This reply comes from completely internalizing the perspective the above post describes. It only makes sense if you accept that the employer is supposed to completely care for their employees. But if you view it as society’s job, then everything changes. For one thing, small mom n pop stores can compete with Walmart a lot easier if healthcare is provided by the state. Also employees can quit if they’re not treated well, etc.

From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there--at least its not as highly publicized. For whatever reason, the US is still the place to be and everyone wants to come to the US to start a company--my current company included (We have Canadian founders).

I quit my job and thanks to the insurance changes in the US a few years ago, I was able to stay on my parents health insurance for a meaningful amount of time. It allowed me to take the chance of starting my own company. Unsure if I would have done the same, had circumstances been different.

Others are responding in a way that explains your premise, but I actually reject the premise. Specifically, I do not think this is true:

> From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there -- at least its not as highly publicized.

There are a lot of startups in Europe; particularly France, UK, Germany, Switzerland and Scandanavia, and they are well publicized locally. I hypothesize they don't get surfaced to the attention of Americans for a few reasons:

1. Essentially no country in Europe provides businesses with as many freedoms as America does. American businesses have more autonomy, and a lot of basic facts about American life primarily exist within the framework of a business (e.g. healthcare). This makes it a less attractive environment for investors, so these startups don't get international attention as easily.

2. Partly as a result of #1, and also because of a reduced cost of living (and thereby labor) in much of Europe, startups in Europe typically don't pay as well as those in America.

This is to say that Europe has lots of entrepreneurialism, it just exists in a less recognizable way compred to America due to cultural, political and economic differences.

There's another factor worth mentioning:

Europe provides a better social net, and this is funded in larger part by heavier taxes on companies. To encourage entrepreneurship, small companies are exempted from many taxes and regulations, which causes there to be a more prominent cliff as a company grows from small to large.

This is perhaps most noticeable in France, where a lot of stuff kicks in with your 50th employee, and so there are a great deal more companies with 49 employees than 50 employees.

I think a consequence of this is that European entrepreneurs tend not to result in as many large companies as American entrepreneurs, as you'll have more people who stop at a smaller size to avoid the penalties of being large.

It’s only a safety net to you. If you have free healthcare your entire life you don’t think of it as a safety net it’s just something you expect.

And the sort of worries Americans have about healthcare stopping you from starting a business we just move those worries elsewhere to rent or whatever.

Europe probably has about as many startups as the US if not more. There certainly seem to be a lot more independent contractor software engineers.

The bottleneck to highly publicized startups is investors. Investors are less likely to let people use their money if they think the government will get in the way of their growth.

Startups are in the US because of a long chain of decisions and network effects that ultimately come from US military spending in the 60s.

> I quit my job and thanks to the insurance changes in the US a few years ago

So you're saying that you were able to take the chance to build a startup because of the safety net?

Yeah, had President Obama not made that change and extended health insurance to 26, I would have thought harder about quitting my job.

Sure, a safety net paid for by employers, not the gov’t.

Once you agree a safety net is a net positive, then it comes down to implementation.

In this case, the employer is the parent's employer. Which means that the people who can take the risk to create startups is limited to "people whose parents have health insurance". Which excludes a large section of society, including for example poor people.

(also--and this might be a bit of a jump for someone just learning about inequality of opportunity--but a fun thing to research online is "why is the US the only country with employer-based health insurance", especially once you discover the answer is "slavery")!

During World War II, the US government imposed price controls to prevent the market from reflecting the reality of shortages. Employers started competing by offering health insurance because they were barred from raising wages.

Thanks for the correction!

I actually confused my facts here - it's tipping I was thinking of that comes directly from slavery. Employer-paid health care just _continues_ because of racism, as opposed to being created by it.

USA might be better for startups than else where (I have no idea), but it's definitely gotten objectively worse since the 70s, measured by number of companies started every year, number of publicly traded companies, and so forth.

IMHO, universal healthcare and childcare would indirectly lead to a lot of new startups.

