and not external forces. If the employer has to increase prices to make this work, then fine. Do it. But make sure to not skimp on the cheese, etc. Customers who get annoyed over price raises will ruin you if you are just an ass. And at that point, rightfully so. Fines for something like this should be something like forcing them to pay all their employee's extra $$ per hour every time they do it. This way the money goes to those who need it, and not those who don't; cause lets be real here, lawmakers and governments don't need every penalty paid put into their pocket. Theirs is a crime against the people who work for them, so therefore they should get that cash. 3. Enforce not exactly a minimum wage, but something that might be referred to instead as a 'balanced' wage. Not a living wage, cause that's basically what we are already talking about. No, instead we should just accept that not every job is worth X$/hour. But a person still needs to get the money they need to get by. So what to do? You base it off that persons budget and potential future expenses vs the job they will be doing. If the employer and employee cannot come to terms on what is appropriate, then the employee probably needs to find a different job worth that much instead. Personally, I have no issue with this idea not because it is my own; but because I wish we took this kind of approach more often, instead of 'trying people out' just to fire them. This would reduce that, while being more beneficial to things like income equity, instead of equality, because again... not everything is the exact same. Not all jobs are worth X$/hr. Basically the premise of 3 is ultimately to enforce fair pay, instead of minimum pay. Minimum makes it into a benchmark. If you meet that benchmark, you are considered an okay employer, even if you're a p.o.s. We need to do away with that, without ruining people's lives at the same time. I think this is the best step forward for that, while being reasonable to all sides needs and demands. Also, things like wage ceilings and gaps and etc would essentially disappear as a notion, since at that point it's up to every single person on a equal front to determine their ideal pay for each job. It's not longer just up to the employer, but also the employee. Some may say it's already like this, but it really isn't. Not like I am explaining. Then again, it also may be a factor of what kind of work a person is in. Like many, I'm currently service industry. Even as I fix computers on the side. 4. All employees should essentially be treated like contractors in terms of taxes. It may be convenient to never have to think about it, but having automatic income taxes and other payroll taxations occur just embolden governments to spend that money however they like. Instead, we should be creating a system that better understands just how much a person uses or contributes in regards to society, and tax them according to both that and their current income based annually; but with each month in a separate table as well for better context. I think if done right, most people would prefer this system, since it would only ever be taking what you should actually be having to pay for in the first place. That said, rebates will probably not ever be a thing anymore, since they don't have the automatic tax base to fund it all with. Tit for tat, right? Either or, these 4 things I think would mostly solve our pay problems. Or at least help us get onto a better path again.
scythe 5y ago
The anchor you're looking for is the median wage. In the US, the minimum wage tends to be around 35-45% of the median wage, and is mostly harmless to employment. In Chile, it hovers around 65% and the effects are more significant, while the distributional effects seem to be exhausted: https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007 https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007 https://take-profit.org/en/statistics/wages/chile/ https://take-profit.org/en/statistics/wages/chile/ Half the median wage is obviously the simplest answer, but some studies have suggested other numbers. Now you're probably wondering: what does the median wage have to do with a "level of living"? It's simply the presently existing normal "level of living"! The median wage reflects various aspects of the local economy, and is responsive to things like housing prices.
seanmcdirmid 5y ago
Not just the USA, but what country does that hold? I guess if housing standards are lower, it is easier to survive on a minimum wage, but you specifically stated an at least 90 sqm 1 bedroom apartment in a semi-prime location. Where in the world is that already possible?
AniseAbyss 5y ago
Obviously you could set up a very complex super computer run socialist system of welfare subsidies (European countries do it) that makes life better for the poors but that only works if you can get the rest of society on board to actually give a shit. I was impressed with the Trump cheques though. Did not think the US would just helicopter drop money into the economy like that.
earthboundkid 5y ago
https://www.bloomberg.com/news/articles/2017-06-09/the-hourly-wage-required-to-rent-a-2-bedroom-apartment-2017 https://www.bloomberg.com/news/articles/2017-06-09/the-hourl...
eek2121 5y ago
It wouldn't fix things if that is what you are wondering. You MIGHT get away with 1 person with a 1-bedroom apartment. However, regarding gas prices, contrary to popular belief, the US does not have any permanent control at all over gas prices. They COULD have control over gas prices, however that would require all parties to pass a law to prohibit speculations (aka "futures") on oil pricing. There are too many hands in the pot for that to happen. Note that this isn't an issue unique to the US. Not a single country in the world has a law like this. That being said, I 100% agree with minimum wage being 3x the median cost of a 1-bedroom apartment for 1 person working 20 hours a week. Why 20 hours a week? Companies LOVE to only give folks part time hours. Of course, in my area that equates to $42/hour, however, note that even at 40 hours a week you are looking at $21/hour. Also, why 3x? When you apply for a mortgage OR sign a lease you typically need to earn 3x the housing cost in order to qualify. Mortgage companies and landlords alike typically want to see housing take less than 33% of your pretax income.
mrtesthah 5y ago
I wonder what the USA would look like if the cost and supply of 1 bedroom apartment were guaranteed in order to ensure affordability by those making minimum wage. In other words: why should landlords be allowed to capture the majority of value created by society? There are plenty of examples of successful affordable housing -- case in point, Vienna: https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affordability-Case-Cracked/ https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...
renewiltord 5y ago
To be honest, I think that’s thinking small. I think we should define minimum wage as being tied to how much one needs to afford a single space colony. Two space colonies would be too much, but one per American seems reasonable.
cbar_tx 5y ago
you could bypass all the bull and get a far better outcome by simply tying the salary of every member of Congress to the median income. One day people will realize how important it is to hold their representatives accountable and hopefully make it happen.

