JP Morgan CEO can't explain how his low paid employee should budget her salary

[mathlete]

The reason a lot of us aren't particularly taken with the woman's plight is that we don't like non-frugal spending which then requires extra-market-based correction, i.e., welfare.

The lady spends about the same as I do yet I earn 4 times as much. Sooner or later I'll be asked to fork out more tax to pay for welfare for people like her, thus deferring my own, well-earned retirement. I'm not saying I don't want to fund welfare at all - but there's a line between truly needed welfare and gratuitous welfare. If a single mother can spend $35k USD a year, that's gratuitous. It's a huge figure, one that I have to really try in order to be able to spend.

I agree with you that some CEO salaries are obscene - but that's another matter.

Such a salary would net you ~$29K after state, local, federal, and FICA taxes. $29K/year of spending for a mother and a child in Irivine California is in no way "non-frugal". Full stop.

The MIT Living Wage calculation for 1-adult 1-child in the area is north of $50K a year. I know we don't exactly like the living wage calculator around here, but even if you steeply discount the living wage, such a hypothetical family is barely making it, or not making it. The shortfall already comes from welfare. This is the point of asking a big bank C.E.O. to consider such a situation. To consider what role his bank plays in low salaries and income inequality, and what role the giant tax cut they just got plays in the underfunding of safety nets.

[StarBright]

@mathlete  - you keep saying things better than I can say them and before I post them so this is just a general thumbs up in your direction.

If we even talk about this from a worst case scenario, ie. this woman has done everything wrong that people are assuming she has: had a child out of wed lock young, no father, etc (and not just married/divorced ended up in crappy situation through no fault of her own). Then this hypothetical lady is still doing exactly what we encourage people in her situation to do, get her GED, enroll her child in decent quality childcare ($450 a month for after school care is at least base-level decent and not just dropping a kid off to watch TV somewhere), and work 40 hours a week in a job that will offer her opportunities to grow in the future.

She's doing what we say people should do and a portion of this thread is sh*tting on her. It is not cool. You can always find something someone has done wrong in the past (even us awesome mustachians) and you can encourage people and even offer suggestions. But to write someone's situation off because you assume they can find a magical unicorn of a housing situation ignores reality.

And just to be clear, I think  1,200 or less a month housing in a safe environment where she manages to be within 20 minutes of her daughter's childcare is the unicorn in this situation - rush hour in San Diego and Orange Counties is generally 30-40 minutes per 10 miles in my experience.

[JLee]

@mathlete  - you keep saying things better than I can say them and before I post them so this is just a general thumbs up in your direction.

If we even talk about this from a worst case scenario, ie. this woman has done everything wrong that people are assuming she has: had a child out of wed lock young, no father, etc (and not just married/divorced ended up in crappy situation through no fault of her own). Then this hypothetical lady is still doing exactly what we encourage people in her situation to do, get her GED, enroll her child in decent quality childcare ($450 a month for after school care is at least base-level decent and not just dropping a kid off to watch TV somewhere), and work 40 hours a week in a job that will offer her opportunities to grow in the future.

She's doing what we say people should do and a portion of this thread is sh*tting on her. It is not cool. You can always find something someone has done wrong in the past (even us awesome mustachians) and you can encourage people and even offer suggestions. But to write someone's situation off because you assume they can find a magical unicorn of a housing situation ignores reality.

And just to be clear, I think  1,200 or less a month housing in a safe environment where she manages to be within 20 minutes of her daughter's childcare is the unicorn in this situation - rush hour in San Diego and Orange Counties is generally 30-40 minutes per 10 miles in my experience.

Yes, and such solutions like that are often "don't live in a HCOL area unless you have a HCOL salary."

Some situations are not reasonably workable without changing the equation.  If I were to post and say "I want to live in Manhattan but an apartment takes half of my income, what do I do" I guarantee people here would say "don't live in Manhattan."

[mathlete]

Yes, and such solutions like that are often "don't live in a HCOL area unless you have a HCOL salary."

Some situations are not reasonably workable without changing the equation.  If I were to post and say "I want to live in Manhattan but an apartment takes half of my income, what do I do" I guarantee people here would say "don't live in Manhattan."

Manhattan is 23 square miles. The Greater Los Angeles Area is close to 5,000 square miles. There are fundamental and obvious problems to treating entire metro areas as if they're analogous to wealthy neighborhoods. Should we be expecting all the line cooks to commute daily from Nevada?

[JLee]

Yes, and such solutions like that are often "don't live in a HCOL area unless you have a HCOL salary."

Some situations are not reasonably workable without changing the equation.  If I were to post and say "I want to live in Manhattan but an apartment takes half of my income, what do I do" I guarantee people here would say "don't live in Manhattan."

Manhattan is 23 square miles. The Greater Los Angeles Area is close to 5,000 square miles. There are fundamental and obvious problems to treating entire metro areas as if they're analogous to wealthy neighborhoods. Should we be expecting all the line cooks to commute daily from Nevada?

Close, yeah - the Los Angeles metropolitan area is 4,850 square miles. If that's your chosen metric for comparison, the New York metropolitan area is 13,318 square miles.  There are options.

I am unclear as to what exactly your argument is - it seems to be that any full time job should be able to support a single mother with a child, child care, a non-shared living situation and a car in a HCOL area but that doesn't seem reasonable to me.

[mathlete]

I am unclear as to what exactly your argument is - it seems to be that any full time job should be able to support a single mother with a child, child care, a non-shared living situation and a car in a HCOL area but that doesn't seem reasonable to me.

My points are as follows:

1.) Our entire economy, top to bottom, needs re-examining. A good place to start is by looking at what responsibility employers have to pay wages that are commensurate with the cost of living, OR, we need to re-examine the efficacy of granting huge tax cuts to $100bn revenue companies, which further stresses the safety net.
2.) I think it's pretty out there how aggressively some posters think this hypothetical woman should pursue racing to the bottom even further when the man sitting at the table runs a bank that made $32 billion in net income last year.

[Bloop Bloop]

As others have said, even if we accept that employers should pay a "living wage", whose living standard do they peg at? A single mother living in a $400/week nice flat in a HCOL area? Damn, why not just go all out and make sure every company can pay for a family of four?

