Author Topic: JP Morgan CEO can't explain how his low paid employee should budget her salary  (Read 39399 times)

Bloop Bloop

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If you are arguing for a fully user-paid society, I think you'd find that the rich would really get richer. So be careful what you wish for.

As an Australian, we have better safety nets than you Americans, but we high earners in Australia pay a heavy price - our marginal rate is higher (on incomes over $180,000, we pay 45% + 2.5% tax, soon to be 47% + 2.5% tax); our luxury cars are subject to a 33% tax (a Porsche 911 costs $260,000 here compared to $140,000 if we did a straight currency swap); and our spread of incomes is lower. I know for a fact from speaking to my friends in the States who are surgeons/lawyers that the top professionals in Australia get paid less - mid 6 figures instead of high 6 figures, high 6 figures instead of low 7 figures. These are the things we sacrifice for a nicer society. I'm not saying it's not a worthwhile sacrifice, but there's always a price to pay.

mathlete

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

I was going to respond to that post thoughtfully, but you saved me the trouble. Obviously a single parent household is ideal for nobody, but to take it out on the one parent who actually stuck around is a special brand of shitty.

On top of that, the guy doesn’t know how to use the enter key, making his post difficult to read and respond to. And he closes by talking about how “profit shouldn’t be allowed”, which absolutely no one here got even remotely close to saying.

Three strikes.

calimom

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I know! While we're at it, we should just all agree that women don't deserve equal pay!

https://www.youtube.com/watch?v=QNnRamMk7xo

Davnasty

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

I was going to respond to that post thoughtfully, but you saved me the trouble. Obviously a single parent household is ideal for nobody, but to take it out on the one parent who actually stuck around is a special brand of shitty.


Not to mention we were just discussing statistics on single parents which showed most are divorced or separated, suggesting there were two parents at one time. Not even a little sympathy for the 1.1% who are widows? ouch.

Not that it really even matters to the discussion. Even if someone made a mistake, punishing them indefinitely is not good for them, their child, or the society they're bringing that child up in.

Given jlcnuke's comment ignored a lot of what's already been said in this thread, I suggest we proceed by ignoring his as well.

EscapeVelocity2020

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I can't watch the video right now, but its probably the same argument as Walmart, fast food etc.  I don't understand the concept that employers should have to make sure that you can pay all of your expenses.  Employment is at will for both the employee and employer in the US.  So if you don't want a job at the amount that they are willing to pay, then don't work there.
So major employers paying less than the living wage aren't taking advantage of their workers in your opinion? Don't you think that if those workers had any other options they'd work for an employer who clearly doesn't care about their welfare?

I think it's an absolute disgrace if employees can't afford a basic lifestyle while working one fulltime job. That should be enough to cover rent for a modest apartment, utilities, food, health insurance and yes, shock, even internet, phone etc, all those "luxuries" that are really necessities these days.

Also, as a tax payer I feel strongly that we shouldn't let CEO's and shareholders get away with burdening society instead of taking a pay cut themselves.

Working my way through the thread, the inevitable backlash against wageslave23, but this stood out.

Norway as a country has adopted exactly this philosophy.  It still has capitalism in the consumer market, but also socialized medical and education benefits (not tied to employment).  Sure, there are no Norwegian billionaires, but is that actually a measure of a country being progressive?

EscapeVelocity2020

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Looks like that employee could learn something on this forum!  Quick search showed lower priced housing in the area, and 400/month food budget for 2 people is well above others here with 4 people. 

I get that it might not be a living wage, but everyone can cherry pick numbers. 

Perhaps this would be another good humanitarian effort for Mustachians, free budget counseling for the working poor. I'm sure we could find some challenging case studies and it would be interesting social experiment.

I worry quite a bit about this.  As I stated in the 'wealth tax' thread, those at the bottom are blaming themselves for being poor while there are some real forces at work (higher compounding ratios for capital vs. labor) which make 'saving more' irrelevant in capitalism.

SachaFiscal

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This is a very interesting thread.  I like hearing from both sides and can empathize with both.  I'm somewhere in the middle where I want to help people who really need it but don't want people to take advantage of the system. There isn't a simple solution. To solve or improve the situation would require a broad system knowledge and understanding of the consequences of the proposed changes.

I like the idea of free or almost free higher education.  Something like what the University of the People offers (https://www.uopeople.edu).  I think one of the many barriers to higher paying careers is the enormous cost of college education and other training programs.  It's a huge industry and takes advantage of the desperation of people who want to try to rise up out of poverty or lower economic classes. I hope that free or low cost online education can really take off and create opportunities for people.

I feel that things like basic food, minimal shelter, healthcare, and education should be provided for all citizens in the ideal society.  Actually this is what is provided in most prisons, I think.  I don't really like the idea of giving people money that they can just do what they want with because I feel like this can be exploited.  I would rather provide people with services that will keep them off the streets, fed, in good health, and provide them with a way to educate themselves and lift themselves out of poverty.  What if we had communities with strict rules where people could get room and board for free or for working part time, while they get an education? They have to do well in their studies and complete their work tasks in order to stay.  At the end of the stay they will have a degree and be provided with help finding a job.



jlcnuke

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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.

Sounds great. Let's stop taxing them at all while we're at it. And while we're at it, let's just make all things funded by those who use them, whether person or company, after all, you're sick of the freeloaders right??

EscapeVelocity2020

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I don’t think it was suggested that everyone has to move.  This employee chooses to live alone in their own apartment, spend too much on an oversized vehicle(for her), eat fabulous food, and still run a deficit.  For someone with those needs, maybe they need to find another location, figure out how to make more money, or just run up CC debt. That’s the employees choice.

I lived with roommates until I was married.  There would be plenty of eager, unattached, HS educated people who could easily make this work. Plus, at close to 17/hour, plenty of attached, partnered, married, or other people that would be sharing housing that could take this job.

