Biden seeking a $15 an hour minimum wage in his Covid relief proposal (1 Viewer)

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    If there’s already a Biden economy thread, I can add this there. It could have gone in the Covid thread, but the impact of this would extend well beyond that topic.

    Well past time to raise the minimum wage, which hasn’t been increased since 2009.

     
    For those who keep making this about teenagers and "burger flippers."

    epi-raisethewage.jpg

    "Burger flipper" is usually the go-to example of a low skilled job, so we are not talking just about "burger flippers" when we I say "burger flippers", and I don't think anyone said it would affect just teenagers.

    I personally don't have a problem with raising the minimum wage per se. I have a problem with just a blanket raise without consideration of the myriad of other factors that affect low-income workers. The following will not be as detailed as I'd want it to be, and may seem incoherent ramblings at some point :), but anyway:

    If you are making $7.50 and hour, surely another $7.50 will seem like a bonanza; but if you are making $14.50, not so much. Wage earnings and inflation vary by State, metro area, city. Some States will see a much higher impact than others in more than one way. States/metro areas that are already "expensive" will not see much of an impact as very few people make minimum wage. States that are "cheap" will see the most impact not only in net wage increases, but in job losses because the type of businesses that employ people in those places may not be able to support the raise.

    A $15/hour job, working 40/hr weeks, with paid time off, will pay $31,200 a year before taxes. As above, that may be a "living wage" in some places, but not all places. These are obvious generalizations, but most likely than not, making $31,200 a year before taxes, you still won't be able to save money, or have health insurance, or be able to move out of the shared house/apartment, afford better education, or better transportation, get credit/bank loans with decent APRs (or even get credit),, etc...

    And we don't have mechanisms in place to prevent the people who will get the temporary reprieve from poverty to go right back where they were a few years down the road, which is my biggest beef. I guess a temporary reprieve from poverty is better than no reprieve at all.

    Anyway, those are some of my thoughts from my very comfortable, privileged position...
     
    WHAT!!?!?

    Here, I made a more appropriate avatar for you :hihi:
    utjc.png


    LOL.

    Seriously, though - I think it's worth considering getting rid of most government interferences in the market and instead just go with cash payments when there are deficiencies.

    This is actually closer to a libertarian argument than a socialist one.
     
    LOL.

    Seriously, though - I think it's worth considering getting rid of most government interferences in the market and instead just go with cash payments when there are deficiencies.

    This is actually closer to a libertarian argument than a socialist one.
    Yeah, I trust businesses/market to do the right thing about as much as I trust a fox to watch a henhouse.
     
    Yeah, I trust businesses/market to do the right thing about as much as I trust a fox to watch a henhouse.

    ?

    That’s kind of the point. Businesses exist to make profit. That’s what we expect them to do. But that leads to problems. So the most efficient way to correct those problems is to just tax them and give money to poor people
     
    "Burger flipper" is usually the go-to example of a low skilled job, so we are not talking just about "burger flippers" when we I say "burger flippers", and I don't think anyone said it would affect just teenagers.

    I personally don't have a problem with raising the minimum wage per se. I have a problem with just a blanket raise without consideration of the myriad of other factors that affect low-income workers. The following will not be as detailed as I'd want it to be, and may seem incoherent ramblings at some point :), but anyway:

    If you are making $7.50 and hour, surely another $7.50 will seem like a bonanza; but if you are making $14.50, not so much. Wage earnings and inflation vary by State, metro area, city. Some States will see a much higher impact than others in more than one way. States/metro areas that are already "expensive" will not see much of an impact as very few people make minimum wage. States that are "cheap" will see the most impact not only in net wage increases, but in job losses because the type of businesses that employ people in those places may not be able to support the raise.

    A $15/hour job, working 40/hr weeks, with paid time off, will pay $31,200 a year before taxes. As above, that may be a "living wage" in some places, but not all places. These are obvious generalizations, but most likely than not, making $31,200 a year before taxes, you still won't be able to save money, or have health insurance, or be able to move out of the shared house/apartment, afford better education, or better transportation, get credit/bank loans with decent APRs (or even get credit),, etc...

    And we don't have mechanisms in place to prevent the people who will get the temporary reprieve from poverty to go right back where they were a few years down the road, which is my biggest beef. I guess a temporary reprieve from poverty is better than no reprieve at all.

    Anyway, those are some of my thoughts from my very comfortable, privileged position...
    I agree with a lot of your post's concerns. It's not enough to make me want to not raise the MW, though.

    As to the "$7.50 to $15" change/bonanza and how it affects others who earn more than MW but less than the proposed MW:

    First, obviously it's not a one-time increase -- it's targeted now over 5 years (personally I think it should be a little longer -- like the first two years to get to $10 quickly, then every two years a bump until it hits $15 by 2027/2028), so the change will be a bit over time. Second, for those making (as in your example) $14.50, even if over 5-7 years they wouldn't earn a wage bump (which is really hard to believe, but I'll go with it) they still will benefit from the eventual target. It does have a wage inflation effect -- many jobs now that are in between the current MW and the target MW will see wages rise, and not just to the target MW if businesses want to keep qualified workers. Again, IMO the argument that people who are also underpaid today will now have wages very close to (or at) the minimum is a lazy argument. Almost ALL wages need to rise given the wage stagnation that has occurred for the past 30-40 years.
     
