A minimum wage is nothing more than a tool in our arsenal to fight poverty. I (and many economists) argue that it is one of our worst tools. A negative income tax is much better. It won't distort labor markets or risk driving up unemployment. And it's fairer in that the burden is shared collectively rather than just by some industries. Goldman Sachs doesn't get hurt by a minimum wage, but small business owners, such as those running a convenience store, do.

This is where we disagree.

Companies that employ workers below subsistence wages are actually being indirectly subsidized collectively by every single taxpayer.

Those underpaid employees are the ones who then go on to collect public benefits to make up the difference between survival and their take-home pay, and those benefits come out of our tax dollars.

Allowing employers to pay below subsistence wages is corporate welfare.

All this bill does is tip the scales back to where they need to be: if you as a business are not paying a living wage to your employees, you're effectively forcing the taxpayer to pay the part of the salary you're not interested in paying.

This is also the interest the state has in the matter, as not doing so negatively impacts the state.

No more mooching.

> Goldman Sachs doesn't get hurt by a minimum wage, but small business owners, such as those running a convenience store, do.

And I'm sorry but those businesses wouldn't exist without the government passively subsidizing them by providing benefits to the workers they're stiffing.

If these are the kinds of businesses we want more of, it should be via an explicit, active subsidy program. If not, they will have to go out of business or find a way to make the economics work. That's capitalism.

This is a very common and very wrong interpretation. Taxpayers aren't subsidizing the company. Taxpayers are subsidizing themselves. In a competitive market (which all low wages jobs are in) the employer will simply pass on those savings to the consumer. Uber passes them on to riders, Walmart passes them on to shoppers, etc. There is no subsidy to the corporation. The subsidy is to society at large, which is exactly appropriate for tax money to fund.

Uber isn't going to experience margin compression in Seattle as a result of this. All they're going to do is raise their prices. The equilibrium effect of that is two-fold:

1. Fewer rides

2. More cost to Uber's customers

Uber will make less money, but only as a result of the loss of volume. They will not be making more or less money per ride. There will just be fewer rides. That's it.

I’m not saying minimum wage laws are a good idea, but economists have no credibility when they won’t even allow for the possibility that wage laws might reduce corporate profits rather than leading to increased prices.

And this is not something that hasn't been tried in practice yet. Just look at European countries like the Netherlands, Belgium, Germany, France, Spain etc. They have significantly higher minimum wages (relatively to their GDP or median household income) than the US and consumer goods and services are in general much more expensive (relatively) there than in the US.

If we follow your train of thought, we shouldn't see employers paying minimum wage with higher margins because those higher margins would have transpired to lower prices for consumers.

McDonalds corporate profit margin is 20%! People might say, "Well most margin comes from franchise fees and McDonalds doesn't directly own most restaurants or own that cost base" - but while some franchisees earn 12%+ profit, they don't even have a mechanism where they are even ALLOWED to reduce prices so how exactly are higher profits supposed to get passed back as lower prices?

The reality is that if a companies goal is to profit-maximise, "cost plus margin" is not a particularly effective strategy. From an economics perspective, you would work out what your demand curve is, plot that against your cost base to produce a profit figure for each point on the demand curve, and pick where maximises profit. In reality this will be less of a formal process, but this is the microeconomic theory.

Do you have anything to back up this wrong claim? It very much seems like this is a matter of perspective.

> Taxpayers aren't subsidizing the company. Taxpayers are subsidizing themselves.

Again this seems like perspective. The taxpayers as a group may be subsidizing themselves but the individual making enough to support themselves would be subsidizing others. So from their perspective they are paying for a company’s unwillingness or inability to pay a living wage.

It's pretty straightforward economics, and the rest of my comment explains it, I think.

> Again this seems like perspective. The taxpayers as a group may be subsidizing themselves but the individual making enough to support themselves would be subsidizing others. So from their perspective they are paying for a company’s unwillingness or inability to pay a living wage.

The question is: where does the economic benefit of the subsidy flow? And the answer to that is primarily back to consumers, not to companies. It flows to companies primarily in the sense that it allows some companies to exist that wouldn't otherwise exist. But it's not clear exactly how making them not exist would benefit anyone.

The gap between the free market value of someone's labor and a 'living wage' is not an externality. It is not a secret cost that businesses are shirking. It is a social obligation that we made up because we want our citizens to have a certain standard of living, and that's fine, but we should all pay that together.

Companies should pay people what their labor is worth, and we should all make up the difference together, if that's what we believe is right.

If those workers were capable of earning enough money to no longer be eligible for public benefits, they would choose to take those jobs instead. But they aren’t, so they don’t. If they didn’t have the option of working low-wage jobs and supplementing that income with public assistance, they would be unemployed and completely dependent on public assistance. In other words, it is low-wage employers who subsidize the taxpayer, not the other way around.

It seems weird to me to accept it quasi as a law of nature that large parts of the population get paid below subsistence level for their work, often doing physically or emotionally hard labor, while others earn big in bullshit-rich environments.

I get that we need some sort of market for effective allocation of resources. But seeing how rich western societies are as a whole, while still giving many of their members trouble with feeding themselves, housing and (in some countries) getting adequate medical care, makes me wonder how far we've really come with finding a good way to distribute wealth adequately.

Saying that "the market forces" don't allow people to make enough money to get by seems like such a cop-out to me. Yes, public benefits are a way of redistributing wealth for a better outcome, but let's not forget that the market is a human creation and we can influence how it operates in multiple ways.