On a macroeconomic scale, are we just saying that huge portions of the country, including our largest job centers like Los Angeles, San Francisco, Seattle, New York, and Austin are off limits to median income single mothers?

Congresswoman Porter was not actually asking Dimon to solve one single mother's financial woes. She was illustrating a market failure. A market that demands low skill workers, but does not pay them high enough wages, is a market failure. There are ways to address this failure that don't include the mass exodus of single mothers from urban job centers.

Remember, this job pays more than 5k net cash than MMM budget for his family. 

MMM is incredibly wealthy. Wealthy people have options available to them that poor people do not. And his published low spending does not truly capture the cost of his lifestyle. It's meant as an illustration of how people of means can hack the system, live on less, and build wealth. It's not guideline for single mothers.

Wow, this post is like, wow!

effigy98

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I rather see minimum wage eliminated. Putting all this on the employer is just bad in so many ways. I would also like welfare programs, subsidized housing, etc eliminated as that just angers people who are working hard but see their money transferred to the irresponsible, but we need something because making everyone homeless sucks too. When I was younger, I would have liked the option of not working some crappy job to make ends meet and pursue entrepreneurship which I think is good for society as a whole.

What would be nice
Inflation is calculated on what 60% of people actually spend money on, so it includes stuff like healthcare, college, etc.
Universal Basic Income that is the same for everyone and is paid out for each person (so larger families get more) that keeps up with inflation and is enough to live on if needed.
Universal Health Care that is good enough where people do not go bankrupt and can get most issues treated.
All welfare like programs eliminated, universal income should be enough to replace.
Strong financial education k thru 12 that teaches budgets, compound interest, etc.

Simpleton

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The problem that no one wants to say is that at its fundamental level, the employee in many situations does not provide even as much value as minimum wage.

If there were no minimum wage, there would be adequate labour supply to have people compete for jobs for less money than minimum wage most of the time. That lower value is the true, free market value of the labor for many of these positions. People taking those jobs would surely have tough lives.

Thankfully, we as a society have decided that its not acceptable to let people work for so little, and we have created minimum wage. In itself this is a form of welfare - paid for by all customers of whatever business it applies to.

I think this is a good thing, but it is a rule that we have imposed on business. If you want the business to go even further, we should mandate it because we cannot expect the business to do this willingly. If one business (ie a big publicly facing company who gets scrutinized) does, it puts itself at an inherent disadvantage to the local shop owner (which usually pays less than big box stores) who do not feel compelled to pay more.

« Last Edit: April 19, 2019, 03:14:22 PM by Simpleton »

mathlete

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Wow, this post is like, wow!

Wow, like how, wow?

skp

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I am not a business owner.  But I always thought that if I was one, I would try to subsidize childcare. I think it would be a win win.   I go to a small beauty salon, which has 5 employees. 4 of the 5 are currently pregnant, due within 3 months of each other.  Some of them are trying to trade off babysitting, taking off one day a week.  The salon is large with a few extra rooms.  Why can't the owner provide the space and everyone would chip in to pay the babysitter.  As a business owner, you have the space available anyway, your employees could work one day extra a week, you'd have less call offs for babysitting issues, and it would be a good perk for hiring.  Benefits are as important if not more important than minimum wage.

cloudsail

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Another bit of history from Communist China that many westerners might not know about.

After all the crazy shit (cultural revolution, famine, etc.) passed and Mao kicked the bucket, things stabilized and life was pretty good for a lot of people. Government owned corporations provided free housing and many benefits. My mom had free childcare where she worked. She brought me to work and was able to go breastfeed me whenever she wanted. Companies gave out benefits for food, transportation, clothing, etc. They took care of funeral expenses. Your company basically took care of you from birth until death. Many people didn't actually have to spend a cent of their income on basic needs. You could even go to your boss for marriage counseling if your spouse was cheating on you.

But.... those corporations stagnated. They just weren't competitive. I mean, why would their employees work hard if all their needs were met? There was no innovation, private corporations were popping up, factories shut down and innumerable government employees were laid off. It was a really sad time.

We, as a species, tend to only strive when we need to survive, when there are wants that aren't met.

It's just something interesting to think about before we start pushing for more socialism.

EscapeVelocity2020

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Wow, this post is like, wow!

Wow, like how, wow?

The idea that large groups of people should leave HCOL areas.  And the recognition that maybe MMM does not live on 25k/yr

accolay

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If you are arguing for a fully user-paid society, I think you'd find that the rich would really get richer. So be careful what you wish for.

As an Australian, we have better safety nets than you Americans, but we high earners in Australia pay a heavy price - our marginal rate is higher (on incomes over $180,000, we pay 45% + 2.5% tax, soon to be 47% + 2.5% tax); our luxury cars are subject to a 33% tax (a Porsche 911 costs $260,000 here compared to $140,000 if we did a straight currency swap); and our spread of incomes is lower. I know for a fact from speaking to my friends in the States who are surgeons/lawyers that the top professionals in Australia get paid less - mid 6 figures instead of high 6 figures, high 6 figures instead of low 7 figures. These are the things we sacrifice for a nicer society. I'm not saying it's not a worthwhile sacrifice, but there's always a price to pay.

Those tax and wage rates insure that better safety net and... are you expecting some kinda of sympathy for the tax/price of luxury vehicles? LOL!

I'm all for someone being able to make as much damn money as possible but this is a discussion about a living wage. It's comical that you'd bring up someone only making $500,000 per year vs. $750,000 or only making $750,000 vs. $1,250,000 as a problem. Because, fuck, either way that is an obscene amount of money. You're arguing unnecessary income vs. unnecessary income. What a first world problem.

Bloop Bloop

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Whatever, mate. You have your financial guideposts, I have mine.