    ?

    That’s kind of the point. Businesses exist to make profit. That’s what we expect them to do. But that leads to problems. So the most efficient way to correct those problems is to just tax them and give money to poor people
    I didn't realize you meant to specifically tax those who pay low wages separately from those who don't.

    I think corporate taxes should go up. I think if people working for a company need government assistance in your scenario, that specific company should be taxed to cover the cost of the assistance plus a penalty, say 25% of the assistance needed. I'm not sure businesses who actually pay a good wage or way above should be taxed more to cover the immoral businesses wages, and I doubt those businesses would like that, either.
     
    ?

    That’s kind of the point. Businesses exist to make profit. That’s what we expect them to do. But that leads to problems. So the most efficient way to correct those problems is to just tax them and give money to poor people
    So what happens when every business decides not to pay any of their workers more than $1 per day? The government's just gonna fill all that gap?

    And before you say "employees will decide to go somewhere else because they will be paid better somewhere else," you have to realize that under your scenario, it doesn't matter. If you're making $1/day or making $7.25/hr, you're still living in poverty, and under your plan, the government is still going to make you whole regardless, so employees will still be making the same amount of money (whatever the government funded "poverty line" payment ends up being) regardless through some combination of paycheck and government funds.
     
    So what happens when every business decides not to pay any of their workers more than $1 per day? The government's just gonna fill all that gap?

    And before you say "employees will decide to go somewhere else because they will be paid better somewhere else," you have to realize that under your scenario, it doesn't matter. If you're making $1/day or making $7.25/hr, you're still living in poverty, and under your plan, the government is still going to make you whole regardless, so employees will still be making the same amount of money (whatever the government funded "poverty line" payment ends up being) regardless through some combination of paycheck and government funds.

    I suppose in theory it makes sense. But in practice, I don't think this holds water. In practice, without any government mechanisms, businesses are still going to pay what they need to in order to retain talent. The question will be what they're willing to pay for entry level employees. Even at entry level, pay matters. My kids had a choice between Mcd, Chick-fil-A and Olive Garden. The starting wages were $12, $15 and $17. None of them picked Mcd. :hihi:

    I do think there should be state/local minimum wages rather than federal. I think we'll get better, more targeted and responsive wage floors that way.
     
    I didn't realize you meant to specifically tax those who pay low wages separately from those who don't.

    I think corporate taxes should go up. I think if people working for a company need government assistance in your scenario, that specific company should be taxed to cover the cost of the assistance plus a penalty, say 25% of the assistance needed. I'm not sure businesses who actually pay a good wage or way above should be taxed more to cover the immoral businesses wages, and I doubt those businesses would like that, either.

    I wouldn't look at it that way. Obviously, a company that pays it's employees more can deduct that as costs, and we could also give some sort of tax incentive for x% of employees being paid over a certain amount, but I think that can be gamed.

    Instead, we have a societal desire that anyone working a full time job be able to live above the poverty line, and have health care. Rather than trying to manipulate the market, it's far simpler to just do a straight payment.

    So what happens when every business decides not to pay any of their workers more than $1 per day? The government's just gonna fill all that gap?

    And before you say "employees will decide to go somewhere else because they will be paid better somewhere else," you have to realize that under your scenario, it doesn't matter. If you're making $1/day or making $7.25/hr, you're still living in poverty, and under your plan, the government is still going to make you whole regardless, so employees will still be making the same amount of money (whatever the government funded "poverty line" payment ends up being) regardless through some combination of paycheck and government funds.

    But the government isn't just paying people until they make a certain amount, they are giving $x to everyone who works a certain number of hours. Let's say that number is $15,000. If your current job pays only $1/hour and you work 1800 hours, you get $16,800. If company across the street offers you $3/hour, you now get $20,400, which is more than $16,800. Companies still need to compete for labor.
     
    I wouldn't look at it that way. Obviously, a company that pays it's employees more can deduct that as costs, and we could also give some sort of tax incentive for x% of employees being paid over a certain amount, but I think that can be gamed.

    Instead, we have a societal desire that anyone working a full time job be able to live above the poverty line, and have health care. Rather than trying to manipulate the market, it's far simpler to just do a straight payment.



    But the government isn't just paying people until they make a certain amount, they are giving $x to everyone who works a certain number of hours. Let's say that number is $15,000. If your current job pays only $1/hour and you work 1800 hours, you get $16,800. If company across the street offers you $3/hour, you now get $20,400, which is more than $16,800. Companies still need to compete for labor.
    If they’re not paying people up to the poverty line, then you haven’t fixed anything except giving corporations more profits. Poor people are still going to need welfare in order to eat and continue the job. If you give them an EITC that doesn’t meet their needs because they’re getting $1/day, then you’re still going to have to give them other welfare means so they can survive.

    Companies will still have their labor subsidized by the government. The point should be to have companies pay for their labor.
     
