4 ms·
The problem isn't wealth. The problem is poverty. There isn't much of a practical difference between 1MM and 10MM or 10MM and 100MM. Or even 10K and 100K. It's
by pluma 12y ago
The problem isn't wealth. The problem is poverty.
There isn't much of a practical difference between 1MM and 10MM or 10MM and 100MM. Or even 10K and 100K. It's not that there isn't any difference, it's just that (ignoring extreme scenarios like having to pay medical bills in the US) the difference is mostly a luxury.
But below a certain threshold, it's not a matter of luxury. It's a matter of being able to afford the bare necessities.
I don't make 100K/month. Right now I don't even make 10K/month. To be honest, I'd probably be able to cope (as I have had to in the past) with as little as 1K/month or less. But I don't mind if some investment banker or Fortune 500 CEO makes several orders of magnitude than me.
The problem isn't just that someone who works two full-time jobs can barely afford the absolute minimum of necessities. The problem is that making money is a requirement to have access to these essentials. We don't need more jobs, we need better social care. We don't need to cut rich people's wages, we need to eliminate poor people's reliance on wages to keep them housed, fed, warm, healthy and content (or "maintained" if that sounds less socialist and more business-y).
Minimum wage is a red herring. Minimum wages are (and should be) dictated by economical concerns alone. It's impossible to regulate them. You can dictate numbers, but that doesn't solve the problem they're meant to address.
Minimum wage jobs are not only useless because they can't pay for a living. They're also useless because they generally don't offer any opportunity for personal advancement. If you mop floors at McDonald's for a living, you're likely not going to turn that into a career. If anything, it's a stop-gap, but any effect it will have on your future occupations will likely have nothing to do with the actual tasks you performed (except maybe for a marketing sob-story if you make it big).
So separate the two concerns: give people what they need whether they have a job or not, and pay them whatever is economically sensible for any job they take.
Basic income and/or strong social services are a better solution than always trying to regulate businesses into supplying sufficient wages against market demands. If anything, the latter just encourages businesses to eliminate those minimum wage jobs entirely to reduce unnecessary costs.
You can't compete with technological progress. If you artificially inflate wages, that just makes the humans even less appealing.
- sokoloff 12y agoI'd argue that there's a massive difference between 1MM and 10MM USD. The former is not enough to comfortably retire on at age 30 and heading up a household of 4. The latter is. That's a massive qualitative difference, IMO.
- sirrocco 12y agoThat's exactly what he said - it's a matter of luxury. Retiring at 30 is a luxury.
- sokoloff 12y agoExtended far enough, so is not starving to death in utter squalor. One person's luxury is another person's normal. I view retirement as "normal" and it's just a question of when. 30, 40, or 50 - none of those would I define as luxury-due-to-age.
- pluma 12y agoI think the mistake is the underlying assumption. What does it mean to "retire"? If you mean being able to live comfortably without having to work, I'm arguing (for some definitions of "comfort") that's where you should start in the first place. If you mean having a house, money in the bank, paying for your hobbies and taking regular vacations overseas, then that's what I'm arguing is a luxury. Sure, if you define "luxury" as something that goes beyond your goal in life (say, having a reliable amount of savings to afford your lifestyle), then retiring with a yacht at 30 may possibly not be something you'd consider a luxury. But that doesn't change what I said. I don't view retirement (in any shape or form) as "normal", unless medically necessary. But I also don't conflate unemployment and poverty. So you may very well decide to stop working at 30 regardless of your savings and prior income -- assuming you're guaranteed access to all necessities by default. As far as I'm concerned, the only reason you should ever end up in poverty is if you have extremely unreasonable spending habits (e.g. gambling), and even then it's most likely an indicator of an underlying psychological or social problem than "your own fault".
- sokoloff 12y agoIn today's world, absent social security or other income programs, $1MM in a post-tax account provides about $35K in income over a 60+ year projected period of non-work (aka "retirement"). This is about 75% of the median income for families of 4 and has to cover everything (including rent, unless you take some of the $1MM and buy a house, reducing your safe withdrawal rate accordingly). That's a fairly spartan existence, IMO. Proponents of basic income systems (which are certainly appealing emotionally and viscerally) need to account for how to give every family the purchasing power of millionaires, forever. That seems economically a non-starter, regardless of whether or not I think it would be awesome to live in such a world where every precious hour of my labor could be devoted to improving my family's comfort and overall lot in life instead of more than half of it going to "run the family".