It's easier to bootstrap in Europe, it's harder to go further than that because of much higher regulatory barriers (ex: need to implement GDPR from day one) and a lack of investment dollars relatively. Also since it's more comfortable, european startups looks more like Radical Fish Games (from germany) or Bear (from Italy) than they do like Spotify or Nokia.

In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.

People factor in the assistance they expect to receive when taking a job in terms of food, healthcare, and money when they take a job that will with assistance provide them the means to live. It is not unheard of at some low paying employers to guide new employees to benefit programs to help them meet their needs.

In effect such programs reduce the market clearing price for labor at the expense of other tax payers. Such program often require that the recipients work but not for how much. At the limit sufficiently generous benefits could inspire someone to work for $1 per year and you could subsidize taco bells entire workforce but the minimum wage and the limits of federal dollars both prevent this.

>In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live

Absolutely false. People will always work at the highest wage they can obtain unless they value their time above what that wage. No government assistance leads to even more people working for $1/hr because they're even more desperate.

And employers will pay the least that they can pay and get people in the door. The least they can possibly pay is lessor if government benefits can be used to make up the difference.

Government benefits lower the floor so low that people literally couldn't live if they were paid solely in wages rather than wages + benefits.

Walmart pays enough to survive without government benefits, it's just a terrible life. If an employee dies because they don't have healthcare Walmart would hire someone else.

With no government benefits there would be vastly more pressure to unionize and demand better wages or just ask for more on the front end and select the employer willing to pay more.

With all due respect, this is obviously not true. The U.S. used to literally have slave labor. Then it had child labor, uncapped workweek lengths, no safety regulations, no minimum wage, etc. The workers who died in the Triangle Shirtwaist Factory, for example, earned the equivalent of today's $3.67/hour working 52 hours per week thanks to there being "no government fingers on the scale".

I know that libertarian types like to pretend government regulations just appeared into reality suddenly, without anything provoking them. But the reality is, most government regulations were put in place to save people from unsafe conditions that the free market exploited.

I see Uber (and Uber-likes) as repeating this ugly history but using different organisational/communication patterns to avoid regulation.

Regulation is written in blood.

Faith in Freedom Markets™, in this case employer / employee relations, are rooted in a few easily dismissed misconceptions:

- markets are efficient

- people are rational

- everyone has perfect information

- there are no power imbalances

Aside: Do you play poker? I've started to wonder if Freedom Markets™ advocates are familiar with that kind of meta thinking.

>In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.

I don't know how you're even supposed to go from such a premise that is demonstrably, empirically false.

If you don't make enough to have a place to live, medicine, and food you die or at least your life falls apart. How is that false. Some people make so little money they would at that wage not be able to sustain life. These people sustain themselves via government benefits in addition to wages.

Well, the real truth is that we're all able to survive on very low wages. If your options are shit job that delays death 10 years or die now, you take the shit job.

Bare survival is very cheap in America.

Its really not. Medical care and insurance is very very expensive. Rent that is actually near somewhere you can work is very expensive. Cars are expensive. Keeping a beater running can be more expensive than making car payments on a cheapish car.

There are niches wherein some can survive on little because they can rent a room or stay with family, because they don't have medical issues and can go without insurance etc etc. These are situational factors that don't scale to a whole society or even the whole of an individuals life.

All of these things are "luxuries" in the US.

The poor often go largely without healthcare. Their health deteriorates severely, but it's better than just starving to death. A lot of people have very long bus commutes to work because they can't afford a car or housing close to their workplace or to the best public transportation. Their credit score is probably no good, so they can't get a loan on a "cheapish" car. So if they do get a car, they're stuck maintaining a beater.

They may not have living parents who can help them, or their parents may be just as poor as they are.

Your assumptions are all based on a middle-class individual from middle-class upbringing. That doesn't make any sense when we're talking about the plight of the poor, who are the ones most affected by government assistance, minimum wage, etc.

That's definitely beyond survival. Survival is just living. I think I could survive on about $10 a day in America in the right place, i.e. I could do that indefinitely and live into my 50s.

Indoor shelter isn't necessary for survival. Motor vehicles aren't essential for survival. And you go to the ER and get emergency care if you're in trouble.