And I don't think that paying less than $400/week for rent or $40/month for a phone plan is a "race to the bottom". As I said, I (and I'm sure many others, who make multiples of what this woman does) don't even have those expenses.

Finally, a lot of us don't have any issues with a society and rewards certain forms of hard work and fails to reward other forms of lack of frugality/thrift. At the end of the day if society were more equal I'd have a harder time retiring. I (and many others I'm sure) make good money from bank shares. And if it comes to choosing between the financial interests of a profligate worker versus my own interests - me being, I think, an intelligent investor who hasn't made shit choices - then I know who I'm voting for every day of the week. Give me points for honesty, at least.

[SachaFiscal]

Maybe a middle of the road solution would be for JP Morgan to offer more opportunities for advancement.  They could offer a benefit to help bank tellers get the education and training they would need to become loan officers or financial advisors.  Basically a hand-up instead of a hand-out.

[Bloop Bloop]

Maybe a middle of the road solution would be for JP Morgan to offer more opportunities for advancement.  They could offer a benefit to help bank tellers get the education and training they would need to become loan officers or financial advisors.  Basically a hand-up instead of a hand-out.

I agree with you, but this still wouldn't pacify some in this thread, who'll always gravitate towards the situation of those on the lowest rungs of the ability/work ethic ladder. After all, if one person advances, that means another misses out, and what to do about the poor second person?

[mathlete]

As others have said, even if we accept that employers should pay a "living wage", whose living standard do they peg at? A single mother living in a $400/week nice flat in a HCOL area? Damn, why not just go all out and make sure every company can pay for a family of four?

And I don't think that paying less than $400/week for rent or $40/month for a phone plan is a "race to the bottom". As I said, I (and I'm sure many others, who make multiples of what this woman does) don't even have those expenses.

Market rents are what they are. We can discuss why if people want to, but right now, it's a fact of life in the Greater LA Area. $40 also seems perfectly reasonable for a cellphone plan. Maybe you guys have figured out how to pay less, but focusing on it as if it matters at all in this context is pretty myopic IMO.

I don't think JP Morgan necessarily has to pay this hypothetical woman her living wage just because she has a kid and maybe her coworker doesn't. But if we don't do that (I don't think we should), we should at least have a tax and a welfare structure that recognizes that.

Finally, a lot of us don't have any issues with a society and rewards certain forms of hard work and fails to reward other forms of lack of frugality/thrift.

I don't think this description of society fits reality. I say that as a fairly thrifty and hardworking person myself. Hard work and thriftiness are great and they help a lot. But capitalism rewards capital. It's not called laborism or thriftyism. I'd bet on the outcomes of the person with capital over the harder worker 11 times out of 10.

[GuitarStv]

As others have said, even if we accept that employers should pay a "living wage", whose living standard do they peg at? A single mother living in a $400/week nice flat in a HCOL area? Damn, why not just go all out and make sure every company can pay for a family of four?

And I don't think that paying less than $400/week for rent or $40/month for a phone plan is a "race to the bottom". As I said, I (and I'm sure many others, who make multiples of what this woman does) don't even have those expenses.

Finally, a lot of us don't have any issues with a society and rewards certain forms of hard work and fails to reward other forms of lack of frugality/thrift. At the end of the day if society were more equal I'd have a harder time retiring. I (and many others I'm sure) make good money from bank shares. And if it comes to choosing between the financial interests of a profligate worker versus my own interests - me being, I think, an intelligent investor who hasn't made shit choices - then I know who I'm voting for every day of the week. Give me points for honesty, at least.

You frame this as a choice between "the financial interests of a profligate worker versus my own interests" when in reality that's not the choice that you have.

You can choose to:
- personally pay for the "profilgate worker" through taxation and social programs

or

- force companies to pay the full costs of the "profilgate workers" they hire



In both cases the "profilgate worker" is being paid for.  In the case that you support, you are on the hook for the costs.  Which seems like a weird thing to support - given that it's contrary to your own financial interests.

[Bloop Bloop]

As others have said, even if we accept that employers should pay a "living wage", whose living standard do they peg at? A single mother living in a $400/week nice flat in a HCOL area? Damn, why not just go all out and make sure every company can pay for a family of four?

And I don't think that paying less than $400/week for rent or $40/month for a phone plan is a "race to the bottom". As I said, I (and I'm sure many others, who make multiples of what this woman does) don't even have those expenses.

Market rents are what they are. We can discuss why if people want to, but right now, it's a fact of life in the Greater LA Area. $40 also seems perfectly reasonable for a cellphone plan. Maybe you guys have figured out how to pay less, but focusing on it as if it matters at all in this context is pretty myopic IMO.

I don't think JP Morgan necessarily has to pay this hypothetical woman her living wage just because she has a kid and maybe her coworker doesn't. But if we don't do that (I don't think we should), we should at least have a tax and a welfare structure that recognizes that.

Finally, a lot of us don't have any issues with a society and rewards certain forms of hard work and fails to reward other forms of lack of frugality/thrift.

I don't think this description of society fits reality. I say that as a fairly thrifty and hardworking person myself. Hard work and thriftiness are great and they help a lot. But capitalism rewards capital. It's not called laborism or thriftyism. I'd bet on the outcomes of the person with capital over the harder worker 11 times out of 10.

$40 is ridiculous for a cell phone plan. Unless you want lots of data and the latest iPhone. There's nothing wrong with that, if you can afford it.

And of course you can say that I'm being myopic to look at a $25/month saving. Of course that by itself does nothing. The point is, where else can this lady cut costs? From groceries to living in slightly lesser accommodation. It all adds up.

And previously I've said I'm happy to have enough welfare so that this lady and her kid are never homeless or starving. Beyond that, I don't know what more you could want. There's only so many hand-outs we need to give.

And as for your dichotomy between capital and labour, in truth there's no dichotomy. For one thing, as you accrue income, it becomes capital. For another, there's no hard and fast distinction between a worker-slave and a master-boss. Any worker can go out and start his or her own business, like many of us have, and then become little capitalists. You write as if you need $100 million and a factory in order to start a business. Whereas you really just need a couple of thousand bucks and a desk.

