Consider how the program actually works. You have a job and pay taxes, but don't make much money, so the government takes the taxes you paid and gives them back to you. But you have to apply for the program, and then spend the money (which was originally yours) on only the things they tell you to. And there is more than one assistance program so you have to apply to them each individually. Then each of the programs have their own phase outs if you make more money, but the phase out rates combine to a very high de facto marginal tax rate, which means if you're still struggling you can't get out of it by working some extra hours because that just causes you to lose your benefits. It's a poverty trap.
Then prices go up by 20% or more, but you still can't make any more money or you lose your benefits. In response your benefits are increased by one dollar.
Are people even wrong to want to blow all of that up and replace it with a tax credit?
The cost of ingredients for a burger doesn’t radically change if a burger flipper gets paid more and the price of the burger isn’t going up drastically either.
Clearly companies with billion dollar market caps can also be held to higher standards because no one is going to pay more than they are required for labor. Maybe the minimum wage is a percentage of the business total profits and minimum wage at $7.25 is just the floor?
A lot of wealth is locked up in the wealthiest people which could be circulating in the economy instead of being in a Swiss bank account.
There are multiple layers, multiple solutions instead of hoping wealth trickles down. Poverty wasn’t solved under the last Trump administration as I recall nor do I expect it in the upcoming one.
> The cost of ingredients for a burger doesn’t radically change if a burger flipper gets paid more and the price of the burger isn’t going up drastically either.
These things are two sides of the same coin. The increase in wages is the same as the increase in costs, so if one of them is small then so is the other one and if one of them is large then so is the other one.
> Clearly companies with billion dollar market caps can also be held to higher standards because no one is going to pay more than they are required for labor. Maybe the minimum wage is a percentage of the business total profits and minimum wage at $7.25 is just the floor?
This is only less of a bad idea because the bad idea then applies to fewer businesses. Also, the billion dollar market cap companies would then just contract it out.
> A lot of wealth is locked up in the wealthiest people which could be circulating in the economy instead of being in a Swiss bank account.
That's not real wealth. That's just money. Money is numbers in a computer. Taking non-circulating money and putting it into circulation has the same inflationary effect as printing it. Whereas leaving it non-circulating doesn't consume any real resources (land, labor, etc.) because it's just bits.
However, most rich people don't store their "wealth" as cash money anyway, they buy stocks and things, which in turn puts the money in the hands of businesses to use to hire employees etc. That money isn't non-circulating and what you're doing then is reallocating resources from something else.
You're trying to solve the problem that people aren't being paid enough by passing a law that literally says they have to be paid more. It's like passing a law that literally says housing prices have to be low. That's a dumb law. You can't just magic up a change in labor demand or housing supply. You need to figure out why wages are low or housing prices are high and do something about that.
Genuinely, if you have something to teach I’m all ears for my personal betterment.
How do we ensure everyone gets a livable wage without redistributing the wealth of the rich, mandating a higher minimum wage, or increasing inflation and since you mentioned housing, make that affordable without gutting the value of the house which will make home owners upset.
If the answer is tax cuts for the rich “job creators” so they might spend some of the savings on employees instead of pocketing it, we’ve had decades for that to work.
> You're trying to solve the problem that people aren't being paid enough by passing a law that literally says they have to be paid more
If a company is profitable and chooses not to share their profitability with their employees then I have no qualms with this anymore than I do with the current minimum wage law. Businesses are more profitable than ever, employees more productive than ever, they had their chance to do this on their own and avoid gov interference and they blew it.
> If the answer is tax cuts for the rich “job creators” so they might spend some of the savings on employees instead of pocketing it, we’ve had decades for that to work.
The way "supply side economics" is supposed to work is that you lower barriers to entry and operating costs (i.e. simplify regulations and lower taxes) to make it easier for more companies enter the market, so you get more competition and competition reduces the share of prices that go to investors instead of employees or customers. This is basically right, if you actually do it.
So we've had decades for this to work, right? Here's federal receipts as a percent of GDP:
https://fred.stlouisfed.org/series/FYFRGDA188S
You can clearly see the point where we significantly lowered taxes to see what would happen, which is nowhere. 2016 was nearly the first time we tried lowering taxes at all outside of a recession, even that was by less than 2%, and that experiment got stuffed up by COVID.
