Alternative title: "events of 2020 case poverty rate to regress to 2017/2018 levels"
Frankly I'm surprised the effect was so small considering that the industries hit hardest by covid employ a heck of a lot of people who are near the poverty line to begin with. I would expect all those people to be pushed to the other side of the line resulting in a much more dramatic increase in the poverty rate.
Only because of the moratorium on evictions, which is deferring a lot of financial pain till later, and thereby making today's numbers look a lot better than they are.
Why would evictions impact the poverty rate? Isn't it just the share of people who fall under a certain level of income, without directly accounting for things like housing insecurity?
It's hard to maintain employment if you are evicted from your home, especially if you have a family. You have to move in with extended family/friends and, thus, may no longer be within commuting distance of your job.
Or you could end up homeless/couch surfing and that is also very difficult for staying employed.
I can tell you that for myself, being homeless made keeping my job difficult for a hundred reasons. On top of that, it drove me into a deep depressive episode, which impacts my ability to work severely, and I turned to drug use in a big way, which obviously lead to my situation becoming even more difficult.
We haven't seen all the effects of 2020. First, all these analysis are lagging indicators. Second, the poverty that started in 2020 will continue to impact lives for many years into the future.
I think one thing that 2020 that has brought to the forefront, that has been overlooked to date, how the groundwork for exporting many "white-collar" jobs the US is ready to do. I don't mean to be the Chicken Little in the room, but India and Eastern Europe have great programming resources at fractions of the cost. Management have become used to a work force that is remote and uses remote commits with communication almost entirely by email.
While there will be companies that choose to "work American", I'm sure, much like the auto industry in the 70's and 80's moving manufacturing to Mexico and importing to America while maintaining the monichre of "an American company" like Ford and Chevrolet, shareholders will demand costs be kept down. There are no shipping costs on digital goods =/
It's pretty obvious that there has been an enlarging wealth gap and poverty rate has increased. What I don't understand is that the current narrative is to attribute such unfortunate events to systemic racism. Shouldn't we at least look at class difference, shift of industry trend, impact of policies, i.e., take the holistic view?
I contend that the real tragedy of American politics is that what ought to be class/labor issues gets sidetracked into race issues. If poor whites would stop thinking in terms of race and instead think in terms of class and economic justice then real progress could be made. Lyndon Johnson had a famous quote about just this.
Upper-class whites are obsessed with race, especially in the last few years.
Every news story - and the news comes from the upper whites - gets twisted into something about race, as in this case. Every tech company, every Hollywood studio, every academic institution are vibrating with energy to find and fight racism; overflowing with programs and policies about race. Hell, even the Oscars can't be won by white guys making movies about white guys any more - it's in the rules!
To say it's the poor whites who are "thinking in terms of race" too much is utterly absurd. Where's the evidence that they're thinking in terms of race more than the academics or NYT? You'll hear way more about race in a random sample of discussions at the NYT than you possibly could at a NASCAR event.
The people thinking too much in terms of race are the upper-class whites, and they do this to justify their superiority over the lower whites by borrowing morality points from the (in this narrative) victimized non-whites.
Yes, upper class are obsessed with race and are enacting superficial policies that do little to help people who really need it. They are content to do things that make it appear to be addressing a problem but not doing things that would actually address those problems. For instance, upper class people rarely advocate for changing the way k-12 schools are funded. They rarely advocate for increasing the pay and resources of public defenders. They rarely advocate for reforming a justice system that caters to those who can afford a lawyer and crushes those who can’t.
The obsession with race by the political class gets lower class whites to lose focus on real reform that would benefit everyone. So instead of saying why can’t poor people afford justice they have their attention shifted on the crimes committed by POC and the need for more cops and harsh penalties and whatnot. Instead of saying we need better pay, better health and child care the focus is on welfare deadbeats. This list goes on.
The focus on a large numbers of issues in the U.S. is about race rather than about class. News media and whatnot fuel this because fear sells. It’s gets more viewers to talk about out of control black kids terrorizing whites than it is to talk about school reform, prison reform, culture reform, etc.
Fair enough, but since about the 90's I don't recall much in the news about "out of control black kids terrorizing whites".
COPS isn't even on the air any more, you know.
These days it's pretty much wall-to-wall "out of control white cops terrorizing black kids". There was a big thing about it last year, as you recall.
Before that there was a thing about "out of control white kids terrorizing a native elder" which turned out to be a total lie as well.
Trying to think of any major news story about "out of control black kids terrorizing whites" in any recent decade. Last I know is the Central Park jogger case from the 1980's.
Genuine question: how can poor whites join with POC, given how the systemic racial injustice narrative has developed? I would be worried about a “this protest isn’t about your situation, white person” response. (Given the current tenor)
> I would be worried about a “this protest isn’t about your situation, white person” response. (Given the current tenor)
A genuine question of my own: what has planted this worry in your mind? What tenor do you speak of? The demographics of the US mean that any policy that POC want to enact has to also be supported by enormous numbers of white people; that POC-friendly policies have ever passed is evidence that working with white people is par for the course.
To attempt to answer your original question, it depends on what you mean by "join".
The simplest answer is to bring it back around to class and recognize the shared fight against intergenerational poverty: support social programs that disproportionately benefit the poor of all races e.g. a livable minimum wage, expanded worker protections, public healthcare, etc.
If what you mean instead is to start a conversation about the unique ways in which poor whites are disadvantaged, well that's fertile ground but it also requires acknowledging that whites and poor whites have schismed into, effectively, entirely different races (they don't intermarry, they don't socialize together, they hold different values, have different cultural touchstones, etc). That's a difficult conversation to have, and you're going to find a lot of resistance from plenty of poor whites who still want to associate their identities with a holistic "whiteness" that they still long to be a part of. But someone has to start the conversation, even if it's uncomfortable, because the alternative is that the powers-that-be continue to wield that longing as an instrument by which to motivate poor whites to vote against the social programs that would benefit them.
There is the widely accepted concept of an ally. You could be one. You'll be a second-class citizen. You'll have to supplicate for your place. For the 'space you take up' as they like to say. You'll need to keep up with the latest woke thinking on TikTok and Twitter, so you know how you're expected to think, believe, feel, speak, and act, in order to keep your probationary status as an ally. And it'll always be probationary. I'm not going to, but you could.
Ah, if only it was actually about empathizing and showing respect. Wouldn't that be something.
This is such a startlingly uncharitable response that I don't know how to react. Where is this coming from? Who said anything about being a self-proclaimed "ally"? What do TikTok and Twitter have to do with this? It sounds less like you're here for a conversation about race and class and more like you have a need to unpack the distorted perceptions that one internet subculture has for another internet subculture.
This comment wouldn't read much different if you had included the phrase "white genocide" somewhere. I recommend you consider from where these prejudices are sourced.
I don’t know what white genocide is, much less how it relates to anything I wrote. What you think you read probably isn’t what I thought I wrote. I was dryly lamenting the options available to progressives who are uncomfortable with the theory and praxis of the kiddies these days.
My prejudices, if you insist on playing that card, come from listening carefully to exactly the people who demand I shut up and listen. I actually go to great lengths to understand their point of view. Before I judge them.
I'm not certain what you're asking or what you mean by "planted." The word "planted" implies that an idea with no basis in reality was put into this person's head. Seems like a strange way to word it if you're asking that question in good faith.
Anyway, I'm not speaking for the person you responded to, my point here is simply that there are people with loud enough voices saying "white people" should "shut up." That is what I see as part of the current tenor, which would mean that some white people aren't going to bother engaging in this.
The quote that shows up in several of those links:
"I’m no longer engaging with white people on the topic of race. Not all white people, just the vast majority who refuse to accept the existence of structural racism and its symptoms."
