Income Inequality and the Work Ethic

[Airbeck]

@Fotheringay-Phipps

There’s nothing in your latest post that is not a misunderstanding which has already been addressed in this thread. If you still don’t understand it, it’s unlikely that you will. I’m not going round and round on this.

[Same goes for Airbeck as well.]

Your incessant condescending attitude towards the rest of the posters on this board is a ‘misunderstanding which has already been addressed in this thread’? Really, where did you address your need to talk down to everyone who disagrees with you? I remember you hand-waving it away as if it is something you simply must do because of everyone else holding rigidly to ideology, being the paragon of reason and fairness that you are. Is that what you call ‘addressing’ your problem?

Because you’re still doing it. In almost every post. I’m beginning to think that you just don’t know any other way to communicate.

[DrCube]

From what I can tell, the issue is that employers, after years of saying “We’re going to cut our lowest paid workers’ hours so we don’t have to pay for their healthcare” are now realizing “Wait, you mean there will be fewer wage slaves held captive by a need for insurance, and therefore we may have to compete for workers by paying them a slightly less shitty wage?”

Sounds like 100% upside to me. It would be nice to go further by completely divorcing healthcare from employment. But this sounds like a step in the right direction to me.

I was never a big fan of Obamacare, but from where I’m sitting, it seems to be having some small positive effect. Let’s hope that trend continues. Unlike Republicans, I’m not rooting for this to fail, even though I never really supported it.

[Desert_Dumpster]

@Airbeck

Your incessant condescending attitude towards the rest of the posters on this board is a ‘misunderstanding which has already been addressed in this thread’? Really, where did you address your need to talk down to everyone who disagrees with you? I remember you hand-waving it away as if it is something you simply must do because of everyone else holding rigidly to ideology, being the paragon of reason and fairness that you are. Is that what you call ‘addressing’ your problem?

Because you’re still doing it. In almost every post. I’m beginning to think that you just don’t know any other way to communicate.

I would have given up talking to this guy a long time ago. It’s abundantly clear that he’s here not to discuss but rather, to pontificate.

This might be forgiven to some extent if he was in any way correct in his interpretations of the report–but he isn’t. He dismisses any proof of his fundamental errors by creating a fog of condescension. This not only annoys everyone (distracting the discussion from the reasons why he is wrong), but it also makes him feel better about himself when that tiny sliver of doubt intrudes.

The scary thing is that we have people like him in the highest branches of government. Not only are they unthinking slaves to a bankrupt ideology, they condescend to and insult anyone who doesn’t subscribe to their loony philosophies.

In other words, I recommend throwing in the towel here. Convincing him to even talk to people decently, let alone to open the iron lid of his mind a crack to let in some fresh air, is like trying to teach a dog to play the violin.

[Airbeck]

Yeah, I totally agree. I have no expectation that anything I’ve said will actually make a difference in the end. That was going to be my last post on the topic anyway. Actually the one before that was going to be the last, but then he had to go and name-drop me at the end of a condescending reply to someone else entirely. But yeah, some fights are just not worth the effort. This appears to fall into that category.

[Eva_Luna]

@elucidator

Now, that example offered of someone who has sufficient where-with-all for modest and comfortable retirement, does not actually need to money from his employment, but dare not threaten his insurance. If he leaves his job and it is taken by someone who does need the money, isnt that a net positive?

Precisely, and I can’t say that I was surprised at how many commenters on yesterday’s column by Nobel Prizewinning economist Paul Krugman on the subject made the exact same point.

[tomndebb]

ENOUGH!

There will be no more comments on the attitudes, (condescending or not), or personal qualities of other posters.

[ /Moderating ]

[adaher]

@DrCube

From what I can tell, the issue is that employers, after years of saying “We’re going to cut our lowest paid workers’ hours so we don’t have to pay for their healthcare” are now realizing “Wait, you mean there will be fewer wage slaves held captive by a need for insurance, and therefore we may have to compete for workers by paying them a slightly less shitty wage?”

Sounds like 100% upside to me. It would be nice to go further by completely divorcing healthcare from employment. But this sounds like a step in the right direction to me.

Just so long as going forward we account for that when measuring income inequality. Lower income people now have a greater incentive to work less than higher income people, so while the well-being of lower income individuals will increase, the stats will show their incomes falling.

[Voyager]

@Fotheringay-Phipps

That’s true but that situation does not result in a net decrease in employment. One employed guy retires, and one unemployed guy gets a job and the number of employed people remains the same.

But the CBO report says there will be a net decrease in employment. This is not the result of that type of situation.

But it results in a net decrease in the unemployment rate, because the guy who has retired is no longer in the labor force, and is not in the denominator.

If I hated my job, which I don’t, I’d be in exactly this situation. The ACA makes it possible for me to get medical insurance while not working. I’m old enough and have enough saved to be able to retire - but couldn’t before because of insurance.

I doubt it is a major factor, since so few people who want to retire early can afford to.