I leave it as an exercise for the reader to count the number of pages in the US Code or CFR by year and look for a trend.
Okay, so if we actually tried those things for once we might get more competition, which could be good.
The opposite of this is, of course, less competition. Zoning rules that inhibit construction of higher density housing, certificate of need laws in healthcare, corporate mergers that ought to be antitrust violations, etc. That is what we've actually been doing, and therefore what we need to stop.
> make that affordable without gutting the value of existing housing which will make existing home owners upset.
"Make housing prices go down without making housing prices go down" is not a thing. The closest you get is to make real (i.e. inflation-adjusted) housing prices go down while nominal housing prices stay the same, by keeping nominal housing prices from increasing (e.g. by building a lot of new housing) while wages and the prices of everything else increase. This might even satisfy existing homeowners, because then the price of their existing house doesn't go down relative to their existing mortgage.
Which is approximately what you get if you just build a ton of new housing until housing prices go down, then lower interest rates or otherwise create new money as that happens, which causes the nominal housing prices to maintain their current level while wages and other prices go up.
The real key for getting this to work is to make sure that the "inflation" also applies to wages, which for the last few years it hasn't, which is why everybody is so upset. If you make $110 and spend $100 and then in a few years you make $130 and spend $120, not a big deal. If you now have to spend $120 but still only make $110, huge problem. But this is the thing where market consolidation enables rent extraction; you have to enforce antitrust laws and prevent regulatory capture to prevent that from happening.
> If a company is profitable and chooses not to share their profitability with their employees then I have no qualms with this
Companies don't pay people more than they have to just as employees don't take lower paying jobs when higher paying ones are available.
If corporate profits are high, that's a sign that some kind of regulatory capture is happening or antitrust enforcement is necessary, because otherwise smaller competitors would use some of their profits to gain market share by lowering prices. Instead of trying to order them to pay more, figure out why that market is broken when it should be forcing them to charge less.
> It’s not 1/1 increase and labor is not the only cost. If 5 employees make an extra $1 the price of a burger doesn’t go up $5.
It's a 1/1 increase, you're just implying that it would take five employees an hour to make one burger. If five employees each make $1/hour more then that restaurant has to cover an additional cost of $5/hour, not $5/burger. But that whole $5 is coming from somewhere, and restaurants are notoriously competitive businesses, so that somewhere is liable to be from customers.
> If 5 employees build a million dollar house the cost of the house doesn’t go up if they get paid $7 extra because the cost is tied up in material/licenses/etc, not labor.
I suspect you're underestimating the proportion of construction costs that go to labor. "Materials" is also an input that has labor costs baked into it. You're buying "lumber" but what you're really doing is paying a lumberjack to fell trees and a sawmill operator to cut them and a truck driver to transport them and a clerk at the hardware store to ring them up etc.
What you really want to do is not to increase the cost of labor but to reduce the proportion of wages going to rents. The largest categories of these rents are actual rents (i.e. landlords/housing costs), high healthcare costs largely as a result of regulatory capture, and tax dollars spent on inefficient or corrupt government programs. Stop wasting money on those things -- we're talking trillions of dollars here -- and you get to put the money in your pocket.
> It's a 1/1 increase, you're just implying that it would take five employees an hour to make one burger. If five employees each make $1/hour more then that restaurant has to cover an additional cost of $5/hour, not $5/burger. But that whole $5 is coming from somewhere, and restaurants are notoriously competitive businesses, so that somewhere is liable to be from customers.
I don’t mean to drag this on, I just want to end saying I’m not implying 5 people are needed to make a burger. I’m saying that increasing wages for 5 employees by a $1 doesn’t increase the cost of an individual good (burger) sold to customers by $5 so the burden to the customer to support this new paradigm is negligible, especially at the volume of goods being sold. It is not a death knell to the business as it is sometimes painted.
Yes the 5$ is made up somewhere, either in cutting costs elsewhere, increasing sales or increasing prices. They may already be making numbers that would support an increased wage without any changes to those things.