It sounds like you have answered the above poster's question about how to join in: by "accept[ing] the existence of structural racism and its symptoms".
> The word "planted" implies that an idea with no basis in reality was put into this person's head.
As I explain in my post, it cannot have basis in reality due to the provable existence of democratic decisions in favor of POC that have not merely included white voters, but often were comprised of a majority of white voters.
To say that someone is telling whites to "shut up" is to misrepresent your own cited headlines: "shut up and listen". If someone wants you to listen, it is self-evident that they want your help. You don't ask someone to listen if you don't care what they think or what they do. If someone in need asks another for help, the very first thing they will want to do is have the other person listen to what they need. And if someone is telling someone else to shut up so they can ask for help, that suggests that they think their cry for help is being drowned out.
Here's a reminder that you obliquely asked another commenter what "planted" an idea into their head. I'm not sure why you would demand other people talk to you in the way you want to be talked, especially when you just did this.
There exists bitterness towards white women, who "joined" the civil rights movement in the 60s. The criticism is they stopped fighting once their issues were starting to be addressed.
The whole idea of reframing around class is to say "I know you think race is the primary differentiator, but I really think it's class/money/power". That is a negation of BLM, whose purpose is to bring attention to black Americans' rate of being murdered by police.
Remember the response to "All Lives Matter"? (Putting aside the bad faith actors), a number of people think police violence in general should be the #1 priority. The responses are often, "yes, all lives matter - but right now we're talking about black lives." Remember the cancer-walk comparison? If you show up to a breast cancer walk, trying to talk about prostate cancer, you're being a jerk. (The analogy here would be to show up to the breast cancer walk talking about how it's not even about cancer - all diseases need more awareness.)
It's very complicated. Attention is a limited thing, and while it'd be great if we could care about BLM and poor whites and addicts and immigrants, that doesn't seem to be how the public's collection attention works. Reframing the problem might be a better solution, but I don't think progressives would be receptive towards the reframe.
Thanks for the thought provoking discussion. I personally agree with your statement that it's really about the "shared fight against intergenerational poverty", but I'm not brave enough to try and lead the reframe because I think both sides would reject it. I think this route would address many of the core issues that have led to the Trumpworld voters, who don't care what the stance is as long as someone is fighting for them.
I think it starts by treating them with respect and engaging with them as human beings with their own minds, thoughts, fears, and concerns. If you approach it through the lens of "How do I get X group to sign up to Y platform", people will quickly figure out that you aren't engaging with them at all. Your well-meant and genuine intentions will go nowhere.
My suggestion is that you can start with what the demographic in question cares about. Then look sincerely at if what you're trying to do actually addresses those real, sincere, valid concerns in a way that's comprehensible to a relatively ignorant person who is perhaps justifiably suspicious of being tricked.
Really you just have to frame it as such. There is a distinction here, race issues tend to deal with the interface between citizens and the government (police among other things) where class issues tend to deal with the interface between corporations and the government.
This is a gross oversimplification, but I think the takeaway is it's ok to have spaces for both discussions.
I'd also add that both discussions are happening concurrently. The race issue is big right now, but economic justice is still a central topic. Occupy was a good example even if not a well organized one.
There is a resistance from any movement, when they have the national attention, and another movement speaks up. It seems there is a perception that the public can only care about one thing at a time.
My guess is that any attempt to reframe away from race, towards social class, would be strongly opposed by key interests. That makes it very difficult to get into the conversation, and creates infighting between marginalized groups.
So maybe it turns out this sociology/governance stuff is more complicated than my engineers bias wants to admit. How do you make a decision when the complexity makes prediction useless?
That's a good point. I suspect maybe we're overthinking things a bit. Most movements that enter the spotlight have spent a good amount of time growing behind the scenes beforehand. We can push for class reform without framing it as reframing race issues and wait for its time in the spotlight later.
In the US and UK's most recent national elections, there were two candidates who sought to build multi-ethnic coalitions of working people, and did a pretty good job of it considering how much hate and slander they received from the media and their own parties.
The template for a movement is out there, and we're not as divided as you think. Just ignore academics and journalists lol.
'The narrative' doesn't unconditionally control what people do. There are also multiple narratives out there and people get to subscribe to the one they want. If someone builds up an income-based coalition then the idea of 'systemic racial injustice' will fade away in favour of looking for more money.
It sounds like you're saying that the poor whites are the one pushing the systematic racism view of the problem. Since it seems clear to me that that's not the case, I am confused by this view. Am I misunderstanding what you're saying?
Edit: Since this got downvoted already, I'll try to clarify? I'm confused by what appears to be the opinion of the poster and asking for clarification so that I can better understand them. If you're going to downvote me, at least be helpful and provide some sort of answer to the question.
Edit: Changed the word agenda to "view of the problem", since it's possible that was being interpreted in a way it wasn't meant.
I am definitely not saying that poor whites are the ones pushing the notion of race over class. I’m saying they’ve been taught by media to view things in terms of race rather than class. Race has been used by the ruling class to stifle economic justice. It’s been used to divide the lower class.
It seems like 'the issues' are being framed in ways that are convenient for the political parties. The Democratic and Republican parties each get about the same support (plus or minus 5%) from various 'classes' (as defined by income or wealth quintiles), but get very different support from different ethnic groups (national origin, and not just race has a big impact).
That said, I think your class-based paradigm is just as badly flawed.
Yeah, class-based paradigm could well be deeply flawed as well. I just wish people could evaluate our situation from all angles instead of following certain narrative only.
Poor whites DO focus on economic issues. That's why Trump was able to promise bringing back manufacturing & coal jobs to win over a large segment of voters.
The problem is that all of the Democrat/liberal/left-wing (whichever label you prefer when discussing the core American political divide) completely denies the existence of poor whites and explicitly rejects helping them. For the past 50 years all of the focus on social justice and structural inequalities have been focused exclusively on the urban poor, racial or sexual minorities, etc.
If you're a poor white kid from a trailer park in West Virginia, you might face all the expected problems - poor education, widespread substance abuse, lack of role models, lack of resources... but there's no college scholarships for you, nobody trying to admit you to their university, nobody trying to hire you or promote you.
I spent 2 years as a social worker in West Virginia. The poor whites I worked with weren't racists and weren't stupid. They were just born into poverty and a system which pretends all whites are privileged oppressors.
I'm from Ohio, and OSU considers students from the Appalachian region of Ohio as underrepresented students and has specific scholarships for them as well as makes them eligible for many more general diversity/inclusion scholarships. Also first generation college students (of any race) qualify for some diversity programs as well. I know other colleges in Ohio, like Ohio University, had similar programs.
I think syops criticism applies to the combined dynamic of the 2 American political parties and mainstream narratives, rather than either one specifically.
The upper class needs some way to turn the middle against the lower--otherwise how can they justify their share of the wealth? Currently that way has to do with melanin.
If we can figure out how to leave racism behind, and I surely hope we can, they'll have to find a new way to divide us. I wonder what it'll be.
Why would you think poor whites are to blame? If anything they are getting even more shafted than minorities: there is 0 sympathy if not outright hatred for poor whites, males in particular. Witness the opioid holocaust.
I would instead blame all the elites that profit from the unfortunate but very real and universal human tendency towards racial prejudice. It is the oldest trick in the book, you identify some sub-group, preferably through something obvious like race, and you blame another groups woes on them. Politicians play that game, the news media plays that game and social networks accidentally machine learn it. It is all obvious and disgusting and treasonous.