[elucidator]

I am intending to start a thread tentatively titled “The Defenestration At Prague and Its Effect on Calvinist Theology in the Intervening Years”. Naturally, most of the thread postings will center on the disastrous results from Obamacare and the stubborn refusal of its supporters to accept that obvious truth. There may even be some reference to Prague.

[Fear_Itself]

@Fotheringay-Phipps

Here’s how it works:

CBO Report: the ACA will cause 2 million or so fewer employees, since fewer people will be motivated to work.
Van Hollis: But that means that the unemployment rate will go down, because a higher percentage of people who do want work will find it.
CBO Head: that’s correct.
Me: Agree that’s correct, but fewer people being motivated to work is itself the issue that I want to discuss.

Really? Do you want to discuss it, or do you just want to state it emphatically as fact? What is your position on fewer people being motivated to work? Is it a good thing or a bad thing, and why? In this case, “motivated” is a euphemism for coerced to create prosperity for investors, simply because the alternative is to go without adequate health care.

Another question I would like answered is, who has the stronger work ethic: someone who works 60 hours a week at two jobs for $8.00 an hour, or someone who works 60 hours a week in corporate management for $200,000 a year? If Obamacare subsidies give the poor worker the choice to work less and spend more time with his family, does that mean he lacks a work ethic?

[Desert_Dumpster]

@Fear_Itself

Really? Do you want to discuss it, or do you just want to state it emphatically as fact? What is your position on fewer people being motivated to work? Is it a good thing or a bad thing, and why? In this case, “motivated” is a euphemism for coerced to create prosperity for investors, simply because the alternative is to go without adequate health care.

Another question I would like answered is, who has the stronger work ethic: someone who works 60 hours a week at two jobs for $8.00 an hour, or someone who works 60 hours a week in corporate management for $200,000 a year? If Obamacare subsidies give the poor worker the choice to work less and spend more time with his family, does that mean he lacks a work ethic?

You don’t understand. The poor are lazy and should die. That guy working 60 hours a week in the minimum wage jobs probably takes a lot of smoking breaks, so he’s just a worthless bum, a parasite on the body of the noble corporation that employs him.

And the ACA will stop people from working so hard because now they’ll be able to get their pain medications for free. This will destroy the American economy, kill every single job in the country, and turn us into a giant mass of freeloaders. We will have no way to resist when the aliens invade. Humanity will be snuffed out. All because that black Muslim bastard got elected!

At last, I see the light. Thank you, Fumblingslosh-Picayune, or whatever your name is.

[tomndebb]

@Desert_Dumpster

At last, I see the light. Thank you, Fumblingslosh-Picayune, or whatever your name is.

You have already been told that if you continue to insult other posters, you would jeopardize your posting privileges.

This is a Warning that you need to modify your behavior for the better.

[ /Moderating ]

[Desert_Dumpster]

@tomndebb

You have already been told that if you continue to insult other posters, you would jeopardize your posting privileges.

This is a Warning that you need to modify your behavior for the better.

[ /Moderating ]

Relax, good buddy. I’ll be leaving these boards long before you throw me off them. This is only a diversion while I’m in bed, waiting for my leg to heal. I don’t know why you have such a hard-on for me, but singling out people for expulsion might be one of the rewards of the otherwise boring job of being a moderator.

I’ve noticed that the “don’t insult other posters” “rule” doesn’t apply when I’m the insultee.

[elucidator]

Banned name!

[tomndebb]

@Desert_Dumpster

I’ve noticed that the “don’t insult other posters” “rule” doesn’t apply when I’m the insultee.

Funny. I recall asking you to report any insults you have suffered. You have failed to provide a single one.

[Desert_Dumpster]

@tomndebb

Funny. I recall asking you to report any insults you have suffered. You have failed to provide a single one.

I didn’t because a) I don’t in general like the practice of “tattling”; I prefer to fight my own battles; b) I can’t think of a worse way to spend an hour than picking my way through old threads to identify who’s been a douchebag to me or others; and c) I very, very much doubt that you would do anything, let alone modify your stance, were I to provide 500 such examples.

[JohnT]

Nothing I love more than a “newb” who knows more about the boundaries of the rules than I do.

[Fotheringay-Phipps]

@Fotheringay-Phipps

@Jas09

The CBO report does not back up this statement. In fact, the CBO was very clear to state that they made no attempt to determine the relative weights of these effects.

I did not see this in the CBO report. Can you quote the portion of the report where this is stated?

This seems to have gotten lost among other matters, so it’s worth repeating. I don’t believe that the assertion by Jas09 is correct, and my original statement that “The major factor appears to be the high effective marginal tax on work which results from the progressive nature of the subsidies and taxes” is correct.

Worth reading the actual report itself, considering the amount of disinformation and distortion that seems to be based on second-hand twisting in partisan sources (not that Jas09 him/herself is an example of this, just a description of many responses to this thread). I’ve copied below relevant sections of the CBO report. These are from pages 118-122 of the report (linked in an earlier post). If anyone thinks there’s something relevant that I’ve left out which supports an alternative interpretation, they can post that as well, of course.

