6 ms·

The U.S. could of course just have automatic cost of living adjustment s to minimum wage, like it does for social security payments.

by dsm4ck 2y ago

nine_k 2y ago
[flagged]
- mclion 2y ago
  You should really look at what happens in countries with miniman wage. It's not really like you fear.
  - nine_k 2y ago
    I did look, of course. High minimum wages, serious social support for unemployed or unemployable, high taxes, generally a more collectivist mindset among citizens than what we have in the US. Additionally, the US has a very backwards system of social support, which cuts off benefits abruptly, so earning slightly more makes you suddenly quite worse off, instead of weaning you off the support smoothly as your income grows. It's literally a trap. Raising the minimum wage may trigger this for some, too, so staying at the same job at a higher hourly rate results in a lower total income than being unemployed and living entirely off benefits. This system should be fixed first.
    - ceejayoz 2y ago
      > This system should be fixed first. Hard if every proposed fix is met with "this would make even more small businesses unviable, and even more people unemployed" objections.
      - nine_k 2y ago
        I see. But not touching the minimum wage, and instead making the same amount of benefits provided gradually instead of having a sharp boundary (as now) would go a long way. It won't make any businesses die; to the contrary, the people who won't take a slightly better job now would grow at work, and maybe eventually grow out of poverty entirely. Currently it's only possible by either taking a hit in income among the way, or by suddenly jumping to a much better job.
- triceratops 2y ago
  Why? If customers still need those services, bigger businesses will provide them and hire the newly-unemployed.
  - nine_k 2y ago
    Big businesses are usually more efficient, even simply due to scale. They need fewer employees for the same amount of sales. Raising the minimum wage squeezes away the least-qualified employees, who are constrained in various ways (language, education, health, etc). The more qualified employees may and do of course benefit. High minimum wages work well with a strong social security network, and higher taxes to support it. It's not what we have in the US though.
- jmward01 2y ago
  Really? Please back that up with actual data or studies. If labor costs go up equally then a business isn't at a competitive disadvantage. Small businesses also often get tax breaks and the like as part of minimum wage increases. In the end they often get helped by a minimum wage increase. At a minimum it isn't a slam dunk in any way that 'they make small businesses unviable' while it is very clear that it makes lives better for employees [1]. Finally, if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist since those employees are likely being subsidized by taxpayers for the gap between what the business is paying and what they need to live on. Put simply, I don't want to subsidize a business so that it can avoid paying its employees. [1] https://irle.berkeley.edu/wp-content/uploads/2023/03/Small-Businesses-and-the-Minimum-Wage-3-14-23.pdf https://irle.berkeley.edu/wp-content/uploads/2023/03/Small-B...
  - jldugger 2y ago
    > If labor costs go up equally then a business isn't at a competitive disadvantage The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead. > if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist ... I don't want to subsidize a business so that it can avoid paying its employees. I doubt you meant it this way, but that's a fascinating argument against progressive taxation.
    - jmward01 2y ago
      > The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead. And meanwhile there will be more people with more money in their pockets able to now go out and get a meal somewhere. The secondary effects are many and you can't isolate price increase without looking at the new demand created. It may seem odd, but when you pay people more they end up spending more. [1] Additionally, part of the problem here is the perception that 'The classic low wage job is flipping burgers.' with the implication that that is just for high school kids so not a real job. Unfortunately this whole country runs on gig and minimum wage jobs (or worse). Enabling these jobs is just a route to funneling money up and increasing the wealth gap. People are doing an honest day's work and should be paid enough to live on that. Any argument to short-change them is an argument that society has to pick up for the slack of the employer. Are you suggesting we increase taxes to pay for that gap? Because that is what actually happens. So, why not. But instead of taxing me for a bad employment model, let's instead put a huge wealth tax on businesses that pay less than a minimum wage and then use it to pay for all the social programs that are needed to keep that workforce alive. I don't personally like that idea but at least then the costs of cheap labor would be put onto the places abusing it and not me. [1] https://cepr.org/voxeu/columns/spending-income-and-debt-responses-minimum-wage-hikes https://cepr.org/voxeu/columns/spending-income-and-debt-resp...