And my point is that someone else's "living wage" is my "tax impost". You can call my priorities comical and I can call your priorities misguided. It is what it is. And you might think something is 'obscene' whereas I - since I work with a lot of people who make the lower bounds of your figures - see it as just reward for a lot of talent, studying, and performance under stress which other people simply can't manage - otherwise they'd be earning the same.

And 'unnecessary' vs 'necessary' is always relative. Does someone need to buy a fancy X rather than a basic X? The question can be posed for everyone's purchases, but the difference is that some pay it out of their own pocket and some want others' largesse.

Every problem discussed on these forums is a first world problem, including the original thread problem of how to get by on $35k USD (+ subsidies) in a ridiculously high cost of living area.

accolay

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And you might think something is 'obscene' whereas I - since I work with a lot of people who make the lower bounds of your figures - see it as just reward for a lot of talent, studying, and performance under stress which other people simply can't manage - otherwise they'd be earning the same.

#humblebrag But high five for exceptionalism.

I think part of the MMM premise is that the salaries you mentioned offer an obscene amount of money. And there are plenty of jobs that require a lot of talent, study and performance under stress that get paid significantly less than $500k/year. Yeah yeah I get it, but WTF is Dimon doing that would entitle him to $31m per year?

marty998

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The problem that no one wants to say is that at its fundamental level, the employee in many situations does not provide even as much value as minimum wage.

If there were no minimum wage, there would be adequate labour supply to have people compete for jobs for less money than minimum wage most of the time. That lower value is the true, free market value of the labor for many of these positions. People taking those jobs would surely have tough lives.

Thankfully, we as a society have decided that its not acceptable to let people work for so little, and we have created minimum wage. In itself this is a form of welfare - paid for by all customers of whatever business it applies to.

I think this is a good thing, but it is a rule that we have imposed on business. If you want the business to go even further, we should mandate it because we cannot expect the business to do this willingly. If one business (ie a big publicly facing company who gets scrutinized) does, it puts itself at an inherent disadvantage to the local shop owner (which usually pays less than big box stores) who do not feel compelled to pay more.

I have harsh words for a post like this but I'll attempt to be tactful and say it's misguided, as you are basically arguing every non-revenue generating employee is not worth their expense to the organisation.

- What do you think happens if the mail clerk doesn't deliver internal documents for signing that are worth hundreds of millions of dollars?
- What do you think happens if an assistant doesn't manage their Executive's diary properly, and they end up wasting productive hours of their own time and that of their staff?
- What do you think happens if the cleaners don't manage the bathrooms efficiently, or wipe down and sanitise the kitchen benches in the lunchroom and the office catches a bacterial or gastric infection?

Every job has value beyond the obvious. Please stop with this nonsense that employees don't provide as much value as the minimum wage. It's wilful blindness to reality.


SachaFiscal

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I am not a business owner.  But I always thought that if I was one, I would try to subsidize childcare. I think it would be a win win.   I go to a small beauty salon, which has 5 employees. 4 of the 5 are currently pregnant, due within 3 months of each other.  Some of them are trying to trade off babysitting, taking off one day a week.  The salon is large with a few extra rooms.  Why can't the owner provide the space and everyone would chip in to pay the babysitter.  As a business owner, you have the space available anyway, your employees could work one day extra a week, you'd have less call offs for babysitting issues, and it would be a good perk for hiring.  Benefits are as important if not more important than minimum wage.

This is a great idea. I wish employers offered in house childcare as a benefit.

SachaFiscal

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We, as a species, tend to only strive when we need to survive, when there are wants that aren't met.

I can see this tendency in myself.  Now that I’m retired it’s difficult for me to motivate myself sometimes. Most of the time I have to be accountable to someone else (my spouse, a teacher, family and friends) in order to accomplish things. When I was working, survival (not losing my job), is what motivated me to bust my ass.

But do you think there are hardworking people who just can’t make it in the US because there’s just not enough jobs that pay a true living wage? What if its not just hard work and frugality but also a lot of luck that has made most of the people on this forum so successful?

We’re asking everyone to work hard, educate themselves, and move from minimum wage jobs to higher paying jobs, but are there enough higher paying jobs for everyone that wants them and are willing to work hard to be qualified for them?






Bloop Bloop

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The problem that no one wants to say is that at its fundamental level, the employee in many situations does not provide even as much value as minimum wage.

If there were no minimum wage, there would be adequate labour supply to have people compete for jobs for less money than minimum wage most of the time. That lower value is the true, free market value of the labor for many of these positions. People taking those jobs would surely have tough lives.

Thankfully, we as a society have decided that its not acceptable to let people work for so little, and we have created minimum wage. In itself this is a form of welfare - paid for by all customers of whatever business it applies to.

I think this is a good thing, but it is a rule that we have imposed on business. If you want the business to go even further, we should mandate it because we cannot expect the business to do this willingly. If one business (ie a big publicly facing company who gets scrutinized) does, it puts itself at an inherent disadvantage to the local shop owner (which usually pays less than big box stores) who do not feel compelled to pay more.

I have harsh words for a post like this but I'll attempt to be tactful and say it's misguided, as you are basically arguing every non-revenue generating employee is not worth their expense to the organisation.

- What do you think happens if the mail clerk doesn't deliver internal documents for signing that are worth hundreds of millions of dollars?
- What do you think happens if an assistant doesn't manage their Executive's diary properly, and they end up wasting productive hours of their own time and that of their staff?
- What do you think happens if the cleaners don't manage the bathrooms efficiently, or wipe down and sanitise the kitchen benches in the lunchroom and the office catches a bacterial or gastric infection?