You'll notice that the rise in media reporting on systematic racism correlates strongly with the rise in discussions about class difference, industry trends, globalization, etc. The latter was Bernie Sander's platform before he was "challenged" by BLM during the 2016 primary. Not to imply that Sanders didn't previously support BLM, but he rhetoric changed after that. It was clear to me that Sanders thought the primary issue was class and that by addressing that we would improve everyone's life who was affected by the economic troubles due to the issues you mention. It's almost as if someone has something to gain by splitting us apart rather than letting everyone focus on their common issues.
Perhaps that's not the case organically but it seems that way because the media has been beating that drum relentlessly for the past half decade or so, in the process creating the actual strife they had been magnifying.
Class solidarity is non-existent in the US. Racial issues are much more visible. Poverty tends to be chronic and society to this day attempts to dismiss it as laziness or personal failure on the part of the individual, there isn't really anywhere for a flashpoint to happen. Incidents like George Floyd's murder act as a nexus around which debate, protests, and change can form.
The history of the US is far more rasist then it is classist; and there has been far more social movements along racial lines then class lines.
While we have had (successful) class based movements in the past, there is no class based analog in US history to the civil rights movement, or abolition. Even school children understand what Martin Luther King day is about; most American's couldn't tell you what Labor Day is about.
When there was a global movement for class based solidarity, the US found itself on the other side of the fight. (I'm referring to cold war era communism).
Even if a class based approach makes more sense now; there is a lot of institutional and cultural inertia behind a race based approach.
The problems associated with poverty and economic affect both minorities and whites. However, racism adds an extra layer of difficulties on top of the more general problems---and poor whites are some of the strongest supporters of this extra layer. Further, racism has been a problem longer than (the current wave of) poverty and economic inequality. (See, for example, the 1950s and 60s when inequality was lower but racism was much stronger.)
Edit: A corollary of this: the "problems associated with poverty and economic affect both minorities and whites" can be seen as a way to distract attention from the very real problems of racism.
Poverty and economic disadvantage of POC are an obvious affect of 100s of years of oppression and has kept generations of Americans in poverty.
POC are more likely to be poor, far less social mobility, less housing opportunities (loan access as an example), hurt by gentrification, lacking quality education and so much more. Over policing + horrendous and an unfair criminal 'justice' system locking up black and brown kids (this chart is so disgusting [1]) and that's if they don't get shot during a traffic stop or selling lose cigarettes.
LGBTQ face similar hurdles, triple down Trans POC who are killed at a shocking rate with no repercussions most people don't care they are disposable in their eyes.
To your example of poor whites supporting this oppression I don't have data but I have seen this in part of my extended family who live in the south. Systemically poor, no social mobility. Despite being dependent on the social safety net they are hardcore MAGA and overtly blame POC and immigrants as the reason they are poor. One uncle (long story family problem trying to get him housed) refuses to live near black people...
I think part of the idea is that systemic racism lead to class difference, shift of industry trend, impact of policies. If you set people up for failure for one generation to trap them into poverty, it's enough work done to keep further generations trapped too. Just look at how segregated neighborhoods/cities still are. It's mostly because of policy from a long time ago that still has an effect to this day.
Taking the holistic view includes recognizing that systemic racism contributes to those class differences and vice versa: it's a pretty brutal feedback loop, and requires addressing both ends of it in order to fix it.
Well the word 'racism' doesn't appear in TFA that I could see.
However, I think the definition of "systemic racism" has changed to mean the existence of a demographic skew in the bottom and top economic quartiles. In other words, as long as "whites" don't makeup an proportionate percentage of the lowest quartile, and "blacks" don't make up a proportionate percentage of the highest quartile, that is, by definition, systemic racism.
In essence, the term no longer represents a critique on equality, but rather a critique on equity of outcomes.
The people will not be allowed to think about those things. The cathedral doesn't want people to start thinking about occupying Wall Street again, so they will keep everyone distracted with these other things. It's no surprise that every major corporation is loudly pushing woke topics.
I think using the word regress seems to imply that it was improving. Wealth inequality in the U.S. has been getting worse at faster rates, even before 2020.
If you define poverty as income related to costs of living and obtaining necessities for living, it should be entirely decoupled from income inequality. If the poorest 20% of americans had their incomes triple over night without a corresponding increase of the costs of living and Bezos becomes a trillionare, poverty would have decrease with income inequality worsening. If the richest Americans all saw 75% of their wealth and income evaporate overnight while the poorest 50% americans lost 10% wealth and income, income inequality would reduce but poverty would still increase.
You might say that income inequality contributes to disparities in political influence which may cause more longterm poverty, but that link has far too many steps in it (political corruption for example) to say the two are now directly linked
I think that definition is susceptible to defining the "necessities for living" in ways that underestimate poverty. How do you define what's the standard of living? As of 2021 I'd imagine that several necessities for interacting with society such as internet access and potentially even mobile access would not be universally viewed as required to be above the poverty line. Similarly while home ownership is probably not required to be above poverty line, is stable access to housing required? What about having sufficient savings to survive/social support to survive the loss of a paycheck without missing rent?
At least where I live in Maryland, being on "welfare" includes a cheap smart phone because a lot of jobs assume you have one for things like driving directions, getting signatures, taking pictures of receipts, etc.
If someone falls below the point where they can afford the requirements for typical jobs, then they may enter into a spiral where there is no path out of poverty.
There was a great moment of irony in my early career where lacking a job post-college ('08 reccession) I was unable to pay my student loans. 6 months after graduating I received an offer from Sallie Mae to work as an engineer, however due to corporate policy a sallie mae will not employ anyone who is arrears on their student debt.
At this point, owing approximately $2000 and only had $250 to my name which was required for rent, food, and the 18 year old ford escort that I needed to drive to work.
I was able to arrange the money, but ultimately I was within a day of being put out of work for lack of ability to pay a debt. Had this occurred I likely would not have been able to work in software, and in all likelihood the bank may never have gotten their money back on the student loans.
Either mobile data access or internet access should be, yes. You need one of those to access the job market today (among other critical services). Smartphones have become so cheap that they are most people (especially those in lower socioeconomic brackets) only computing device, and having a phone number is also a prerequisite for society, so mobile data access is the common way to gain internet access for a large swathe of society.
This is a global phenomenon too (and even more so in other countries).
I think it makes sense for them to be decoupled on some level, but maybe not totally.
The danger on one side is falling into a sort of hedonic treadmill issue where the poverty level defines a standard of living that is so generous that it ceases to be a measurement of hardship. The danger on the other side is fixing the poverty level at some static level that doesn't take into consideration inflation and other changes to the environment that people actually live their lives in.
Exactly. Some people seem to refer to poverty as living with the standards of 2000 years ago. Of course we improved. That doesn't mean that relative poverty is getting worse and that other factors like free time have worsened if compared with centuries ago.
>other factors like free time have worsened if compared with centuries ago.
This might be true if you consider being holed up with your family for the entirety of winter as "free time." Also, these studies always neglect the amount of random work that needed to be done before technology (e.g. fetching water from a well, chopping firewood, weaving baskets, etc).
Even ignoring time spent doing non-work things we don't do, free time has increased a lot over a century. We have good data on this. Factory shifts circa 1900 were long, and 2-day weekends rare.
Unless "centuries ago" means several centuries, in which case maybe it's murkier, the pre-industrial world was different. IIRC hours worked increased in the pre-industrial build-up to the revolution -- perhaps because there was more to buy, and people adjusted to try to buy things, rather than stopping when they had enough to eat.
idk man poverty in the us is not as bad as in india but it sure is worse than east europe. there is a dude here stating inequality is not bad, perhaps they’d want to visit communist countries to see how wide the gap is between regular folks and the elite
Have you ever visited a gypsy village in eastern Slovakia or in the Balkans? You know, the huts that barely stand? Or some of the most notorious housing projects?
