Should the Minimum Wage Be Increased to $15?

Great Debates
121

That sort of establishment caters to the price insensitive (I know, I frequent those places, or did pre-Covid). Raising prices to cover a minimum wage won’t impact the owners sales - a resort community is a captive audience, and the resort and restaurant guests that are having the kind of meals that result in waiters making $80 an hour in tips are really not worried about an extra $25 on their bill. In the meantime, most waitstaff don’t make $80 an hour in tips. Many of them get stuck working at low tip establishments and end up with shifts that aren’t busy enough to bring them up to minimum wage. The business is supposed to cover them to the point of minimum wage - but it seldom happens.

And there is some chance that if the minimum wage for restaurant employees were livable, we’d put the breaks on the broken American tipping system. To get great waitstaff, you’d need to pay more.

122

Shhhh., it’s a secret!

But I seriously doubt that all that many libertarians would get behind it, as it would substantially need to increase the taxes the govt takes in.

As it is, my understanding is that they want less involvement in the govts role in healthcare, not more.

That said, the one thing that seems consistent on libertarians is their inconsistency. Ask 3 Libertarians their views on economic policy, get 17 different answers. I’m sure that there are some that could get behind creating a massive govt program, but I can’t imagine that it would appeal to the bulk of the party.

123

I have put exactly no time into looking at UBI proposals, but … is that part (increased cost/taxes) a given ?

Depending on how a UBI is structured, couldn’t any number of state, federal and local bureaucracies be dismantled since their basic functions would now be achieved with a stroke of a pen from a ‘single-payer ?’

At least in theory ?

Which also helps to identify institutions whose ox would be gored by a UBI, and who would actively lobby to prevent it.

It’s not entirely unlike Universal Health Care in that (all of the above) regard.

124

Sure. How many people does it take to send out 200 mm checks? You could get rid of HUD, VA, and some of Labor. that would be physical shrinking of the workforce. Though single payer would eat some of those gains.

For a financial basis you would get to cut all social services at the federal and state level as well as most non-safety labor enforcement. Taxes would have to go up but primarily the goal there will be to reverse the payment above a certain threshold and then a bit more to pay for the payments to the tier keeping the UBI payment.

From a “freedom from government” perspective the government would no longer care what relationship you had with your employer you could strike any deal you wanted. The government would create a floor that you could fall through it you wanted to (take your UBI and go buy nothing but weed and live on the streets) but above that you could do what you wanted to. The choices available to each person would increase.

I think there is a huge argument here both for practical and political purposes. Like many things I don’t think the concept of UBI is the problem its the details. These details are the reason it isn’t possible without massive compromise that leaves everyone unhappy similar to ACHA. Personally, I’d aim UBI at $1,083/month per adult and $350 for each child (payments indexed to CPI) but my goal is to ensure no one falls below the poverty line not necessarily lives comfortably or with dignity.

To tie back in the thread and not make this a UBI hijack that is the equivalent of two parents (2 kids) working full time jobs earning $8.41 per hour + healthcare so much better then how we treat our poor today but not necessarily a dramatic lifestyle improvement. I haven’t spent the time to see how the + healthcare would equate to dollars per hour so it might actually be close to the $15/hour MW without healthcare we’re talking about today.

125

Sure the political goal of most libertarians would be to remove the government subsidy for employer paid health insurance but politics is about the possible. Trading “personal freedom” for an increased tax burden is certainly something that could be entertained. Of course, not by the anarchist libertarians that most on the board prefer to envision. Also, just to be clear I’m referring to the libertarian wing of the republican party not the actual libertarian party.

126

I’ve also thought it might get some bipartisan buy-in as well, though true libertarians would have nothing to do with it. Rather, this would be supported by plain ole boring post-19th Century economic conservatives, who acknowledge a place for public sector support but just want to limit its scope and growth.

Progressives could have their piece of the cake, which is more public support for households; moderate economic conservatives could get a piece as well, if we couch the argument in terms of potentially reducing bureaucracy. Whether this would actually happen in practice, I don’t know, and it would probably take an economist or someone with extensive knowledge of the bureaucracy and administration of public services and programs to come up with a good answer here.

127

I don’t see how they could pay out thousands of dollars in cash or services per person a month without increasing taxes.

They could just borrow it or print it, but those have their own problems associated.

Sure, but I don’t know that that would be enough to make up for what it would cost.