In CBO’s view, the ACA’s effects on labor supply will stem mainly from the following provisions, roughly in order of importance:

[ul]
[li]The subsidies for health insurance purchased through exchanges;[/li][li]The expansion of eligibility for Medicaid;[/li][li]The penalties on employers that decline to offer insurance; and[/li][li]The new taxes imposed on labor income.[/li][/ul]

And they go on to explain the effects of each:

Subsidies

For some people, the availability of exchange subsidies under the ACA will reduce incentives to work both through a substitution effect and through an income effect. The former arises because subsidies decline with rising income (and increase as income falls), thus making work less attractive. As a result, some people will choose not to work or will work less—thus substituting other activities for work. The income effect arises because subsidies increase available resources—similar to giving people greater income—thereby allowing some people to maintain the same standard of living while working less.

Medicaid

For some people, the ACA’s expansion of Medicaid will reduce the incentive to work—but among other people it will increase that incentive. As with exchange subsidies, access to Medicaid confers financial benefits that are phased out with rising income or (more commonly) eliminated when income exceeds a threshold; some people will thus work fewer hours or withdraw from the labor force to become or remain eligible (the substitution effect). Moreover, those financial benefits will lead some people to work less because the increase in their available resources enables them to reduce work without a decline in their standard of living (the income effect).

At the same time, some people who would have been eligible for Medicaid under prior law—in particular, working parents with very low income—will work more as a result of the ACA’s provisions.

But

Taking that research into account, CBO estimates that expanded Medicaid eligibility under the ACA will, on balance, reduce incentives to work.

Employer Penalty

In CBO’s judgment, the costs of the penalty eventually will be borne primarily by workers in the form of reductions in wages or other compensation—just as the costs of a payroll tax levied on employers will generally be passed along to employees. Because the supply of labor is responsive to changes in compensation, the employer penalty will ultimately induce some workers to supply less labor.

Tax Rates

To cover part of the cost of the expansion of coverage, the ACA also imposes higher taxes on some people. In particular, the payroll tax for Medicare’s Hospital Insurance program has increased by 0.9 percentage points for workers whose earnings are above $200,000 ($250,000 for those filing a joint return).14 As with other tax increases, those changes will exert competing pressures on labor supply: Lower after-tax compensation will encourage people to work more to make up for the lost income, but the decline in after-tax hourly compensation also will reduce the return on each additional hour of work, thus tending to reduce the incentive to work. On net, CBO anticipates, the second effect will be larger than the first, and the tax will yield a small net reduction in labor supply.

In addition, beginning in 2018, the ACA imposes an excise tax on certain high-cost health insurance plans. CBO expects that the burden of that tax will, over time, be borne primarily by workers in the form of smaller after-tax compensation. Some firms may seek to avoid or limit the amount of the excise tax they pay by switching to less expensive health plans, and in that case workers’ wages should rise by a corresponding amount. Those wages will be subject to income and payroll taxes, however, so total tax payments by those workers will be higher than they would have been in the absence of the ACA. After-tax compensation will thus fall whether firms pay the excise tax or take steps to avoid it, and the resulting increases in average and marginal tax rates will cause a slight decline in the supply of labor, CBO estimates.

[Fotheringay-Phipps]

@Fear_Itself

Do you want to discuss it, or do you just want to state it emphatically as fact?

The CBO report says it, not me.

What is your position on fewer people being motivated to work? Is it a good thing or a bad thing, and why?

It’s a bad thing for 2 reasons. 1) because in aggregate there are fewer people working to support the population, which means that either the people who do work have to work harder, or their standard of living declines, and 2) because it frequently creates a poverty trap, or cycle of poverty, for those who chose to work less.

Another question I would like answered is, who has the stronger work ethic: someone who works 60 hours a week at two jobs for $8.00 an hour, or someone who works 60 hours a week in corporate management for $200,000 a year? If Obamacare subsidies give the poor worker the choice to work less and spend more time with his family, does that mean he lacks a work ethic?

Truth of the matter is that “work ethic” was perhaps a poor choice of words. I pondered a bit when I wrote the title, but couldn’t come up with a better one. To the extent that “work ethic” is measured as the willingness to work a given amount for a given reward, then it wouldn’t be affected (directly, at any rate). What this is really about is changing the work/reward ratio, and thus changing the incentive to work for those affected.

[elucidator]

Yes, it changes it from a compelling incentive into a reasonable incentive. Thought you were all about individual responsibility and freedom of choice? Yet you do not trust the individual to make the reasonable choice, but tremble in fear the he will choose to tip himself into a poverty trap. Why is that, pray?

If you cannot quit without putting a family member at grave risk, what incentive has the employer to treat you with respect as to your worth? Are benevolence and gentle warmth central characteristics of the Free Market (blessings and peace be upon it…)?

Compelled employment is slavery with a paycheck. Its is an improvement in that whippings are not prevalent, you cannot actually be sold, and one does get paid. Not good enough.