The base line for survival is pretty low. It's just "continue to not be dead".

I think you are stretching the argument beyond reasoning. Nobody would show up to walmart in between shitting in the street and sleeping in a tent and trying to live and remain healthy on food that doesn't require a fridge while hoping that nobody stole even those final earthly possessions while I was working. At some point where the bottom 25-30% are living like this people either organize and force change or collectively burn shit down and kill the rich.

You'd think that, but my experience living in the Third World is that people will accept a lot. i.e. the market clearing price can definitely drop below what you think is the minimum wage for a decent living.

All of this is just to say that, empirically, I have seen the following to not be true in the sense that you mean it (required to live being short for "required to live a decent standard of living"), though it is true in the literal sense that I described it:

> In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.

> if you view it as society’s job

It makes sense with a system like a universal basic income.

Where we stand now, society is expecting everyone being supported by one or more (self)employed jobs, so underpaying people is unacceptable.

I'd argue a change like UBI should come first before lifting the need for companies to pay their employees better.

If healthcare was provided by the state, Mom and Pop stores wouldn’t be able to easily afford to operate. In France, it’s extremely expensive for small businesses to hire workers and the advantages go to the large companies who can afford to pay those “social charges.” If you pay a worker €20,000 in France, it costs the employer €40,000 for that worker. Then the €20,000 wage is also taxed at a high percentage. The result is. That France has very low per capita disposable income than does the US. Anytime government “runs” something, there is a non-trivial deadweight loss incurred. We need to find ways to increase efficiency, not hamper it.

You’re not subsidizing Walmart. You’ve decided that workers should enjoy some standard of living but are unwilling to shoulder the costs of providing it (e.g. through taxes). Instead, you’ve kicked those costs to Walmart. Walmart is subsidizing you.

So what you're saying, if I'm understanding you correctly, is that instead of me exchanging money for goods and services from specific companies or exercising my freedom of choice, it's much better for me to be making up the hidden costs of chronically underpaid workers for businesses that I don't like. And somehow Walmart is subsidizing me because I'm exercising my freedom of choice. As opposed to about 5% of my paycheck going to subsidize companies like Walmart who choose not to pay a living wage.

So why not just remove all the money from the economy? I personally find Walmart's business model of chronically underpaying people then making them dependent on a huge bureaucracy to make up the living wage pretty repugnant. Whereas paying them an extra $6.00/hr means they no longer have to spend time waiting in line and on the phone during their off hours. They don't have to look specifically for landlords who accept section 8 vouchers.

The living wage removes a huge amount of hidden labor involved in living off of minimum wage and that's what you're missing here.

In the absence of legislation, Walmart would pay their workers some wage $x. You have decided that, as a matter of decency, they should actually pay $z > $x. However, you and like-minded voters have only compelled Walmart to pay some intermediate sum $y.

Now, you're upset about the residual $z-$y coming out of your pocket. But you might instead be grateful that Walmart is kicking in $y-$x to support your extravagant political demands. That's the subsidy.

> it's much better for me to be making up the hidden costs of chronically underpaid workers

Those workers are only underpaid according to your notions of fairness. You think _Walmart_ should be tasked with implementing _your_ moral vision at _their_ expense. I think _you_ should be tasked with implementing _your_ moral vision at _your_ expense.

It doesn’t suddenly become about moral vision and fairness only when it’s something progressives want.

The notions of private property and free markets are about moral vision and fairness. They are enforced with the threat of violence, and they benefit members of society unequally. Some people like to pretend that they’re natural, that they’re a given, and that challenging any component of them is imposing one’s own morality on some God-given system.

That is false. No economic system is more or less about morality and fairness than any other. You believe in letting the capital retain more of the earnings than the labor because you think that is moral. It has nothing to do with some supposed position of neutrality.

I'm not here to argue about what is owed but by whom.The government is a system to implement (and pay for) a shared social vision. Walmart is a system to sell cheap foreign-made goods to Americans. People who gnash their teeth about corporate subsidies are trying to transfer costs from the first system--which was expressly designed to bear them--to the second, which was not. It's a poor idea, and self-serving to boot.