If public benefits subsidize cheap labor in exchange for cheaper consumer prices, that is (as has been pointed out) a way of shifting some of the price off the product to be paid via taxes, externalizing some of the cost to the general public, incurring a human cost on the people who provide the labor, while allowing private investors to take a share of the transfer as their profit. I don't know if that's the most effective way of distributing resources here, but let's not forget that we might not only want to optimize for money making potential here, but also for harder to price things like the pursuit of happiness.

Earning “below subsistence level” for physically and emotionally hard work is how over 99% of human lives have gone throughout history. It’s somewhat miraculous how many people in developed countries don’t live that way anymore.

Instead of invoking the supernatural, I'd prefer to call it quite fortunate that human ingenuity has allowed us to exploit vast energy sources in order to raise the general level of well-being among a portion of humanity, while also finding ways to share wealth and power in (unfortunately not exclusively) more peaceful ways.

The cop-out I was talking about is precisely this kind of hiding behind proclaimed laws of nature and miracles, when there's clearly choice and agency involved. Comparing the situation of laborers, but also the stratification of western societies, in the Victorian era with today I think shows that we can not only increase the size of the pie, but also influence how to distribute it more fairly.

I think that seeing how much "miracle" there is to go around, it's worthwhile considering how to enable more people to take part in it, by finding ways to spread the miracle whip around a tad more evenly.

The jobs available on the market aren't continuously and uniformly distributed on the pay axis between $0 to ${whatever corporate CEOs take home}. Most people can't marginally improve their pay by marginally improving their capabilities.

> If they didn’t have the option of working low-wage jobs and supplementing that income with public assistance, they would be unemployed and completely dependent on public assistance.

Not if they had an option of working higher-wage jobs. The market pushes salaries down as much as it's allowed. Apply some upward pressure, and the market just may find it in its heart to pay more for the same job.

However, doing it through this weird reach-around where you have to make low-income earners a public charge (based on the immigration terminology) while subsidizing only the companies that pay so little as to require it - isn't IMO a rational approach. Have you seen how arduous Medicaid is? Food stamps? That's not a vocational training program, that's a punishment for being poor while having a system set up explicitly to make you poor. After all, this is not subsidizing the individuals, it's subsidizing the business.

It's a blunt instrument right now. Just paying minimum wage doesn't guarantee any sort of education or training. What corner store offers education and training programs?

The rational approach is to make companies pay a living wage as a baseline, and then if you want to encourage certain behaviors - like educational training, for instance - offer tax credits and rebates. Or, if you want to subsidize specific low value added businesses like corner stores, subsidize them directly.

Begin with a baseline of livability, and then, if the company wants to go above and beyond, reward them for doing so.

I think the better option is to guarantee a minimum wage through a subsidy, while abolishing all minimum wage laws. Like a negative income tax. So let's say you earn $12 stocking shelves, the government should subsidize $4 per hour to give you a total income of $16 per hour. If you make $15/hr, they subsidize $1. If you make $20, they subsidize zero.

In this way, the downsides of minimum wages are avoided (cutting back on hours, laying people off, raising prices, and pricing low skill people out of the workforce), while still allowing a decent income for anyone working full time.

You can tax the subsidy at a higher rate than your normal tax rate, so that businesses are still dealing with competitive market incentives and cannot pay a $1/hr leaving the remainder to the government, and so that employees are always incentivized to take the highest paying job.

If you run the numbers, providing every employee in america with a $16 minimum wage, working 40 hours per week, and assuming the average employee making less than $16 makes $12, would cost $500 billion per year. This is not an out of reach policy.

The fact that they don’t is only because they can’t, because minimum wage law.

Pretty bad example - where’s the incentive to work harder for the extra $3/hour when you get nothing?

And do you really mean to tax per hour rather than per year which is where we currently base income taxes on? Wouldn’t that continue to encourage 70, 80, 90 hour weeks which is really bad.

I don't understand what you're asking here.

"And do you really mean to tax per hour rather than per year which is where we currently base income taxes on?"

You'd continue to be taxed the same way. But all the income from the subsidy would be taxed at a higher rate than the income the business paid.

In this way, you are always incentivized as the employee to take a higher paying job.

What’s the difference?

What stops you doing a deal where you (on paper) work 80 hours a week for $8 rather than 40 for $16, you’d cost the employer the same, but you would get twice the income ($1280 a week).

How do you even define when you’re working.

12 plus 4

15 plus 1

I’d expect it to be more like

12 plus 4

16 plus 3

20 plus 2

24 plus 1

A 20% marginal tax rate.

The hour thing seems massively corruptible

Earn 15 get 1 subsidy

Earn 12 get 4 subsidy

What’s the difference to the worker?

Fork 4/3rds harder to earn 16 not 12, see no gain. Equivelent of 100% marginal tax.

Let's say you and I are rich charitable types, and we each decide to spend $1000 helping a poor high school graduate get a good start in life. We narrow down our options for spending the money to three plans.

We could pay for them to go to school. If we want, we could insist they choose a cost-effective, good quality course and keep their grades up.

We could give them unconditional cash. That might be really efficient, as often the poor know what the poor need better than the rich do. And if they spend it all on partying or computer game lootboxes, so be it.

Or we could pay them to mow the mayor's lawn. The mayor thinks this is a great plan and that they're going to learn a lot.