Depends on exactly what the proposal is, but if we are guaranteeing everyone food, clothing, shelter, healthcare, and other basic necessities, that’s going to come with a substantial cost.

Depends on who you are talking about. I applied for food stamps once, and the very rude woman who told me that I should just work more (when work was nearly impossible to find) would probably be upset if her job security were threatened.

But there are also those who would love to no longer be the one who has to give a family bad news that their costs are not to be covered.

The thing about UHC is that almost everyone would pay less overall. However, they’d still pay more in taxes. The increase in their taxes would be more than offset by their savings on healthcare premiums and costs, but it is still funneling a huge amount of money through the govt.

128

For the most part. If you take the proposal I prefer: we give every adult $1,083/month and every minor $350. With ~31mm minors and 300mm adults that would be $335B per month and $4T per year or roughly the same as the current federal budget. You can cut a bunch at the federal and state level to not require doubling taxes but they are going up.

129

Exactly, and the tax code is what needs changing as much as we need a minimum wage.

130

The cheapest place I can find around here is a studio apartment for $750 a month. Most tend to go at $900 or more for very basic plans. I don’t know that 1083 a month is going to cut it without also putting in some sort of price controls on rent as well.

As far as your comment on comfortable and dignified a few posts ago, agreed on the former, not on the latter.

People shouldn’t be comfortable, they should have a desire to find a way to be productive to earn more. But they should have a dignified existence, by that, I mean that they are able to have clean clothes, live in a place that is not infested by rodents or pests, eat food that is wholesome and nutritious.

But, social security is already 1 trillion of that, and I assume that that will be folded in. Get rid of the wage cap on social security, and make it just a straight tax, and it should generate a fair amount of revenue.

I’m also a strong advocate of a national property tax. This not only generates revenue, but also discourages consolidation of property.

131

Particularly when it comes to UBI I think that is too much to ask for. Working and earning additional money should be what provides those things (or having saved during your working life in the case of retirees) while those that are unable to work should be provided for through the healthcare system with things like handicapped accessible dwellings. But the average 20 something ski bum who wants to live in Aspen I’m fine with them sleeping 10 to a studio apartment if they want too. Freedom of choice should include the choice to suffer. UBIs purpose should be to allow people the ability to leave their terrible conditions if they want to either by quiting their job or physically moving.

132

I don’t think UBI would be sufficient if it were truly a universal basic income. We’d still need social assistance for food, transportation, and housing of some sort in some areas of the country.

133

I don’t think we need a radical tax plan; I would start by simply reversing the Trump and maybe the Bush tax cuts, and then gradually add a few percentage points to taxes across the board over the course of a few years.

The real Rubicon for the US to cross is whether to impose some form of value-added tax nationwide. I’m not sure I want to go there, since it’s a tax on consumption.

134

I would propose that a UBI should be a “lowest common denominator” value for the national level and top-ups should be provided by local governments for high cost of living areas. I think the same thing really should apply for minimum wages (eg. $15/hr minimum wage may be appropriate nationally while higher cost of living cities may set their own minimum wages to $18, 20, 25, etc.).

In addition, I don’t think it’s a requirement to live alone in order to be living a dignified life. I think if you’re subsisting solely on UBI it is very reasonable to expect you to have a roommate or two, and I would expect there are many places where you should be able to get by on $500/month rent.

135

Why? Assuming that healthcare covered people who were infirm or disabled.

136

If they want to live in Aspen, then sure, they take what they get.

If they just want a place to live, then it should be livable. If a UBI doesn’t provide adequate shelter and food, then it’s not an effective way to deal with those who are displaced.

Especially if you are using it to replace all other social services. Disabled? Great, we’ll put you in a rat infested hole with a bunch of strangers. You retired and your company went bankrupt and dropped its pension? Hope you like cat food.

Sure, working 60 hours a week to help start a business, or to improve your community, with little or no recompense. Not being forced to endure undignified conditions.

But your proposal just gives them the option of different terrible conditions.

You don’t have to do much to incentivize people to work. The one thing that will always remain true is that wants are unlimited. If you take care of people’s needs, they will still be wanting more.

One of the complaints I hear about a UBI is that then people will sit around playing video games all day. How would they do this? They would need to buy a game console and games, those aren’t free, so they’d have to work for it.

If they want to sit around smoking weed, then they would need to get a job to afford the weed.