We allow the second system to exist because it is meant to play some very small part in our shared social vision, and it is meant to pay for its associated costs. If it wasn't designed to bear the cost of paying its workers a wage that we collectively deem to be decent, then perhaps it was poorly designed and deserves to be reevaluated. I think that judgement belongs to all of us.

And if we consider all of the locally owned retailers that have gone out of business due to Walmart's (admittedly efficient) business practices, then saying something like "Walmart doesn't need to exist" really isn't that all that crazy.

Voting provides us the opportunity to set the ground rules for living in a society. If they can thrive in a market with lower taxes or fewer rules let them.

Isn't $y just the minimum wage, and in the absence of the voter-compelled pressure, $y tends towards lower than $x (as the zero-pay internships have amply shown can be taken advantage of)? The value of $x shouldn't be taken alone; it can be a blended value arrived at with ancillary policy decisions decided by major actors like Walmart with asymmetric resources to throw at policymakers.

Walmart isn't going to run at a loss. They'll raise prices appropriately, or decide that expanding the same exact store into every small town in America is no longer a profitable growth strategy.

> They'll raise prices appropriately, or decide that expanding the same exact store into every small town in America is no longer a profitable growth strategy.

Or redesign those stores to not depend on as much human labour.

Sure, and there's a secondary point where if the need for labor no longer makes wages the primary mechanism by which a corporation pays its way in society, we may need to compensate with other forms of tax or cost of doing business.

I don't directly begrudge a company or CEO their profits and paycheck, but if corporate profits are at all time highs while investment in infrastructure, education, healthcare, etc. are inadequate, that points to an imbalance that isn't being solved by the labor market.

Good. Less wasted human time.

And more wasted humans. Wait, but all the labor in the world can become machine learning experts and earn $500K pa by working for Google while circle-jerking here on how tech companies are evil.

Amazon did exactly this recently. The costs of the new digital services tax were immediately passed on to suppliers. Amazon won't be paying a cent of it.

Of course legislation could - and should - go after Amazon in other ways. But it makes the point that you don't want lawyers trying to define corporate taxation policy, because too few lawyers have the first clue how to define policy with no loopholes and real teeth.

What is to be gained by reducing Amazon's profits? Less stuff able to be bought online?

Increase competition by allowing local businesses without megacorp productivity leverage to compete on price.

That sounds ideal.

This is actually what I'm asking for. Raise peoples' wages, make it illegal to offer health insurance as a benefit, and provide a single-payer option for everyone. Make sure there's a universal basic income rather than something means-tested. Or, barring that, raise the minimum wage so most people who are working don't need the safety net.

Means-testing causes huge bureaucracies in the US. The rules around the means-testing make it very difficult for the social programs to actually provide anything in a reasonable amount of time. Or if they do they have byzantine requirements like you have to make X number of job-seeking contacts during the week, you have to interview, and you have to take classes from people who haven't searched for a job outside of the public sector in 20 years. Or for food stamps you're limited to only a few sections of the store.

Why illegal?

It would force insurance companies to compete on healthcare plans for everyone, and give employees the ability to choose their plan.

Right now employers get a discount for pooling their employees together for insurance, and as an employee you either take that discounted plan (which your employer pays part of) or go out on your own which is almost always significantly more expensive.

Getting rid of the bundling and pooling would actually make the insurance market competitive and give people a choice. It would also mean that having good health care is no longer something your employer holds over you, increasing your ability to change jobs, walk out of a bad employment situation, or go out on your own as a freelancer/contractor.

Getting rid of the employer health insurance advantage this way, or via a more radical single-payer system, would actually boost self-employment and very-small business, who currently have disadvantages in getting or providing these benefits.

As an example my fiancé and I decided that we could support both of us on my income. So she quit her job. And then we had a very long difficult time figuring out that it would cost a lot of money for her to have a baby on my insurance because the out of pocket maximum would just about wipe out my savings. But her old insurance has a maximum that’s about 10% of what mine would be in the same situation. So we’re paying almost twice as much per month for COBRA continuation. Whereas if I could take the 400 a month my employer spends on my behalf I could get insurance that’s just about as good as she’s getting.