    If they’re not paying people up to the poverty line, then you haven’t fixed anything except giving corporations more profits. Poor people are still going to need welfare in order to eat and continue the job. If you give them an EITC that doesn’t meet their needs because they’re getting $1/day, then you’re still going to have to give them other welfare means so they can survive.

    Companies will still have their labor subsidized by the government. The point should be to have companies pay for their labor.

    I think I'm not explaining something correctly. The point is to make the EITC high enough so they don't need welfare. And then you fund EITC from taxes. The wealthy companies still pay for it, but it removes the market incentive to automate low skill jobs away, or to cut hours and so on. And everyone gets it. It's basically UBI, but you still need to work a job to get it.

    So, the desire is for everyone who works a full time job to get roughly $30K a year right? So, make the EITC be $23K. If someone is making $4/hour and works 1920 hours per year, then they would take home $30,680. If they make $7 per hour, then they make even more money, so companies still need to compete for their labor.

    All tax brackets would need to be adjusted some, if I'm making $200K per year already and paying $30K in taxes, under this scheme I'd make $223K per year and pay $53K in taxes, so it's neutral for me. Or maybe, I'll need to pay $55K in taxes so it's a little negative for me.

    Basically, the end result is the same. Workers have enough to live on, but instead of manipulating the market to force every job below a certain level pay the same amount, which then incentivizes companies to automate low skill jobs or cut hours, you let the market determine wages and such, and then just do straight taxes to make up the difference.

    I'd probably get rid of welfare programs as well. I think just straight wealth redistribution achieves the same effect more efficiently.
     
    I think I'm not explaining something correctly. The point is to make the EITC high enough so they don't need welfare. And then you fund EITC from taxes.
    Where do you think the money for welfare comes from?

    I guess I’m stuck on how this is a libertarian point of view. A $23,000 (practically $2k/month) UBI for working literally any job sounds as far from any libertarian policy as I can think of. The abolishing minimum wage part, sure, but there’s no libertarian on earth that then wants to turn around and tax corporations the difference.

    Further, taxing corporations to make up the difference would actually put more downward pressure on wages because they’re having to pay higher taxes, unless you’re incentivizing paying higher wages with reduced taxes...but then you’re going to have trouble paying for that UBI.

    I just think there’s a lot of moving parts in this proposition that just wouldn’t really work in the real world.

    Which I guess makes it pretty libertarian after all.
     
    Where do you think the money for welfare comes from?

    I guess I’m stuck on how this is a libertarian point of view. A $23,000 (practically $2k/month) UBI for working literally any job sounds as far from any libertarian policy as I can think of. The abolishing minimum wage part, sure, but there’s no libertarian on earth that then wants to turn around and tax corporations the difference.

    Well, I said it was more libertarian than socialist - in that, there's no government program, and less market manipulation. Just a straight wealth redistribution. There are actually a number of libertarians who have stated interest in UBI because then you can just get rid of all these government programs -- so while they don't agree that the government should be doing this sort of thing, but if we're going to do it, do it in the simplest manner possible. I'm not a libertarian, since I do think government has a role in these sorts of things, but I do want to do it in the most efficient manner possible.

    Further, taxing corporations to make up the difference would actually put more downward pressure on wages because they’re having to pay higher taxes, unless you’re incentivizing paying higher wages with reduced taxes...but then you’re going to have trouble paying for that UBI.

    I'm not sure it would because corporations still need to compete for labor, people still will want to earn more money, so a company that pays more will attract better talent, at least where talent is needed, and better pay means better retention.

    Now, there are still some problems which you and V-chip have pointed out. Mainly, corporations that thrive on low income jobs will still be subsidized by everyone else b/c writing a tax structure to hit only those companies will be extremely difficult. But this also doesn't hurt small businesses, and reduces the incentive to automate low skill jobs (something that will happen anyway, but increasing minimum wage will speed that up).

    I just think there’s a lot of moving parts in this proposition that just wouldn’t really work in the real world.

    Which I guess makes it pretty libertarian after all.

    Lol
     
    I came across a fun fact today. My neighbors daughter is a 19 year old student who has chosen to take a year off school before going to university. She has gotten a job at out local McD. She gets 22$ an hour and 5 weeks paid vacation (Standard pay/benefits for entry level adults at McD here)
     
    No, conflicted with a BB game that I had to watch. Heard he did well though. 🤷‍♀️
     
    I came across a fun fact today. My neighbors daughter is a 19 year old student who has chosen to take a year off school before going to university. She has gotten a job at out local McD. She gets 22$ an hour and 5 weeks paid vacation (Standard pay/benefits for entry level adults at McD here)

    McD around here are advertising either $13 or $14 an hour to start. We are not a large urban area. I’m not sure who still makes the actual minimum wage anymore.

    When I was still a supervisor at the hospital lab we were trying to hire lab assistants, OTJ training and requires a HS diploma. Paid $12 to $13 an hour to start, and we were losing employees to fast food jobs because they were paid more. We had to up our starting pay across the hospital system. Of course, we offer a really good full benefit package, not sure that fast food could match that, but when you need to pay your bills I get it that an extra $1-2 an hour makes a big difference.
     

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