Every job has value beyond the obvious. Please stop with this nonsense that employees don't provide as much value as the minimum wage. It's wilful blindness to reality.
I think the point of that post is that the marginal/replacement value of labour can be very low. For example, the jobs you listed (mail clerk, cleaners) probably ARE worth the minimum wage, and in fact often pay better. Executive assistants are well paid full stop, and so they should be. I think the point the other person was making is that some jobs don't even have that much value - their marginal/replacement value, esp in this era of tech and outsourcing, is very low.

six-car-habit

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 I found this quote tonight and since we have a few Austrailians contributing to the thread , thought I'd include it.
 A short perspective on American wages from another "1st world " country.

  ** Labor party leader Shorten, a former union organizer, said on Saturday he would reverse the decision by a tribunal to cut overtime pay in several low-paying industries within 100 days of the May 18 poll.

“Do we really want to go down the American path of workplace relations where a worker ... to make ends meet has to rely on tips and charity and the coins and dollar notes left on the table after the guest has gone?” Shorten told supporters in Melbourne.

“That is not the Australian way.”

In 2017, the Fair Work Commission ruled that reductions in the so-called penalty rates for weekends, public holidays and late night or morning shifts in retail, hospitality, fast-food and pharmacy would be phased in gradually by 2020. **

Bloop Bloop

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To give that quote some context, the pre-cut figure 2.0x loading for Sundays and now the new minimum is 1.5x loading for Sundays (not including shift work which retains a 1.75x loading).

The min wage is approx $18/hour and the min casual wage is that figure plus a 25% loading so approx $22.5/hour - most affected workers are casuals.

So min Sunday wage was previously $45/hour and now is about $35/hour - either way not exactly a pittance, and probably evocative of why so many low skill jobs are being replaced by automated screens. I can hire a talented law student to do legal research for me for $30/hour so the casual rates simply don't stack up.

Kyle Schuant

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Law students and clerks are pretty famous for being willing to work long hours for shitty pay. They do this because they have very real prospects of very well paid, permanent full-time jobs further down the track. Wait staff, on the other hand, are typically looking at 4-5hr shifts (after 5hr a meal break is mandatory, so many employers just offer 5hr shifts) which can be cancelled with two hours' notice, with no prospect of permanent full-time work in the future.

There's more to work than the hourly rate. There's the total hours worked, and the security and future career prospects of that job. This discussion is a great example of the divide in the Western world between waged and salaried workers. The salaried workers simply don't get that life on part-time casual work, whatever the hourly rate, is different to permanent full-time work.

qwerty3020

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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.

Sounds great. Let's stop taxing them at all while we're at it. And while we're at it, let's just make all things funded by those who use them, whether person or company, after all, you're sick of the freeloaders right??

We live in a society. No man is an island. I hate that fact as much as the next person, but it is still a fact. No person is completely in control of their fate, not CEOs and not single moms. CEOs benefit from having millions of non-starving people who make bad choices to work for scraps. Single moms benefit from a tiny social safety net to keep them from starving in the street. Neither of these things are possible without some degree of cooperation generally realized in the form of government, which is funded through taxes.

P.S. I would be a libertarian if I thought that the libertarian utopia wouldn't end in slavery for me, my family and every non-sociopath I have ever met. Yes, government is an oppressive force and takes taxes by force. It is better than the alternative. You aren't rich enough or blood thirsty enough to survive in a libertarian society.

Simpleton

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The problem that no one wants to say is that at its fundamental level, the employee in many situations does not provide even as much value as minimum wage.

If there were no minimum wage, there would be adequate labour supply to have people compete for jobs for less money than minimum wage most of the time. That lower value is the true, free market value of the labor for many of these positions. People taking those jobs would surely have tough lives.

Thankfully, we as a society have decided that its not acceptable to let people work for so little, and we have created minimum wage. In itself this is a form of welfare - paid for by all customers of whatever business it applies to.

I think this is a good thing, but it is a rule that we have imposed on business. If you want the business to go even further, we should mandate it because we cannot expect the business to do this willingly. If one business (ie a big publicly facing company who gets scrutinized) does, it puts itself at an inherent disadvantage to the local shop owner (which usually pays less than big box stores) who do not feel compelled to pay more.

I have harsh words for a post like this but I'll attempt to be tactful and say it's misguided, as you are basically arguing every non-revenue generating employee is not worth their expense to the organisation.

- What do you think happens if the mail clerk doesn't deliver internal documents for signing that are worth hundreds of millions of dollars?
- What do you think happens if an assistant doesn't manage their Executive's diary properly, and they end up wasting productive hours of their own time and that of their staff?
- What do you think happens if the cleaners don't manage the bathrooms efficiently, or wipe down and sanitise the kitchen benches in the lunchroom and the office catches a bacterial or gastric infection?

Every job has value beyond the obvious. Please stop with this nonsense that employees don't provide as much value as the minimum wage. It's wilful blindness to reality.

Marty,

Value as I measure it is what people would pay for something willingly. If there were no minimum wage, many entry level positions would pay far less than they do currently because people would willingly work for less. A good example is when minimum wage recently went from $11.40 to $14.00 in Ontario. We can no longer pay less than $14.00, but people did, and surely were willingly working for less. I am not saying these people are not valuable, or that the jobs they do are not essential.

As for CEO's - people pay CEO's willingly - the government doesnt mandate it. I see no problem with people willingly paying someone a market rate.

« Last Edit: April 20, 2019, 06:27:24 PM by Simpleton »

Bloop Bloop

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Another example is Uber. I know that the nominal rate for Uber is 'decent', but when you factor in depreciation, operating expenses, fuel, self-insurance, tax obligations and down-time, the actual rate is sub-minimum wage. Yet people gladly do it, which shows that there is a lot of unused labor in the market which is happy to do supplemental work at a sub-min wage.

mathlete

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A very difficult part of having conversations like these, is that people often assume that government intervention on behalf of poor people (welfare, rent control, MW, etc.) are the only external forces acting on an otherwise free housing or labor market.