I accept that you may still disagree with me but I wanted to make my position clear.
Restaurants are highly competitive. A fast food restaurant generally has ~25% of the price as direct labor costs and ~3% of the price as profit margin.
> I’m saying that increasing wages for 5 employees by a $1 doesn’t increase the cost of an individual good (burger) sold to customers by $5 so the burden to the customer to support this new paradigm is negligible, especially at the volume of food being sold. Yes the 5$ is made up somewhere but it’s spread out across multiple goods sold to multiple customers that share only small fraction of the burden for supporting that change. I don’t know how to state it more clearly than that.
Oh certainly, but then the spreading out comes back in again. You pass a law that requires the average wage to increase by 10%, so the price of the average item doesn't increase by $5 (i.e. 100%), it increases by ~10%. But then it's not just the burger that goes up by 10%, it's everything (on average).
Now, this result is not going to be uniform, but that's another problem in itself. For the average wage to increase by 10%, the wages of people who actually make minimum wage might have to go up by 100%, because there aren't that many of them. For them -- at least the ones who don't lose their jobs as a result -- the 10% is smaller.
But the other population for which the hit is smaller is the very rich, because they spend a lower proportion of their income. The CEO who makes 1000 times minimum wage is paying the same $5 for a burger as anyone else, so the 5% increase is a 0.005% increase in spending to them. Even if they buy a fancy burger for $100, 5% of that is still only equivalent to 0.1% for the person making minimum wage.
So if the hit is less to the very rich and less to the people making minimum wage (if they don't lose their jobs), where does the rest of the money come from? Oof, the middle class. They pay the higher prices and spend ~all of their income but don't get any of the money. And the goal is supposed to be to benefit the poor at the expense of the rich, not to hollow out the middle, right?
So you raise the minimum wage but keep the crazy high effective marginal tax rate? Then the benefits phase out eats the extra money the same as it would if they were working extra hours.
Also, hardly anybody actually makes the minimum wage. If your problem is you make $20/hour but that's not enough to afford housing, raising the minimum wage to $15/hour doesn't get you a raise and only makes the things you buy cost more. If you tried to use a $40/hour minimum wage you would get high unemployment and stagflation.
Minimum wage laws are broken technology. They do more harm than good and most of the studies "in favor" of them are really only claiming that they don't hurt that much, and those studies are performed in contexts where the minimum wage is quite low. Somewhat obviously, if the median wage is $18/hour and less than 1% of people make less than $4/hour and then you ban paying less than $4/hour, there is no major effect and therefore no major harm. That doesn't at all imply that banning anyone from paying less than $40/hour is going to be equally harmless.
Going to chime in here hopefully to give better context than "a carton of eggs is up 10%!" or whatever.
The average price of a gallon of gas in 2018 was ~$2.72, peak was $2.92 in May.
The average price of a gallon of gas in 2022 was ~$3.95, peak was $5.01 in June.
So that's an increase in average price of about 45% between the midpoints of Trump and Biden, and an eyewatering 71% in peak increases. Obama 2014 was ~$3.37 average and $3.70 peak in June, for further comparison. Trump's economy was objectively and factually easier to live in.
A 45% increase for a good necessary for daily life is going to hurt no matter what, let alone 71%. All else being equal it's thrown around as a meme that incumbent presidents and parties live and die by the gas price index, but there's a reason for that.
Anecdata, I'm decidedly middle class. I can afford luxuries reasonably if I want to, and objectively I can tolerate increasing costs of living fine (for now). That said though, even I feel a bit of discomfort buying mundane groceries because they definitely feel like they should be cheaper. It's even worse for mundane luxuries like beer, I can't really complain about a luxury good being expensive but at the same time it still feels too expensive anyway.
Don't get me started on gas prices, where I'm at they're ~$4.00 per gallon today and were up to ~$5.00 at some points during Biden. It was ~$2.00 during Trump. That's a 100% increase or more, you can't pay me to say that doesn't hurt even if I can still afford it.
That feeling of discomfort and pain isn't nice and I don't blame a voter if they cast a single issue vote on it.
(Thus the low comprehension level of many voters.)