Is the third option the cleverest use of our money? Or is that the the stupidest option, with the mayor taking us for fools?

I agree with say subsidising training for Nurses, Paramedics etc

I don’t see what leads you to this conclusion. It seems self-evident that people who get paid need less government-provided (ie taxpayer-provided) benefits.

Some of this is food stamps. Which Walmart bills the government for when food is bought from their stores using them.

Walmart moving into a small town and driving a bunch of small business's out doesn't make anything more efficient, it literally costs the taxpayer more, of which a bunch of that goes to Walmart's owners as revenue.

> If you could also prevent other existing competitors from Walmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Walmart did, and now there's all these ex-Walmart people looking for a job.

You mention existing competitors would face the same regulation and control that Walmart would but the rest of your post reads like you only expect Walmart employees to be laid off. What makes you think that Smiths, Macey's, Kroger, Target, etc won't have to let workers go for the same reasons that Walmart workers would be let go? If you're instituting policies that result in Walmart cutting its workforce, those same policies will absolutely cause the same to happen in competing chains.

Okay, so you've managed to flood the labor market with workers from a dozen grocery chains- what next?

> New grocery stores would form

How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared?

> And if they paid enough to get these people off welfare

Where is the money coming from that allows these new stores to pay their workers $6.2b more than before? By a) raising prices on groceries and b) hiring fewer workers.

So, to recap: a large part of the workforce has been laid off, prices have risen for everyone across the board, and because the new stores with the higher prices aren't hiring as many workers to compensate for the policies you've instituted, part of the workforce that was laid off in the first place will still be out of work! That's without even taking into consideration the effect this will have on the rest of the working class. Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not. Either they'll work more to increase their incomes, learn to live with less while keeping their grocery budgets static, or get the government to subsidize them which is the whole problem you wanted to fix in the first place.

If you're instituting a policy that causes massive lay-offs for multiple corporations while increasing the cost of living for everyone (including the people you just got laid off), you're not going to free up $6.2b to be used elsewhere- you're creating a situation where a) even more people will need to take advantage of government subsidies to make ends meet; wasn't this what you were trying to fix? b) families will, as they always have, learn to survive on less while spending the same as before. c) permanently add to the unemployment pool because the new stores are hiring fewer employees than were laid off by the new policies you instituted.

I don't like this solution. Am I wrong? I've never had any formal econ education so it's perfectly reasonable to believe I'm missing some key points here; this is just how it logically plays out in my mind.

Fair enough. I'm not from the US, I don't know the US retail market that well, beyond recognizing some brands. I assumed, by the tone of the comment thread I replied in, that Walmart is unique in being a big retailer on the wrong side of the size of wages - but in retrospect, that was a stupid assumption.

> How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared?

I handwaved the risk of total societal collapse here :). But companies folding doesn't mean the infrastructure is gone; it can be reacquired and reused by new companies.

> part of the workforce that was laid off in the first place will still be out of work!

Fair enough. My assumption here was that the demand for grocery store workforce is driven by the demand for food, which would not change in this situation. But perhaps there's a surplus of workers.

> Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not.

A good point.

I agree with your analysis. Thanks for breaking down and simulating the consequences of my idea in larger context, and thanks for calling me on my bullshit. I'm not particularly proud of that comment.

That said, I'm still having trouble buying the idea that arbitrarily low wages are a good thing - I feel (though I'm not 100% convinced either) that these wages aren't determined solely by what makes sense for a given job category; there's a feedback loop pushing the wages down to however low they can get, and I suspect that there are optimizations left on the table, or cashed in as profits, that could be instead used to raise the wages while not meaningfully affecting the survivability of the company or the end prices for consumers.

In fact, without welfare, and programs like SSDI - which when it started in the 1950s, accepted only 200,000 people as a result of strict eligibility requirements, and has since grown into a massive social welfare program with over 10 million beneficiaries - far more people would be applying for the jobs offered by Walmart.

I'm not saying we should; but it seems like there's some other component that needs to be added to your logic, and a quick brainstorm by my non-economist brain doesn't seem to be able to fill it in.

Then "something must be done" so you could spend a bunch of money building more jails, imprisoning and murdering a bunch of these people via law enforcement and the net result would be a society where somehow Americans decided that the most important thing to them was the profit margins of billionaires and Uber rather then being able to walk down the street without getting mugged or smelling human effluent.

The classic American thinking on welfare and labor relations: that surely there's no other possible reasons to do these things.

Companies that employ workers at any pay that reduces their public benefit entitlement are subsidizing every single taxpayer, not the other way around.

If employers do not pay enough that their employees require the use of zero entitlement programs, they are mooching off the state in the amount of the entitlement programs their employees consume.

I'd be open to, instead of raising the minimum wage, having the state bill employers to recover the cost of entitlement programs they had to provide for their employees.

[1] https://livingwage.mit.edu/counties/53033

That isn't how a NIT/UBI works. There is no making up the difference, everyone gets the same amount from the government in all cases.

Moreover, the frame you're using is that the employer owes the employee a living wage. It assumes that if the employer can't stay in business paying $16.09 then the employee will get the higher wage regardless. But if that alternative was available, why wouldn't they have taken the other, higher paying job to begin with? And if the alternative is instead unemployment, you are obviously doing no one any favors by prohibiting them from making some money rather than none.