deegles 5y ago

A better method is to give everyone a universal basic income enough to afford a place to live and to eliminate the minimum wage. That way jobs would have to pay what the job is worth to people, not amounts that create a poverty trap.

vsareto 5y ago
The real estate industry would need significant overhauls before tying it to UBI. A minimum wage increase based on inflation would be vastly easier to get done politically in the US and even that bare minimum still hasn't happened yet.

alluro2 5y ago

Why is it such a hard question? Half of the world does it this way. If implemented right, it would be a socialist democracy and function mostly as Scandinavian countries do - free market for everything, except the stuff that is affecting basic quality of life for majority of population.

elil17 5y ago

God a one hour drive without traffic is like a inhumanely long commute Interesting thought though

shadowgovt 5y ago
Apparently, a little under 1 in 10 US workers have a 1-hr-plus commute time (https://www.census.gov/content/dam/Census/library/publications/2021/acs/acs-47.pdf https://www.census.gov/content/dam/Census/library/publicatio...).
- bcrosby95 5y ago
  That's with traffic though. I live about 45 minutes from downtown LA without traffic. Which turns into 2.5 hours with traffic.
  - kbelder 5y ago
    My commute is 45 minutes without traffic... 46 minutes with traffic. (I live in Oregon.)
    - mkoryak 5y ago
      Sounds like your definition of traffic is different from my definition of traffic.

wnevets 5y ago

>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. Slightly smaller yachts for the executives.

gruez 5y ago
>Slightly smaller yachts for the executives. Yeah, it will result in lower real income for executives ...along with anyone that make more than 3x the poverty threshold, per CBO's report: https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States#Congressional_Budget_Office's_estimates_of_federal_minimum_wage_increases https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
- wnevets 5y ago
  Is that using the same logic that predicted the Ford Motor Company would go bankrupt in a few years after they raised their minimum wage over a 100 years ago?
  - gruez 5y ago
    I don't know. Based on the wikipedia description[1] they seem pretty reputable by economists and other academics >Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient,[3][4] economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. There is a consensus among economists that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."[5] So I'm inclined to give them the benefit of the doubt, that they didn't make obvious mistakes in their analysis that a hacker news commenter could have pointed out. Feel free to read the report in depth and disprove that, though.

wccrawford 5y ago

That's not nearly enough detail for the setting of the wage. Companies would simply assume that they always eat the cheapest food, buy the cheapest transportation, never go on vacation, no luxuries at all, etc etc. If you don't factor all that in, they'll factor it out.

TaylorAlexander 5y ago
> Companies would simply assume This could be defined by local governments with additional standards not written in to this internet comment.
- aksss 5y ago
  Nothing stops a local government, to my knowledge, or a state government from raising minimum wage for the unique conditions their locale faces and the ideals they want to reflect. People too often think about federal minimum wage, but think about how diverse the environments are that federal minimum wage affects. If you live in a city/state where the minimum wage is lower than you think it should be, you'll probably have better luck changing local conditions rather than trying to boil the ocean that is the US with 350m people and an enormous landmass consisting of the densely urban and sparsely rural, the rich coastlines and wealthy mountain resorts to the impoverished hill countries.
  - tssva 5y ago
    A large number of states don't allow local governments to set local minimum wages. Many of those states are as diverse as you describe the US. Trying to adjust the minimum wage may not be trying to boil an ocean but is trying to boil a sea or the great lakes.
  - TaylorAlexander 5y ago
    Indeed in California where I live we have our own minimum wage, and I believe cities like San Francisco have their own too. But when someone says > I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. Then "nothing stops local government from doing it" seems to me to lack the aspect of wonder the parent had intended to evoke.

bo1024 5y ago

A universal basic income would have some advantages over a minimum wage. Minimum wage interferes with supply and demand in the labor market, which is why some economists dislike it. UBI moves the supply curve to a different place, but it allows those principles to function.

bogwog 5y ago
UBI could allow the elimination of minimum wage entirely, along with a ton of other scattered welfare programs that have lots of administrative overhead and the typical middleman industries that leech off of government programs. It’s a no-brainer!
- njarboe 5y ago
  Most people working for minimum wage (and probably most people in general in the US) work pay check to pay check (like the Applebee's manager stated in the article). They max out their available credit so that the interest takes up all of the possible slack in their income. Under UBI how to you prevent people from now borrowing more money (spending it on a vacation, clothes, fancier car, etc.), paying all the UBI as interest and ending up back in the same financial situation they were before. I don't think UBI solves peoples financial problems. I think Thomas Paine's idea of getting a large lump sum when reaching the age of maturity has some merit. Maybe a manditory two year service in the military or other government org after high school and then they receive a large chunk of money to start their life ($200k or something like that). The person could spend it on school, start a business, down payment on a house, wedding, etc. Having classed in high school discussing what one should do with that money would be a great way for students to think about the future and in a positive way.
  - dragonwriter 5y ago
    > Under UBI how to you prevent people from now borrowing more money (spending it on a vacation, clothes, fancier car, etc.), paying all the UBI as interest and ending up back in the same financial situation they were before. Don't make UBI subject to garnishment/attachment to pay debt and exclude it from income considered available when determining bankruptcy terms. Lending behavior under those conditions will prevent the use of credit you are concerned with, and bankruptcy itself will resolve problematic cases to the extent that lending behavior does not prevent it.