[Bloop Bloop]

As others have said, even if we accept that employers should pay a "living wage", whose living standard do they peg at? A single mother living in a $400/week nice flat in a HCOL area? Damn, why not just go all out and make sure every company can pay for a family of four?

And I don't think that paying less than $400/week for rent or $40/month for a phone plan is a "race to the bottom". As I said, I (and I'm sure many others, who make multiples of what this woman does) don't even have those expenses.

Finally, a lot of us don't have any issues with a society and rewards certain forms of hard work and fails to reward other forms of lack of frugality/thrift. At the end of the day if society were more equal I'd have a harder time retiring. I (and many others I'm sure) make good money from bank shares. And if it comes to choosing between the financial interests of a profligate worker versus my own interests - me being, I think, an intelligent investor who hasn't made shit choices - then I know who I'm voting for every day of the week. Give me points for honesty, at least.

You frame this as a choice between "the financial interests of a profligate worker versus my own interests" when in reality that's not the choice that you have.

You can choose to:
- personally pay for the "profilgate worker" through taxation and social programs

or

- force companies to pay the full costs of the "profilgate workers" they hire



In both cases the "profilgate worker" is being paid for.  In the case that you support, you are on the hook for the costs.  Which seems like a weird thing to support - given that it's contrary to your own financial interests.

I've dealt with the exact point in an earlier post. There's no free lunch in forcing companies to pay 'the full cost' (whatever that means). It generally means artificially inflated wages, which then flows through to the outputs, and to all the there workers currently on low wages, etc. So yes, if all companies increased their pay by $5/hr, we might save a bit on welfare, but we'd be paying more every time we go to the grocer, the supermarket, the car dealership, etc

[DadJokes]

Maybe this is a pretentious suggestion and may be covered by the article, but has she considered not living in one of the highest cost of living areas in the world? Despite the usual objections, it's not expensive to move, nor would it be difficult to find a "low paying" job elsewhere.

Okay, then where do the we find the labor to fill low paying jobs in high COL areas?

If there's no one else to fill the position at $16.50 1) the hourly rate would go up, 2) more automation would be introduced, or 3) if the position doesn't provide enough value to JP Morgan to raise the rates (unlikely) it may just be eliminated.

My guess as to what would actually happen though is that someone with lower expenses would take the job and it would pay enough to support them.

That's about as well as it could be put.

We should not be forcing companies to pay more than market price for wages, and we should not subsidize people who choose to live in a HCOL area.

[mathlete]

$40 is ridiculous for a cell phone plan.

Hard disagree. I guess we're at an impasse on this one, which is fine.

And previously I've said I'm happy to have enough welfare so that this lady and her kid are never homeless or starving.

Fantastic! I'd be glad to turn this into a discussion about huge corporate tax cuts that benefit companies like JPM placing more of that welfare burden on financed debt.

And as for your dichotomy between capital and labour, in truth there's no dichotomy. For one thing, as you accrue income, it becomes capital. For another, there's no hard and fast distinction between a worker-slave and a master-boss. Any worker can go out and start his or her own business, like many of us have, and then become little capitalists. You write as if you need $100 million and a factory in order to start a business. Whereas you really just need a couple of thousand bucks and a desk.

What happened in the late 1970s? Did median and and low income families become less thrifty and hardworking?

[calimom]

The reason a lot of us aren't particularly taken with the woman's plight is that we don't like non-frugal spending which then requires extra-market-based correction, i.e., welfare.

The lady spends about the same as I do yet I earn 4 times as much. Sooner or later I'll be asked to fork out more tax to pay for welfare for people like her, thus deferring my own, well-earned retirement. I'm not saying I don't want to fund welfare at all - but there's a line between truly needed welfare and gratuitous welfare. If a single mother can spend $35k USD a year, that's gratuitous. It's a huge figure, one that I have to really try in order to be able to spend.

I agree with you that some CEO salaries are obscene - but that's another matter.

Where, exactly does it state this full time worker is getting welfare benefits? Let's hope she's at least able to access EITC, that's a huge help for the working poor. I'm also not getting all the vitriol about a used minivan and how she should 'just move'. It's fun to beat up on those less fortunate, the last allowable bloodsport Shaming someone for having a child and wanting a good life for them just seems cruel.

And why is the CEO's $30M salary and over $1B NW off the table for discussion? Is anyone discussing his multiple homes scattered about, private jet flights around the globe. Sure, we get he's an Harvard educated white man in America who's had a lot of breaks and is well connected. His life is an exploding volcano of wastefulness very likely.

Large labor-heavy corporations could go a long way in treating workers better. Sure, keep the $16.50 salary. How about kicking in fully paid (not just partial) health insurance, a cell phone allowance, transport allowance for either personal vehicles or public transportation and some quarterly bonuses for merit or whatever.

It's fun to play poor and shame others isn't it? Easy to say 'I live on X per month and save XXX per month!

[DadJokes]

What happened in the late 1970s? Did median and and low income families become less thrifty and hardworking?

Yes, actually. It may have started before then, but there's no doubt that America has become a culture of consumption, which has certainly benefited the producers far more than it has benefited the consumers. The FI movement already knows that much, and it's why we tend to reject consumerism.

My takeaway from that chart is that median households are just as well off now as they were then, or even slightly better off. However, that doesn't appear to be good enough, because other people have more. The growth in income of the super rich has not negatively affected the middle class, but it has certainly bred plenty of envy.

[Bloop Bloop]

$40 is ridiculous for a cell phone plan.

Hard disagree. I guess we're at an impasse on this one, which is fine.

And previously I've said I'm happy to have enough welfare so that this lady and her kid are never homeless or starving.

Fantastic! I'd be glad to turn this into a discussion about huge corporate tax cuts that benefit companies like JPM placing more of that welfare burden on financed debt.

And as for your dichotomy between capital and labour, in truth there's no dichotomy. For one thing, as you accrue income, it becomes capital. For another, there's no hard and fast distinction between a worker-slave and a master-boss. Any worker can go out and start his or her own business, like many of us have, and then become little capitalists. You write as if you need $100 million and a factory in order to start a business. Whereas you really just need a couple of thousand bucks and a desk.

What happened in the late 1970s? Did median and and low income families become less thrifty and hardworking?

