> 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.