boredumb 5y ago

Would probably look like everyone working for the same dozen companies.

Grollicus 5y ago

There'll be a bunch of cheap singular apartments spread all over the US - let's for convenience's sake assume they're about a one hour drive apart from each other but that's a totally random number of course. You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? Probably the owner lost their keys or something and then lawyers can argue for years if the owner is actually required to hand over the keys. Or maybe the apartment has no way to enter and lawyers can now argue for years if an apartment needs to have a door? At least that's what I can imagine would happen.

tshaddox 5y ago
> You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? I mean, presumably in this hypothetical situation we wouldn't want to simultaneously dissolve basic renter's rights.
- wedowhatwedo 5y ago
  You obviously don't live in Indiana....to think there are basic renter's rights. That would be a huge win. I'm only slightly kidding. The Indiana legislature was "too busy" to consider a renter's rights bill this year. They were busy trying to "solve the problem" of transgender kids playing on sports teams in schools. That's obviously way more important than lower income people having affordable, safe places to live.
- glenstein 5y ago
  Yeah, and this is the trouble with trying to get people to engage with hypotheticals on the internet in thoughtful ways. The usual formula for any engagement with hypothetical ideas is for it to be reflexively dismissed with a "that'll never work" response. Most of the time I think this is the instinctive friction we feel at being asked to engage with a new idea, and saying that'll never work for [insert reason] is intended not to express a counter-argument so much as it is to reject the invitation to participate in the exercise. But even in the genre of "that'll never work" responses, this one is uniquely strange. Normally the "that'll never work" response suggests that there's some obstacle that arises as a consequence of the change to the status quo. But here, it's just a list obstacles that aren't connected to any underlying principle. It doesn't even feel like the usual "that'll never work" response.

quantum_magpie 5y ago

>two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. My immediate reaction to this statement was.. it's insane? In my opinion it should read 'a single person able to afford a 1 bedroom apartment within an hour of public transport commute.' Otherwise it sounds like you don't think anyone should be able to live anywhere reasonable without roommates?

namecheapTA 5y ago
He didn't say that no one should live reasonable places without roommates. He said that the few percent of people making the lowest wages in the country might have to have roommates.
srjek 5y ago
That was also my first reaction, but an alternate reading is that it's two people living on the (minimum) wages of one person.
monkeybutton 5y ago
Perhaps the assumption is of a couple living together? Also known as: shack up and produce offspring/future worker bees.
- endisneigh 5y ago
  Yes, that’s what I was assuming here
shafyy 5y ago
Exactly. Even the mindset of thinking in "driving" vs. walking or public transport shows a lot.
- XorNot 5y ago
  It is however realistic given the the US's urban layout and population preferences. Also nowhere has succeeded in keeping essential, low paid workers living near where they work - gentrification forces them out.

johnrob 5y ago

Without debating the merits of said concept, the effect would be to (finally) boost the supply of housing, and find a way to transition (decouple?) stored wealth from real estate assets to something else.

gruez 5y ago

> I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. More labor being "outsourced" to cheap counties, for one. Rather than a restaurant making meals on site, they'll do most of the prep work 50 miles away where the CoL (and minimum wage) is cheap and truck it in.

tshaddox 5y ago
I'm pretty sure any restaurant in the United States that prepares meals on site does so because that's a crucial part of the product they're offering, not because it's cheaper to prepare the meals on site.
- s1artibartfast 5y ago
  If it is a crucial part of the product, some restaurants will switch products and others would go out of business.
exac 5y ago
Correct me if I'm wrong, but wouldn't it be better for the environment if all the produce is delivered in one trip, verse the environmental cost of 50 employees driving 100 miles / day? I'm assuming the LCOL employees live close to the factory.
babelfish 5y ago
Places like Applebee’s already do this…

Schroedingersat 5y ago

Nah, Make it one bedroom per adult (so 1 bed apt for one, or 2 bed for 2, whichever is more) with a 30 minute commute in peak hour (by any means), as well as enough left over for a deposit on a similar home in 5 years for 20% lvr assuming current property value growth continues.

golemiprague 5y ago

paulpauper 5y ago

there are way more expenses besides that. it will never be enough without creating problems . Rather than putting the onus on business, just fire up the brrrrinter.

munk-a 5y ago
I am failing to understand what that second sentence means - can you de-meme it a bit?

sokoloff 5y ago

The word “afford” is doing a lot of work there. Is paying 40% of gross income for rent “too much”? 35%? 30%? What if utilities were included vs not? 10th percentile rent? 25th percentile?

