> So the solution is to throw many of the people who currently make $10/hour out of a job and onto welfare? That's what you're proposing.

It's not an either / or. If the US were to invest more in education and developing the economy everywhere, there would be more jobs beyond low paid "unskilled" labour. That is, at the moment there's too much demand in low paid jobs, too little in e.g. college or uni level positions, and too much supply of people desperate enough for a job to take something below the standards of living.

Compare with my country, which during the pandemic saw a large amount of people in the service industry change jobs, because during the pandemic a lot of restaurants and the like were closed. When those opened up again, they found themselves with a shortage of staff, leading to the ones that still worked in the industry to be in a strong negotiating position and have their wages increased significantly.

Take away the supply - by increasing supply of higher-paid and diverse jobs everywhere - and low wage jobs become higher paid jobs automatically. In theory.

>It's not an either / or. If the US were to invest more in education and developing the economy everywhere, there would be more jobs beyond low paid "unskilled" labour.

I don't know how far this extends, though. I live in an area where nearly anyone who wants to can get an affordable college education (and, I'd venture to guess, very close to free in most cases). And yet the graduation rate is abysmal. The fact is the higher ed path is a round hole and many people are square pegs. We can't just turn everyone into a highly educated skilled worker. I agree with the other posters that a wealthy country should have a dignity threshold for the members of their society, but I'm come to realize education may not be the main pathway to get there.

How would you propose to increase the supply of higher-paid and diverse jobs? The USA already spends enormous amounts on education subsidies and Keynesian economic stimulus. And what is a "diverse" job anyway?

The USA and many other countries already have a surplus of people with college degrees that have no real value from a job skills perspective (elite overproduction). Future job growth is likely to be concentrated in skilled labor fields as we re-industrialize. We should probably shift some funding away from universities, and towards community colleges and trade schools.

> When those opened up again, they found themselves with a shortage of staff, leading to the ones that still worked in the industry to be in a strong negotiating position and have their wages increased significantly.

No need to compare, that happened in the US.

https://www.nber.org/papers/w31010

No that is not what I am proposing. I have lived through the introduction of minimum wage in 2015 in Germany. Maybe you lived through more such transitions, but I did not observe what you (maliciously?) claimed to be for.

Sure the US is always different (and solution working elsewhere can't possibly be applied to it), but granted: a UBI might be a better choice ultimately. But the question is if that is really within the set of realistic choices. A UBI is a hard sell even in comparably "socialist" countries in Europe. In the US it would be dead on arrival. Consider that maybe this is the idea.

You know, a bit like what the Hyperloop did for intercontinental trains, proposed by a guy who wanted to sell more cars.

I have a slightly different take: if your business is only profitable by the taxpayer subsidizing a relatively large number of employees wages with welfare benefits, you should be capped on how profitable your business is. In other words, you can be as profitable as you want but as soon as your business model relies on taxpayers to be viable, those taxpayers have a say in just how much profit is considered reasonable.

> if your business is only profitable by the taxpayer subsidizing a relatively large number of employees wages with welfare benefits

Welfare does not subsidize employers, it is a subsidy /against/ employers. Giving employees welfare increases their wages because it increases their negotiating power.

If it wasn't clear, my point was that it allows employers to arbitrarily lower their wage rate where the business is viable.

Example:

-Employee needs $15/hour to 'afford life'.

-Business is only profit-positive if it pays $12/hour or less

-Assuming the employee will only accept a job if it allows them to 'afford life', as long as the government subsidizes the equivalent of $3/hour, business is able to turn a profit. Anything less than that, the employee does not accept the position and the business is not viable.

This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.

> my point was that it allows employers to arbitrarily lower their wage rate where the business is viable.

But it doesn't do that, in fact it requires the employers to raise their wages.

Your model has a single employer (a monopsony) who doesn't need to negotiate. That's a case where minimum wages cause both wages and employment to rise.

> This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.

McDonald's (mainly) doesn't have employees, it has franchisers and those have employees. Different companies.

More importantly, if you're on the left then you should think welfare is good. It's good that they're telling people that! We should require it in fact!

If you're saying that telling someone to get welfare is bad, you're making an argument that welfare is bad. In your model signing up for welfare makes employees poorer. That doesn't make sense.

>But it doesn't do that, in fact it requires the employers to raise their wages.

Is there evidence to this claim? Even the most recent UBI studies seem to run contrary to this point.

This otherwise borders on a bad-faith post. Yes, McDonalds corporation is different than a franchise, but the profits of the former are obviously tightly coupled to the operations of the latter.