That is a trip straight to the Middle Ages. Look at the following videos.
Those are gypsy and you can find the same exact type of camps/villages in Western Europe, no need to go to Eastern Europe.
Their condition doesn't really depend on the poverty level of the country they live in, but other factors such as cultural and integration issues, not always caused by them.
I am a Czech, I know gypsies well, I had several classmates from all sorts of gypsy families - from very well integrated to the ghetto standard.
I would argue that multigenerational poverty in contemporary West has always something to do with cultural and integration issues. Plenty of refugees who came with a small bags of personal items have built middle class lives in a generation, even though they were foreign, did not know the language and faced crude racism from primitives.
It is possible for the people at the bottom to have better housing, better food, better education, and better health, while the people at the top still enjoy a vastly disproportionately greater increase in income and wealth.
With disproportionate gains and different spending priorities, you won't see consistent inflation across all kinds of goods. Because the inflation is concentrated at the top, the people at the bottom won't get priced out of the things they need. They're not getting priced out of anything they couldn't have afforded 20 years ago.
A nice house that cost $100k in 1999 costs $200k today.
A fabulous house that cost $500k in 1999 costs $5,000k today.
My parents bought a home in 1988 for $100k and sold it six years later for $120k. Zillow says it’s worth $590k now. They bought their next home in 1994 for $180k, and it’s now appraised at $650k. This is Sacramento, CA.
By the way, they pay about $3k/year in property taxes, while a new homeowner pays about triple that. If property taxes weren’t kept so artificially low for long time homeowners, I don’t think property prices would have gone up so much.
Inequality is not a bad thing. It's actually necessary to have inequality of outcomes otherwise you have no incentives for improvement. An example of a society with very low inequality is old-school communism where most people are equally poor - it's clearly not a good thing.
What is bad is extreme inequality where a lot of people are in poverty. I think most people would agree that poverty is a bad thing that we should try to reduce.
It's quite possible for poverty to decrease and inequality to increase at the same time. The old "a rising tide lifts all boats" analogy. It just means everyone is doing better but the wealthy are seeing more relative gains. If the whole pie is growing, it's easy to see how everyone could get more pie even if it's not distributed equally.
edit If you disagree please state why. Drive by downvotes do not convince me that I'm mistaken, they just lower my opinion of the average HN user.
I've been thinking about this a lot this past decade or so, and it is an interesting question. One thought I've had is that a perception (real or not) of inequality is baked into our species as being bad, particularly when it gets extreme. Why might that be? Well, if my neighbor generally has more resources than me, it's usually not that big of a deal. You maybe have more or better food, or some nicer things, but if my needs are met and I have things I can enjoy, I don't get worried.
Now, if you suddenly have a lot more than me, say you have enough to provide for other people in a meaningful way, I start to get concerned. Why? Because you don't just have more than me, you start having power over me. And if I don't stop inequality increasing, that could quickly get to the point that I can't do anything about it. Your power can become absolute, for all practical purposes.
I think humanity has learned culturally, if not genetically, that really bad situations arise if someone has way more than you. Power corrupts and all that, and gross inequality becomes power.
Of course, these days, it might not be "real", meaningful inequality (Jeff Bezos has a lot of wealth, but it is wealth tied up in Amazon, mostly, and the US Government has far, far more wealth), but the perception is there, and the perception is enough to trigger concern.
You could probably go further and tie some of that discomfort into competition for mates. If my neighbor had more than me, I might start to worry that he will outcompete me in the market for a mate. I'm not sure this matters as much today - but one can imagine it did for most of human history when communities were much smaller and the majority of men died without leaving offspring behind.
It's an interesting idea, I don't know if there is something to it or not. It's hard to discuss anything involving gender roles these days.
This is really well-stated. The goal should be reducing poverty, not inequality. China for example has drastically reduced the number of people living in poverty while also seeing massive increases in income inequality. Few people would make the case that the average person in China is doing worse than that they would have been 30 years ago, despite the fact that there is clearly more "income inequality".
Typically that would be viewed as high inequality. If the ruling class of .1% controls 99.9% of the wealth then the "average wealth" and the "median wealth" will be extremely different aka wealth inequality.
Yes, exactly. What matters is do you have the resources to comfortably meet your needs or not. It does not matter if some people have many times more resources than you, that does not affect your situation. You might be envious, but that's neither here nor there really in your day to day quality of life.
If we define the federal poverty threshold as having an annual income of less than $1 poverty metrics will improve drastically. Heck, we might even be able to solve it!
It seems like the left is already doing that, just in the opposite direction. Poverty has continued to decrease in the U.S. so we longer talk about it much, instead we focus on "income inequality" because it serves a particular political philosophy. If "income inequality" is a major issue regardless of how well people are doing, then there will always be a reason to intervene in the economy and redistribute wealth, since any society with any sort of market economy will always see an uneven distribution of wealth.
I don't know why we always go back to income inequality, it's not a useful metric. What matters is how many people are living good, prosperous lives. You can have have income equality simply by keeping everyone equally poor, or you can have prosperous societies where some people have a lot more than others, but everyone is doing well. Income inequality is only meaningful if the amount if wealth and prosperity in a society is fixed, which it's not.
> I don't know why we always go back to income inequality
Because it's pretty well established that outside of the most abject poverty, relative deprivation is a more significant factor driving experienced disutility than absolute material condition, contrary to the naive assumptions many people make that increasing individual absolute material condition increases individual utility independent of external context.
There are, of course, people who don't believe it works that way, people who don't want it to work that way, and people who don't want other people to believe it works that way because such belief threatens their own advantaged position.
That reads as an argument but my lack of English skills makes it hard to understand what exactly are you saying.
However, it does seem to me that that you still haven't addressed one of the main points you're responding to, that we can have perfect equality where everyone lives as the average person below poverty line today. Would that be a better society considering your arguments?
> we can have perfect equality where everyone lives as the average person below poverty line today
Well, no, we probably can't. Inequality can be mitigated, but it can’t be eliminated, especially durably.
> Would that be a better society considering your arguments?
That's really an objectively unanswerable question for many reasons. You can't really measure, on more than an ordinal scale, individual utility, or aggregate it, except by interposing non-objective judgements. Would it be better for lots of people currently above the poverty line? Maybe, depends how far below the poverty line the equal society was.
Arguably yes. I'm not saying it's necessarily the world I would want to live in but I suspect the world's aggregate perceived level of happiness may be higher.
> ... relative deprivation is a more significant factor driving experienced disutility than absolute material condition ...
Which data are you talking about? Because on the one hand, yes. On the other hand most of the data I'm aware of is very context- (especially social-situation-) specific. I don't think there is evidence that the simple existence somewhere out there of very wealthy people is upsetting.
Unfortunately the amount of power in society is largely fixed, and income inequality combined with rulings like Citizens United lets that power be captured by the very few. I suppose it's nice that this kind of modern serfdom lets people live relatively "well", but if people sense they have no control over their government you're headed for trouble.
The US is primarily a materialist individualistic society where good is defined by commercial mimesis and folklore of the particular outweigh that of the common. Expressing concern for “income inequality” signals a virtuous desire for all to attain a nirvana of stuff attained through the magic of money.
That is hardly the case. Expressing concern for income inequality means expressing concern for people to have autonomy, proper food and shelter, proper healthcare, savings, and retirement capability. It is not virtue signaling, as you put it.
Yes, as you just stated you are primarily concerned with materialism and by introducing “income inequality” into any and every discussion, similar to a vegan talking food, you signal that you promote virtue despite not understanding that a good life is much more than material concerns. If it is not “virtue signaling” as I did not put it, than what is your motivation for continuing the cyclical social structure of income and “proper” stuff? You and anyone, even the “people” for whom you wish to demonstrate concern, can step off the hedonic treadmill anytime you want.