Spooky23 5y ago
Usually 36-40% is the standard. Around $1000 assuming $15 minimum wage and full time employment. There’s already a standard for this with things like Section 8 vouchers. It’s hilarious how many HN commenters think these are intractable, impossible problems.
- sokoloff 5y ago
  You realize that’s got the direction wrong? “Given the affordability of housing somewhere within a pretty huge circle, what must the local minimum wage be?”
  - Spooky23 5y ago
    Not sure why this is so hard to compute. The federal government already tallies prevailing rent for every US city/county. If the policy goal was to set minimum wage to a 40% of full time gross income, and the prevailing rent for basic housing is $1000/mo, 1000/40%=$2500, or $15/hr. You can rent an apartment for $450 in the small town I grew up in. Same calculation would be $6.75/hr. Most employers use a similar methodology to set travel expense thresholds, etc. A system like this could be subsidized by tax credits on the payroll side.

wernercd 5y ago

That idea ("1 bed room within 1 hour") is simplistic when you consider places like CA that have NIMBY brigades and huge amounts of red-tape making housing needlessly limited driving up prices with bad leadership. Hard to feel super supportive of massive changes to min-wage for places that literally make affordable housing impossible. Growing population + massive regulation + NIMBY = you're gonna have a bad time. Increasing minimum wage without fixing other issues is a ticket to non-solutions.

Spooky23 5y ago
California is subsidized by the people living in their cars. Wage adjustment like that will drive some of the market effects that are suppressed by the inertia that unchanging property taxes creates. Grandma would move out of her 4 bedroom home that costs $300/yr in taxes if she had to pay the gardener $40/hr. Those cost increase tax would reduce property cost. In states where property tax adjusts you can see that dynamic. NYC metro area is cheap compared to California, and the depressed upstate cities feature high taxes and incredibly cheap property.
- wernercd 5y ago
  "Grandma would move out" So gentrification? Get rid of the "undesirables" instead of building more housing... The problem isn't "grandma" (Or, I think that problem is vastly smaller than lack of new building/investment due to hostile regulations). The problem is anti-grow regulations that block what can be built (IE: must match look/feel, can't build high rises, etc)... and anti-grow regulations that demand massive investment in what can be built (IE: requiring water sprinklers in new homes, solar, etc) making new options grossly over-priced. Cars aren't more expensive just because of inflation... they are more and more expensive due to regulations upon regulations such as air bags, abs, etc. Some of which is good... but a lot of which is debatable or outright wasteful. Same for housing. Making grandma move out won't create the massive amount of new housing required for some areas. Those areas need new, affordable housing to be invested in - not getting rid of "undesirables" to raise taxes. "feature high taxes and cheap property" It's not cheap if you're taxed to death to stay there. Artificially low prices due to artificially high taxes aren't a solution any more than over regulation is. And the idea of higher wages won't solve the issue that'll end up being inflation adjusted higher prices to pay higher taxes to pay for higher prices to pay for higher taxes to...

throwaway0a5e 5y ago

> if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. It would implode or we would adjust our standards in every other area to make it happen. We are simply not rich enough to afford that for everyone the way things are currently structured.

sg47 5y ago

You should also add 'with one job per adult family member under 65'.

dlbucci 5y ago

Or, you know, have a Cost of Living/Inflation adjustment every year. That's such a simple idea to me and it's sort of insane to me that not only is that not something that happens, but no one seems to be even suggesting it (or at least, no politicians are campaigning on it). Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24, so just hearing that, I don't know how it shouldn't be around there today, but people talk about $15 like it's crazy.

frumper 5y ago
Maybe a source? I was curious and using federal minimum wages from either 1970($1.45/hr) or 1979($2.90/hr) would yield less than $12/hr. I know you can contest how inflation is calculated, or use shadow stats, but then you're getting into murky waters. The official numbers are no where near the claim of $24/hr though.
- throwbigdata 5y ago
  [flagged]
- astrange 5y ago
  Australia's minimum wage actually is around 21USD/hour, but it helps to be a petro state. (It's usually written $15 an hour, but IMO you should count casual loading to compare to the US.)
jandrewrogers 5y ago
That math doesn't work out. $24/hr is roughly the average (not median) US wage today. $15/hr is close to the median US wage. Making that work would imply extreme wage compression for everyone regardless of occupation or skill.
metaphor 5y ago
> Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24... Bullshit...the unqualified assertion doesn't even pass a ballpark sniff test using Department of Labor's historical federal minimum wage rates[1] and Bureau of Labor Statistics' CPI inflation calculator[2] against Feb 2022 buying power. | Eff Date | Rate | Today | |----------|------|-------| | Jan 1970 | 1.60 | 12.01 | | May 1974 | 2.00 | 11.68 | | Jan 1975 | 2.10 | 11.44 | | Jan 1976 | 2.30 | 11.74 | | Jan 1978 | 2.65 | 12.03 | | Jan 1979 | 2.90 | 12.05 | [1] https://www.dol.gov/agencies/whd/minimum-wage/history/chart https://www.dol.gov/agencies/whd/minimum-wage/history/chart [2] https://data.bls.gov/cgi-bin/cpicalc.pl https://data.bls.gov/cgi-bin/cpicalc.pl