I have no problem with people voting GOP, and am happy to debate Democrat vs Republican policies and economic impact, etc. Republicans certainly do some things better than Democrats. But this wasn't about policy. If Americans have so little values, and are so gullible, that they are willing to sell out to a man who is literally a despicable self-serving despot (the only reason he's not as bad as Putin or Xi is because he's restrained by the Constitutional structure), for a promise of cheap gas that Trump can't even fulfill (it may happen, but it won't be because of Trump, just like the price of gas going up in 2022 had nothing to do with Biden), well, that's a very sad statement about a large segment of the American people.
Indeed, the economy is practically a force of nature with countless levers and the federal government can only influence a small handful of them.
That said, when Trump argues "Drill, baby, drill!" and Biden and Harris shut down oil production and transport in the name of environmentalism, guess how that affects gas prices and the broader cost of living at large.
Not to mention America failing to police the world and maintain or establish peace will lead to higher costs of living. Note that Obama literally said on the record that America is no longer the world police, and Biden and Harris are more of that.
Democrat policies are not conducive to a better economy for the common man, and arguing that the stock market is at all time highs or the prime rate is coming down merely signals a harsh detachment from reality on the ground.
I don’t know what facts you’re basing this on but the US military action abroad is not correlated with higher standard of living in the US. In fact one could argue the opposite, but they’re not really interconnected.
> Drill baby drill
High oil prices are not because we’re not drilling enough. Oil production in the US is at an all time high and was higher under Biden than under Trump. (Not that I think it’s a good thing).
You need to reevaluate your news sources or do more research before you determine which set of policies are better for the common man as you put it.
Wars lead to disturbed movement of people and goods, massive loss of lives, destruction of goods, destruction of infrastructure, destruction of production, and more. Wars are great for the military industrial complex and even moreso if you never have to take lead yourself, but it's hell for everyone else.
Pax Americana, the era in which we all live in today, is predicated on the US policing the world and maintaining or establishing the peace for everyone's (and chiefly the US's) benefit. The means can be either Soft Diplomacy or Bigger Gun Diplomacy, but regardless every single administration in recent history with the exception of Trump's first term has been a disaster for world peace and thus better economies and happier lives American or otherwise.
>High oil prices are not because we’re not drilling enough.
High oil prices are because we let OPEC strangle us all by our balls. Anyone paying even the slightest of attention to how oil pricing works will know that OPEC decides the price they want and then adjusts the production/supply to get it.
If we "drill, baby, drill" harder and harder then OPEC will be forced to produce less to maintain the price until they can't, at which point oil prices will come down until right before we also start bleeding red ink. We can crash that price even harder with government action to compensate the bleeding, too. Don't believe me? It's literally what China does with practically everything.
So I am going to sharply disagree with you: High oil prices are because we're not drilling enough. If Biden's actually drilling more oil than Trump, that just means Trump needs to drill even harder.
The US has been a _net exporter_ of oil for some years, and we don't depend on OPEC and haven't in some time. (The only reason we import oil is because it's cheaper to import some oil and sell our oil at a higher price.) Very little of our oil comes from OPEC. We get 4x more oil from Canada than we do from OPEC.
War is hell, and on that I can agree with you. But "Pax Americana" hasn't been around for a long time, and especially not since we invaded Iraq and Afghanistan. In fact, all the wars that we've been engaged in for decades now have been wars that we started. We're just not good at "establishing the peace" and we haven't been since the 1950s, or if you want to argue that we provided a "bulwark against communism" in the 70s and 80s, which has some merit except that communism failed because of economics not our global policing, then we haven't been "establishing the peace" since the fall of the USSR in 1991.
BTW empathy is when you can feel for those you don't relate to/have attachment to. Empathy is when you make a genuine effort to understand and connect, even across differences. It's not a concept only for people you already relate to.
If people never have a shot at redemption, why would they ever try to redeem themselves?
And mind, the whole campaign was based on "Trump is worse". That is also hardly ignoring someone.
That's not what I meant by "getting away from them". It's just like Germany in the 1930s: the smart people got out and moved somewhere else before the SHTF. It's the same thing I did: I left the USA. I don't see things getting any better there in my lifetime, and I didn't want to be around the angry MAGA people, so I left.