If people find contentment on a basic UBI, it is because they are fulfilling their desires of either creation or self improvement, not because they are doing so through consumption of consumer goods and services. And if someone wants to sit around all day writing books, painting, or creating music, or if they want to sit around learning and educating themselves, then that’s a positive, IMO.

137

Lowest common denominator can be pretty damn low.

I can probably rent a hut in the backwoods of Tennessee and live on squirrels and possums for under $100 a month.

138

I don’t believe in a right to live where you want. Yes, if granny loses her pension she may have to live in a group home situation in the midwest rather thank keep her solo apartment in New York. Living by yourself is also a luxury and dormitory facilities would be quite acceptable way for people on the bottom rung of society to live.

I think disabled is a medical condition and should be treated under healthcare (and to a large extent old age too). In one of the past UBI threads it was brought up that people in wheelchairs need extra wide hallways which tend to increase their rent due to additional square footage as well as making the place more desirable. I think getting a voucher for the difference in rent should come from the heathcare system rather than increasing UBI for everyone and then we already have someone in place to determine need.

The squirrel and possum jab is unnecessary but, yes, UBI should be structured based on the lowest place people can live in the US. It is a choice to live in nicer areas but with $1,000 a month they can pack up and move somewhere cheaper if they want to value something more than location. We shouldn’t be trying to guarantee a middle class life but minimum that people can live with in the US.

139

There are two reason why cash give aways to the rich don’t cause inflation the same way that a minimum wage increase would. First, increasing the minimum wage will increase the cost of production since you will have to pay your workers more. That means either prices will have to rise of profits will have to go down. But there is no particular reason to decrease profits since now with the minimum wage increase people have more money to spend and still want your stuff so they will buy at a higher price. With big tax cuts for the wealthy, that just gets squirreled away without any effect on the overall means of production.

The second reason is that unlike the poor, the wealthy don’t actually spend their on the consumer goods that are the basis for measuring inflation. so giving them more money doesn’t have the same effect on demand. Instead on consumer goods they buy stock, and that is where the inflation has really been felt, more money chasing the same amount of stock is how the Dow managed to gain around 20% in the year of the plague.

Unfortunately I think the place that will really get the inflation hit is low income housing. There is no shortage of low income people seeking affordable housing, so the slum lords charge as much as their tenets can afford, and will raise rent as soon as that amount increases. Unless efforts are made to control rent, much of the increase in wage is going to go right out of their paycheck and into the landlords pocket.

Note although I’m sounding like a bit of a Debbie Downer, I’m not necessarily against a minimum wage increase. Something’s got to be done to curb inequality and allow people who work hard to have enough to make a life. I just don’t know what can be done in a system that is structurally designed to funnel all money upwards.

Another thought that I had is rather than indexing the minimum wage to inflation what if we indexed it to GDP per capita? That might do a better job of sharing a general increase in prosperity rather than just treading water.

140

I don’t know that that’s a given – particularly with planned and phased-in increases to the MW.

Source (NOTE: PDF)

While I’m not an acolyte of trickle-down economics, the higher dollar purchases of the more affluent, including to some degree their investments in the capital market, do trickle down – the benefits come inextricably tied to the costs.

There are inflationary pressures that are unique to the high-earners/wealth cohort: the increased demand for Starbucks Americano’s may drive increases in the prices of a couple dozen things associated with bringing that product to the consumer. Increased speculation in real estate or high-end automobiles tends to have a greater number of associated industries and component parts.

So even those investments in the capital markets create upward pricing pressure as higher paid workers in growing public companies (and every company connected to them, and every person invested in them) can/will/do spend more on houses, cars, and groceries.

Which costs do tend to affect the poor, and disparately (ie, inflation inequality).

The poor really don’t get to escape from the inflationary pricing pressure of the wealthy, and they have no bargaining power to speak of in order to improve their position.

I’d like to believe that our vaunted Free Market could be a wee bit less Darwinian. I’d also like to believe in a Free Market that isn’t quite so akin to letting your kids raise themselves, totally unfettered :wink:

But mostly, I suspect that much of our current inequality can be traced to:

  • low-wage earners whose earnings haven’t kept pace with inflation, and
  • a Federal Income Tax policy that is probably more regressive than any of us could imagine (meaning: high earners pay substantially less of their total income than we’re being led to believe)