I suspect what happened is a number of things
1 - Rise of dual-income families (due to increased female participation in paid work)
2 - Dual income families + assortative mating = naturally more inequality
3 - Globalisation, migration and free trade

In other words, family structure changed and the work force became more competitive overall. Thrift and hard work used to get you +3 stats boost if enabled and -3 stats boost if disabled, now they give +5/-5 stats boost.

[Laserjet3051]

Maybe this is a pretentious suggestion and may be covered by the article, but has she considered not living in one of the highest cost of living areas in the world? Despite the usual objections, it's not expensive to move, nor would it be difficult to find a "low paying" job elsewhere.

Okay, then where do the we find the labor to fill low paying jobs in high COL areas?

If there's no one else to fill the position at $16.50 1) the hourly rate would go up, 2) more automation would be introduced, or 3) if the position doesn't provide enough value to JP Morgan to raise the rates (unlikely) it may just be eliminated.

My guess as to what would actually happen though is that someone with lower expenses would take the job and it would pay enough to support them.

That's about as well as it could be put.

We should not be forcing companies to pay more than market price for wages, and we should not subsidize people who choose to live in a HCOL area.

Absolutely, couldnt agree more. As someone who is intimately familiar with the Irvine (and surrounding area) real estate markets, the subject in this story should not be paying Irvine rental prices, when her income more readily aligns with the MUCH LOWER rental prices in neighboring Santa Ana. Folks on this board may not realize that north Irvine is a mere 100 FEET away from the southern edge of Santa Ana. The difference is stark, and the real estate pricing reflects that. I make far more than the subject in this story, and I know I am unable to afford Irvine rental prices, so I chose not to live there.  It's funny, there is so much "prestige" associated with living in Irvine, that folks will do almost anything to be able to say they live in Irvine.

With ridiculous housing costs in socal, a move to Santa Ana may be the better prescription for the subjects ails than trying to force JPM to pay above market value for her skills.

[mm1970]

@mathlete  - you keep saying things better than I can say them and before I post them so this is just a general thumbs up in your direction.

If we even talk about this from a worst case scenario, ie. this woman has done everything wrong that people are assuming she has: had a child out of wed lock young, no father, etc (and not just married/divorced ended up in crappy situation through no fault of her own). Then this hypothetical lady is still doing exactly what we encourage people in her situation to do, get her GED, enroll her child in decent quality childcare ($450 a month for after school care is at least base-level decent and not just dropping a kid off to watch TV somewhere), and work 40 hours a week in a job that will offer her opportunities to grow in the future.

She's doing what we say people should do and a portion of this thread is sh*tting on her. It is not cool. You can always find something someone has done wrong in the past (even us awesome mustachians) and you can encourage people and even offer suggestions. But to write someone's situation off because you assume they can find a magical unicorn of a housing situation ignores reality.

And just to be clear, I think  1,200 or less a month housing in a safe environment where she manages to be within 20 minutes of her daughter's childcare is the unicorn in this situation - rush hour in San Diego and Orange Counties is generally 30-40 minutes per 10 miles in my experience.

It's the new normal here.

[calimom]

@DadJokes , just curious. When you filed your taxes this year, did you itemize your mortgage interest? Take allowable deductions for your child/ren? Daycare? Are they or will they attend public schools?

If yes to any of the above, why are we subsidizing YOUR lifestyle?

[dividendman]

Having a CEO (or anyone) explain how someone else should budget their salary is dumb.

[Bloop Bloop]

@DadJokes , just curious. When you filed your taxes this year, did you itemize your mortgage interest? Take allowable deductions for your child/ren? Daycare? Are they or will they attend public schools?

If yes to any of the above, why are we subsidizing YOUR lifestyle?

It's semantically disingenuous to compare a tax offset - which enables someone to keep more of his or her own money - in the same way as a welfare handout - which gives someone another person's redistributed money.

As for public schools, if DadJokes pays his taxes, he is entitled to send kids to public schools. Now it might be that if you take a strict view of it that a low income earner is being subsidised via public schools, if the tax paid is less than the average cost per child times the number of children in school. But somehow I think you're not trying to make that point. You're instead trying to combine and conflate several different things for your own particular purposes.

[calimom]

@DadJokes , just curious. When you filed your taxes this year, did you itemize your mortgage interest? Take allowable deductions for your child/ren? Daycare? Are they or will they attend public schools?

If yes to any of the above, why are we subsidizing YOUR lifestyle?

It's semantically disingenuous to compare a tax offset - which enables someone to keep more of his or her own money - in the same way as a welfare handout - which gives someone another person's redistributed money.

As for public schools, if DadJokes pays his taxes, he is entitled to send kids to public schools. Now it might be that if you take a strict view of it that a low income earner is being subsidised via public schools, if the tax paid is less than the average cost per child times the number of children in school. But somehow I think you're not trying to make that point. You're instead trying to combine and conflate several different things for your own particular purposes.

Thank you for your feedback.

[cloudsail]

@DadJokes , just curious. When you filed your taxes this year, did you itemize your mortgage interest? Take allowable deductions for your child/ren? Daycare? Are they or will they attend public schools?

If yes to any of the above, why are we subsidizing YOUR lifestyle?

It's semantically disingenuous to compare a tax offset - which enables someone to keep more of his or her own money - in the same way as a welfare handout - which gives someone another person's redistributed money.

As for public schools, if DadJokes pays his taxes, he is entitled to send kids to public schools. Now it might be that if you take a strict view of it that a low income earner is being subsidised via public schools, if the tax paid is less than the average cost per child times the number of children in school. But somehow I think you're not trying to make that point. You're instead trying to combine and conflate several different things for your own particular purposes.

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

[mathlete]

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

Forgive my extremely illogical and emotional appeal. I can barely type through all of my tears right now, but it seems to me that there are a lot of countries with both a higher effective tax rate, and high Human Development Index than the United States.

https://www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally
http://hdr.undp.org/en/composite/HDI

[cloudsail]

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

Forgive my extremely illogical and emotional appeal. I can barely type through all of my tears right now, but it seems to me that there are a lot of countries with both a higher effective tax rate, and high Human Development Index than the United States.

https://www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally
http://hdr.undp.org/en/composite/HDI

Since when were we talking about tax rate? I thought this was about the definition of living wage, or government policies to prevent high CEO salaries.

