That is too simplistic view of the economy. You can't allocate all revenue to payroll. That's not how business or the economy works.

> That is too simplistic view of the economy. You can't allocate all revenue to payroll.

You may be right about this. In fact I'd wager that you are. But the problem isn't that part of what you said; it's this:

> That's not how business or the economy works.

You're probably right about this too! The problem is that, in these conversations, we usually just stop here. Whereas more and more, I'm finding myself asking "can we citizens find ways for business or the economy to work in some other way, even just a little bit? Are we willing to just creatively try and answer some of this stuff?"

I think, if you just stop at "that's not how ___ works" without pushing things further, well, it feels like rolling over. The way "business and the economy worked" in the American South as recently as the 60's was that, if you had a certain skin color, you were relegated to a shitty part of, say, the restaurant, or you were prohibited from participating in the economy in any meaningful sense at all. But then some people asked "is there a way for things to work differently?" It's far from sunshine and gumdrops 55 years later but you can't be chucked out of a lunch counter for being black anymore.

I think he may actually be wrong, maybe... All costs are payroll costs in an abstraction interpretive sort of way. The non-pay roll-costs such as materials goes to pay other people to make and supply the materials. The cost of steel really is the cost to pay another group to mine, refine, and distribute the steel. Every accountant item I believe can be conceived this way.

Capital investment. No one is going to provide capital if there is 0 return. Basically Y Combinator (incl this site) would not exist.

Another example of reinterpreted payroll costs. Different payment scheme but still paying some other people to be money supply for a business(equity).

OK but you are getting off track here. The parent's argument was that if you take GDP / working Americans = working livable wage. My only point was that doesn't work because of costs and investment.

Sure you could look at capital investment as a form of payroll, but it's going to heavily skew the numbers and now GDP is not a great way to estimate if we can afford to pay a livable wage simply by looking at GDP.

Yeah your right. Whoops!! Sorry my brain misfired when I read your other response. Deepest apologies, im working with low grade human intelligence machinery here. Need to upgrade to super intelligence next time on reincarnation.

Your right, numbers don't show everything and yah just can't redistribute gdp in a communist sort of manner. But I do think one of the parents thinking exercises does indicate that wealth distribution is more of a problem in America than certain European nations.

Capitalism for all it's flaws is a great system to motivate work, wealth creation, and capital investment(as u mentioned).

In an alternative reality fairer system that can muster up a similar work ethic the average person would be better off and you'd have similar innovation potential but with different work ethic driving motivational mechanisms. But that's a improvable hypothetical to be fair. That's your point of contention right?

Capital, in turn, is also just accumulated payroll (or, as I think someone called it, labour).

Congratulations, guys, you're well on your way to reinventing Marxian economics.

But it is fair to say that economies that look remarkably like our own are able to support higher wages with no catastrophic downsides. The same argument goes for universal healthcare, family and sick leave, etc.

No I don't think that is fair at all and I feel that you need a source that dives deep into the details because it is far more complicated than X country's wages > U.S. wages.

I am not saying "X country's wages > U.S. wages".

I am saying there are a dozen countries, including several that are extremely similar to the US, that not only have higher wages, and higher minimum wages, but also extensive paid family and vacation leave, universal healthcare and a wide range of quality of life metrics around or above what we see in the US.

I wasn't arguing against those things? I was just referring to the parent's comment that based on our GDP we could afford to pay everyone a living wage. Maybe we can, but using the GDP to gauge that is not a valid way to demonstrate that.

Which part do you want to dive deep? High minimum wages? Or universal health care?

Australia has both, and a smaller gdp/capita than the US. Happy to dive as deep as you like.

On both front, Australia still has effective unions with political representation, and thus corporate interests don’t always win. That’s the main difference with the US.

Stealing from Jeremy Howard on twitter -

"The 5 largest companies in the US are all computer software/hardware.

Australia's largest company is in mining, and 4 of the next 5 are banks.