That's not the case at all. Anyone who lives in a "nice" neighborhood can tell you that there is a lot of big money interest behind pushing city council to zone for commercial or single family housing rather than lower cost multifamily housing. California is a big state. There's plenty of land available to house everyone if it's zoned and permitted the right way. Lots of private equity and foreign investment money doesn't want it that way though.

So there are two schools of thought here. One school of thought says that property and housing is there to serve the interest of capital ROI. It's their for private equity to juice returns for their partners, or perhaps it's there for Chinese investors to hedge against their domestic currency.

The other school of thought says that land and housing are there to shelter people who live, work, do commerce, and pay taxes in the community.

former player

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The problem that no one wants to say is that at its fundamental level, the employee in many situations does not provide even as much value as minimum wage.

If there were no minimum wage, there would be adequate labour supply to have people compete for jobs for less money than minimum wage most of the time. That lower value is the true, free market value of the labor for many of these positions. People taking those jobs would surely have tough lives.

Thankfully, we as a society have decided that its not acceptable to let people work for so little, and we have created minimum wage. In itself this is a form of welfare - paid for by all customers of whatever business it applies to.

I think this is a good thing, but it is a rule that we have imposed on business. If you want the business to go even further, we should mandate it because we cannot expect the business to do this willingly. If one business (ie a big publicly facing company who gets scrutinized) does, it puts itself at an inherent disadvantage to the local shop owner (which usually pays less than big box stores) who do not feel compelled to pay more.

I have harsh words for a post like this but I'll attempt to be tactful and say it's misguided, as you are basically arguing every non-revenue generating employee is not worth their expense to the organisation.

- What do you think happens if the mail clerk doesn't deliver internal documents for signing that are worth hundreds of millions of dollars?
- What do you think happens if an assistant doesn't manage their Executive's diary properly, and they end up wasting productive hours of their own time and that of their staff?
- What do you think happens if the cleaners don't manage the bathrooms efficiently, or wipe down and sanitise the kitchen benches in the lunchroom and the office catches a bacterial or gastric infection?

Every job has value beyond the obvious. Please stop with this nonsense that employees don't provide as much value as the minimum wage. It's wilful blindness to reality.

Marty,

Value as I measure it is what people would pay for something willingly. If there were no minimum wage, many entry level positions would pay far less than they do currently because people would willingly work for less. A good example is when minimum wage recently went from $11.40 to $14.00 in Ontario. We can no longer pay less than $14.00, but people did, and surely were willingly working for less. I am not saying these people are not valuable, or that the jobs they do are not essential.

As for CEO's - people pay CEO's willingly - the government doesnt mandate it. I see no problem with people willingly paying someone a market rate.

The problem with this argument is that it assumes that the markets for employment are economically "pure" at both top and bottom.  Which is completely and utterly untrue: there are all sorts of issues skewing the employment market, social, political and legal.  All the minimum wage is doing is mitigating some of the factors that skew wages low at the bottom end.  There appears to be very little in the past 30 years (unlike previous times, and hopefully unlike future times) that has put any sort of brake on runaway executive pay levels.

Adam Zapple

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There absolutely are jobs that are not worth minimum wage.  You will be hard pressed to name many of them, though, because once companies find a way to eliminate them, they do.  This is why you see less grocery baggers, and now cashiers at large stores in the US.  It is an unintended consequence of artificially inflating minimum wage...low skilled workers are left with nothing to do. 


TempusFugit

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When did we as a society decide that every job should pay enough to live on?  Why cant there be jobs that are primarily taken by young people who merely need some extra money to suppliment other resources, like students who are still largely supported by parents or scholarships?  Or perhaps jobs that are taken by second earners or retirees who also have other resources?  Or jobs that no one ever expects to be held for years without advancement to higher positions?  "Starter jobs" like internships? 

The insistence that any job that might be held by someone who doesnt have other resources, or who has a child of their own, must now pay anyone who holds that job enough to fully support a decent lifestyle strikes me as borderline foolish.  The predictable result is that those jobs will no longer be available to anyone, as they do not provide a value to the employer comensurate to the cost.  Cheaper alternatives such as automation will be found or the job will simply disappear. 

Mandated higher wages (at some point, esp if regional differences are not accounted for) will perhaps benefit those workers who actually have a job in this category, but there will be many more losers who wont have any job at all. 

mathlete

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When did we as a society decide that every job should pay enough to live on? Why cant there be jobs that are primarily taken by young people who merely need some extra money to suppliment other resources, like students who are still largely supported by parents or scholarships?  Or perhaps jobs that are taken by second earners or retirees who also have other resources?  Or jobs that no one ever expects to be held for years without advancement to higher positions?  "Starter jobs" like internships? 

The insistence that any job that might be held by someone who doesnt have other resources, or who has a child of their own, must now pay anyone who holds that job enough to fully support a decent lifestyle strikes me as borderline foolish.  The predictable result is that those jobs will no longer be available to anyone, as they do not provide a value to the employer comensurate to the cost.  Cheaper alternatives such as automation will be found or the job will simply disappear. 

Mandated higher wages (at some point, esp if regional differences are not accounted for) will perhaps benefit those workers who actually have a job in this category, but there will be many more losers who wont have any job at all.

Since the evaporation of low skill, high paying jobs at the hands of globalization and technology. And automation is coming no matter how low we keep wages. Trying to underbid the robots for labor is silly because they're just going to win in the end anyway.

Research on what effect minimum wages have on employment is actually pretty mixed. But there are other solutions. Expanding the EITC  would have an effect similar to that of raising the MW, but without the punitive effect on small business. Strengthening the public health option would be nice too.

cloudsail

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We, as a species, tend to only strive when we need to survive, when there are wants that aren't met.

