That’s actually a good thing, as it decreases the cost of producing goods and services, combating inflation.
IMO, it’s better to not have a job, than to have a job that doesn’t pay for a basic cost of living. If you are not working, you can find ways of bettering yourself, to make yourself a more valuable employee, or at least keep an eye out for a better job. If you are working, then you have far less time for that.
But that’s simply because of inflation. MW increases don’t cause inflation, MW increases are needed because of inflation.
The only “trap” is if MW doesn’t get increased to keep up with inflation.
I really don’t see how that follows. I’ve raised my pay pretty substantially since the pandemic hit. I’m not sure what I needed to be careful of there.
Your pay is keeping up with inflation; minimum wages rarely do. Businesses will always look for ways to cut costs and improve productivity, which typically impacts lower wage employment. Employers will cut hours and benefits to do it. Again, not a reason to depress wages - I’m supportive of minimum wages but I don’t necessarily agree with “the fight for $15”; it ought to be a gradual increase periodically. Low-wage workers need supplemental cash of some sort, but more than that, they need access to education and training, as well as affordable housing.
Minimum wages don’t because of politics. The steep increase needed now comes from decades of the MW not keeping up with inflation.
One way of improving productivity is to automate so that less skilled and lower paid workers can do the job. Look at supermarkets. Forget self-checkout - bar codes mean a less trained employee can check customers out faster. The issue is that the workers should be getting some of this productivity improvement.
Obviously the average increase in costs for a consumer will be much less than the increase in the MW. And since most customers will be richer than the MW wage worker, the loss of utility of that extra cost will be much less than the increase in the utility of the extra pay of the worker.
And has been mentioned, investment to improve productivity is good for the economy.
I agree that workers should be getting more productivity, but there’s a constant effort among the capitalists at the top of the food chain to make sure that they don’t. It’s not that they’re conspiring against the working poor; they’re just looking out for themselves. I basically agree that we need periodic increases in the minimum wage, but simultaneously, we need schemes of taxation and wealth redistribution and investment. Stated differently, we need a more socialized form of capitalism (but for the love of God, don’t call it “democratic socialism”).
There’s also a constant effort among consumers to keep costs low.
I invested in equipment that increased the efficiency of my employees. It amounted to a couple month’s wages. The increased productivity didn’t go directly into raises, it went into paying for the equipment, as well as keeping prices low in spite of increased costs, which includes raises to keep up with COL and expectations.
If an employee increases their productivity on their own, through skill or innovation, then that merits a raise based on increased productivity. If the increase in productivity comes from increase in capital, then why exactly should the employee get those gains?
Now, I’m all for a $15 MW, phased in over at least 4 -5 years(maybe 16-17 by then), as well as then fixing MW increases to inflation. But I’m still a business owner, who sees things from that perspective, and if an employee has an increase in productivity because I paid to improve the equipment that they use, then I think that I should at least get to share in those profits.
OTOH, I’m also a big advocate of a UBI, which if made as a living wage, including health benefits, then I don’t think that a MW is necessary any longer. But that’s a whole different topic.
Each business is different, and small businesses are more sensitive to the performance of single employees, so some of my ideas might not work in each case, but I’d like to see more companies have profit-sharing mechanisms - or at least experiment with it. So in other words, the profits still go to shareholder investors, but employees themselves get maybe quarterly profit bonuses to pad their pay a little bit. We’d still need a wage floor, but the businesses themselves are helping employees economically with a wage boost. Moreover, I think it would do wonders for morale; it would make employees feel as though they’re not just labor but they have a vested interest in seeing the company perform well.
I’d rather there be means-tested regular income. If you’re a millionaire, you don’t need UBI. But the guy who cleans offices at night, does. If everyone benefits from transfer payments then the net effect is probably inflation, and it probably would happen in a relatively short time frame.
There is a certain subset of society that either does not need a living wage of is not capable of competing for jobs that do pay a living wage. There are a lot of folks simply looking to supplement there income. This has always been well understood until fairly recently.
Do they also share in loss? I’m doing pretty good at the moment, but there were months that went by that I didn’t pay myself a cent. There were even times at the beginning that I was paying to work.
If we get a downturn, and I’m left with a few hundred thousand in liabilities, should the employees share in that as well?