Australia really needs to join the modern world..." [1]

--

On top of this you haven't compared -

1. The quality of life difference between minimum wage workers in those countries 2. The quality of health care between these countries 3. Median house hold income (not everyone is on minimum wage) 4. Differences in taxes and "net" pay 5. The differences in the makeup of the economies and conditions of jobs

Honestly the factors are endless and I am not going to spend more time enumerating them all.

[1] https://twitter.com/jeremyphoward/status/1403627678528200704

So you want to dive deep or use Twitter quotes?

You want to talk about quality of life difference between $7/hour and $23/hour ??? Sure where do you want to start?

Want to talk about quality of healthcare… the US will lose badly here (except in certain types of cancer). And skewed statistics because the US just refuses treatment to a bunch of folks which hides treatment/mortality rates.

You want to talk about median income 33k (us) vs 43k (au)?

Or back to the more pressing point: when you only have corporate lobbyists and no lobbyists for workers (unions) workers get skrewed across the board.

Look, all I was arguing is that the economies are vastly different. So what if Australia wins on all of those? I don't believe that is true, but it doesn't matter.

All I was saying is you can't use GDP as a gauge for how much money is available for payroll (as suggested by the grandparent). That is very dependent on the economy producing it.

… I don’t understand your point. If you are generating a net surplus, then your economy is growing. If your per capita size is large, then inequality is something government can solve with taxation/redistribution it has nothing to do with whether it is iron ore or software generating the taxable $.

And yes, Australia beats out the US on pretty much any metric you like (unless you are looking for corporate benefit, then the US will win out, it’s much better to be a capitalist in the US)

GDP is gross domestic product. It isn't representative of net surplus. That's my entire point.

You are talking about government spending? And arguing that they may not be in a budgetary surplus?

Because if they are in positive GDP then they are in an economic surplus… that’s what gdp is right? Else they are in a recession.

Neither of which matter to my point, because the pie is ALREADY big enough for a living wage for everyone.

Who is talking about government spending? The OP I was responding to was talking about livable wages provided by corporations. This has nothing to do with the government.

I was clarifying your point, you were saying positive gdp didn’t imply positive economic growth… or size of economy but it does. So what was your meaning?

It's a good approximation, inequality is what is skewing it in the US.

US GDP has been lower than China GDP since 2019 and if anything the pandemic accelerated the process of Chinese economic outpacing the US economy. In China there is enough money for everyone to have living wage too. And you pay for you healthcare in China too even though their GDP is enough to cover it for all Chinese citizens. Apparently they are focusing on the big picture, i.e. becoming No.1 and surpassing US by a long shot. Making our currency inflate at 5% a year means we need to deduct that 5% from our GDP growth for that year -- its economics 101.

You want to use China as an example? Sure!

China has the fastest growing and largest middle class (or middle income earners) in the world. They prove exactly the point I’m making. There will come a point in time where there are less people (%) living in poverty in China than in the US if you follow the current trend lines.

Also you are only kind of right with “you pay for healthcare”. It’s heavily subsidised… compared with the US.

Your assumptions are totally incorrect. US has the most subsidized healthcare in the world by GDP. That's for starters. Second, I gave you hard data. What do you give me? Your wishful thinking that China will adhere to your wishes? And start paying for nothing? The Party doesn't pay for nothing. In China you work. And you pay for your doctor.

> US has the most subsidized healthcare in the world by GDP.

No. Just... No, absolutely not. That's among the most factually incorrect statements I've seen anywhere online, let alone on HN. Why would you even write something like that; are you really so utterly ill-informed, or just plain lying?

I think in a really stupid way, it’s correct.

As in: The US spend more on healthcare as a percentage of gdp.

But it pretends that capital efficiency between government spending is equal. As Australia shows: free hospitals for less per/capita(or gdp) spending than the US…

Why is us health care so expensive then? In Australia drs and hospitals are free… there is no cost. How do you subsidise more than that?

In the US I’ve used the hospital system once (minor treatment, no over night stay) my insurance paid $4000+ usd. In China I’ve used the hospital system for a fairly serious physical injury and was treated very quickly, couple hours and I paid ~$600 rmb.

> In China I’ve used the hospital system for a fairly serious physical injury and was treated very quickly, couple hours and I paid ~$600 rmb.

