A basic living income ... could it wipe out poverty?
Dragom @ Thu Sep 16, 2010 4:08 pm
I'm on minimum wage. I bought my GF a used car for Christmas. It works nice.
But I am unusual from a normal low income earner as 10% of my income isn't lost to drugs, alcohol, gambling and prostitution.
Unless you count buying your GF a car as prostitution. And I do.
BartSimpson @ Thu Sep 16, 2010 4:13 pm
It isn't if you truly care for her.
Dayseed @ Thu Sep 16, 2010 5:09 pm
Actually, most labour economics that I studied showed that most of your fears Bart simply never come to pass. Increasing the minimum wage to $100 is unrealistic and a straw-man argument, nor does inflation begin to rear its ugly head.
That said, national increases in the minimum wage to livable levels needs to be done on a steady middle ground of wage hikes. Yes, people who get their panties in a bunch over government regulation of anything in the private sector will be pissing through bunched panties, but that's life.
As it turns out, a flaw in the idea that labourers will get fired to compensate never comes to pass because that relies on flawed reasons. The idea that employers purchase labour in monetary quantities, i.e. I have $40K in my labour budget; therefore, as the cost rises I will spend to my budget and hire less workers, doesn't happen en masse. Sure, some people may get fired, but the majority doesn't. Those cost increases get absorbed in other ways; profit-margin cuts, increased responsibilities to maximize efficiency, passing it on to customers. Employers don't purchase labour the same way you purchase Pepsi. If Pepsi raised its cost by $10 a case, you can switch to Coke until Pepsi drops its prices. Employers don't have that luxury and hiring and firing is disruptive and leads to inefficiencies at the business. Nobody likes taking two people to make sure a rookie line-cook isn't burning the chicken on the rotisserie.
Inflation doesn't factor in greatly either. The flaw in that thinking is that all increases in wage are immediately directed towards purchases. If a minimum wage worker gets an extra $40 a week, it may go to debt repayment, savings, retirement et cetera.
There's an excellent case study from the City of Baltimore in the 1990's [In voice of Stewie: Do we have a link? No link? Alright, thought we had a link.] They mandated that wage increases would be tied to city contracts. The largesse the city was showing private companies would be reflected in some of that largesse being given directly to the workers. (A trickle-down theory that actually worked!) They found that the companies usually saved on cost in lower turnover rates. (Sorry, don't remember the rest, but google ought to do the trick).
Bart, maybe you posted links to the French example of nationwide wage hikes and I'd be keen to read about it if you didn't. I'm too lazy to click around to find out if you did.
Now, before I'm accused of being a communist, I should also point out that while I favour helping my fellow man live more comfortably, I don't want him living as comfortably as I do without doing what I do.
ASLplease @ Thu Sep 16, 2010 5:16 pm
people ought to use personal goals as the rule stick to measure their sucesses and progress, and they'd be a darn sight more happier than worrying about how much your neighbor make, Who gives a shit what my neighbor makes, I dont live with him.
Lemmy @ Thu Sep 16, 2010 5:17 pm
Dayseed Dayseed:
There's an excellent case study from the City of Baltimore in the 1990's [In voice of Stewie: Do we have a link? No link? Alright, thought we had a link.]
http://epi.3cdn.net/63b7cb4cbcf2f33b2d_w9m6bnks7.pdf
Dragom @ Thu Sep 16, 2010 6:42 pm
Anyway, I was trying to say that Poverty has nothing to do with income but rather outcome... I mean expenses.
Nothing creates the stench of genuine poverty as well as stale beer and cigarette ash.
andyt @ Thu Sep 16, 2010 11:45 pm
Dayseed Dayseed:
Actually, most labour economics that I studied showed that most of your fears Bart simply never come to pass. Increasing the minimum wage to $100 is unrealistic and a straw-man argument, nor does inflation begin to rear its ugly head.
That said, national increases in the minimum wage to livable levels needs to be done on a steady middle ground of wage hikes. Yes, people who get their panties in a bunch over government regulation of anything in the private sector will be pissing through bunched panties, but that's life.
As it turns out, a flaw in the idea that labourers will get fired to compensate never comes to pass because that relies on flawed reasons. The idea that employers purchase labour in monetary quantities, i.e. I have $40K in my labour budget; therefore, as the cost rises I will spend to my budget and hire less workers, doesn't happen en masse. Sure, some people may get fired, but the majority doesn't. Those cost increases get absorbed in other ways; profit-margin cuts, increased responsibilities to maximize efficiency, passing it on to customers. Employers don't purchase labour the same way you purchase Pepsi. If Pepsi raised its cost by $10 a case, you can switch to Coke until Pepsi drops its prices. Employers don't have that luxury and hiring and firing is disruptive and leads to inefficiencies at the business. Nobody likes taking two people to make sure a rookie line-cook isn't burning the chicken on the rotisserie.