I’ve seen some co-op companies, and it does seem as though the employees have good morale. IME, they’ve had a pretty high failure rate, and have trouble growing, specifically because a business runs poorly as a democracy. I choose if I want to spend money to expand, to improve or repair equipment, or if I want to give that money to my employees or keep it for myself. I choose who to hire, and who to give raises to. If someone objects to how I run things, I am willing to hear them out, and if they have a point, acknowledge it, but I have the final say.
It’s weird how things work, generally, the further one is from the point of actual production or sale, the more one makes. When I worked fast food, I made the least when I was making hamburgers or taking money, I made more when I was watching others make hamburgers or take money, and my boss, who just watched me watch others make hamburgers or take money made even more. Her boss made even more money to tell her to watch me watch others make hamburgers or take money. The highest paid people are the ones whose job it is to find ways of justifying their job.
Now, to be fair, as an employee, I thought that a manager was a waste of time, as I did all the work. As a manager, I saw all the things that needed to be done so that employee was able to work. And now as an owner, I see all the things that were done so that as a manager, I was able to work. But it only goes so far up the food chain, really, until it really is a matter of parasitism rather than symbiosis.
One reason to support small businesses is specifically because there is not that profit taking from the very top, that contributes very little to the actual employee or customer experience.
It does need to go both ways though. Employees need to see employers as more than just a paycheck. Employees want to work less and make more, they want to request off the busiest times, and call off because they feel like going to the park today instead of work. Pay and benefits only go so far. Actually working with the owners goes further, I think. If an employee is here, so am I. And while I make more than most of my employees, some of my employees make more than I do. Per hour, I doubt I make more than any of them.
So, if you want to see employees be owners, they need to be willing to take up the responsibilities that comes with being an owner, not just the profits.
I don’t see why. It would cost more, and cause more unintended consequences to create a means tested income. The nice thing about the wealthy is that they are few in number. There are around 20 million millionaires, so setting up means testing to exclude them means having a whole set of bureaucracy, along with possible counter motivational cliffs, in order to deny less than 1% of the population.
No, I wouldn’t propose punishing labor for a bad quarter anymore than I would propose slashing the tires of your company vehicle or taking a hammer to your computer. Your labor is there to help you market, sell, solve customer-facing problems, and do the things you don’t have the time to do, so I wouldn’t advocate taking money away from them. Obviously, if things get bad enough, you might have be forced to trim the size of your staff or the amount of hours.
As I said, this model wouldn’t work for all types of businesses, and I don’t necessarily advocate government strong arming businesses into it, though perhaps some tax incentives for companies that do this might work. I’d honestly need a qualified finance guy or economist to really analyze how feasible this is and which tools in our fiscal toolkit to use.
It depends on what type of democracy we’re talking about here. You probably know by now that I’m not a fan of fully democratic governance in any form – some level of authoritarianism is required to make an organization run, if for no other reason that to realize executive efficiency. I’m in total agreement there. But having democratic influence could actually help companies a lot more than they realize, which is one reason why, contrary to common belief, many unionized organizations are not necessarily examples of inmates running asylums.
Bureaucracy is inevitable with each and every new layer of complexity that you put into an economic and political system. Republicans are correct about one thing, which is that more programs themselves probably means more bureaucracy and more spending, but that isn’t necessarily a bad thing in and of itself. What matters is the economic impact on households. Biden’s stimulus checks to the working poor are literally lifting millions out of poverty as we speak. Not that they’re going to run out and buy new cars, but they now have some room to breathe after clearing rent. That’s targeted stimulus, as opposed to the other forms of stimulus throughout the pandemic, which have been scattered across the economy and are essentially ‘free money’ in the hands of many consumers who were already doing okay. FTR, I’m not advocating that we shouldn’t have cut stimulus checks - we were in a unique situation and needed to make quick decisions to keep the economy going. But it goes to show what would probably happen if we just printed money and put it in everyone’s hands. Stimulus should be means-tested and targeted so that those who are not being served well by the private sector can live comfortably enough to plot their course for improving their lives over the next 1-5 years, whether that’s through a new job in the same field or getting retrained and fitted for another sector of the economy.
But inflation from creating too much cash is a tax on the poor and working classes who have less ability to absorb those costs. That’s especially true in an environment in which our central bank and those around the world are addicted to cheap debt. I agree that we must shift to a more progressive tax system - I mean we already have a progressive tax system in theory but close the loopholes and tax the investment side of the economy more so that we don’t have these inflated asset prices. I agree with more taxation - the problem is that our political system makes that really difficult right now. It’s easier to spend money than to pay for the expenditures and that situation is unsustainable.