I can see this tendency in myself.  Now that I’m retired it’s difficult for me to motivate myself sometimes. Most of the time I have to be accountable to someone else (my spouse, a teacher, family and friends) in order to accomplish things. When I was working, survival (not losing my job), is what motivated me to bust my ass.

But do you think there are hardworking people who just can’t make it in the US because there’s just not enough jobs that pay a true living wage? What if its not just hard work and frugality but also a lot of luck that has made most of the people on this forum so successful?

We’re asking everyone to work hard, educate themselves, and move from minimum wage jobs to higher paying jobs, but are there enough higher paying jobs for everyone that wants them and are willing to work hard to be qualified for them?

I don't think that there's not enough higher paying jobs. If there were, the U.S. could completely close its border to immigration without negative consequences.

The rising cost of living in many urban areas is definitely a problem. I used to live in the Bay Area and a lot of the people in RVs were actually employed. Or else they used to be employed by the hardware manufacturing plants and when these companies shut down they were left without a job. These are localized problems that do not have simple solutions. That's why they're still problems. They can't be solved by something simple like raising the minimum wage a lot higher than it currently is or even zoning for more high density housing (you just get more luxury condos).

I don't think anyone who is successful can honestly say that there was absolutely zero luck involved in their success. Even the absence of terrible misfortune is a form of fortune. But isn't that the essence of life? The living ecosystem is not "fair", either in human society or the natural world. Our modern society actually does a lot to try to equalize this "unfairness," in the form of welfare and social safety nets. But surely anybody who has studied history should realize that any effort to eliminate all luck and make the world completely fair is a fool's undertaking?

cloudsail

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A very difficult part of having conversations like these, is that people often assume that government intervention on behalf of poor people (welfare, rent control, MW, etc.) are the only external forces acting on an otherwise free housing or labor market.

That's not the case at all. Anyone who lives in a "nice" neighborhood can tell you that there is a lot of big money interest behind pushing city council to zone for commercial or single family housing rather than lower cost multifamily housing. California is a big state. There's plenty of land available to house everyone if it's zoned and permitted the right way. Lots of private equity and foreign investment money doesn't want it that way though.

So there are two schools of thought here. One school of thought says that property and housing is there to serve the interest of capital ROI. It's their for private equity to juice returns for their partners, or perhaps it's there for Chinese investors to hedge against their domestic currency.

The other school of thought says that land and housing are there to shelter people who live, work, do commerce, and pay taxes in the community.

I don't know, I live in Seattle and I think you'll find that a lot of the opposition to rezoning or development comes from the local homeowners. Nobody wants a big condo development in their quiet single family neighborhood. In fact, a developer recently bought a house down the street from me and plans to turn it into five townhouses (luxury high-end, not affordable housing). All the neighbors are banding together to try to fight it.

mathlete

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I don't know, I live in Seattle and I think you'll find that a lot of the opposition to rezoning or development comes from the local homeowners. Nobody wants a big condo development in their quiet single family neighborhood. In fact, a developer recently bought a house down the street from me and plans to turn it into five townhouses (luxury high-end, not affordable housing). All the neighbors are banding together to try to fight it.

While it is homeowners showing up to the council meetings, there's often larger orgs (or motivated and wealthy local businessmen/lawyers) doing the spearheading.

Either way though, this is a problem in it's own right. Presumably, these homeowners want workers making their coffee, prepping their food, and providing them teller service at banks. They just don't want to be neighbors with the people providing these services. Neighborhood to neighborhood, maybe this works within a city. It's okay to have low income neighborhoods and high income neighborhoods. I still have some issues with this model, but I'll table those for now.

But what people have been driving at in this thread, is that the entire greater Los Angeles area should be thought of as a high income neighborhood. I don't think that's sustainable.

Kyle Schuant

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There absolutely are jobs that are not worth minimum wage.  You will be hard pressed to name many of them, though, because once companies find a way to eliminate them, they do.  This is why you see less grocery baggers, and now cashiers at large stores in the US.  It is an unintended consequence of artificially inflating minimum wage...low skilled workers are left with nothing to do.
It's minimum wage or even low skills, since even when large companies make record profits, they still fire lots of people, including some higher-skilled ones. It's just a mindset of short-term profits no matter what. It undermines companies in the long-term.

It's part of the inefficiency of large businesses. If you employ 10 people and fire 3 of them, it's immediately obvious that it'll hurt you in the long run. If you employ 10,000 people and fire 3,000 of them, your business is large enough to have some resilience against your stupidity. It'll hurt the company down the track, of course, since if nothing else it hurts the public image. For example, when the auto industry closed down in Australia, Ford and GM simply closed the doors one day and tried to evade paying people's entitlements; Toyota gave everyone three years notice and had programmes trying to bridge them into other work, and offered them large bonuses if they stayed until closing time. After the close-down, Ford and GM sales tanked, while Toyota's kept up.

But hey, in firing 3,000 people you cut costs by $300 million this year, so you get a $3 million bonus, and that's what's important, right?


When did we as a society decide that every job should pay enough to live on? 

In Australia, it was in 1905 when a federal law was passed ("fair and reasonable" wages for your workers, or else pay a tariff) and then in 1907 with the Harvester decision. I am sorry for the US that it is behind other countries in this respect. I suggest you write to your congressperson.

Quote from: cloudsail
I don't think anyone who is successful can honestly say that there was absolutely zero luck involved in their success.

More important than luck is all the people who helped them. A while back there was an article in the paper about a young guy who'd decided not to go to university, and go straight to writing apps, he'd recently sold one for $65,000 and was very proud, saying, "My parents gave me nothing, I did it all myself." He was a graduate of Geelong Grammar with fees of $40,000 annually, and was still living rent-free in his parents' house in South Yarra (median house price $1.5 million), and his father worked in software, too, so no doubt had introduced him to the right people. But the story he told was he'd done it all on his own.