Inflation doesn't factor in greatly either. The flaw in that thinking is that all increases in wage are immediately directed towards purchases. If a minimum wage worker gets an extra $40 a week, it may go to debt repayment, savings, retirement et cetera.
There's an excellent case study from the City of Baltimore in the 1990's [In voice of Stewie: Do we have a link? No link? Alright, thought we had a link.] They mandated that wage increases would be tied to city contracts. The largesse the city was showing private companies would be reflected in some of that largesse being given directly to the workers. (A trickle-down theory that actually worked!) They found that the companies usually saved on cost in lower turnover rates. (Sorry, don't remember the rest, but google ought to do the trick).
Bart, maybe you posted links to the French example of nationwide wage hikes and I'd be keen to read about it if you didn't. I'm too lazy to click around to find out if you did.
Now, before I'm accused of being a communist, I should also point out that while I favour helping my fellow man live more comfortably, I don't want him living as comfortably as I do without doing what I do.
That said, national increases in the minimum wage to livable levels needs to be done on a steady middle ground of wage hikes. Yes, people who get their panties in a bunch over government regulation of anything in the private sector will be pissing through bunched panties, but that's life.
As it turns out, a flaw in the idea that labourers will get fired to compensate never comes to pass because that relies on flawed reasons. The idea that employers purchase labour in monetary quantities, i.e. I have $40K in my labour budget; therefore, as the cost rises I will spend to my budget and hire less workers, doesn't happen en masse. Sure, some people may get fired, but the majority doesn't. Those cost increases get absorbed in other ways; profit-margin cuts, increased responsibilities to maximize efficiency, passing it on to customers. Employers don't purchase labour the same way you purchase Pepsi. If Pepsi raised its cost by $10 a case, you can switch to Coke until Pepsi drops its prices. Employers don't have that luxury and hiring and firing is disruptive and leads to inefficiencies at the business. Nobody likes taking two people to make sure a rookie line-cook isn't burning the chicken on the rotisserie.
Inflation doesn't factor in greatly either. The flaw in that thinking is that all increases in wage are immediately directed towards purchases. If a minimum wage worker gets an extra $40 a week, it may go to debt repayment, savings, retirement et cetera.
There's an excellent case study from the City of Baltimore in the 1990's [In voice of Stewie: Do we have a link? No link? Alright, thought we had a link.] They mandated that wage increases would be tied to city contracts. The largesse the city was showing private companies would be reflected in some of that largesse being given directly to the workers. (A trickle-down theory that actually worked!) They found that the companies usually saved on cost in lower turnover rates. (Sorry, don't remember the rest, but google ought to do the trick).
Bart, maybe you posted links to the French example of nationwide wage hikes and I'd be keen to read about it if you didn't. I'm too lazy to click around to find out if you did.
Now, before I'm accused of being a communist, I should also point out that while I favour helping my fellow man live more comfortably, I don't want him living as comfortably as I do without doing what I do.
I agree. Including the last bit. Nobody's talking Cuba here except Bart.
BartSimpson @ Fri Sep 17, 2010 11:26 pm
Dayseed Dayseed:
Actually, most labour economics that I studied showed that most of your fears Bart simply never come to pass. Increasing the minimum wage to $100 is unrealistic and a straw-man argument, nor does inflation begin to rear its ugly head.
No, it is not. The reason it is not a 'straw man' argument is because it merely illustrates that the argument that the 'effect' of a living wage or even minimum wage being null is inaccurate.
If, as you and your co-believers assert, that there is no impact to the economy on raising the minimum wage to a 'living wage' of, say, $20 per hour, then why not make it $100 per hour?
Because it would be inflationary and labour costs would be ridiculous until the $100 minimum wage was negated by inflation.
Therefore, raising the minimum to an artificial threshold that requires a 'living wage' would also have negative and inflationary effects.
And your argument that there is no evidence to show the inflationary effects of minimum wage is void upon arrival. Economists long ago created a term to describe what happens after a minimum wage is mandated or increased and that term is cost-push inflation. Feel free to study up on it before dismissing something I know just because you don't.