I don’t either, but I also don’t advocate profit sharing.
Which is what I pay them for.
And/or increase the number of hours that I work without pay, reduce my own financial compensation, maybe mortgage my house to contribute to equity, and in the end, be left with a few hundred thousand dollars in liabilities.
All I’m saying here is that those who advocate for profit sharing, don’t think that that should come with any responsibility. I disagree that an employee should have those responsibilities, but also that they should take a share of the profits.
The profits that get shared are shared in the form of their pay. If you think that creating tax incentives to increase pay would work, then I can get behind that, depending on details.
I don’t see it as being feasible for small businesses. I have been putting aside some of the profit that I’ve been making so that when my lease is up, I may be in a place to buy my own commercial property. This would be a benefit to everyone, my employees, my customers, and me. Maybe not so much a benefit to my landlord, but I’m not too worried about him.
If instead, I was required or “incentivized” to return those profits to my employees, then they don’t get equipment upgrades, they don’t get a better location to work out of.
I do see a big difference between a company you can quit, and a country that you cannot. I much more am worried about having a say in governance than I am in my employer’s business. Before I started my own, I rarely held a job over a year, often for a only few months at a time, as I disagreed with the way things were run.
I didn’t actually know that that was a common belief. I’ve never really heard it. Unions are not run by the employees, they are run by essentially politicians who represent those employees. Some union representatives haven’t ever even held the job that they are representing.
I’ve worked a few union shops, and it’s less the inmates running the asylum, and more having two sets of bosses, neither of whom actually care about the individual employee.
Sure it helps the companies, as they no longer have to listen to the complaints of their employees, and instead, that is handled by the union, paid for by garnishing the employee’s own wages.
Spending doesn’t have to come with bureaucracy. You don’t need to add that new layer of complexity. Just send everyone a check every month. (Or direct deposit, or my preferred system of simply having a charge card at 0% interest, a limit equal to a year of the settled upon UBI, and the UBI goes to pay it off every month.)
But complexity for the sake of complexity, I don’t see how that is a good thing. Would you simply have a cut-off if someone’s net wealth exceeded $1 million dollars, or would you have brackets? Would you have a system in place to ensure that there are no cliffs, where someone finds themselves with less take home pay after getting a raise? Would someone find themselves penalized for working, or starting their own business?
I get the motive to “stick it to the man”, and deny the wealthy any part of a UBI, but it just makes it that much harder to implement and make fair. Just tax it back, and it works out the same, and doesn’t force people to have to submit financial disclosure forms in order to receive it.
I also wonder what you mean by a millionaire, exactly. Someone who makes a million dollars a year, or someone who has a million dollars in assets. Many people think that they are referring to the former, when the latter is who they are actually impact. If someone makes $50k a year, and saves and invests wisely, they could have a net worth of well over a million dollars by the time they retire. If someone opens a small business, they may end up having that business be worth a million dollars or more, even if they don’t take home that much.
As did the first round of stimulus, that was not means tested at all. My parents didn’t really need it, so they just gave it to my sister, who did.
The only problem I had with it was that it should have been done more.
And they spent that free money, while others were pulling back on spending. Or they gave it to friends or relatives who needed it.
I’m not sure I follow. What does it show?
Are you saying that it should also be limited in time? That if you haven’t improved your life over 1-5 years, you get cut off?
Unless you give it back to them in the form of a UBI. In which case, inflation is a tax on lenders and hoarders of wealth.
The better way to look at the government is that it can simply print money if it wants to. It could have no taxes at all, and still be able to print money to pay whatever it wanted to pay.
This would be horrible for the economy, so it should scoop some of that money back up in the form of taxes. If you look at taxation as a means of preventing inflation, rather than a means of funding the government, then it starts to make a whole lot more sense to impose taxes on places where it is piling up. Money has a tendency to trickle up. It works its way into the hands of the wealthier and wealthier. A proper taxation and fiscal policy would be to take that money from where it has gathered, and redistribute it evenly.
I personally want to tax real estate. A national property tax. First million or so is exempt, then you start up a graduated bracket system until it is uneconomical to hold any more property. More than hoarding money, hoarding land is becoming detrimental to our economy.
It’s weird that, if you ask the voters, both parties have some level of contempt or even resentment for the wealthy. But, the politicians still favor those exact individuals who their voters dislike.
Get money out of politics, remove the power of the wealthy over our government, and we may actually see some real change that benefits the average (and below average) citizen.