Well, I guess we are all the heroes of our own story. And that sort of self myth-making is probably necessary if you want to be able to say there should be no minimum wage or social welfare net. "I did it all by myself, so can they!"

Bucksandreds

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We, as a species, tend to only strive when we need to survive, when there are wants that aren't met.

I can see this tendency in myself.  Now that I’m retired it’s difficult for me to motivate myself sometimes. Most of the time I have to be accountable to someone else (my spouse, a teacher, family and friends) in order to accomplish things. When I was working, survival (not losing my job), is what motivated me to bust my ass.

But do you think there are hardworking people who just can’t make it in the US because there’s just not enough jobs that pay a true living wage? What if its not just hard work and frugality but also a lot of luck that has made most of the people on this forum so successful?

We’re asking everyone to work hard, educate themselves, and move from minimum wage jobs to higher paying jobs, but are there enough higher paying jobs for everyone that wants them and are willing to work hard to be qualified for them?

The right wing mindset refuses to have an honest intellectual reckoning with itself. No one completely bootstraps anything. I'm a dentist and when I have conversations with rural white conservatives who make 5 time less than me they are shocked that my political concerns are for the lower socioeconomic Americans and they say things like "you had to work hard to be a dentist and you should get a lot more than people who aren't." What they fail to even consider is that my grandfather was a dentist and my father is a lawyer. They made a lot more money than the average person, they greatly encouraged education, I inherited better than average intelligence, I had 4 years of college paid for by my parents, etc,etc. Without those things I would most likely be working for $15 per hour like the typical high school graduate. There are lazy people who do nothing and expect to be taken care of but the VAST majority of people who are working class work as hard or harder than the upper middle/upper class but came from a different background. Through a vast expansion of the EITC we should immediately switch to a system where every American who is willing to work should be fully middle class.

TempusFugit

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When did we as a society decide that every job should pay enough to live on? 

In Australia, it was in 1905 when a federal law was passed ("fair and reasonable" wages for your workers, or else pay a tariff) and then in 1907 with the Harvester decision. I am sorry for the US that it is behind other countries in this respect. I suggest you write to your congressperson.


But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear.  And that's an opportunity lost to someone somewhere who could have benefited by taking the job and making a little extra money. 

I think the problems of automation and offshoring has to be dealt with by some other means. If we eliminate all the small jobs that can at least help someone get by then we make the rest of the problem harder to solve.

former player

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When did we as a society decide that every job should pay enough to live on? 

In Australia, it was in 1905 when a federal law was passed ("fair and reasonable" wages for your workers, or else pay a tariff) and then in 1907 with the Harvester decision. I am sorry for the US that it is behind other countries in this respect. I suggest you write to your congressperson.


But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear.  And that's an opportunity lost to someone somewhere who could have benefited by taking the job and making a little extra money. 

I think the problems of automation and offshoring has to be dealt with by some other means. If we eliminate all the small jobs that can at least help someone get by then we make the rest of the problem harder to solve.

This is the argument that for decades was used to pay women less than men: the man of the household brings in the "living wage", why do women need more than pin money? 

I don't know where you are getting your ideas from, but you are spouting the businessman's rhetoric from the nineteenth century.  Ideas have moved on from then, and you would do well to study some of them.


lemonlyman

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I also disagree that employers should be responsible for paying a hard to define living wage or health benefits. (Reasonable) Medicare-for-all and UBI are the answers here. Especially for smaller employers, dipping into employees' personal lives to comply with arbitrary living standards is overly burdensome. Society can simplify these problems for everyone by taking them off the backs of employers.

My company has ~135 employees. We've had 2 cancer cases in the past 2 years. Our group rate has gone up 50% in those two years because cost of claims far outpaced premiums. The spread of risk to maintain health benefits doesn't work on the employer level. In kind, a company can't possibly be able to manage all the possible and potential choices and circumstances of its employees personal lives to be responsible for a living wage. Employment should be an exchange of value. UBI benefits the working, disabled, and impoverished; a "living wage" doesn't.
« Last Edit: April 22, 2019, 08:18:48 AM by lemonlyman »

mathlete

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I also disagree that employers should be responsible for paying a hard to define living wage or health benefits. (Reasonable) Medicare-for-all and UBI are the answers here. Especially for smaller employers, dipping into employees' personal lives to comply with arbitrary living standards is overly burdensome. Society can simplify these problems for everyone by taking them off the backs of employers.

My company has ~135 employees. We've had 2 cancer cases in the past 2 years. Our group rate has gone up 50% in those two years because cost of claims far outpaced premiums. The spread of risk to maintain health benefits doesn't work on the employer level. In kind, a company can't possibly be able to manage all the possible and potential choices and circumstances of its employees personal lives to determine an adequate living wage. The government can't either. UBI benefits the working, disabled, and impoverished. The "living wage" doesn't.

Mostly agree. I think "living wage" conversations are a great way to ease people into MFA and UBI conversations.

JLee

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To give that quote some context, the pre-cut figure 2.0x loading for Sundays and now the new minimum is 1.5x loading for Sundays (not including shift work which retains a 1.75x loading).

The min wage is approx $18/hour and the min casual wage is that figure plus a 25% loading so approx $22.5/hour - most affected workers are casuals.

So min Sunday wage was previously $45/hour and now is about $35/hour - either way not exactly a pittance, and probably evocative of why so many low skill jobs are being replaced by automated screens. I can hire a talented law student to do legal research for me for $30/hour so the casual rates simply don't stack up.

That's happening here in the US as well and our minimum wage is $7.25/hr.

mathlete

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That's happening here in the US as well and our minimum wage is $7.25/hr.