What does "~$600 rmb" mean? That '$' character is usually called a dollar sign. Do you mean "about US$ 600, but in Renminbi"; or are you just using the dollar sign as a general currency sign, to say "about 600 Renminbi"?

600 rmb.

Emphasising my point what does $150USD get you on an American hospital - maybe a Tylenol?

China achieving an equivalent standard of living would probably not work out so well for the authoritarian government there - but it would work out surprisingly well for Marxism. Actually equalizing US and Chinese wages would lead to an extreme acceleration of other areas with depressed wages and, potentially, lead to the world becoming more equal in wages without the current assumed approach - that US wages will deflate quite significantly.

A world where China elevates itself to the US's level is one we should celebrate in the west as it means we need to suffer less ourselves.

Also, the world is well beyond being a zero sum game economically, most of the biggest economic drivers these days are "silly and irrelevant" things like Facebook, Banking and the service industry. All the world can be well off.

>China achieving an equivalent standard of living would probably not work out so well for the authoritarian government there

That myth has been disproven long ago. Achieving a high standard of living and level of education does not magically cause people to pour into the streets and protest against their authoritarian governments.

>A world where China elevates itself to the US's level is one we should celebrate in the west as it means we need to suffer less ourselves.

A world where Xi Jinping is in charge of the global economy is a world where fundamental dignity is stripped from anyone who isn't Han, white-collar, hyper-nationalistic and living on the East Coast of Mainland China.

Many nations in Asia are gearing up economically and militarily to make sure this cannot happen.

> That myth has been disproven long ago. Achieving a high standard of living and level of education does not magically cause people to pour into the streets and protest against their authoritarian governments.

While a flip doesn't instantly switch it does cause an erosion of the stability of the government. An enlightened populace is less accepting of authoritarianism than an unenlightened one and the excess luxury time that wealth creates leads more of the populace to enlighten themselves.

This is mild fear mongering - I’m skeptical of Xi myself. But You are projecting the colonial powers’ treatment of the world onto a nation that has never done anything close to what you describe.

>But You are projecting the colonial powers’ treatment of the world onto a nation that has never done anything close to what you describe.

Please read some Chinese history. You'll see the exact same level of brutality, imperialism and aggression shown by the European empires, from Rome to Britain.

Much of central and Western China was only conquered during the last 500 years (basically the same period as European colonialism). They too, experienced forced cultural assimilation and ill treatment. They didn't conquer the globe in the way the Europeans did, but equally they didn't have the naval technology to do so.

Ok… heard of Kublai Khan? Part of the mongol empire circa 1200s preceding the colonial powers existence by a good 500-600 years… That was the Yuan Dynasty (in china) and they conquered a whole lot more than modern day china.

Now since Yuan, you’ve had Ming and Qing… neither of which were particularly aggressive outside of their borders… and Qing was of course the start of the Opium wars, where the colonial powers essentially raped china for all its resources.

With regard to your strange Naval quip. You should look up the Chinese treasure ship. (Ming dynasty)… predates the colonials naval power.

So which Chinese in particular would you like me to read about? Everything you said is factually incorrect. To a laughable degree. I recommend you watch Marco Polo on Netflix, it’d teach you something.

If you're getting your historical education from Netflix, maybe you're not the right person to berate others for theirs.

I don’t. Just suggesting that EVEN Netflix would prove OP points wrong.

I’ve got a major in Chinese History. Maybe get one of those too and come back and we can chat?

Naah, doesn't seem worth it, just for the sake of this discussion. ;-)

Sorry, must have missed the meaning of the "even", so the more charitable reading didn't occur to me.

People are the same. China is very well known for its extreme nationalistic tendencies. The Party to stay in power must be really, really to the right in terms on nationalism. Without nationalism the Party has no chance staying in power. Read up on the topic. And yes, they treat their minorities extremely bad. Including concentration camps for Ughurs. US compared to them is a pure equality heaven.

The US comparison is just not true, you are ignoring the vast majority of US history when you say something like that.

Nationalism is not the same as subjecting your surrounding neighbours, which is the implication that the OP was making.