I admit that I am also biased by emotion, as my grandparents lived through the Communist revolution. In case you're not familiar with the history, it was all about wealth redistribution. Mao came into power because he promised to take money from the 1% and give it to the 99%.

My grandparents were neither particularly rich nor particularly poor, middle to lower-middle class is probably the best description. They most definitely did not benefit, and my grandmother loathed Mao during her lifetime. They got by because my grandfather joined the army.

There are other examples in history where the wealth redistribution game went terribly wrong.

I agree that our tax policy is flawed and could use a lot of improvement. I just want to caution against raw emotional appeals, demonizing of corporations, and drastically simple solutions.

[former player]

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

Forgive my extremely illogical and emotional appeal. I can barely type through all of my tears right now, but it seems to me that there are a lot of countries with both a higher effective tax rate, and high Human Development Index than the United States.

https://www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally
http://hdr.undp.org/en/composite/HDI

Taxes in the USA are actually pretty comparable to a number of other countries which might be thought to have higher tax rates (including Canada and Australia), as long as you include in it the Healthcare Stupidity Tax that you pay in the USA.  Which makes the disparities in HDI between the USA and other countries even more stark.

[mathlete]

Since when were we talking about tax rate? I thought this was about the definition of living wage, or government policies to prevent high CEO salaries.

I admit that I am also biased by emotion, as my grandparents lived through the Communist revolution. In case you're not familiar with the history, it was all about wealth redistribution. Mao came into power because he promised to take money from the 1% and give it to the 99%.

My grandparents were neither particularly rich nor particularly poor, middle to lower-middle class is probably the best description. They most definitely did not benefit, and my grandmother loathed Mao during her lifetime. They got by because my grandfather joined the army.

There are other examples in history where the wealth redistribution game went terribly wrong.

I agree that our tax policy is flawed and could use a lot of improvement. I just want to caution against raw emotional appeals, demonizing of corporations, and drastically simple solutions.

I've personally been discussing corporate taxes at least since yesterday. I also think taxes are implicit in any discussion on living wages, since a living wage is the wage someone needs to operate in their locale. If they're not making that wage, the difference is probably made up by welfare, which is funded by taxes. Also, I think taxes are an implicit part of any discussion involving wealth redistribution.

I don't think I'm trying to demonize corporations either. I even went as far as to say Dimon and JP Morgan's extreme profits

doesn't make them bad or evil,

I'm very sorry that your  grandparents lived through the suckiness of Mao's China. By no means should their cautionary experience be ignored. But I think there are other, more successful models for wealth redistribution that we can look to as well. Canada, the Nordic Countries, Germany, etc.

My biggest concern (likely shared by Congresswoman Porter) is that human labor has become incredibly devalued in the past four or five decades, thanks to technology and globalization. If we look to the future, it's going to go almost to zero for everyone. That's why I find the direction these discussions go in troubling. Maybe a single mom in Irvine California should spend less than $40 on a cell phone plan, but frugality has hard limits, and we'll rub up against them sooner or later.

[wageslave23]

@DadJokes , just curious. When you filed your taxes this year, did you itemize your mortgage interest? Take allowable deductions for your child/ren? Daycare? Are they or will they attend public schools?

If yes to any of the above, why are we subsidizing YOUR lifestyle?

As a CPA and as a citizen, I would love for the IRS to get rid of all the stupid loopholes.  Figure out a fair flat tax percentage based on income and let people spend their money however they choose.  But that's a side tangent to the discussion.

[partgypsy]

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

Forgive my extremely illogical and emotional appeal. I can barely type through all of my tears right now, but it seems to me that there are a lot of countries with both a higher effective tax rate, and high Human Development Index than the United States.

https://www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally
http://hdr.undp.org/en/composite/HDI

Since when were we talking about tax rate? I thought this was about the definition of living wage, or government policies to prevent high CEO salaries.

I admit that I am also biased by emotion, as my grandparents lived through the Communist revolution. In case you're not familiar with the history, it was all about wealth redistribution. Mao came into power because he promised to take money from the 1% and give it to the 99%.

My grandparents were neither particularly rich nor particularly poor, middle to lower-middle class is probably the best description. They most definitely did not benefit, and my grandmother loathed Mao during her lifetime. They got by because my grandfather joined the army.

There are other examples in history where the wealth redistribution game went terribly wrong.

I agree that our tax policy is flawed and could use a lot of improvement. I just want to caution against raw emotional appeals, demonizing of corporations, and drastically simple solutions.

Seriously? No one here is arguing or remotely arguing for financial redistribution of the likes of Mao, or Stalin, Or Pol Pot. We are talking about what is a living wage, and whether free market capitalization (which isn't completely free market as corporations through their many years of lobbying have many tax breaks and fiscal advantages) over an individual person has gone too far. To argue that political redistribution of resources is a "bad idea" because of people like Mao, is not a logical argument.

If anything, those revolts and the ability for a dictator to gain control, only happen when a political system becomes so corrupt and unfair the average person feels the system no longer works for them and there is no hope other than to tear it all down.

Other countries have shown us you can both have a higher tax basis AND a higher quality of life, higher public health, higher life expectancy, AND higher social economic mobility than what we experience in the US. So yeah I would say there is definitely room for improvement for the current state of the US. Most not likely in a system that both allows CEOs to influence who are on the boards and have essentially unlimited compensation, AND the average person can work full time and not afford to live in the same city they work in.

[cloudsail]

My biggest concern (likely shared by Congresswoman Porter) is that human labor has become incredibly devalued in the past four or five decades, thanks to technology and globalization. If we look to the future, it's going to go almost to zero for everyone. That's why I find the direction these discussions go in troubling. Maybe a single mom in Irvine California should spend less than $40 on a cell phone plan, but frugality has hard limits, and we'll rub up against them sooner or later.

Oh for sure, the devaluing of unskilled labor and the impending AI revolution is something I worry about too. But I feel like we should be finding NEW solutions to these problems. The current Democratic rhetoric of "Let's beat the Megacorps to the ground!" just seems like a repeat of past mistakes. FWIW, I think many Republican policies are retarded as well. Makes it really hard to figure out who to vote for come election time. I really wish there was some way to get rid of the two party system.