I think you're trying to say that it's not a useful metric by itself. Which may be true. But we're able to observe multiple metrics luckily. And we know that not everyone is doing well. So naturally we're going to look to other metrics for more information.
It's not over yet! And won't be for a long time. There are a lot of people just scrapping by right now. All it will take is one big financial hit to knock them down into true poverty.
This metric is income-only. Which is why it's so small - extended unemployment benefits (with the bonuses) have keep a lot of people above this line.
In reality, there are a lot more people than this who are just on the edge of scraping by. Some of their own volition (some people on the edge make $200k+ and it's because of a series of poor decisions), but even more people because the poverty line doesn't even pay for their studio apartment (I see you, California!), much less food or anything else.
California, from every source I've seen, has a major, systemic, generations long market failure. The supply of housing has been nearly inelastic while demand remains high, with the obvious results.
However there are also less obvious results given the time domain involved. The problems have followed those retiring out of California's market as other regions follow in the same footsteps.
As an example; the greater Seattle / Puget Sound metro area reached a combination of sprawl / urban growth boundary / natural features (mountains, lakes, the sound) at about the same time that the 2008 recession killed what little development was still occurring.
The price of a very cramped, noisy (poor insulation) apartment in the city without even a parking spot to store the vehicle for anything you're doing outside of the city (E.G. visiting family on a weekend, going hiking, etc) was easily at least 3K (offhand, the last time I looked), and similar units in the suburbs quite far out, if available, were about 1.5K per month.
There might be more rural areas, but those were excluded from my search as the last time I looked they failed even the FCC's definition of broadband (25mbit down, 3mbit up). I suspect any areas out that far with good Internet would still have bad prices.
There are about 4,000 added units within a mile radius of me (Santa Clara / Sunnyvale border) in an 18 month span (would have been a year without Covid)... nearly 3,000 adjacent to Lawrence Expressway alone.
The phrase “market failure” often implies that left to their own devices people can’t find a way to satisfice wants and needs through the normal process of selling, buying and owning. My impression of California housing (and likely Seattle too) is that there are other factors at play and that the “market” isn’t the thing causing the “failure.”
Seattle prices have dropped with the pandemic. Even pre-covid I was paying roughly 2k for a studio with parking. Now that same apartment would be 200-300 a month cheaper.
The poverty rate is an awful metric. It simply counts the number of people who earn below a certain income. So people dipping $1 below the line are counted the same as those dipping $10,000 below the line. So, poverty-rate alleviation measures can be implemented simply by focusing on the top end of those under the limit - of course, this doesn't help much. What we should really worry about is the poverty gap - the amount of income people need to get people above the poverty line.
> What we should really worry about is the poverty gap - the amount of income people need to get people above the poverty line.
Is that not showing an increase right now too? I mean, I don't disagree that serious analysis needs more info than a single number. But... what's the policy distinction here that you're trying to argue?
There's no mystery to the current situation: people are out of work due to the pandemic and making a lot less money, and that's bad.
Edit: two replies have responded by repeating the theoretical distinction and proposing scenarios where the two metrics would diverge. I understand that part. I'm asking if there is any evidence RIGHT NOW that this is the wrong metric to look at. Because naively, you'd really expect that people losing a lot of jobs to covid would simultaneously increase the population of people below the poverty line AND the average/median incomes of those people already below it. And if that's true, and it seems to be, why are we arguing about minutiae about metrics? The cause, and the solution, is the same in either case.
"Reduce the number of people in poverty by 50%" is a different goal than "Reduce the net poverty gap by 50%". A real headline can be that fewer people are in poverty than last year but the dollar sum of poverty is higher.
Effective policy considers the true goal - people are living better - and takes into account Goodhart's law as possible. I would say OP is arguing that the latter goal metric is better for humans than the former, and I agree.
If there are 5mm people below the poverty line and they all make $1 under the limit then you can close the gap, and reduce the poverty rate to 0 by giving each person a dollar.
If they are all making $10 below the limit then you can evenly distribute the money and reduce the gap by 10% while keeping the poverty rate the same. Or you can give all of the money to only 10% of the population and reduce the poverty rate by 10% while the gap remains the same.
I don’t know how this is typically measured (or measured in this specific case because I can’t find the actual paper), but do economists generally apply the same dollar threshold to everyone across the country, or do they account for regional cost of living?
Apparently the standard poverty threshold does not vary by region. There is a measure called the "Supplemental Poverty Measure" which does take into account certain cost-of-living adjustments, amongst other things. More info here: https://www.census.gov/content/dam/Census/library/publicatio...
It does not look like this research used that measure. Given the income disparity between urban and rural areas, I'm worried that this could paint a misleading picture about who exactly is suffering here.
(I'm definitely no expert here, just a lay person trying to interpret this.)
I don't think the arbitrary nature is as big of a deal as the first user suggests. If policy makers were truly optimizing for poverty rate reduction of that single metric than Goodhart's law would come into play - but they don't really do that. Other people use other thresholds and I've never seen any evidence that people just below the poverty line getting help is responsible for the shift.
If in the worst case more people are unemployed b/c the minimum wage increase, the poverty rate would increase. But the converse wont be true - even if the economy is booming and unemployment is zero, these folks are still going to be poor
This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic.
For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have.
"talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have."
This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor.
But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture.
My argument is that the __buying power__ should be increased, by forcing the market to have more of what people need. (I.E. more housing so housing actually becomes affordable)
That would also help out the middle class, rather than trying to lift the tide without building more high-ground docks.
You're fair to argue that it's immoral; I'm agnostic on the idea. Though I'm not sure that Economics has much to say about it.
As for whether it's destructive, I used to strongly believe so.
Now I believe that, as long as there is unemployment in the system (and my understanding is economics tells us that there will ALWAYS be unemployment), the lack of an adequate wage floor will always result in a race to the bottom and a drag on wages.
In the minimum-wage-adjacent pay rates, you might have double the potential workers than the number of workers actually hired. There is therefore zero incentive to offer additional pay for additional productivity at that wage tier, because the employees can simply be replaced (yes, at some fixed cost).
“and my understanding is economics tells us that there will ALWAYS be unemployment”
Will there? In my state just a couple years ago traditional minimum wage jobs could not be filled. State minimum wage was around $7 an hour and every fast food restaurant and grocery store had big signs out front offering $11 or $12 an hour.
In general, it would seem that if everyone was free to offer work at any price, and everyone was free to accept work at any price, yes, some very low value jobs would race to the bottom, but those would be jobs that don’t even exist right now due to minimum wage laws. Many more people would be able to get at least some job, and in many cases wages would naturally go up without the need of government coercion.
Exon 101 is a political argument not a scientific one. There are more than 9 schools of economics all disagreeing with each other. Whatever Economic 101 you are taught depends on your country/teacher/power structure etc.
> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have.
are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?
I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.
> it isn't inflationary. You're not creating new money
Nitpick. We have no evidence minimum wage increases are inflationary. (We have evidence it is not [1][2].) But something doesn't have to create new money to be inflationary.
Increasing money velocity causes inflation as much as printing bills. The poor spend their dollars in the real economy (as opposed to the wealthy, who buy GameStock calls). That increases demand for those goods and services, which can result in a price spike.
Again, we don't have evidence of this happening. But theoretically, it's sound. (And less theoretically, it's why central banks can print pots of money while still fighting deflation.)
> when price of flowers goes up prior to Valentine's day, that's inflation?
No. Inflation is a "a general rise in the price level in an economy over a period of time" [1]. A single product pricing up is not a "general rise," and a temporary spike before Valentine's Day isn't "over a period of time."
Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
If you made a minimum wage that was significantly above the prevailing wage I'd expect to see inflation in a economy like the US. My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. We might not call that inflation in the economy generally as after all stocks would "deflate" during that time but in terms of living day to day it would be.
Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers.
That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.
>My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock.
OK ... but if the money supply stays the same, then all you're doing is just shifting the demand curves from one set of products (stocks) to another (TVs?). Put anther way, some things will go up, and some things will go down because spending habits changed. This happens now. It's not inflation just because the price of roses goes up in February.
I agree it isn't inflation in the classic sense, I'm not sure of a great term for this effect.
A thought experiment, if I printed up a dollar for each one in circulation then put them in a vault that shouldn't cause inflation even though the money supply has doubled, similarly if in a thousand years someone opens the vault and puts those dollars into circulation inflation happens even though the money supply has unchanged.
My thesis is dollars that go between hedge fund to hedge fund are "in a vault" compared to dollars that are buying food at the local Walmart. If some of those hedge fund dollars ends up in the hands of a individual (say a minimum wage increase causes firms to halt buybacks and direct that money toward payroll) that would cause inflation of consumer goods as now we have more dollars chasing the same output.
This is an empirical question (if raising minimum wage effects inflation) so what you expect in terms of inflation doesn't really matter. This isn't a philosophy question where you can imagine the answer and get a best in class result.
Since 2009 people on the Internet have been prophesizing about massive inflation and inflation has been extremely low.
Maybe they will one day be right, but like the boy who cried wolf nobody should be listening to warnings about inflation from people on the internet, as a class they don't have any idea what they are talking about.
Offhand, just from my own crummy bio memory of prices of things...
I'd estimate about a 50% increase in food prices in about the last decade.
I'd also estimate that the asking price of a house was completely out of whack even post the recession in 2008; it _never_ corrected in any of the west coast areas I live in. Still even that price has continued to go up due to inelastic supply and ever growing demand.
The government CPI statistics show 18.7% price increase between 2010 and 2020.
It's certainly possible that your expenses went up 50% in your presumably super-affluent area of the U.S. It wouldn't surprise me if booming tech companies in certain regions have caused this- but it is not the effect of monetary policy or government minimum wage policy- and my expenses have not gone up much in the last 10 years in my wealthy-but-not super-affluent east coast suburb.
Im from EU and I think that minimum wage is basically negotiation with employer on your behalf. Obviously the lowest earning people don't have resources to negotiate salary well. IMO it's probably better to define it on more granular lvl that federal.
If someone earns less it should be considered gig not work and basically non even taxed.
> But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
Inflation is a boogeyman. I heard a friend of mine not wanting any sort of covid stimulus checks because it would make his and his family's savings depreciate.
Huh? Inflation is very real. The dollars I saved from 20 years ago buy a lot less across the consumer spectrum. Prices don't go up, the money's purchasing power goes down. That is not a "boogeyman", it's theft by the inflation tax.
yes it's very real, but it is used as a black-and-white "any and all inflation is bad" thing like in my example, especially when discussed on its own instead of holistically combined with things like economic growth and interest rates and other things.
>you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job.
B does not follow from A if demand is elastic. Minimum wage proponents assume enough labor demand is elastic.
The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
Minimum wage just forces some ppl to do more productive stuff. It will take away some jobs but you probably dont want such jobs in developed country. It's just better to allow more part-time work IMO. I would like some opinion of Dutch ppl on their part time work law, which seems interesting to me.
You want those jobs, but you don't want people to make careers out of those jobs. Someone in high school should be working those jobs, someone supporting a family or trying to build a career shouldn't be! Not sure how to solve this issue though... Age-based minimum wage? Something else?
Isn't this basically discrimination? Job is job. Even if you are 13 years old your should be paid the same for similar results. Instead of subsiding via parents.
This make it better for those unlucky youth to help themselves.
Wait, parents shouldn’t subsidize their kids?! As soon as my kid can get a part-time job as a teenager I should totally cut them off? That does sound tempting...
I’m pretty sure I’m feeding and clothing my kids. I mean, I get what you are trying to say, but the fact is, everybody has a different price they are willing to work for based on their circumstances. Sweeping nationwide minimum wage laws are not the best solution for that.
Everybody has a different price they are willing to work for based on their circumstances but that doesn't mean you let them do that. Allowing people to work for low wages drives down wages for others, which is undesirable for lots of reasons including income inequality and not wanting people with families to become poor. Sweeping nationwide minimum wage laws is certainly one solution for that.
Yes, something else. A reasonable education system, a reasonable regulatory framework that let's business success (we have both of these things), and repairing the hole in the bucket that is causing wages at the bottom to be stagnant - illegal immigration. But the majority of power on both sides of 'the aisle' don't want to tackle this for selfish reasons.
Yeah if you arent willing to pay them living wage you probably don't. I'm fine with paying little more than handling it myself. I think amazon Go style shops will get popular. These people probably can transition to different parts of service economy well.
Low skill call centers are total waste of human time, that's why most of it is outsourced. UX just can get improved instead.
>Yeah if you arent willing to pay them living wage you probably don't.
What if they are willing to work for less because it serves their purpose (like a foot in the door in the industry, or something else that you and I can't even think of). For example, we allow unpaid internships because we see the value of it. What about an internship that pays a little? Isn't that better for all?
The problem is you're taking choice away from people who may want it or need it. Why do you think you know better what's good for them than they do?
Yeah, foot in the door to work in McDonalds so you can what? Be manager one day and afford to have family?
Foot in the door as cleaning lady to be hired as secretary? Maybe.
Basically min wage should be defined as basic needs for individual. I don't think that many people will chose to go for lower than that for future personal gain.
If you're comfortable with democracy, why not also be comfortable with other people making their own employment choices, rather than assuming you know better or that they don't have a choice?
Because democracy is about society and not free will (it's about deciding what's better for majority) and yes, I do belive that limiting him that choice(not really him but his employer) is beneficial for society. It similar case to giving free access to alcohol, hard drugs, junk food etc. Someone has to pay this cost of nonoptimal choices.
EDIT: example: you don't provide living wage so some/more ppl will chose to steal. This might destroy their family, so social worker is needed, you also need more police, judges, prisons etc. All of them are employed, happily contributing to GDP. Success! Is it better world? I don't think so. It's much cheaper if with offering living wage. (as global optimisation, company owners and individuals do local optimisations)
Unpaid internships are gatekeeping at its finest: Poor folks can't do them. By expecting people to have someone to support them while they take a chance to get in the door, you are saying you don't want folks that don't have that or aren't rich enough to suffer through it.
Just because a few people are willing to work for less - or for free - to get in the door doesn't mean it is just to take advantage of them and pay them less than a living wage. Not everyone will be working x job for opportunity. Some folks need to eat. And yes, it is taking advantage of people - artists and musicians get offers to get paid in Exposure all the time. Which is really, "please work for free!".
The only real exception to this is, perhaps, when the work is actually part of schooling, and that should be limited. Teachers, doctors, and pharmacists come to mind, though we do treat the doctor interns quite horribly. (some pharmacist interns get a bit of pay).
My local school district employs 14-year olds to vacuum the floor after school each day. You really think that has no value for anyone involved? I know one of the kids and they are sad that they will lose that job if Biden’s minimum wage is passed.
They are being manipulated or are hired because they are cheaper than the staff custodians, who probably have fewer hours because of the school's practice of child labor.
Even after a minimum wage increase, the school will still have to vacuum the floor. I'm guessing it'll just have the other staff do this now, who aren't children.
Because we shouldn't be dependent on child labor, especially when they should be expected to do schoolwork. We can make children feel good about a paycheck by paying them to go to school if we'd like.