Meanwhile it doesn't take into account the cost differences inherent in different forms of employment. If you work across the street from where you live, you have no commuting expense. If you work 60 miles away, at $.59/mile you have >$70/day in commuting expense, equivalent to $8.85/hour in wages. After taxes. And you lose two hours a day to sitting in traffic. It would be totally rational for someone to prefer the job across the street for $7.50/hour to the one 60 miles away for $16.09/hour, but your position is that they should be prohibited from taking that job even though it would be better for both them and society.

Now, I understand you think these are all things that, as a matter of decency, our citizens should have. That's great! Then pay for it, and stop saddling everyone else with the costs of your morality.

For what it's worth when I reviewed their methodology, as I suggest you do, I didn't see a line-item for "biannual iPhone upgrade." [1] And re: medical care, I'm sure you know someone making $12/hr can't afford to set foot in a hospital in America. For a single-income household of 2 parents and a child, the threshold for Medicaid eligibility is $15/hr.

As a taxpayer, I retort, stop saddling me with the bill for the employees time you're consuming but refusing to pay for. If their services are that important to you, I'm sure you can pay what it costs without forcing me to split it with you. As a fine upstanding participant in this nation's economy, I'm confident you'll find a way. Maybe forego that biannual iPhone upgrade ;)

[1] https://livingwage.mit.edu/resources/Living-Wage-Users-Guide...

If society wants to mandate a $16.09/hr wage, then it will have to accept that jobs that are not worth $16.09/hr will disappear, and we'll have more people with no income at all to deal with.

I am quite sure someone else will be willing to step up and get that work done.

Can't afford often means unwilling to pay, not unable to pay.

Where there is demand for that work, there is also strong incentive to make money getting that work done.

Someone will. And they will do it differently, take a lower margin, bundle it with other work to bring the value up, increase their pricing, etc...

Yup. Robots. Can’t wait.

The hard truth is the investment is huge! And general automation, sufficient to replace basic labors on a meaningful scale is still in development.

May happen some day. It will be a long while though. Plenty long enough for this discussion to remain relevant.

Secondly, say we arrive at that point.

What changes?

People have costs to exist and be humans.

I put this in another comment: if we truly do not pay those costs, people die and or do not show up for work.

Lots of dead people is not helpful or desirable.

So what do we expect them to do?

There's plenty of stuff at the margins. Labor is getting expensive, so McDonald's has machines to fill drink orders now. Some places have robots mopping the floors, etc. Self-checkout is more and more available.

We're not going to see McDonald's or wherever fully automated anytime soon, but the number of people needed to run the restaurant will decrease.

McDees freeing up labor makes available elsewhere.

We are not currently funding our labor needs and are seeing decaying infrastructure, just as one example out of many.

One other question we should be asking is why labor is getting more expensive when the promise of tech advancement and automation was to make it cheaper to live.

Cost and risk exposure continues to rise.

Current automation does not appear to be helping.

This is where you run into flawed premises. A very hefty chunk of automation, in fact, does not make it either cheaper or easier to live. Particularly now that many firms are reaching the limits of actual innovation, and are turning to transaction facilitation and fee extraction as their primary profit taking mechanism.

When the innovators are innovating on being middle-men where previously no middle-men could exist, you've got issues.

Example:

Electronic bill payment service. In order to avoid the hassle of a stamp, envelope, and check, pay $2 on top of your bill to do it from a convenience store.

Not only are you paying more over and above your bill, you get a false gain of value. You just go to the store right? But what if the service goes under? What if servers go down? So on, and so forth.

Arguably, a great deal of automation that exists today strikes me as a regression from 40 years ago. Fewer people actually have a clue now about how value flows through the system, yet resources centralize far more easily than ever before.

Indeed, and I would put health care increases into the pile of things wiping out gains too.

Crap like this is giving us the motivation for finding solutions and getting closer.

Just like the danger of starvation is giving people the motivation to get off their asses and get to work and improve themselves.

We're pretty simple energy conservation machines otherwise. Give me a small stipend for weed, games and porn and I’d still be living in my parents basement.

That's not crap. It is reality.

Both the cost and capability of automation tech needs very significant improvement before we can talk realistically about it actually replacing basic labors. I have experience with these things. We have come far. There is far to go. I am not being negative here, just brutally realistic.

About as brutal and real as the problems related to low wage employment.

And as I said above, whether we have that available as a meaningful component in the discussion changes nothing.

One other argument is all our innovation and increased productivity was supposed to be associated with it being far cheaper to live. Increased automation augments that promise.

Fact is Americans face ever higher cost and risk exposure relative to their income despite much progress on those fronts.

We are not seeing it get cheaper to live so far.

Will we?

Fair question.

We will need to see that happen, or automation changes nothing about the basic discussion we are having here, and that is people have costs to exist and show up for work.

And at some point, we can also say, if there is work to show up for, but we do not have to say that today, and for a reasonable future given where we are and the current pace of advancement.

There is a lot of work to do, that we need to do, and we might as well employ people respectably and invest in them to get those works done, in addition to the massive value basic labors already add to our lives.

I don't know about you, but my time is worth a lot! There is a great chance we both can do work that isn't basic too.

Those people doing basic labor enable us to do that which we do.

How much is that worth?

I would suggest it is worth enough for them to make it and show up for work, same as us. (I am not suggesting they get a wage same as ours, just one that allows for a reasonable, modest, dignified life, and that they get it because what they do is necessary.)

Up thread I posed a question, "which is it?"

Corporations fully funding their labor, or government insuring that and corporations pay what they feel they can or should pay?