PhileinSophia 5y ago

[dead]

imgabe 5y ago

Mass confusion. Every location has to have a custom minimum wage based on the local real estate market? How are you going to enforce that? How about people figure out how much money they need to afford the lifestyle they want and then get a job that pays that much?

all2 5y ago
The US Department of Defense already has a Cost of Living Allowance (COLA) calculated for most of the United States, large parts of Germany, and large parts of Korea. The work is already done.
- imgabe 5y ago
  That takes into account the specific set of apartments within a 1 hour drive of each individual work location in the US and automatically updates as apartment rents fluctuate?
  - Wowfunhappy 5y ago
    If this was a real law, lawmakers would definitely need to flesh out the requirement beyond what an HN commenter presumably spitballed in a couple minutes or less, yes. As written, the requirement also doesn't account for factors like public transit. But I do think the idea has merit.
- nathancahill 5y ago
  Even further, the US State Department has a COLA for any city it has an embassy or consulate in the world. But it's for a diplomatic lifestyle, not for minimum wage workers in the US.
gunfighthacksaw 5y ago
> Every location has to have a custom minimum wage I think the federal structure of the USA lends itself nicely to that problem. There would be an issue in extremely heterogeneous states like Washington or California, where the big cities on the coast are known for being expensive while the interior is often cheaper, less desirable and subject to snobbery, as in the case of Bakersfield which I have never heard anything good about.

deleted 5y ago

[deleted]

thepasswordis 5y ago

>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. It would look like both minimum wage, and rent/real estate prices going directly to infinity.

kube-system 5y ago

It would look like somewhere between $7.25 - $725/hr, depending on their circumstances.

tenebrisalietum 5y ago

>I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic. A lot of stuff would be automated or simply not exist. I don't see how high minimum wage can "work" to solve social issues if companies can choose between not hiring people and paying a high minimum wage.

munk-a 5y ago
If automation was free it'd be here already. Automation creates high skilled jobs to manage the automation - it can be a significant labour save but the way healthy economies work that freed labour is going to find some other service to offer.
- tenebrisalietum 5y ago
  So how does taking low-wage jobs away affect or inprove "finding some other service to offer", or conversely, how is the presence of low-wage jobs preventing people from finding these services?

ALittleLight 5y ago

I think there should be an exception for people who are financially dependent on someone else. If you're a teen living at home you should be able to work for whatever someone will pay.

bobro 5y ago
why?
- munk-a 5y ago
  To distort the labour market and make it harder for adults to actually bargain with their employers for a reasonable wage - I'd assume.
- ALittleLight 5y ago
  Why would you hire a teenager for a relatively large amount of money?
  - ThatPlayer 5y ago
    Are they not producing the same amount of work as anyone else?
    - ALittleLight 5y ago
      No? They have less experience and education on account of being young. Some teens may be geniuses who are better than anyone else, and business owners would be well advised to hire those genius teens at market rates, but some teens will not be as productive as their older counterparts and they shouldn't find themselves forbidden from working just because their labor cannot sell for more than minimum wage.
      - ThatPlayer 5y ago
        Age does not equal experience and education. There are jobs where you don't need any experience and education anyways. The ones that are typically considered minimum wage jobs, like cleaning or restocking shelves. Employers shouldn't be able to hire teenagers for cheap just because they're younger, especially since a teenager isn't going to be less productive than an adult with those types of jobs.

mrfusion 5y ago

You should include traffic in it.

brightball 5y ago

I know this won’t be popular but minimum wage shouldn’t exist. Basic income, sure but not minimum wage. Every discussion of minimum wage blames employers for something that is completely out of their control: inflation. When the price of gas, housing and food rises the business where you work doesn’t suddenly have more money to hand out. If anything their costs have gone up too reducing what they can afford to pay out. It blows my mind that people continue to act like rising costs are the fault of their employers, who have no control of it at all. No doubt, this exec in particular was a moron who deserves to be fired for even suggesting what he did but the overall sentiment just doesn’t jive for so many businesses that are getting squeezed harder and harder everyday.

tssva 5y ago
Hmmmm, how could a business possibly compensate for increased costs including labor costs?
- brightball 5y ago
  By raising prices and further cementing inflation across the board, which will be passed on to other people and other business to persist the effect even further if they don’t lose customers because of the price increases. It sounds so simple to just raise prices, but if it were that simple it would have happened long before. Especially on the lower end of the consumer goods and services market the price sensitivity of people is sky high. In grocery stores companies chose to shrink their products and hope people didn’t notice rather than increases prices for that exact reason. It gets passed along somewhere and in the end the more people who decide to “just raise prices” the worse the problem gets.
- tick_tock_tick 5y ago
  Go under and close?
deleted 5y ago
[deleted]
account42 5y ago

nostrademons 5y ago

Inflation, probably followed by corruption. Minimum wage would rise to the point where a person could afford a 1BR apartment within a 1 hour drive without traffic. Then the rents of those 1BR apartments would rise to capture that new minimum wage. Then minimum wage would rise to afford the new rent, and so on. Eventually someone's going to say "Hey, I own an apartment block downtown, I'm supposed to rent it out to the hoi polloi, but I'll let you live there rent free if you work for me and do exactly as I say, wink wink". This is a very common situation in much of Latin America - both inflation being transmitted through CoL-indexed social goods, and the corruption that comes from trying to bypass that. Any durable solution needs to address the questions of "How do we ensure that there are enough 1BR apartments within a 1 hour drive for everyone who wants one to get one?", "How do we incentivize the construction of these 1BR apartments?", "How do we maintain the desirability of these apartments once they're built?", and "How do we prevent one firm from owning all of the desirable 1BR apartments and setting whatever price they want?"