In the US insurance system your employer gets to decide what it costs for you to get medical care. The ACA cemented all the worst parts of the insurance system and made it illegal for me to choose my own insurance if I want to work for a larger company.

The insurance marketplace brought about by the ACA actually seems like a pretty decent idea. The problem is that not everyone is using it and most people are still tied to whatever plan their employer picks. Usually politicians say something like "People like the health plans they have and want to keep them."

Meanwhile I have changed jobs once in the last 3 years but in that same timespan I have had 6 different health plans / providers because companies renegotiate their plan every year and often pick a new one because they can get a better deal or the previous plan increased in price.

Having my own chosen plan via an open marketplace that was mine and not my employers would have actually resulted in more stability.

In the grand scheme of things society needs things like bridges, electricity, water, roads as necessary prerequisite for Walmart to have shoppers and therefore an income.

In the same fashion society needs people that make enough money to meet their basic needs like food and medicine so that they may spend their additional funds on higher margin items that actually keep Walmart afloat.

Businesses and the wealthy people that own them are vastly the beneficiaries of such policies as maintain a healthy functional society in the same way as they benefit from roads but for any given business if they can shirk their share they can keep the difference so they are incentivized to forget.

It is strange that you consider paying their share a gift rather than a due. It seems worshiping economics is a barrier to understanding it.

For many people, economic history appears to begin with the New Deal, when FDR willed the middle class into existence with a chicken in every pot.

A moment's thought should convince you that commerce antedates redistribution, wage floors, etc. Prosperity doesn't require a collectivist thumb on the scales.

Can you point out the capitalist paradise where prosperity for the many doesn't require such a thumb on the scale?

It certainly isn't the US where in fact said thumb is presently pressed firmly on that scale via social security, food stamps, medicare, medicaid, tanif, section 8 and so forth.

You are right to point out that such places don't exist. But it's worth remembering that the US was wealthy (and increasingly so) long before Keynes dressed up playground fairness as an academic discipline. Rich societies enable the existence of big government, not the other way around.

Prior to Keynes, the US built it's wealth on slave labor. The cost for human rights is high.

There is a strong consensus among economic historians that slavery didn't move the needle that much. Cotton production was perhaps 5% of GDP. The slave stock constituted perhaps 15% of national wealth.

https://sci-hub.tw/10.1016/j.eeh.2017.12.002

Slavery wasn't an evenly distributed affair.

Do you just oppose the use of tax dollars to support anyone or anything other than what you personally happen to use and like? What do you think about Medicaid, food stamps, the child tax credit (especially if you don't have children)? Assuming you aren't a student, do you oppose tax dollars going toward financial support for students? Do you oppose UBI?

Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)

These all represent your taxes going to support things that you are unlikely to benefit from personally, after all.

If you remove the impact to other people from the calculus of where you'd want tax dollars to go, then I think most people would opt to enrich themselves rather than not. But that's just not how the world works. The reality is that any given person's tax dollars are used on all kinds of things that will never directly benefit them, or even their families or even socioeconomic class.

I don't think anyone is against your examples. The issue is WHERE the tax money is coming from and the PROPORTIONS of tax paid in relation to overall income.

Unfortunately right now the middle class is being stuck with most of the bill on a PER-CAPITA income basis. And considering the wealth gap between the rich and the middle class is SUBSTANTIAL, it means we're essentially having relatively poor people (middle class) pay the bills of very poor people (lower class).

When you zoom out a little (and remove irrational emotions about the topic clouding your perception), it's easier to see the disconnect.

This is incorrect. On a per-capita basis the middle class is not being stuck with most of the bill. The bottom 50% pays less than 3% of federal income taxes (which are the largest source of federal income). That same amount of income tax is paid by the top 1,400 tax-payers.

Also no need for the line about irrational emotions - lets have some proper discourse please.

This isn't incorrect. I said per-capita relative to income, not to mention the difference in purchasing power of what's left. I'm not talking about the total amount paid by the richest.