Someone has to pay, or they die and don't show up for work.

I don't care which. I do care that we continue to refuse to discuss which way it should be and instead treat all this like some problem the people doing basic labors for us should solve on their own, despite their contributions having good value and being necessary.

Just saying.

The US is wealthy enough to provide everyone in it a basic standard of life (shelter, food, healthcare, entertainment, transport) as a right.

Is it though? I know USA borrows heavily and spends a lot of its money on luxury items like a fearsome army and the most expensive health care (per capita) in the world.

Also the way USA is making that money is by heavily taxing its value creating people who are highly motivated to do their best work by a lack of safety net and other niceties. Now I wonder if you provide them all shelter, food, healthcare, entertainment and transport, who would be motivated to work anymore?!

The idea that we can't afford to feed and shelter our people is patently absurd.

Of course we can afford to feed and shelter our people, we do it already. But we have to work for it. And we do. Which just makes me wonder what happens if we don’t...

Homelessness is on the rise. Every year, pandemic or not, more people fall into real economic trouble and that has been going on for decades now.

A majority are impacted today, and that was true before the pandemic.

I am not saying a majority are without food and shelter, though those numbers are a lot higher than they should and could be. I am saying the struggling majority face costs and risks that generally exceed their income.

Living paycheck to paycheck, one accident, illness, emergency event away from real, material loss.

This is all going on while a few make a lot of money, even during a pandemic, and?

It is entirely unnecessary.

The first thing people say is something along the lines of being unwilling and or unable to pay to remedy things because [judgement of some sort.]

Lazy, their fault, whatever it is.

I have A / B tested this for years too.

Another hard fact is a great many people are willing to pay more in their own lives to avoid paying for what they see as personal failings of some sort or other.

That judgement again.

Again, pre pandemic, there were not enough jobs that pay people enough to exist and show up for work.

That is still true and it is all worse now because of the pandemic.

Is there any wonder at the trends, given the harsh realities?

Not really, but there is all that judgement too.

They deserve it for [reasons]

And none of that speaks to the fact that it is simply not necessary.

Up thread I posed a question:

Working people should make enough from their labor to exist reasonably and show up for work and huge numbers of them don't.

Either we require companies to fully fund their labor, or we have government do that, or somehow we need people to be able to live much lower cost, lower risk lives.

Which is it?

Fact is we need a lot of basic labors done and will need that for the foreseeable future.

That means some of us will be doing those labors, those labors will be necessary, will benefit all of us in that our own time is more available to do what we do too.

If a big employer does not pay the labor enough, and government fills the gap, how come we judge those people so poorly? How come we make it as painful as we can to get that help?

How come we fail to see the massive demand for basic labor being met and the resulting high value it adds to our lives ignored?

Take your shit. My shit, for example.

I really do value all the labor involved in making my shit disappear. I assume you do too.

Doesn't everyone?

What if we had to do that ourselves? It stinks, where do we put it? How do we transport it? To whom? And for how much?

Now, think about all of us having to manage that directly, how inefficient it is, how much time we lose having to deal with it?

That would be crazy, right? Huge opportunity. Someone would start up, and handle our shit and we would pay them and they would profit by consolidating efforts...

My point here is people will work. It makes a lot of sense.

What does not make any sense is seeing basic labors in such a negative way, like a failure, or lousy people getting work they deserve and all the other garbage seen and heard day in and day out.

Here is another way to see it all.

When my wife was sick, and we had to give up our home for lack of health care coverage (ugly story, not our fault), suddenly I was a home maker in addition to the breadwinner.

Life breaks down into thirds. One to work one to be humans, do what we want to do, and one to sleep.

Asking people who do not get enough from their labor to exist reasonably and show up for work to work more only goes so far.

When life is nothing but sleep and work, other alternatives start to look more attractive. Crime? Mooching off others? Living in a camp? Drugs to escape the brutality and pain of it all?

Maybe drugs to keep sleep at bay started and became chronic?

This is going on all over the place too.

And then one more brutal part:

All those negatives. Basically valuing basic, necessary labor, that generally adds a lot of value to our lives, as low as possible doesn't really help motivate people, does it?

Is there any wonder you wonder as you do and suggest the harsh conditions are necessary as you did?

None at all! You are not alone.

And no judgement from me either. None implied, intended.

I am just trying to suggest we are doing ourselves no real good this way.

There are real problems brewing and we, as a nation, are not having anywhere clise to a healthy conversation about how to get past them, improve and in general run the place better than we are currently running it into the ground.

What it comes down to is our social order is a choice, and we are not choosing wisely or creating the efficiencies necessary in our society to move forward. Maybe this is a facet of human nature, but that's not the end of the conversation. We need to understand how to overcome these ideologies that are obstacles to a more equitable and innovative "Star Trek Future".

After all, "nature" has never stopped us before.

Cheers!

The minimum wage is not much higher than the federal poverty level.

> you went to the ballot box and kicked those costs to corporations. The minimum-wage companies are subsidizing you.

Walmart and McDonald's are among the top employers of workers who receive government aid.

https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...

It should, but it doesn't.

Amazon is a classic example. Despite being the beneficiaries of many types of corporate welfare (including paying some full-time employees so poorly that they had to be on welfare), Amazon has paid $0 in tax a few times.

In fact, there is no meaningful relationship between Amazon's profits and taxes. Their profits go up, and sometimes their taxes actually go down[1].