[GuitarStv]

My biggest concern (likely shared by Congresswoman Porter) is that human labor has become incredibly devalued in the past four or five decades, thanks to technology and globalization. If we look to the future, it's going to go almost to zero for everyone. That's why I find the direction these discussions go in troubling. Maybe a single mom in Irvine California should spend less than $40 on a cell phone plan, but frugality has hard limits, and we'll rub up against them sooner or later.

Oh for sure, the devaluing of unskilled labor and the impending AI revolution is something I worry about too. But I feel like we should be finding NEW solutions to these problems. The current Democratic rhetoric of "Let's beat the Megacorps to the ground!" just seems like a repeat of past mistakes. FWIW, I think many Republican policies are retarded as well. Makes it really hard to figure out who to vote for come election time. I really wish there was some way to get rid of the two party system.

You consider slightly raising the minimum wage to be beating megacorps into the ground at a time where corporations are posting some of their highest profits ever?

[mathlete]

Oh for sure, the devaluing of unskilled labor and the impending AI revolution is something I worry about too. But I feel like we should be finding NEW solutions to these problems. The current Democratic rhetoric of "Let's beat the Megacorps to the ground!" just seems like a repeat of past mistakes. FWIW, I think many Republican policies are retarded as well. Makes it really hard to figure out who to vote for come election time. I really wish there was some way to get rid of the two party system.

Hmm. I don't know. The Republican president elected in 2000 cut taxes dramatically, and corporate profits hit all time highs. Then, when things got bad, he bailed out the banks. His Democrat successor bailed out the auto industry, and then corporate profits hit all time highs again. Then a Republican came in in 2016, dramatically cut corporate taxes, and profits hit all time highs once again in 2018.

I can make the case that both parties have been big friends to Megacorps as of late. There are some candidates who are looking to change that though. I'm interested in what they do if they win.

[Davnasty]

Hear hear.

It's so much easier to appeal to emotion than logic and reason, just like the video the OP posted. The apparently simple and powerful premise of taking money from the rich and redistributing it to the poor has historically never been simple and often been catastrophic for rich and poor alike.

Forgive my extremely illogical and emotional appeal. I can barely type through all of my tears right now, but it seems to me that there are a lot of countries with both a higher effective tax rate, and high Human Development Index than the United States.

https://www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally
http://hdr.undp.org/en/composite/HDI

Since when were we talking about tax rate? I thought this was about the definition of living wage, or government policies to prevent high CEO salaries.

I admit that I am also biased by emotion, as my grandparents lived through the Communist revolution. In case you're not familiar with the history, it was all about wealth redistribution. Mao came into power because he promised to take money from the 1% and give it to the 99%.

My grandparents were neither particularly rich nor particularly poor, middle to lower-middle class is probably the best description. They most definitely did not benefit, and my grandmother loathed Mao during her lifetime. They got by because my grandfather joined the army.

There are other examples in history where the wealth redistribution game went terribly wrong.

I agree that our tax policy is flawed and could use a lot of improvement. I just want to caution against raw emotional appeals, demonizing of corporations, and drastically simple solutions.

Seriously? No one here is arguing or remotely arguing for financial redistribution of the likes of Mao, or Stalin, Or Pol Pot. We are talking about what is a living wage, and whether free market capitalization (which isn't completely free market as corporations through their many years of lobbying have many tax breaks and fiscal advantages) over an individual person has gone too far. To argue that political redistribution of resources is a "bad idea" because of people like Mao, is not a logical argument.

If anything, those revolts and the ability for a dictator to gain control, only happen when a political system becomes so corrupt and unfair the average person feels the system no longer works for them and there is no hope other than to tear it all down.

Other countries have shown us you can both have a higher tax basis AND a higher quality of life, higher public health, higher life expectancy, AND higher social economic mobility than what we experience in the US. So yeah I would say there is definitely room for improvement for the current state of the US. Most not likely in a system that both allows CEOs to influence who are on the boards and have essentially unlimited compensation, AND the average person can work full time and not afford to live in the same city they work in.

I think I agree with everything you're saying here and I probably even agree with some of Porter's stances on policy, but I still take issue with her example and it's presentation. I don't think her example showed either of the points in your comment I've bolded in that a single mother is not the average person and I think it's quite likely that she can live in the same city she works in (or at least within commutable distance).

In terms of Porter's larger point this may be splitting hairs, but anyone who wants to discredit her is going to be splitting those same hairs.

I actually thought about posting this as a case study before it was posted here. That probably would have been more fun but I was worried it might get too political for that sub forum.

[GuitarStv]

a single mother is not the average person

There are 327.2 million people in the US (https://www.politifact.com/wisconsin/statements/2018/feb/20/kevin-nicholson/which-higher-number-people-or-number-guns-america/).  There are 13.7 single parents raising 22 million children (https://www.verywellfamily.com/single-parent-census-data-2997668).  While a single parent might not be the norm . . . 1 in 10 people in the US are in a single parent family.  It's pretty common.

[cloudsail]

Seriously? No one here is arguing or remotely arguing for financial redistribution of the likes of Mao, or Stalin, Or Pol Pot. We are talking about what is a living wage, and whether free market capitalization (which isn't completely free market as corporations through their many years of lobbying have many tax breaks and fiscal advantages) over an individual person has gone too far. To argue that political redistribution of resources is a "bad idea" because of people like Mao, is not a logical argument.

If anything, those revolts and the ability for a dictator to gain control, only happen when a political system becomes so corrupt and unfair the average person feels the system no longer works for them and there is no hope other than to tear it all down.

Other countries have shown us you can both have a higher tax basis AND a higher quality of life, higher public health, higher life expectancy, AND higher social economic mobility than what we experience in the US. So yeah I would say there is definitely room for improvement for the current state of the US. Most not likely in a system that both allows CEOs to influence who are on the boards and have essentially unlimited compensation, AND the average person can work full time and not afford to live in the same city they work in.

I'm actually Canadian and have spent more years living in Canada than the U.S., so I'm pretty familiar with Canadian society and which aspects are better or worse than the U.S. It's not perfect by any means, and there's a lot of economic dependence on our southern neighbour. It doesn't face many of the same problems simply because it just has less people.