dv_dt 5y ago
If the rent pricing exceeds the production or maintenance cost of the apartments by too high a profit margin, then a government or regulated private entity should be formed to build them at a reasonable margin, thus controlling the minimum wage growth. Alternately a large enough ratio of government controlled units within a market could be managed to provide a market weighting to reasonable prices. (you can see that in play in some European cities).
glenstein 5y ago
>Then the rents of those 1BR apartments would rise to capture that new minimum wage. This is commonly expressed as a consequence of raising the minimum wage, but in the most nuanced discussions of inflation that I've been exposed to, people are mindful of the fact that inflation ripples out into different segments of the economy in different ways. I think the most plausible outcome is that certain segments of the economy function as shock absorbers, which take the hit of inflation disproportionately as the economy rebalances itself and relieves pressures on segments of the economy that were being squeezed unsustainably hard. And so there is indeed a ripple effect of raising the minimum wage, namely there's more money to spend, but it radiates out into the economy in disproportionate ways, and can be a net benefit to wage earners because prices on critical necessities may rise, but not in proportion to the rise in wages.

bun_at_work 5y ago

Unfortunately, adding complexity to legislation often makes it impassable. This is especially true now, with the increased polarization in our politics. Some variation of your suggesting is better than what we currently have for minimum wage. However, getting that through congress seems impossible, IMO.

woah 5y ago

I wonder what the USA would look like if zoning laws were defined as: Issue building permits until people can afford a 1 bedroom apartment within a 1 hour drive of work without traffic

pvarangot 5y ago
You need to issue building permits and also build public transport infrastructure to guarantee the 1 hour commute. Driving from all around the Valley to Big Tech campuses is already pretty bad with traffic and the highways are not bad, and the urban density is ridiculously low.

karaterobot 5y ago

Everybody is giving you theoretical answers, but I am literal minded. According to some website, Miami, FL is the most expensive real estate market in the country, and Florida has a fairly low minimum wage currently. So, I'll work with that. I assume that a 1 hour drive without traffic puts you at most around 55 miles (freeways are faster, city streets are slower, but this is an estimate). That could put you in places like Belle Glade, Florida, where the 1 bedroom apartment listings are between $400 and $650 per month. But, it could also put you in the much nicer West Palm Beach, Florida, where (according to Zillow Fair Market Rent for ZIP Code 33401) the average rental for a 1 bedroom apartment is $1274 per month. Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment. According to this other random website, the average hourly wage in Miami is $21 per hour. The minimum wage in Florida is currently $8.65 per hour. In summary, if they took the least generous interpretation of your rule set (the Belle Glade case) they could safely lower the minimum wage. If they took the most generous (the West Palm Beach case) they would need to raise it by about $2.50 per hour. The average wage across the U.S. is about $27, and 2/3rds of people make "at least" above $15/hour, so it may not affect most people at all, ceteris paribus, and making the assumption that the example region is a useful example. This is all very hand-wavey and back of the envelop, of course.

dxbydt 5y ago
Hey stranger, thanks for doing the math! This is very helpful. I didn't know where to begin, but you've done all the work for me. Thank you again.
metaphor 5y ago
> Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment. Apologies for the approximation nit and acknowledged that it was all back of the envelope, but $11.11/hr struck me as low at face value. Upping the ante a bit, let's further assume single standard deduction earner with a $1911 net monthly income requirement (because you can't actually pay with money you don't have), which roughly implies 12% marginal tax bracket. Let's also account for fixed 6.2% social security withholding, and fixed 1.45% medicare withholding. Squaring against this standard 2022 IRS Publication 15-T withholding method[1], we come to the following arithmetic expression to determine gross monthly income requirement: (grossMonthly - fixed10pc - marginal12pc - ssWithholding - mcWithholding = netMonthly) x - 85.60 - 0.12(x - 1935) - 0.062x - 0.0145x = 1911 Crunching the numbers (~$2196 gross monthly income) while using your proposed 4.3 weeks per month scalar, it's more like $12.77/hr (or $11.11 being -13.0% in relative error). To be sure, this assumes complete omission of common tax-advantaged benefits such as deferred 401(k) retirement savings and medical/dental insurance coverage. > The minimum wage in Florida is currently $8.65 per hour. Florida's prevailing minimum wage is in fact $10/hr[2], with scheduled increases at $1 every year towards a $15/hr target by 2026[3]. [1] https://www.irs.gov/pub/irs-pdf/p15t.pdf https://www.irs.gov/pub/irs-pdf/p15t.pdf ref PDF p. 59 [2] https://www.dol.gov/agencies/whd/minimum-wage/state#fl https://www.dol.gov/agencies/whd/minimum-wage/state#fl [3] https://floridajobs.org/docs/default-source/business-growth-and-partnerships/for-employers/posters-and-required-notices/2021-minimum-wage/september-2021/florida-minimum-wage-september-2021-announcement.pdf https://floridajobs.org/docs/default-source/business-growth-... EDIT: Whoops, accidentally used table values for two-or-more jobs scaling; corrected.