1. https://www.washingtonpost.com/resizer/fWL3rv40cvsIPAqSvf1wz...

This is a very misleading statement that I see thrown around a lot. Either it's done in bad faith, or it's ignorant of how corporate taxes work (and why).

If you don't earn a profit, there's nothing to tax. Amazon has been (to the credit of their extremely patient investors) funneling their revenue back into growing the company instead of giving it to investors and the government.

Amazon could jack up its prices, stop hiring, cut wages, lay off tens of thousands of workers, slash investments that grow the company, and they would realize a tidy profit. Now they are paying corporate taxes. I guess that would make populist politicians and pundits happy?

So when people disagree with you, they are either malicious or stupid? There's 0% chance that you're wrong, even though you're in the minority of everyone who looks at this and thinks, "Wow, Amazon should pay more in taxes"?

> If you don't earn a profit, there's nothing to tax. Amazon has been (to the credit of their extremely patient investors) funneling their revenue back into growing the company instead of giving it to investors and the government.

No, they haven't. They have been turning a profit. If you reinvest your money in your company, it doesn't show up in your income statement as profit.

The reason Amazon doesn't pay taxes is because of friendly tax law. Part of the proposal from the left in the US is to tax Amazon based on the numbers in their actual financial statements, instead of playing lots of games with depreciation, stock compensation, and carry-forward losses.

So your argument here is somewhat orthogonal to the actual discussion, which is how to tax corporations, not whether corporations are acting within the law. We already know that what they're doing is legal, we just don't want it to be legal anymore.

If you want to uphold the principle that Jeff Bezos should pay more taxes than Grandma, don’t tax Jeff Bezos and Grandma’s pension fund at the same rate. That’s what corporate taxes effectively do.

Source: i do this.

This seems really basic in that society already has a way for Amazon to pay. And we’ve had it for decades.

It’s curious to hear statements like this that make me think there’s some problem to be solved.

Do you think capital gains should be higher? Do you want to shift the method of taxation from personal income taxes to somewhere else?

When the rules were set up this wasn't the intention, and there might have to be changes. To be fair to Amazon, their problems are not as serious as many other companies which make it look like they make zero profit in some countries by "paying" themselves in another.

My understanding is that capital gains taxes are intended to grow capital with the goal of a larger payout in the future as capital is reinvested. It’s purposely not intended to be a real-time tax on gains because future taxes will be greater.

For example, if there’s $100 in profit today and it’s paid out as a dividend then that’s $15 in tax revenue. But if that $100 is invested in the company, it compounds at some rate (say 5% although this varies by company and Amazon is much more efficient) so in 10 years that $100 becomes $162 (1.05^10*100) and if cashed out then as dividend results in $24.3 in tax revenue.

Theoretically if you think the government can invest and get a return greater than within individual companies then capital gains doesn’t make sense, but that’s an argument for economists.

But wanted to share that the goal of capital gains is to maximize tax revenue through efficient incentives.

Of course, it might be they could spend more efficiently, but if all purchases move online, and online companies manage to avoid paying tax to most governments, these basic utilities are in trouble.

But I suppose that’s where you can try convince governments to do away with capital gains and tax very differently. I don’t think you’ll find any countries that do this or do it efficiently. The growth of capital is really important to long term improvement, and even pretty “socialist” countries like the Scandinavian nations encourage capital growth through their tax policy.

I think the difference is that the value for Amazon is focused on one company while the value for society is spread across 7 billion people.

In my mind, without 'society', there would be no police, no hospitals, no public education, no roads. In my mind, these are all part of what we get by being in a society. Amazon is welcome to try to function in countries with no functioning government, but I suspect they would have limited success.

But I think that the main benefit of society is that it provides an environment that allows members to contribute and make it better. So while society provides safety, etc people and companies add to it with additional value. This value gets taxed (to support society) and the remaining value builds and compounds.

So at a macro level any persisting organization contributes more to society than they gain or society would crumble. By definition the growth in society is driven by people making it better. And people work on stuff like corporations.

On the micro level, it’s hard to figure out the exact net contribution from individual persons and companies, but Amazon is obviously a huge company paying out returns and the second order effects from how they’ve driven e-commerce, cloud, and logistics make me think they’ve helped many others beyond just customers and shareholders.

That being said, maybe taxes should be changed. But they are currently paying everything required of them and monetarily generate lots of revenue for government (eg, corporate income taxes, sales tax, property tax, tariffs, capita gains paid by shareholders, and income tax paid by employees, etc)

The only benefits they can really profit from are things no one else can get, which generally only amount to corruption for anything I can think of. I'm sure there's some, of course.

There's value in the stock, but that's taxed as stockholders sell and realize the capital gains.

I understand you have a link with the word "profits." WaPo is misusing the term. Profits are revenues after expenses and the numbers in that graph are not taking certain expenses into account. When the expenses are taken into account the profit drops to zero.

Specifically, one of the big expenses deducted before calculating tax was liquidation of employee stock options. And guess what? Instead of being taxed at the corporate income tax rate those options were taxed as individual income for the employees who exercised them -- an even higher rate!

In your example the gains were in fact taxed. The tax was just applied in a different place than where you're happening to look.

> WaPo is misusing the term. Profits are revenues after expenses and the numbers in that graph are not taking certain expenses into account.

"Profit" is not a defined term. It's shorthand for something else, usually gross profit, operating profit, or net income.