I do think healthcare in the U.S. is incredibly stupid. That was probably my biggest culture shock moving here.

History is very complicated, it's never as simple as: people were dissatisfied, so dictator took over. Movements that start out seemingly well-intentioned can snowball down a slippery slope that takes the whole society with it. Mao's Communist Party started as a guerrilla movement during the Japanese occupation of China. Do you think any of the average Joe during that time thought it was going to become what it did?

We face very different challenges in our current society than anything in the past, and simply trying to equalize everything just isn't realistic. What kind of repercussions do you think forcing JPM to pay their entry-level high school graduate positions $21/hr would have? Many previous posters have already detailed the wide-ranging complications that would arise from this. It certainly isn't as simple as taking money out of the CEO's pocket and putting in the single mother's.

[partgypsy]

a single mother is not the average person

There are 327.2 million people in the US (https://www.politifact.com/wisconsin/statements/2018/feb/20/kevin-nicholson/which-higher-number-people-or-number-guns-america/).  There are 13.7 single parents raising 22 million children (https://www.verywellfamily.com/single-parent-census-data-2997668).  While a single parent might not be the norm . . . 1 in 10 people in the US are in a single parent family.  It's pretty common.

I probably would not be in that group as I'm divorced, and both of my kids parents are alive. But i have my kids the majority of the time, hold down a household and do not receive child support. So functionally it feels like being a single parent. 

[cloudsail]

Also, speaking of inequality, why do you think I left Canada for the U.S., despite better healthcare, better social safety nets, better society? (I like Canadians much better than Americans, sorry.)

Inequality is just as rampant in Canada, and the U.S. offered way more opportunities for people willing to work hard to reap the fruits of their labors. Many of our friends from high school and college took the same route, and have done very well for themselves. The ones who stayed in Canada have pretty much stayed at the same socioeconomic level as their parents, sometimes worse.

[partgypsy]

Also, speaking of inequality, why do you think I left Canada for the U.S., despite better healthcare, better social safety nets, better society? (I like Canadians much better than Americans, sorry.)

Inequality is just as rampant in Canada, and the U.S. offered way more opportunities for people willing to work hard to reap the fruits of their labors. Many of our friends from high school and college took the same route, and have done very well for themselves. The ones who stayed in Canada have pretty much stayed at the same socioeconomic level as their parents, sometimes worse.

Oddly enough, socioeconomic mobility is greater in Canada than the US. But that is speaking on the average. There are corporations and industries that are international and having the opportunity to move here may increase your social mobility. Heck, that might be the best of both worlds; grow up in canada with assured medical, healthcare, education, move here for the jobs. 

[Davnasty]

a single mother is not the average person

There are 327.2 million people in the US (https://www.politifact.com/wisconsin/statements/2018/feb/20/kevin-nicholson/which-higher-number-people-or-number-guns-america/).  There are 13.7 single parents raising 22 million children (https://www.verywellfamily.com/single-parent-census-data-2997668).  While a single parent might not be the norm . . . 1 in 10 people in the US are in a single parent family.  It's pretty common.

I probably would not be in that group as I'm divorced, but both of my kids parents are alive. But i have my kids the majority of the time, hold down a household and do not receive child support. So functionally it feels like being a single parent.

Actually it looks like you would be counted in this number. It even counts parents who are married to someone other than the biological parent if I'm understanding correctly.

Of the mothers who are custodial parents:
44.2% are currently divorced or separated
36.8% have never been married
18% are married; in most cases, these numbers represent women who have remarried
1.1% were widowed

Of the fathers who are custodial parents:
53.5% are divorced or separated
24.7% have never married1

While I'm always interested in statistics this seems to be getting off topic pretty quickly. I stand by my opinion that using a single mother's expenses to establish a living wage is not a good idea.

[Davnasty]

Also, and this is nitpicky too but I think it's kinda funny, The very first line in her calculation is wrong.

She wrote $16.50/hr x 40hrs/wk x 52wks = $35,070 but really it's $34,320.

And I don't think she factored in 1 dependent or the child tax credit.

[mathlete]

Also, and this is nitpicky too but I think it's kinda funny, The very first line in her calculation is wrong.

She wrote $16.50/hr x 40hrs/wk x 52wks = $35,070 but really it's $34,320.

And I don't think she factored in 1 dependent or the child tax credit.

I don't think so either. I arrived at a similar calculation as her when I ran the numbers for only one exemption.

I assume this is on purpose, and that the point is that extra exemptions, rebates, and refundable credits are counted as government money to help make ends meet since wages aren't high enough.

Again, two ways to go on this, JPM could pay higher salaries, or we could decline to give them such rosy tax treatment so that we can better afford to provide single mothers the help they need without running such high deficits.

[EscapeVelocity2020]

Looking forward to making a better comment now that I am aware what this thread is all about.  Just saw it on Seth Meyers - https://www.youtube.com/watch?v=PrIezztmr3E

[cloudsail]

My biggest concern (likely shared by Congresswoman Porter) is that human labor has become incredibly devalued in the past four or five decades, thanks to technology and globalization. If we look to the future, it's going to go almost to zero for everyone. That's why I find the direction these discussions go in troubling. Maybe a single mom in Irvine California should spend less than $40 on a cell phone plan, but frugality has hard limits, and we'll rub up against them sooner or later.

Oh for sure, the devaluing of unskilled labor and the impending AI revolution is something I worry about too. But I feel like we should be finding NEW solutions to these problems. The current Democratic rhetoric of "Let's beat the Megacorps to the ground!" just seems like a repeat of past mistakes. FWIW, I think many Republican policies are retarded as well. Makes it really hard to figure out who to vote for come election time. I really wish there was some way to get rid of the two party system.

You consider slightly raising the minimum wage to be beating megacorps into the ground at a time where corporations are posting some of their highest profits ever?

Slightly raising the minimum wage is not at all what candidates like Elizabeth Warren and Bernie Sanders are proposing. I don't know if they are saying what they're saying just to get votes, because I'm pretty sure measures like forcing corporations to disband would have far reaching consequences that they cannot foresee.