Taxes are based on marginal rates. The more you make the more you pay. If you are a high earner making $300k in California your combined rate (federal/state/fica) is 38% and you pay $114k in tax. If you are middle class make $60k your combined rate is 22% and you pay $13.3k.

If you are a business owner and most of your income comes from capital gains, still not possible to pay anywhere near 22%. Rate on capital gains is 33.3% (20% federal + 13.3% state).

> Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)

It doesn't negate your point, but for Tesla specifically, no vehicles bought in 2020 or later are applicable for the federal tax credit at all (the page you linked acknowledges this). Raising the $7500 amount wouldn't benefit any Tesla buyers.

An entirely self-interested Tesla buyer would first want the per-manufacturer limit on the tax credit removed or increased. Then maybe have that credit amount increased.

I agree with other replies that this is just a matter of perspective. Here’s an alternate one - if you hate Walmart and/or you hate the idea of unskilled workers in lower paying jobs, why do want to make them solely reliant on big employers like Walmart?

A better safety net, in addition to achieving the same immediate outcome of workers living with better conditions, also means workers have more options. It might lower the supply of potential Walmart employees and actually also increase their wages or working conditions. But more importantly it would mean they could leave Walmart and still get by. Or they could work fewer hours without worrying about things like losing their employer sponsored health insurance. More people could live more fulfilling lives rather than being so reliant on their job at Walmart.

I imagine part of this would be ensuring that companies do not underpay their workers by enforcing strict standards on minimum wage and changing corporate tax obligations.

Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it. I’m surprised there isn’t more agreement politically, the benefit obligation is a huge drain on small companies and solo entrepreneurs.

==Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it.==

Not to mention the cost of staff needed negotiate, maintain, and explain the options to employees.

Yes, that's how welfare works.

When you pay taxes for a single payer healthcare system, you're absolving the company the responsibility to provide health insurance to their employees (read: "underpay their workers"). Many societies are okay with this because the end result is actually better/more efficient for everyone.

If people had more social welfare they wouldn't bother to waste their life at Walmart for tiny incremental wages. So Walmart would pay more.

I agree. If we give say everyone 5 dollars an hour for no work. Livable wage is say 10. Then companies only have to pay 5. They can pocket the other 5 or lower their prices. Which is more likely? This also has other knock on effects. It is only possible in the very short term. In the long term inflation will wipe out the extra 5 and things will go back to steady state. It sounds nice, heck I would not mind it personally, but the knock-on effects for something like that could be a terrible creation that would take years to fix. Just first order effects do not seem great.

Why not pay them 10 and use the labour in the community? Then if Uber et al wants labour they have to bid it away from the "common good".

Once everybody has an alternative job to go to outside the private sector, it no longer matters if Uber decides not to pay people and instead automates all the vehicles.

Then everybody wins due to improved productivity - Uber and the people with community jobs.

So uber would 'buy' from some central org? Why not just cut out the middle man then and deal directly with their employees? Why create a middle man? Middle man in any economic system tend to destroy wealth. Uber is in itself a middle man between people who want a ride and people who pay for it. They upended a middle man who was less efficient.

Don't see where parent is saying anything about Labor from a central org. He's just saying Uber has to up their bid in order to win the services of said Labor.

Because of the problem of how to decide how they labor is used. Central planning communism has never worked. Free market with regulation and taxation has a much better record.

The person decides how their labour is used. They take a guaranteed job or they take a private job.

The private job then just has to be better than the guaranteed one and they will get the labour.

Where's your central planning in that?

I prefer UBI to phase out based on how much you make. You give everyone five dollars an hour. if I make 6 dollars an hour, UBI only pays me an extra 1 dollar. So there is no cutoff like with welfare today.

I think UBI would function as a replacement for minimum wage, in this case. Why would anyone take a job paying less than 5?

THIS x 1000.

Walmart used to have a page for employees telling them how to apply for food stamps.

Those costs should be charged back to the company.

Yes, the ideal thing would be for Walmart to go out of business and all those people who currently need partial government assistance instead requiring full government assistance. Think of the tax savings!

By that logic you’re subsidizing any company that takes a risk, fails and employees go on unemployment.