For 2018, AMZN had gross profit of $93B, operating profit of $12B, and net income of $11.6B. The WaPo numbers in the graph use one of the latter two figures, so the graph is absolutely correct. It is NOT revenue in the graph, and their profits have absolutely gone up.

Do you honestly think an edited and widely read paper like WaPo is going to make an incredibly basic accounting mistake in their business section?

> In your example the gains were in fact taxed.

No, they weren't. Most of Amazon's shares are not held by employees. Taxing employees is not solving the core issue that everyone is upset about, which is that Amazon (taken either as an entity or as its owners, most of whom are not employees) is paying close to 0% taxes. Period. That's it.

No one is arguing whether the activity surrounding Amazon generates tax revenue. That's outside the scope of the argument.

And in this case, we are discussing profit as is relevant to the tax code. There is no need to be adversarial considering you've just said you agree with me.

> No, they weren't.

Yes, they were.

> Most of Amazon's shares are not held by employees.

This is irrelevant as capital gains are necessarily taxed.

> which is that Amazon (taken either as an entity or as its owners, most of whom are not employees) is paying close to 0% taxes. Period. That's it.

And this is just wrong.

> That's outside the scope of the argument.

It appears it would be most accurate to say that your argument hinges on a particular narrow definition of terms and scope of analysis.

I don't think we need to discuss this further. Your point has been made, such that it is.

To illustrate by example, if you were to directly tax investment activity $1 per trade, you'd kill almost exactly $1 of GDP. Nothing would be gained. Land value taxes and VATs, it turns out, are some of the best because they're inexpensive and largely non-distortionary, and personal income taxes are somewhere in between.

There is a fallacy here where you assumed society operates in a certain manner but provided no evidence to support that. The idea that people's standards of living is a directly a function of their skill level and not deeply influenced by other uncontrollable factors is a very contested and argued point of view. On the contrary, it's clear to see that despite individual productivity sky rocketing over the last 40 years, wages have remained stagnant.

Even the framing of your question is odd - who is the "society as a whole" that bares that burden, when most people who make up society are working class? Rephrased you could have simply stated that the majority working poor shouldn't cause undue burden on the aristocrats.

Lastly, I'll add that the state is already burdened in one way or another. Having a large amount of uninsured people due to corporations off loading their social contract creates a public policy problem. The state can't have people dying in the street or spreading disease because the vast majority of them are underinsured - and to solve these problems the state then increases taxes on everyone just so a corporation or two and get away with the bare minimum.

There are some jobs that don't get done because of minimum wage, but the claim you make is much stronger and really demands some evidence.

> And everytime its raise poor people especially poor young boys with no skills take the brunt of the pain.

So you are saying that the long stretches where real minimum wage erodes are good things for “poor young boys”? Because I don't think there are any measures of the welfare of that group that support either that necessary corollary or your specific claim.

I don't have any sources on hand, but there was a nice feature in the Economist about this a year or two ago.

https://www.aei.org/wp-content/uploads/2016/05/teenjobless.p...

https://restaurant.org/research/restaurant-statistics/restau...

In my experience, people who were not at time in school, were not at time in their jobs. And either they found a job where it did not matter or were in constant trouble because of it or got fired.

Generally, they did not acquired puntuality nor precision. The lack of either was result of general attitude toward everything around and it did not magically changed after school.

But if your family sucks... School won't save you :-(

For companies who prefer to pay their workers as little as they can get away with, it is the tool of choice for those who recognize the meaning of 'wage-slavery'. Theories and promises about 'much better' tools haven't solved the problem. Raises do. A bird in the hand.

Which is natural, when you employ people with almost no marketable skills.

The solution is not raising minimum wage. The solution is more competion for Uber HR so they have to pay more because people have better alternatives. Maybe deregulating labor market so there are more jobs would be a solution.

Those doing the labor need to make enough to exist and show up for work.

If they do not get enough to make it and show up for work, then they don't make it and don't show up for work.

People have costs. Existing and showing up for work has a cost.

If we truly do not pay those costs, people die and dead people do not show up for work.

Clearly, dead people not showing up for work helps no one, so we need to make sure they get enough to make it and show up, right?

If we decide government has this responsibility, fine! Seriously.

But that too has a cost. Literally everything does cost something, and the cost for that is not shaming the fuck out of people who do not make enough to make it and show up for work. And that happens constantly!

Those minimum wage peeps are worthless! Lazy! Dumb! Free loaders! Queens! And on and on it goes.

Pretty hard to say all of those things when a ton of jobs do not pay enough to make it and show up for work.

What do we expect them to do?

Work more?

Well, life breaks down into thirds. One to sleep, one to work, one to be a person and do all the human things humans do, laugh, live, grow, build, do, etc..

When so many jobs do not pay enough to make it and show up for work, people run out of thirds to work, and they have to sleep, and working all the time does not exactly allow for personal growth does it?

Nope and we all know that too.

I sure wish we would just settle on one or the other and quit trying to blame and shame millions of people who do basic labors that are necessary and that save a lot more of us a ton of time that we use to do our work and be humans and all that good stuff.

If we are gonna say government does it, and minimum wage is super low, fine. Government needs to do that, and we need to pay appropriate taxes and get on with life and let everyone play their role with some dignity and compassion.

Or?

We say corporations need to fully fund their labor. In that scenario, we need to pay them appropriately for their goods, services and insure robust competition so margins don't get out of hand. Taxes will be lower, making room for all that to happen.