[jlcnuke]

I am unclear as to what exactly your argument is - it seems to be that any full time job should be able to support a single mother with a child, child care, a non-shared living situation and a car in a HCOL area but that doesn't seem reasonable to me.

My points are as follows:

1.) Our entire economy, top to bottom, needs re-examining. A good place to start is by looking at what responsibility employers have to pay wages that are commensurate with the cost of living, OR, we need to re-examine the efficacy of granting huge tax cuts to $100bn revenue companies, which further stresses the safety net.
2.) I think it's pretty out there how aggressively some posters think this hypothetical woman should pursue racing to the bottom even further when the man sitting at the table runs a bank that made $32 billion in net income last year.

1) Instead of trying to make employers pay people beyond the value they bring to the company, how about... I don't know... having people be responsible for their own financial situation?? Don't go live on your own if you can't afford it. Don't go buy a car if you can't afford it. Don't go start a family if you can't afford it. And let charity and government help the few that find themselves in trouble despite trying to do the right thing? People used to have some pride in being responsible for themselves instead of thinking that the struggling mom and pop store down the street should shell out $20/hour to the cashier because she can't keep her legs closed or insists on living in that nicer apartment etc.
2) I think it's pretty out there how some posters think things would be better if only the highest paid people didn't make so much money, or if companies weren't allowed to make a profit...

[jlcnuke]

Maybe a middle of the road solution would be for JP Morgan to offer more opportunities for advancement.  They could offer a benefit to help bank tellers get the education and training they would need to become loan officers or financial advisors.  Basically a hand-up instead of a hand-out.

I agree with you, but this still wouldn't pacify some in this thread, who'll always gravitate towards the situation of those on the lowest rungs of the ability/work ethic ladder. After all, if one person advances, that means another misses out, and what to do about the poor second person?

Well obviously it's the fault of the CEO that the other person's life is what it is, so they should probably just give that person a million dollars or something as restitution for having been successful... only the rich and/or successful are responsible for anyone's life situation (especially the less fortunate, they're definitely responsible for that), clearly...

[former player]

I am unclear as to what exactly your argument is - it seems to be that any full time job should be able to support a single mother with a child, child care, a non-shared living situation and a car in a HCOL area but that doesn't seem reasonable to me.

My points are as follows:

1.) Our entire economy, top to bottom, needs re-examining. A good place to start is by looking at what responsibility employers have to pay wages that are commensurate with the cost of living, OR, we need to re-examine the efficacy of granting huge tax cuts to $100bn revenue companies, which further stresses the safety net.
2.) I think it's pretty out there how aggressively some posters think this hypothetical woman should pursue racing to the bottom even further when the man sitting at the table runs a bank that made $32 billion in net income last year.

1) Instead of trying to make employers pay people beyond the value they bring to the company, how about... I don't know... having people be responsible for their own financial situation?? Don't go live on your own if you can't afford it. Don't go buy a car if you can't afford it. Don't go start a family if you can't afford it. And let charity and government help the few that find themselves in trouble despite trying to do the right thing? People used to have some pride in being responsible for themselves instead of thinking that the struggling mom and pop store down the street should shell out $20/hour to the cashier because she can't keep her legs closed or insists on living in that nicer apartment etc.
2) I think it's pretty out there how some posters think things would be better if only the highest paid people didn't make so much money, or if companies weren't allowed to make a profit...

Seriously?  "Can't keep her legs closed"?  What misogynist Neanderthal closet did that crawl out of?

[cloudsail]

Also, speaking of inequality, why do you think I left Canada for the U.S., despite better healthcare, better social safety nets, better society? (I like Canadians much better than Americans, sorry.)

Inequality is just as rampant in Canada, and the U.S. offered way more opportunities for people willing to work hard to reap the fruits of their labors. Many of our friends from high school and college took the same route, and have done very well for themselves. The ones who stayed in Canada have pretty much stayed at the same socioeconomic level as their parents, sometimes worse.

Oddly enough, socioeconomic mobility is greater in Canada than the US. But that is speaking on the average. There are corporations and industries that are international and having the opportunity to move here may increase your social mobility. Heck, that might be the best of both worlds; grow up in canada with assured medical, healthcare, education, move here for the jobs.

That's a good idea. My Canadian university degree cost very little. I understand they've raised tuition significantly since then, but I think it's still less than here. We're already considering FIRE-ing there for the healthcare, but this is another good reason to raise our kids there. I'm just not a big fan of snow, and housing in the more temperate places all cost an arm and a leg :(

[qwerty3020]

I am unclear as to what exactly your argument is - it seems to be that any full time job should be able to support a single mother with a child, child care, a non-shared living situation and a car in a HCOL area but that doesn't seem reasonable to me.

My points are as follows:

1.) Our entire economy, top to bottom, needs re-examining. A good place to start is by looking at what responsibility employers have to pay wages that are commensurate with the cost of living, OR, we need to re-examine the efficacy of granting huge tax cuts to $100bn revenue companies, which further stresses the safety net.
2.) I think it's pretty out there how aggressively some posters think this hypothetical woman should pursue racing to the bottom even further when the man sitting at the table runs a bank that made $32 billion in net income last year.

1) Instead of trying to make employers pay people beyond the value they bring to the company, how about... I don't know... having people be responsible for their own financial situation?? Don't go live on your own if you can't afford it. Don't go buy a car if you can't afford it. Don't go start a family if you can't afford it. And let charity and government help the few that find themselves in trouble despite trying to do the right thing? People used to have some pride in being responsible for themselves instead of thinking that the struggling mom and pop store down the street should shell out $20/hour to the cashier because she can't keep her legs closed or insists on living in that nicer apartment etc.
2) I think it's pretty out there how some posters think things would be better if only the highest paid people didn't make so much money, or if companies weren't allowed to make a profit...

Sounds good to me. And while we are at it...How about employers and companies be responsible for their own financial situation? How about they not use roads paid for with taxes? How about they start their own utility companies? How about they start their own public schools and universities to train employees instead of relying on public servants to teach people how to read? End city and state corporate welfare and tax breaks that take money out of the pockets of taxpayers and put it directly into the hands of corporations? How about drug companies stop selling drugs developed in government labs? I'm sick of these freeloaders.