bloaf 5y ago

Employers would pay apartment owners to keep a below market apartment "available" but turn down all applicants, then use that below market price to justify arbitrarily low wages.

ars 5y ago

Think about the positive feedback loop you are proposing here: Minimum wage goes up -> everything costs more -> minimum wage needs to go up some more. So labor expense grows and grows, while expense for "stuff" becomes a smaller and smaller part of that. So how do you make that stuff? You can't hire anyone - too expensive. So either automation, or buy things from other countries. This means firing people. Your proposal will lead to mass unemployment. But it gets worse, since you've tied your numbers to the cost of housing, and cities have the most expensive housing, people won't be able to live in the city (no jobs available that pay enough). So mass migration to places with lower housing, until the cost of housing in a city goes down. What's you've done is incentivized everyone to kind of spread out in a diffuse way to keep down the cost of housing. But where are the jobs in these places? There are no service jobs, since services are too expensive for anyone to buy. You'd have to drive more than an hour to find a job. People will respond by demanding rent control, but that also means less housing is available. So not only did you cause mass unemployment, you also caused mass homelessness.

scarface74 5y ago

“Minimum wage” is different for a single guy and a single mother. Business shouldn’t be responsible for making sure everyone has a “livable” wage. If you believe that should be a policy -and I agree. Then that should be the responsibility of the government. We already have something like that - the earned income tax credit. It just needs to be expanded. Every administration before Trump - both Republican and Democratic supported expanding it. It does take into account the difference between my 18 year old son living at home and a single mother. The government should collect taxes and implement social policy - not private business. See also - health care.

Karrot_Kream 5y ago
EITC is too little too late. I agree that this is the job of the government, to make sure everyone has livable wages, but basing something on an optionally claimable tax credit which most low/moderate income people are only dimly aware of and gives you a net payment from the IRS doesn't help when the cost of living rises suddenly and you face the question of eviction. In general the US government is very bad at handing out benefits to its population. The closest thing that it can do with consistency is task the IRS with debits and credits on a yearly basis, a task that hasn't changed in decades. Until the US gov't can get better at this kind of work, any benefit scheme is bound to fail.
- scarface74 5y ago
  And you expect every private business to do it?
  - Karrot_Kream 5y ago
    No? I expect the government to do something that isn't a yearly tax credit.
    - scarface74 5y ago
      Simple, the government can send money to recipients every month instead of yearly.

parkingrift 5y ago

The minimum would be way, way lower than $15 per individual in an extreme majority of areas. An hour from a job will get you well out of most every urban center. Even in Manhattan two working adults could easily afford a 1BR apartment on a combined income of $30/hr. If you extend that out to one hour in any given direction it drops to as low as $24/hr.

syshum 5y ago

I commend you for actually defining a "living wage"... using your standard, against the current average 1 bedroom apt rent in my area, factoring housing as 1/3 of the budget. I come at $11.00-11.75 as minimum wage for my area...

trentnix 5y ago

The US would import lots more illegal immigrants (because they aren’t subject to wage laws, being illegal and all that), unemployment of unskilled labor would go up, and everything would cost more. And whoever owns Boston Dynamics would get really, really rich. You can play as many games as you like, but if people aren’t able to generate enough value to justify their pay, Stein’s Law will bring things to an abrupt halt.

deleted 5y ago

[deleted]

whyenot 5y ago

I think that may be aiming a little too high. How about defining it as the minimum you need to be able to feed yourself, have a roof over your head, and healthcare without needing food stamps, medicaid, or other basic government assistance.