I can't verify they feel good about getting a paycheck. I have generally been happy to have a bit of money, but I've never cared that it came from a paycheck and realistically, despised that I had to work while going to school (mine was later, in college). I'd have went without if it were a reasonable option.
You might want to rethink yours. You are arguing for child labor with emotional manipulation (Some 14 year olds - children - will be sad to lose a job)
I realize that folks are different. However, In a lot of places and situations, child labor is illegal - and 14 is considered child labor in so many situations. When they do work, it comes with massive restrictions. This is soley because we, as a society, generally feel that the focus should be on school instead of work. If we cannot pay young folks on par with adults, we shouldn't hire them.
As a sidenote: I'm guessing that the real reason the school hired them is because they are cheap labor - soft exploitation - and so long as their rate is less than paying a member of the custodial staff (who would have to pick up the slack), they won't be out of a job.
You seem to put a lot of weight behind this term, Child Labor. I understand that in the past and in some places still today children were/are essentially treated as slaves, and that’s possibly what you are thinking when you write Child Labor. I agree 100% that that is evil.
I assure you that these teenagers are not being mistreated, and there are adults doing this same job with them. Our society has come a long way. No teen spends 100% of their time on school work. Like anyone, they have a price they are willing to trade their time and labor for. Why should they, or anyone not be allowed to make that trade?
And yes, it is an emotional argument. We are emotional beings. Doing a useful job and being rewarded for it satisfies those emotions immensely.
In addition to that, it teaches things in ways that a classroom simply cannot. In a very real way it is paying them to get some education, as you suggested.
If someone's skills do not justify $15/hr, they will get locked out of the labor market, keeping them in poverty. Many municipalities enacted the minimum wage as a way to keep blacks out of the workforce. It is literally an example of codified systemic racism.
There is only so much money for businesses to allocate towards labor, it is not infinite.
Eg: $15K per month for staffing translates to $3750 per week, which translates to $125 per hour at 30 hours per week on average, which translates to ~10 staff at $12 per hour.
At $15 per hour that is reduced to 8 staff. Alternatively the hours for 10 staff would be reduced from 30 hours per week to 24 hours per week.
The money doesn't come from thin air, raising minimum wage for 10 staff at $12 per hour to $15 doesn't mean there will be no layoffs or reduction in hours.
Increasing prices of products sold or services rendered would result in a reduction in products sold or services rendered. Again, the money doesn't come from thin air -- either prices are raised or staff costing is reduced through cut hours or cut headcount.
Who gets cut is another question too -- more than likely it is tied to appearance, education, likeability, or seniority. Who gets hired is another question too -- if the bar is too high for an uneducated black youth then they will simply not get hired. An increase in the minimum wage can result (and has historically resulted in) in higher unemployment among black youth.
A better way to think about this is for retail businesses the storefront landlord acts as a spring-loaded sink of money. The landlord will take all available money until the retailer has bare minimum margins, 2-5% typically. Retailers will trade away wages for rent because landlords are very powerful and retail labor is not at all powerful. Therefore the minimum wage is simply a way for the government to set a rule saying you can only trade down to this amount. To treat the staffing budget as a fixed thing isn't a proper model. You have to understand it as being in tension with other budgets.
It's a lot more complicated. Sometimes staff is set by the budget. Sometimes a business needs a certain amount of staff to function and can't get away with employing less. In a lot of cases, staff is set by the latter, and raising the minimum wage cuts into profit margins. It's potentially inflationary if product prices go up in response to higher costs, but often product prices are very demand sensitive and raising them will result in suboptimal net revenue. There is a reason a lot of studies show that increasing the minimum wage by small amounts has negligible effects on employment: there are many other factors to consider. That being said going from $7 to $15 in the US is an experiment for which there is little to no data, especially for rural effects (since only big cities seem to have tried it). I personally favor not having a minimum wage but only in a society with a UBI so you don't have people needing to make a living off what they earn in the labour market exclusively. In such a society people who's labour contributes negligible value to society can choose to do something other than work if they feel it would be a more valuable use of their time. People who earn a lot in the labour market still face a strong incentive to work. In current society the low-end employers appear to have oligopsony power which results in distorted downward pressure on wages, and many people are forced to take badly paying bad jobs in order to live.
This only holds true for places where there's no room to increase the staffing budget.
There are some industries where it might have an effect, restaurants/coffee shops in particular. But I wouldn't expect mass produced goods/foodstuffs to increase much if at all, simply because of how efficiently the labour is utilised.
There are also be potential productivity gains from having workers in a more financially stable position.
I'm sure Amazon isn't the only place that can afford to pay more, but they are definitely a great example for why our current economic system isn't fit for purpose.
Also destroyed is the value of one's work if worth under minimum wage: she will be rendered unemployable legally.
My first job I got as a poor student is now illegal. Had a chat with that business owner (we still keep in touch) and he only can only afford to hire experienced people now. That job pretty much launched my career and life. I was woefully unprepared for it, but I was cheap.
I might be wrong, but I suspect that if this pandemic had hit before remote working technology had become widespread amongst professionals and white collar elites, there wouldn't have been such an aggressive, broad lock-down strategy.
Instead, the people with power and influence, like us, felt minimal pain compared to the working classes, and marched on with our policies in bliss.
Meanwhile, my family (I grew up in a working class rural family) has suffered tremendously back "home". I'm ok with what's necessary, but deeply resent the politically safe strategy of overreacting by default.
If you live in California, you may be interested to learn that elementary schools are open in states like Colorado, and these states universally have lower rates of infection than CA. You may also be interested to know that a study published by the American Academy of Pediatrics (those quacks!), conducted jointly by Duke/UNC, following 100,000 students and faculty in North Carolina public schools, conclusively determined that schools can be opened safely with basic PPE and adjustments in scheduling.
https://www.aappublications.org/news/2021/01/08/covid-north-...
From the study:
"During the nine-week study period, the 11 districts reported 773 community-acquired infections. Typically, people in North Carolina who are infected have infected slightly more than one other person, meaning there was the potential for 800 to 900 secondary infections within the schools. However, local public health officials found only 32 in-school transmissions, according to the study.
Of those 32 cases, six were in pre-kindergarten, 11 were in elementary schools, six were in middle schools, five were in high schools and four were in schools that included kindergarten through 12th grade. None of the cases involved a child infecting an adult."
My daughter and son are both enrolled and attending in-person school here in Colorado, and it's gone smoothly. I'm curious as to what dynamics exist in California school buildings that would be different than my kid's school buildings, and can't think of any. Which makes me strongly suspect that California and certain other places have schools closed out of an overabundance of caution that doesn't take into account the holistic costs of keeping them closed.
I just started reading Pikkety and at 2010 already private owned capital was at 600% of GDP (almost reaching pre WW1 lvl). I wonder how it's now when stock rised 4x in the last 4 years (probably will rise more with next relief). They have some DB online with such info.
I'm of opinion that work is no longer profitable (and I have top non-exec salary).
I'm not from US but IMO federal wage is stupid but on state lvl I would urge you to implement it. I'm from Poland and I think that keeping our own currency was good for staying competitive. If we had federal EU minimum wage we would be in ruin. Actually EU mandated minimum wage recently but it's defined as 50% of average salary which we have in our country already. Gemany has min at 41% or something like that for example.
That seems more sane and seems to ensure less inequality. E.g. a rising tide lifts all boats. I think that would be something like 24000 a year based on 2019: https://www.thestreet.com/personal-finance/average-income-in...
Current federal minimum is about $15,000 a year for 40 hours a week.
However, I doubt the politicians will do it as it's harder to explain.
Agree. What they gain in salary will offset that for sure. It will affect just people who currently earn those $15 as they will need to renegotiate due to small increases in prices and also they relative productivity.