Yep. Machines are improving faster than humans can improve. Eventually all jobs will be automated. Really, this is a good thing. Scanning items and cashiering is menial and boring work. If a machine is doing it, it frees up a lot of man hours for humans to pursue something better. Problem is, that "something better" won't be a better job one day, since the machines will be doing that better job too.

Loro-rojo

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Breaking news: CEO of major company makes more money than employee with a high school degree with a low skill job.

What most people don't realize is that is a companies are forced to pay what you arbitrarily determined to be a living wage, they will simply not hire the person you are trying to help.  The person making minimum wage is better off with the minimum wage job than unemployed.

ixtap

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Breaking news: CEO of major company makes more money than employee with a high school degree with a low skill job.

What most people don't realize is that is a companies are forced to pay what you arbitrarily determined to be a living wage, they will simply not hire the person you are trying to help.  The person making minimum wage is better off with the minimum wage job than unemployed.

History has not actually borne that out. History has borne out that without a minimum wage, most employers will go as low as they can, no matter the effect on the workers.

Kyle Schuant

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But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear. 
They haven't in Australia, simply because jobs can be part-time, and people who are self-employed are not obliged to pay themselves any particular rate. If I want to charge someone $1 to wash his car, I can. In practice, the minimum wage acts as a sort of benchmark for the self-employed. I have a guy come every 3 months and wash our windows and mirrors, he comes with his wife, it takes them an hour, plus travel, plus cleaning gear, etc.

Americans tend to wail and moan about the idea of a decent minimum wage and social welfare net, and proclaim loudly that putting it in place in the US would lead to economic collapse and social chaos. But it has not done so in other countries. In fact, Australia has a lower unemployment rate than the US, and stronger and steadier economic growth, with no recession for a quarter-century.

Obviously, change must be gradual. Immediately doubling minimum wage would of course destroy businesses. But raising it over 10 years or so wouldn't. Likewise any other change people think good, like a better unemployment benefit, or a UBI, or a carbon tax, or whatever. Business adapts to change, it's just sudden change that hurts.

You are not unique and special snowflakes, sorry. You'd be fine.

mm1970

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But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear. 
They haven't in Australia, simply because jobs can be part-time, and people who are self-employed are not obliged to pay themselves any particular rate. If I want to charge someone $1 to wash his car, I can. In practice, the minimum wage acts as a sort of benchmark for the self-employed. I have a guy come every 3 months and wash our windows and mirrors, he comes with his wife, it takes them an hour, plus travel, plus cleaning gear, etc.

Americans tend to wail and moan about the idea of a decent minimum wage and social welfare net, and proclaim loudly that putting it in place in the US would lead to economic collapse and social chaos. But it has not done so in other countries. In fact, Australia has a lower unemployment rate than the US, and stronger and steadier economic growth, with no recession for a quarter-century.

Obviously, change must be gradual. Immediately doubling minimum wage would of course destroy businesses. But raising it over 10 years or so wouldn't. Likewise any other change people think good, like a better unemployment benefit, or a UBI, or a carbon tax, or whatever. Business adapts to change, it's just sudden change that hurts.

You are not unique and special snowflakes, sorry. You'd be fine.
but but but but...

'merica

jlcnuke

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When did we as a society decide that every job should pay enough to live on? 

In Australia, it was in 1905 when a federal law was passed ("fair and reasonable" wages for your workers, or else pay a tariff) and then in 1907 with the Harvester decision. I am sorry for the US that it is behind other countries in this respect. I suggest you write to your congressperson.


But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear.  And that's an opportunity lost to someone somewhere who could have benefited by taking the job and making a little extra money. 

I think the problems of automation and offshoring has to be dealt with by some other means. If we eliminate all the small jobs that can at least help someone get by then we make the rest of the problem harder to solve.

This is the argument that for decades was used to pay women less than men: the man of the household brings in the "living wage", why do women need more than pin money? 

I don't know where you are getting your ideas from, but you are spouting the businessman's rhetoric from the nineteenth century.  Ideas have moved on from then, and you would do well to study some of them.

"Job A doesn't provide enough value to be worth the amount needed to provide a "living wage" to a family of 3" is absolutely nothing like "we shouldn't have to pay women decent money because their spouse makes a good amount of money". The arguments aren't even related and I can't see how anyone could possibly think they're the same.

A person should be paid what they earn, or what they and their employer agree upon for their wages. No more, no less.

jlcnuke

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But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear. 
They haven't in Australia, simply because jobs can be part-time, and people who are self-employed are not obliged to pay themselves any particular rate. If I want to charge someone $1 to wash his car, I can. In practice, the minimum wage acts as a sort of benchmark for the self-employed. I have a guy come every 3 months and wash our windows and mirrors, he comes with his wife, it takes them an hour, plus travel, plus cleaning gear, etc.

Americans tend to wail and moan about the idea of a decent minimum wage and social welfare net, and proclaim loudly that putting it in place in the US would lead to economic collapse and social chaos. But it has not done so in other countries. In fact, Australia has a lower unemployment rate than the US, and stronger and steadier economic growth, with no recession for a quarter-century.

Obviously, change must be gradual. Immediately doubling minimum wage would of course destroy businesses. But raising it over 10 years or so wouldn't. Likewise any other change people think good, like a better unemployment benefit, or a UBI, or a carbon tax, or whatever. Business adapts to change, it's just sudden change that hurts.

You are not unique and special snowflakes, sorry. You'd be fine.
but but but but...

'merica

I'm not overly familiar with Australia's income requirements system, so I went online and found out that the minimum wage for a 16 year old fast food cook is the equivalent of $7.38 USD/hour. On par with the US minimum wage and lower than the minimum wage in many US states... so much for the system of giving living wages to everyone over there... lol

(calculated here https://calculate.fairwork.gov.au/)