And again, everyone gets on with life, playing their roles with dignity and respect.

Which is it?

The current "blame them" scenario is completely unacceptable. And it is unacceptable because we need those basic labors, someone will be doing them and that needs to be recognized as the value in our lives it truly is and not frowned upon as some how bad, because it just isn't.

So which is it?

This is the national discussion on all this we ought to have.

society as a whole already does that, as do other employers, who generally do cover healthcare, invest in the training of their workforce and so on, it's Uber and other 'gig economy' companies which by means of legal arbitrage are the exception.

And while it's fair to talk about the trade-offs between small, family scale businesses and minimum wage, last time I checked Uber did not exactly fall into that category.

I feel like it's easier to anticipate the side effects of raising a minimum wage than it is for an earnings cap.

Goldman Sachs is a red herring in this argument. The ones hurt most are the very poor who never have a chance to own such a business to begin with. And a business model that relies on cheap labor is not one that should be ethically allowed to exist in modern society IMO. Also as the sibling comment points out, all of society loses when business underpays it's employees and they are forced to permanently rely on transfer payments to make ends meet.

A minimum wage is the best way to use market mechanisms to eliminate poverty via an improved alignment of incentives. Businesses invest in additional capital to make labor more productive due to it's increased inherent cost. More productive labor can in turn charge higher rates. Which translates into higher total demand, which begets more investment and growth.

There are also ancillary benefits as well, many anti-immigration supporters (inaccurately) point to stagnating wages as a negative result of present immigration policy. A boost in minimum wages would take that rhetorical sleight-of-hand away from them.

This is quite wrong: minimum wages do not "fight poverty". The only effect that minimum wage laws have is to render low-paying job illegal. Minimum wage stops potential employers from creating low wage jobs. That's all they do. If unemployment rate is low enough then society doesn't notice, but if unemployment rate is high then people just work ilegally.

Why would any company ever employ anyone in the close-to-minimum-wage bracket? Amazon gets flack for employment, and Google gets none. Only one of those two has made room for any significant number of close-to-minimum-wage workers.

This is a massively perverse incentive that prioritises how rich people feel about themselves over how people without much actually live. IMHO, that's about as close to a working definition of evil as I can muster.

Semi-related: this is also why basic income will never work. Basic income will be seen, inevitably, as subsidising rich companies, which will lead to it being killed off.

Almost anybody can move a box from a conveyor belt to a loading dock, or unload boxes from a truck.

It's just a bad incentive structure because nobody wants these workers due to the terrible PR. Amazon is trying it's hardest to automate everyone out of a job.

The EITC is not a liberal or conservative issue. Every President Republican and Democratic since 1980 has supported it. I don’t know if Trump has said anything one way or the other.

There is already a minimum wage that people can go out and try to find a job for, but mysteriously, there have always been plenty of Uber drivers! Is it perhaps that by creating a minimum wage law, there are fewer jobs available? Or maybe they just like the convenience of working for Uber, even if they aren't guaranteed to make minimum wage after expenses. Or would you go so far as to suggest that these people are too stupid to know they are being voluntarily oppressed, but because you know what's best for them, you would help legislate them out of a job? (Make no mistake: higher prices will result in fewer Uber rides.)

The real minimum wage is zero. Just add a UBI and get rid of all the other market distorting AOC-economics. The resounding success of the gig-economy (in terms of labor supply specifically) is a side effect of a minimum wage that is too high, crowding people out of full time jobs. In the meantime, adding these minimum wage laws to Uber will just result in more people making nothing and fewer people having convenient transport.

Because people who don't use it don't want to pay for it. There is a lot of opposition to public transport that doesn't pay for itself. There is also the horrible feedback loop of "only poor people take public transportation" stigma, making it more difficult to break even.

At least in LA, the problem isn't "poor people ride public transportation." It's straight up "I don't feel safe." I tried using the Metro and didn't buy a car for nearly a year after I moved here, but there were incidents I experienced that made me abandon it. It had nothing to do with poor people.

"A survey of riders showed that women feel less safe than men during all stages of their transit trips — especially at night. For example, just 13% of women surveyed said they felt safe waiting for a train or bus after dark, compared to 30% of men." [1]

When 87% of women and 70% of men don't feel safe on public transportation that's a real problem and it's no surprise that people abandon it as soon as the possibly can.

[1] https://laist.com/2019/10/03/los-angeles-la-metro-women-publ...

It's not a requirement that these public services break even. In fact, (controversially) it's the opposite. [2]

[1] https://about.usps.com/newsroom/national-releases/2019/1114-... [2] https://en.wikipedia.org/wiki/Deficit_spending

If government spending is inefficient and Americans don't feel well represented by their elected officials, then fix it. Oh wait... it isn't that easy...

Offering someone money for doing something is not 'subjugation'.

- Someone is not able to make enough money to have a reasonable quality of life despite contributing to society.

- Society's rules do not provide an alternative (for example, because natural resources and land have already been claimed or because someone doesn't have access to capital).

It would not make sense for someone to willingly go along with a system that does not allow them to live a decent life. Therefore they must be going along with the system due to some form of coercion.

A situation where someone is forced via threat to go along with a system that does not meet their needs is subjugation.

The solution for this problem is also not forcing businesses and people into idea that in the real world makes little of no since.

Cause with this 25% hike many of those driver will lose their jobs when less people take uber. I know since uber pools been taken away I personally hardly ever uber unless its 100% necessary.