I don't mean this as finger-wagging at you or anyone; it's so easy to tell people to stay and fight somewhere where you're not. The Nazis could have prevented early on, later on staying couldn't really change anything, it was just another life destroyed in the maw. So yes, good on those who got out. But also good on those who stayed and fought. Personally, as much as I would love to run away from my own country sometimes, I know that wherever I end in, I will have even less influence than here, as infinitely little influence as that may be. And wherever I'd end up, it would just be an even smaller ship in the same rough waters that seem to be engulfing the world.
In the case of the US, it's arguably the most powerful country that is still somewhat free. The Nazis were stopped in a world war, which they started with no real need. If they hadn't started the war, or if they had won it, or if there hadn't been any other power that isn't also totalitarian that could have conceivably challenged them -- as is the case with the US -- then they might still be in power.
It was close enough back then, if the US falls into that hole, with all the weapon and surveillance tech that exists today, I just don't see any "outside" that could help, or be safe. There could be countries poor enough in resources that get left alone long for me to get old in them, at best, but should I have children, they'd be be up for grabs by whatever is being cooked now. That's basically why I even care about US politics as non-American. When that particular tower falls, it might blot out the sun. If not forever, then for long enough that it simply must never be found out IMO.
Sorry I didn't mean to be this dark, but I mulled this stuff over so much, and this is what I think about it, what I can't help but think about it.
I got tired of dealing with that, and found a society I enjoyed living in much more, so I found a job there and moved there. If someone wants to stay in the US and try to make it better, more power to them, and I hope they succeed. I'm not that young any more and just want to live in a nice place in relative peace, and the US was no longer that place (and, in my view, stopped being that place around 2000).
If you're looking for a place where you can blend into the culture and easily make local friends, it's probably not a great choice, but I could say the same about many, many places (I frequently read articles about US expats complaining about this in western Europe, and frequently moving back), but if you can get a good job here and don't mind a degree of social isolation and can learn enough of the language to get by, I think it's a good choice. It's not an easy place to move to for westerners, however, by most accounts (for social reasons, not logistical/administrative ones). Personally, I didn't have too much trouble, but I know I'm not typical. If you're a tech worker (this is HN after all) and can get a good tech job here, it's really easy to move in, as far as the visa is concerned.
Or you can be a D-leaning voter who sees D only rising to the level of a less-awful version of putting rich people before you, and you want to discipline D for taking all the D-leaning votes for granted, rather than earning them by being effective on your behalf.
Or you can be an R-leaning voter who sees both R and D as putting rich people before them, and then D goes and adds insult to injury with some stunt, but at least this one R candidate sounds like they might make things better. (Helped along by a lot of disinformation, as well as being alienated by D voters in general. You see many D voters as a bunch of elitists who're benefiting more than you, and are screwing you, while they pick causes or other people to favor that you think are stupid and unfair.)
Years ago, I was horrified, the first time I heard a D-leaning college student tell me they weren't voting D, to discipline D, in a very important election. My first thought was that this sounded like some revolutionary-till-graduation thing, which probably sounded better in their head, but now I sorta see.
Having seen a few elections and administrations since then, with D consistently seeming not to earn the votes of people, I've come around to understanding, even if I don't full agree. If many people either go out of their way to discipline D, or simply can't be bothered to go to the polls, IMHO, it's hard to blame them.
A bit similar with R voters.
We're all being served poop sandwiches, who aren't working for us, and we are desperate or depleted.
Right, because how do you empathize with someone who gets $1, and their response is: Oh yeah? Well fine then I'm going to vote for the person who wants to take away literally EVERYTHING to show you!
It is the definition of cutting off your head to spite your body.
I completely understand and empathize with someone on SNAP not getting what they need to cover the insane pricing increases we saw greedy corporations force upon all of us and wanting that rectified. But if your solution to that is to either not vote at all, or intentionally vote for the guy who has literally told you his plan is to gut all social services... I'm not sure what to tell you beyond whatever empathy I DID have for you is gone and enjoy sleeping in the bed you just made for yourself. I, and most of the folks on HN are going to be perfectly fine. Those folks that were on SNAP? Good luck...