When you raise the minimum wage, you raise the floor on prices. Companies have to raise prices to compensate for the increase in the wages they have to pay. Low margin companies like McDonald's pay way more in labor costs than materials costs. That $5 Big Mac probably costs them $0.50 in materials (the meat, cheese etc), $1.00 in rent and $3.00 in labor costs (I don't work for McDonald's and am completely making numbers up to illustrate this point). You have to take into account their supply chain labor as well, the truck drivers, the accountants, etc. So you raise their labor costs and prices naturally have to rise in response. This causes inflation.DesertFox- wrote:
You keep talking to me as if the solution is for me to get more money, despite my saying I don't need more money. I grant you that I would not say no if employers collectively decided to adjust pay so workers are getting a fairer shake. The wealth gap is not good because people working at what we decided should be the minimum wage live in poverty, while again the super rich get to hoard more than anyone could hope to need. It's not good for society. Even with a modest marginal rate increase, you'd still have absurdly wealthy billionaires, but some of the money could be applied to actually be useful via education, infrastructure, etc.Jay wrote:
The wealth gap doesn't matter. If anything it's good because it keeps inflation down. You're worried about affordable housing, yes? Give everyone an extra $2000 per year and yeah, they can buy more stuff, but prices will go up because demand went up. You end up back at square one.DesertFox- wrote:
I suspect Jay misinterpreted my motivations for criticizing the tax cuts, which is why his response was that I was jealous and/or should ask for a raise or get a better job. As I stated, I'm perfectly happy with my job (which reminds me, I still have some pictures from my Euro business trip I should share) and compensation for me as a single twentysomething, as I know it's above average. My debts consist of $1900 at 0% interest on a car compared to my friends still paying student loans, so I also am aware my financial situation is far rosier than a lot of my peers.
My criticism is not coming as a "well I should've gotten more!" view. I don't want to ask for a raise because the company got a tax break. I want everyone to get a raise so they can actually have a reasonable standard of living. My qualms, as described by others above, are that it is economically unjustifiable to give breaks to the exceptionally rich. The wealth gap has starkly increased over the last half century and the average Joe is worse off. This is where I would cue the Baby Boomers talking about how they worked summers to pay for college and then graduated and bought a house.
As far as baby boomers buying houses for cheap. Yeah, that was possible when they were converting farmland near established city into suburbs. The automobile allowed that to happen, but only one time. The issue now is that zoning laws have become outrageous because the people who live there now do everything in their power to protect the property value of their home. (Can you blame them?) But it means severe limits on multi-family housing, severe restrictions on building apartment buildings, height limits, minimum lot sizes, traffic studies, environmental studies, etc.
I apologize if I was a bit over the top, I was having fun with it. I'm sure you're doing your best. Just stop bitching about the rich, they aren't taking money out of your pocket, the government is.
Your housing argument doesn't really make sense, either. Demand has remained the same, but an extra $2k would only make things more
affordable. I don't know why you're talking about suburbanization in the '50s, either, since I'm talking about the wealth gap since about the '70s.
The rich aren't taking money out of my pocket, they're taking money out of all of our pockets (and the government's by fighting tooth and nail to avoid taxes), which is clearly evident by the way the wealth gap has worsened. Again, I don't give a fuck if they toss me a $1500 tax break while giving themselves millions. It's not jealousy. It's an awful policy for a government that hasn't learned the lessons of Brownbackistan. I like when government is actually somewhat able to function and provide services. This sort of "fuck you, got mine" attitude is among the most infuriating self-delusions in recent history.
The same workers that make minimum wage tend to shop at places that also pay their workers minimum wage because it's what they can afford. So now that worker that just got bumped up to $15/hr will see prices rise across the board which over time will put them right back where they started.
We live in a stratified economy. There's really no getting around this. While individual examples can obviously be pulled and scrutinized, wages generally reflect rarity of skillset and demand for that skill. Unskilled labor will always be at the bottom of the pyramid because it is theoretically the easiest to replace, whether by another person or by a machine. If you can be trained to do your job in half a shift, you are unskilled labor, and you are almost completely fungible.
The problem with raising the floor is that it really fucks it up for everyone that was above them. I'm talking about the middle class, not the rich, the rich are largely immune to pricing pressures. If the old minimum wage was $7 and it's raised to $15, everyone that was making $20/hr and living semi-comfortably is now fucked because they have higher prices to deal with and more competition for, and upward pressure on pricing for, things like housing.
As for the wealth gap, it was trending downward until LBJ's Great Society and War on Poverty became the law of the land. With the trillions of dollars we've spent, everyone should have a house and a full 2 car garage at this point. All government programs do is treat the symptoms, poorly, while leaving the underlying issues unaddressed. San Francisco just passed a corporate tax that will raise something like $200M more than they currently receive to help the 7,500 homeless people living there. They are already spending $300M+ on the issue. That works out to over $50,000 spent per year on each homeless person in the city. How much of that money do you think actually reaches the people on the streets? Almost none. It gets eaten up in the bureaucracy by social workers making $100k a year to provide bullshit classes, or conduct surveys, or to the sanitation workers cleaning up human feces off the street, or paying to treat addiction. The dirty secret for nearly every government agency is that they have no desire to actually address the issue they are assigned. If they are successful, they lose their job. If they are unsuccessful, they can demand more money, because just a little bit more will go a long way. The same goes for education. Teachers do a shit job and scores are pitiful? They need more money! Meanwhile they're making above average salaries with bulletproof pensions and working 8 1/2 months of the year while the school administrators are making $350k+. But hey, they all get election day off as a holiday so they can vote themselves more money, so it's all good.
So now we have higher taxes, more parasitic government workers, and we have a "wealth gap" because the poor are kept in poverty by government programs. There's a reason that every city and state run by the very people who run on these issues every election cycle have it the worst - the people they are electing really don't care, they just want your vote and are willing to destroy your life to maintain their own parasitic lifestyle.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