The fact that you had to point this out demonstrates that there are a decent number of people who are either out of touch with what life is like for people living paycheck-to-paycheck, or else they're trying very hard to rationalize things.
Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration.
There are ways to live below your means under even extreme situations.
Both those variables (cost of living and income) are far from fixed. Cost of living can be reduced by removing unnecessary expenses or selecting cheaper options while income can be increased by working more or improving oneself.
But you need to want to have those savings. Most of the people I know living day to day spend beyond their means (like buying the BMW instead of the reliable Honda) or waste their time watching tv, drinking with friends or getting high.
There's a lot of traps when you're living pay check to pay check and suggesting people cut more ignores that there are solid floors on how cheaply you can live and minimum wage is below or just barely above that in a lot of places. Traps include not being able to buy bulk cheap items because they cost more than you can afford or not being able to buy longer lasting items because they cost more than you can save.
Consider just transportation for a minute. The options are fairly simple; walk, bike, public transit or a car. [0] The first two take a while and are very weather dependent so if you live in some parts of the country they're not really options year round and even where they are they take time out of other activities like childcare and cooking (and cooking is one place you can save money but doing so often takes time the one or two shitty low wage jobs don't give you). Public transit is a mess in the US outside of a few cities. For cars cheap means older and by extension more maintenance costs from regular break downs, buying a slightly better more reliable but more expensive car is difficult because you always need a car and the one you have keeps breaking down or other things you similarly had to buy a cheaper but less resilient version of keeps breaking.
[0] For where I live those would take 3.25 hrs, 50 minutes, ~1.5 hr, and 20 minutes respectively.
Of course there are 'floors' to prices. Of course there are regional differences in cost of living. Of course. Of course. But that's not the argument here. Are you really trying to argue that in America it is not possible to live below your means? Really? Really really?
I mean... There are billions of dollars in remittances being sent by immigrants (of all income levels) working legally and illegally back to their families in their home countries. How are immigrants able to save? And yes, it should be an obvious statement that people, even poor people, in poor countries, find ways to save as well.
> waste their time watching tv, drinking with friends or getting high.
How much time per week would you find acceptable to spend on these activities? I refuse to believe that number is "0 hours", that would be an inhuman (without an 'e') expectation.
Time to decompress is super important, and frankly, it is the very essence of living. It is not at all a waste of time - it's their time anyways, who are you to judge? To anyone reading this: The attitude displayed above is toxic and actively harmful. Please ignore what they've said; you can be successful AND drink with friends or get high, even a lot.
Balance is important, but you are not obliged to work on self-improvement at all times (or at ANY TIME - full stop). This insinuation smacks of victim blaming and a superiority complex. The concept that you're 'wasting time' by spending it enjoying yourself is absolutely absurd, insidious, offensive, and IMO just plain mean.
Nobody argued for zero fun-you-time in your life. Just watch the balance and keep your income higher than your expenses so you have some damn saving put aside just in case.
You're making a lot of assumptions in that statement and spinning a hypothetical story in your head that does not match reality.
There are ways to live below your means in America. You may need social assistance if you're in hard times (and that's OK, that's what it's there for), but there is. If you say otherwise, you're just making things up.
I said this in another post, but I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did. It's possible to save even under poverty and/or extreme situations. And America isn't North Korea.
I think many people with jobs let alone those on social assistance, are below the poverty line, because their incomes do not afford the basic essentials.
I’m in Canada, where I think the social safety net is slightly better than America, and I personally live this existence, it’s not a hypothetical for me that I spend over 50% of my income on a studio apartment.
It's a perplexing attitude. OP just threw it out there as if it's an obvious fact that "people living in poverty don’t have “savings”". That is such a blatantly false statement. Poor people in developing countries have savings. I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did.
Poor people aren't idiots. They think about the future. They plan for the future. If they need to save, they will save.
Are you suggesting that raising the minimum wage will increase inflation? That seems theoretically plausible to me, I suppose, but I haven't seen any evidence for it happening in practice. We have had plenty of natural experiments where one region has raised the minimum wage while its neighbours have not. Do you have any information about what happened to inflation in those cases?
I am entirely convinced that an increase to the minimum wage (perhaps not as high as $15/hr) will have no major effect on employment. That idea is contradicted by all the empirical evidence we have. I have not seen enough evidence to draw a conclusion on inflation.
It's been really incredible to watch the "shut it down!" crowd work comfortably from home while watching their 401k rise while the rest of America suffers. Meanwhile small businesses (which employ a disproportionate amount of minorities) basically get rolled into the trash. California effectively mandated they go out of business.
The icing on the cake is seeing politician after politician get caught breaking their own rules. Nancy Pelosi visits a nail salon while the state ordered every other nail salon out of business. It's sick and it's dumb and a large portion of the country couldn't care less.
What is the alternative to shutting it down when a large majority of your population is idiots who don't believe the virus is real?
Seriously. What else do you do?
You should have given much larger stimulus checks and fund small businesses to help them stay open. Doesn't require leaving the restaurant open so Joe Six Pack can continue going to McDonalds every day like a moron.
The political wedging on this issue is gross and annoying.
Ideally you would immediately shut down everything and prevent the virus from even entering. With rigorous border controls and contact tracing you can prevent it from ever taking root.
Having failed that, one option is keep everything open and let people die. Covid is not that deadly, so it's worthy of consideration.
Another possibility is to deliberately make sure the young and healthy are infected. Preferably in a staggered way so they can be given care.
You could also consider making camps for the frail where they can stay isolated from the rest of the world while everything blows over.
> Covid is not that deadly, so it's worthy of consideration.
Right. People seem to loose perspective. In the U.S. we have lost 1 out of 750 people to covid, mostly older and mostly with comorbidities. I assume this number will increase to 1 out of 500 when this is finished. Many countries are in this same range.
From a personal perspective it is a tragedy to lose someone close to you. From a population perspective this is not as big as deal as some people make it out to be.
The article doesn't delve into recovery. I would love to see some analysis on what it will take to lower the poverty rate back down, and for the small businesses that were forced to close to recover. How likely is it that we will see small businesses return?
maybe instead of the fed juicing the markets and the congress giving everyone checks, we should have targeted aid to the needy. but that’s unpopular because people are greedy and want free money even if they don’t need it
(Downvotes? "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", spoken in the 17th or 18th century by "a great princess" upon learning that the peasants had no bread.)
You aren't being downvoted because people didn't get the reference. You are being downvoted because short joke responses are generally frowned upon on HN.
A stonk is a stock that moves with no regard to the intrinsic value of the underlying business
The government's monetary policy, along with widespread retail call option trading, have turned certain "hot" parts of the stock market into stonks, prices rising parabolically or exponentially, making gamblers very rich
"A rising tide (of monetary policy) lifts all boats, er, stocks, er, stonks..."
Related:
"And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” "
As I've seen it used, "stonks" connotes that you're suggesting somebody who doesn't really understand anything about the stock market, but thinks that what's good for the stock market must be good for America.
I think it's not meant to suggest a typo, but rather the slurred accent that comes with being overenthusiastic and loud. I'd compare it to using "Murica" instead of "America" to sugges that somebody is being nationalistic -- and I think there's supposed to be a significant (but not perfect) overlap between the two groups.
In some circles, for sure. I've also just seen it used as a goof or an insult. I think it's one of those things that started being used one way but has spiraled off into many different meanings in many different communities.
Frankly I'm surprised the effect was so small considering that the industries hit hardest by covid employ a heck of a lot of people who are near the poverty line to begin with. I would expect all those people to be pushed to the other side of the line resulting in a much more dramatic increase in the poverty rate.