The U.S. could of course just have automatic cost of living adjustment s to minimum wage, like it does for social security payments.

by dsm4ck 2y ago

The U.S. could of course just have automatic cost of living adjustment s to minimum wage, like it does for social security payments.

nine_k 2y ago

[flagged]

mclion 2y ago
You should really look at what happens in countries with miniman wage. It's not really like you fear.
- nine_k 2y ago
  I did look, of course. High minimum wages, serious social support for unemployed or unemployable, high taxes, generally a more collectivist mindset among citizens than what we have in the US. Additionally, the US has a very backwards system of social support, which cuts off benefits abruptly, so earning slightly more makes you suddenly quite worse off, instead of weaning you off the support smoothly as your income grows. It's literally a trap. Raising the minimum wage may trigger this for some, too, so staying at the same job at a higher hourly rate results in a lower total income than being unemployed and living entirely off benefits. This system should be fixed first.
  - ceejayoz 2y ago
    > This system should be fixed first. Hard if every proposed fix is met with "this would make even more small businesses unviable, and even more people unemployed" objections.
    - nine_k 2y ago
      I see. But not touching the minimum wage, and instead making the same amount of benefits provided gradually instead of having a sharp boundary (as now) would go a long way. It won't make any businesses die; to the contrary, the people who won't take a slightly better job now would grow at work, and maybe eventually grow out of poverty entirely. Currently it's only possible by either taking a hit in income among the way, or by suddenly jumping to a much better job.
triceratops 2y ago
Why? If customers still need those services, bigger businesses will provide them and hire the newly-unemployed.
- nine_k 2y ago
  Big businesses are usually more efficient, even simply due to scale. They need fewer employees for the same amount of sales. Raising the minimum wage squeezes away the least-qualified employees, who are constrained in various ways (language, education, health, etc). The more qualified employees may and do of course benefit. High minimum wages work well with a strong social security network, and higher taxes to support it. It's not what we have in the US though.
jmward01 2y ago
Really? Please back that up with actual data or studies. If labor costs go up equally then a business isn't at a competitive disadvantage. Small businesses also often get tax breaks and the like as part of minimum wage increases. In the end they often get helped by a minimum wage increase. At a minimum it isn't a slam dunk in any way that 'they make small businesses unviable' while it is very clear that it makes lives better for employees [1]. Finally, if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist since those employees are likely being subsidized by taxpayers for the gap between what the business is paying and what they need to live on. Put simply, I don't want to subsidize a business so that it can avoid paying its employees. [1] https://irle.berkeley.edu/wp-content/uploads/2023/03/Small-Businesses-and-the-Minimum-Wage-3-14-23.pdf https://irle.berkeley.edu/wp-content/uploads/2023/03/Small-B...
- jldugger 2y ago
  > If labor costs go up equally then a business isn't at a competitive disadvantage The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead. > if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist ... I don't want to subsidize a business so that it can avoid paying its employees. I doubt you meant it this way, but that's a fascinating argument against progressive taxation.
  - jmward01 2y ago
    > The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead. And meanwhile there will be more people with more money in their pockets able to now go out and get a meal somewhere. The secondary effects are many and you can't isolate price increase without looking at the new demand created. It may seem odd, but when you pay people more they end up spending more. [1] Additionally, part of the problem here is the perception that 'The classic low wage job is flipping burgers.' with the implication that that is just for high school kids so not a real job. Unfortunately this whole country runs on gig and minimum wage jobs (or worse). Enabling these jobs is just a route to funneling money up and increasing the wealth gap. People are doing an honest day's work and should be paid enough to live on that. Any argument to short-change them is an argument that society has to pick up for the slack of the employer. Are you suggesting we increase taxes to pay for that gap? Because that is what actually happens. So, why not. But instead of taxing me for a bad employment model, let's instead put a huge wealth tax on businesses that pay less than a minimum wage and then use it to pay for all the social programs that are needed to keep that workforce alive. I don't personally like that idea but at least then the costs of cheap labor would be put onto the places abusing it and not me. [1] https://cepr.org/voxeu/columns/spending-income-and-debt-responses-minimum-wage-hikes https://cepr.org/voxeu/columns/spending-income-and-debt-resp...