sjmm1989 5y ago

1. You tie it to always being set about 5% higher than current inflation. Minimum. It's not that great a pay raise when the inflation goes up, but seeing as how they don't even do this all the time in every area... it would be a start to get them all on the same page between Canada and the USA. (All meaning provinces and states.) The only grace period that employers should retain, is 1 month to change their pay accordingly. And without reducing hours. On that note. 2. Make it illegal to reduce hours in an attempt to reduce pay due to higher wages; with out some legitimate reason that pertains to the employee's conduct and not external forces. If the employer has to increase prices to make this work, then fine. Do it. But make sure to not skimp on the cheese, etc. Customers who get annoyed over price raises will ruin you if you are just an ass. And at that point, rightfully so. Fines for something like this should be something like forcing them to pay all their employee's extra $$ per hour every time they do it. This way the money goes to those who need it, and not those who don't; cause lets be real here, lawmakers and governments don't need every penalty paid put into their pocket. Theirs is a crime against the people who work for them, so therefore they should get that cash. 3. Enforce not exactly a minimum wage, but something that might be referred to instead as a 'balanced' wage. Not a living wage, cause that's basically what we are already talking about. No, instead we should just accept that not every job is worth X$/hour. But a person still needs to get the money they need to get by. So what to do? You base it off that persons budget and potential future expenses vs the job they will be doing. If the employer and employee cannot come to terms on what is appropriate, then the employee probably needs to find a different job worth that much instead. Personally, I have no issue with this idea not because it is my own; but because I wish we took this kind of approach more often, instead of 'trying people out' just to fire them. This would reduce that, while being more beneficial to things like income equity, instead of equality, because again... not everything is the exact same. Not all jobs are worth X$/hr. Basically the premise of 3 is ultimately to enforce fair pay, instead of minimum pay. Minimum makes it into a benchmark. If you meet that benchmark, you are considered an okay employer, even if you're a p.o.s. We need to do away with that, without ruining people's lives at the same time. I think this is the best step forward for that, while being reasonable to all sides needs and demands. Also, things like wage ceilings and gaps and etc would essentially disappear as a notion, since at that point it's up to every single person on a equal front to determine their ideal pay for each job. It's not longer just up to the employer, but also the employee. Some may say it's already like this, but it really isn't. Not like I am explaining. Then again, it also may be a factor of what kind of work a person is in. Like many, I'm currently service industry. Even as I fix computers on the side. 4. All employees should essentially be treated like contractors in terms of taxes. It may be convenient to never have to think about it, but having automatic income taxes and other payroll taxations occur just embolden governments to spend that money however they like. Instead, we should be creating a system that better understands just how much a person uses or contributes in regards to society, and tax them according to both that and their current income based annually; but with each month in a separate table as well for better context. I think if done right, most people would prefer this system, since it would only ever be taking what you should actually be having to pay for in the first place. That said, rebates will probably not ever be a thing anymore, since they don't have the automatic tax base to fund it all with. Tit for tat, right? Either or, these 4 things I think would mostly solve our pay problems. Or at least help us get onto a better path again.

scythe 5y ago

The anchor you're looking for is the median wage. In the US, the minimum wage tends to be around 35-45% of the median wage, and is mostly harmless to employment. In Chile, it hovers around 65% and the effects are more significant, while the distributional effects seem to be exhausted: https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007 https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007 https://take-profit.org/en/statistics/wages/chile/ https://take-profit.org/en/statistics/wages/chile/ Half the median wage is obviously the simplest answer, but some studies have suggested other numbers. Now you're probably wondering: what does the median wage have to do with a "level of living"? It's simply the presently existing normal "level of living"! The median wage reflects various aspects of the local economy, and is responsive to things like housing prices.

seanmcdirmid 5y ago

Not just the USA, but what country does that hold? I guess if housing standards are lower, it is easier to survive on a minimum wage, but you specifically stated an at least 90 sqm 1 bedroom apartment in a semi-prime location. Where in the world is that already possible?

AniseAbyss 5y ago

Obviously you could set up a very complex super computer run socialist system of welfare subsidies (European countries do it) that makes life better for the poors but that only works if you can get the rest of society on board to actually give a shit. I was impressed with the Trump cheques though. Did not think the US would just helicopter drop money into the economy like that.

earthboundkid 5y ago

https://www.bloomberg.com/news/articles/2017-06-09/the-hourly-wage-required-to-rent-a-2-bedroom-apartment-2017 https://www.bloomberg.com/news/articles/2017-06-09/the-hourl...

eek2121 5y ago

It wouldn't fix things if that is what you are wondering. You MIGHT get away with 1 person with a 1-bedroom apartment. However, regarding gas prices, contrary to popular belief, the US does not have any permanent control at all over gas prices. They COULD have control over gas prices, however that would require all parties to pass a law to prohibit speculations (aka "futures") on oil pricing. There are too many hands in the pot for that to happen. Note that this isn't an issue unique to the US. Not a single country in the world has a law like this. That being said, I 100% agree with minimum wage being 3x the median cost of a 1-bedroom apartment for 1 person working 20 hours a week. Why 20 hours a week? Companies LOVE to only give folks part time hours. Of course, in my area that equates to $42/hour, however, note that even at 40 hours a week you are looking at $21/hour. Also, why 3x? When you apply for a mortgage OR sign a lease you typically need to earn 3x the housing cost in order to qualify. Mortgage companies and landlords alike typically want to see housing take less than 33% of your pretax income.

mrtesthah 5y ago

I wonder what the USA would look like if the cost and supply of 1 bedroom apartment were guaranteed in order to ensure affordability by those making minimum wage. In other words: why should landlords be allowed to capture the majority of value created by society? There are plenty of examples of successful affordable housing -- case in point, Vienna: https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affordability-Case-Cracked/ https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...

renewiltord 5y ago

To be honest, I think that’s thinking small. I think we should define minimum wage as being tied to how much one needs to afford a single space colony. Two space colonies would be too much, but one per American seems reasonable.

cbar_tx 5y ago

you could bypass all the bull and get a far better outcome by simply tying the salary of every member of Congress to the median income. One day people will realize how important it is to hold their representatives accountable and hopefully make it happen.