And it’s not a left/right political argument on whether welfare is “bad”. That’s an overly simplistic perspective. It’s about how a particular system is structured and whether that leads to desirable outcomes for society as a whole.

Or phrased differently: If people don't starve when they won't let others exploit themselves they won't be likely to let others exploit themselves.

If we apply market logic to that this would just mean that employers have to offer better deals.

>If we apply market logic to that this would just mean that employers have to offer better deals.

I'm not sure this follows. By this logic, do you think UBI would cause employers to increase wages?

I think (given sufficient UBI), you would see some industries increase wages but many businesses fold because they are only viable by suppressing wages (which are then subsidized by taxpayers). So, yes, on one hand the remaining employers would be paying more but the overall employer base would be smaller.

Another way to think about it is that as forms of welfare go up like disability, those workers tend to fall out of the labor market. They are using that as a tool for negotiating higher wages. (granted, there many complications in this point)

The majority of new restaurants aren't profitable and go bankrupt within a few years.

I don't think that adds much to the conversation. That says nothing of the existing (and profitable) restaurants that exist and still pay people wages that qualify them for taxpayer subsidies. You can easily reword my point to say "your business plan should not rely on paying people a wage that requires them to be subsidized by taxpayers without additional oversight". I also don't think the point needs to be constrained to restaurants.

Your point still makes no sense. Everyone is subsidized by taxpayers to some extent. We all receive a variety of government benefits, tax credits, etc.

As for a "business plan", that's a total joke. In the real world most small businesses have no real plan. They just make it up as they go and try to survive another day.

If you think that unskilled workers should be paid more then how much exactly? Please be specific. And if paying that much would cause the business to go bankrupt and leave those workers with no jobs, is that a preferable outcome?

I worked in a restaurant for a while as a youth and made minimum wage. It sucked and I hated it, but that was good motivation to learn some actual job skills.

>If you think that unskilled workers should be paid more then how much exactly? Please be specific.

This is one of those pushbacks you see on social media that is used like a gotcha but it’s fairly useless because you and I know it can’t be encapsulated into a forum-sized answer any more than the question “what should a company charge for it’s product, and be specific.” The answer is it depends.

At the risk of sounding as glib as your question, I’ll refer back to earlier comments: an amount that allows employers to “afford life”. That means these two things should not be happening at the same time: 1) a relatively high percentage of the employees rely on the taxpayer to “afford life” in the form of welfare benefits and 2) the company is turning a relatively high profit. Now I know “relatively” needs to be defined, but that’s what crafted policy does, and a forum like HN probably isn’t the place to get into those kinds of weeds. It can probably be pegged to CPI in some way, or limiting executive pay as a multiple of median employee pay when they do rely on taxpayers, as a starting point for the discussion.

It’s odd to me that you want to give a business a free pass for incompetence for lacking a viable plan, and then holding the employees to a high level of responsibility/accountability to “motivate” themselves to “just do better”. What you’re advocating is a kind of semi-permanent underclass since your understanding ignores all kinds of social and psychological barriers that prevent some people from getting “actual job skills.”

The estimated living wage in Manhattan is about $43 per hour. So are you proposing that restaurants in Manhattan should be required to pay that much for unskilled labor, regardless of the value they generate?

Where someone works != where someone lives. If I work remotely for a SV firm, I don’t necessarily have to be paid SV wages. I’m proposing Manhattan restaurants should not be subsidized by taxpayers when they don’t pay a livable wage in order to make a profit. What I’ve said before is that profits should be capped to a reasonable amount if taxpayers are subsidizing a business to a reasonable degree through welfare benefits. That doesn’t require paying $43/hr unless the owners want uncapped profits.

To use your own turn of phrase, get some “actual skills” at creating a profitable business.

> The solution isn't to raise minimum wage, it's to eliminate minimum wage and put in an equitable UBI/welfare system. It'll raise wages naturally, because if they have a decent safety net, most people will feel comfortable quitting / not accepting an unjustly low salary.

This is not an accurate description of the empirical evidence for either minimum wage or UBI.

The evidence is that minimum wages do not reduce employment up to 60% of local median wage and can increase employment - so there's no reason to get rid of it. And UBI doesn't have much effect in either direction - so it's not really that important and the main reason to do it is that it's much simpler than welfare alternatives.

Anyway, UBI isn't an alternative to minimum wage because the point of UBI and other welfare systems is to support non-workers, namely children and the elderly.