There's also a certain amount of framing going on in the original tweet to avoid facing whatever the actual issues are. What exactly is the issue here that is to be tackled?
Going with the USA, apparently something like 98% of people have managed to get work that pays better than the Federal minimum wage. If people on the minimum wage are being failed by society, there needs to be some reflection on what is happening differently with this 2% and how to change that. Legislating people's favourite lucky number with reference to good literature is not the path to good policy.
Cratchit had enough money to almost-support a family with a sick son in presumably the absence of any sort of social spending - ie, he earned enough money to support 2-4 people in London with food and shelter depending on how sick Tiny Tim was, and had an office job with no physical risk. It is unclear why the default position is someone should (1) be doing the similar work as Cratchit (2) possibly with less responsibilities and (3) earning more money in real terms. I can see an argument why some 20 year old with no family doing similar work could be paid the same amount and that it would be quite reasonable. Especially since it is so much easier to move to a low cost of living area in this era of fantastic communication and easy travel.
In short, I'd question why near-poverty while supporting family is unacceptable as a legal minimum. There are a lot of people who don't have a family.
Your first point seems to be that, since only 2.7% of Americans make the federal minimum wage, there is something wrong with them that can be fixed, or something abnormal about their situation. However, most Americans live in states with a minimum wage higher than the federal minimum wage. In fact, 90% of people making minimum wage are making more than the federal minimum. That means 27%+ of people are making minimum wage. It's not abnormal.
> That means 27%+ of people are making minimum wage. It's not abnormal.
Though, of course, that doesn't say anything either way about whether minimum wages should be higher or lower, or whether they are a good idea in the first place. (And neither does the somewhat incoherent comment you replied to.)
That's true. I'll admit, I didn't even try to respond to the person I was replying to with regard to the level they should be at, because I couldn't even understand their position.
That said, I believe in a minimum wage. It probably should be higher. Or, what I would prefer, is instead of raising the minimum wage we raise taxes and provide more government services (e.g. free healthcare for all as opposed to raising the minimum wage.)
Regressive zoning makes the economy run well, for you and no one else.
Also minimum wages are kind of okay because all prices will adjust upwards relative to the lowest price of unspecialized labor.
The real problem is the ability to slow down economic activity below the speed at which most members of society can survive. Imagine starting a siege against a city and running their supplies down until they surrender.
Since money is a monopoly, is necessary for the division of labor and the division of labor is necessary to live a modern life then the ability to stop all money transactions is equivalent to a siege but it can be done to individuals or entire countries. Since those excluded individuals are by definition at the bottom of society they will at some point revolt if they reach a critical mass. So politicians are trying to keep these people busy. They do so by creating jobs and the money for the jobs has to be borrowed from those who have withheld their money. So from a naive perspective it looks like the government is really incompetent and filled with stupid politicians. The moment a "smart" politician stops the "nonsense" (via gold standard, austerity, deregulation) radicalized people will suddenly pop out of nowhere.
In either case the problem is the economic siege, not the response to the siege. Stopping the siege stops the problem.
However, we consider the ability to coduct economic sieges to be a holy cow, after all capitalism has strict private property at its core and private property is by definition the ability to conduct economic sieges. (excluding people from entering your private property).
e.g. If you own an uninterrupted ring of land around a city you own that city.
Withholding money from A to B also interrupts the flow from B to C and C to D. A lot of economic activity may or may not happen because of a single person. This is why debt is exploding endlessly because we recognized the benefit of ignoring the slow people. All we need to do is to make them hurry up.
> Regressive zoning makes the economy run well, for you and no one else.
Huh? Could you please explain what you are talking about?
> Also minimum wages are kind of okay because all prices will adjust upwards relative to the lowest price of unspecialized labor.
Do we have any empirical evidence for this? Would you we could look at price level data for different countries over time and compare that with data on minimum wage legislation? What would you expect to see?
Minimum wage legislation only concerns you, if you are running a business that offers jobs to poor people. If you automate and hire robots instead: no obligation. If you don't open a business in the first place: no obligation. If you outsource overseas: no obligation.
Do you see how the article I linked applies?
I would suggest that if we want to help poor people via legislation, we give them money financed out of general taxation. Instead of special obligations that effectively act as a tax on interactions with the needy.
> I firmly believe in a minimum wage.
What makes you believe so?
What do you think minimum wage legislation accomplishes? What are the costs and benefits you see?
What empirical evidence, if any, would change your mind?
Woah, horsey. For most HN readers including you and I, it looks like just a “lucky number”, but to the people it matters it is everything. Financial security is for most intents and purposes the first rung of being happy.
> There are a lot of people who don't have a family.
Social support per child can account for this. It’s a politically vulnerable policy, as it ‘seems intuitive’ for smart people that this would ‘incentivise child-rearing’. But upon leaving the blue sky anyone would realise that a normal person doesn’t calculate their life so coolly in quite that imagined fashion.
To pre-empt a counter-narrative about minimum wage - inflationary effects - it’s worth noting that modern countries both seek mild inflation and regularly enact policy which expect some inflationary outcomes.
Trickle-up benefits are known to be far more beneficial to all of society, which includes incumbents, than trickle-down policy. This also in time offsets the inflationary effect somewhat on the supply side.
Inflation is a monetary phenomenon. Central banks control that.
If you are actually looking for non-strawman arguments against minimum wage:
First, see https://web.archive.org/web/20220217044208/https://blog.jaib... (Basically, don't punish employers for interacting with poor people, nor reward other folks for successfully avoiding interaction with poor people. If you want to help poor people, give them money.)
Second, employers are paid with a whole basket of goods, and money is just one of component. Training, working conditions, flexibility etc are others. A minimum wage makes some of these baskets illegal, even though they might be mutually agreeable to all parties involved.
Central banks don't control money. People who hold onto money control money since the central bank is forced to make as much money available to be lent out as much as is being saved because savings = investments must hold and allowing savings to go down to the level of investments is frowned upon (negative interest means savings exceed investment).
Central banks don't control real variables. But they do have a quite a big impact on nominal variables.
> People who hold onto money control money since the central bank is forced to make as much money available to be lent out as much as is being saved because savings = investments must hold and allowing savings to go down to the level of investments is frowned upon (negative interest means savings exceed investment).
Huh? Could you please explain?
First, not all saving happen as loans.
When someone harvests wood from her property and burns the wood in her fireplace, that's consumption. If she uses the wood to build a shed, that's investment. (No market involved in this example.)
Similarly, when I invest in a startup vs when I buy food, the amount of money needed for either activity is basically the same. One is saving/investment, the other is consumption.
When people save money in the bank, the bank typically turns around and loans that money out (or invests it in other ways). The money doesn't just pile up at the bank.
Now you are right that people often hold on to cash and that banks keep a certain amount of reserves around. Some amount because of regulatory requirements, some because it makes business sense. (You can clearly see the latter in countries that have no regulatory reserve requirements for banks.)
Also keep in mind that saving and investment are increasingly global phenomena: people from one part of the world can invest in other parts of the world. Eg Chinese people buying American stocks does lower the real cost of capital for American companies.
Inflation is a local phenomenon. Eg Japanese deflation and Zimbabwean hyperinflation cause neither deflation nor hyperinflation in Switzerland.
> Especially since it is so much easier to move to a low cost of living area in this era of fantastic communication and easy travel.
How often have you, yourself, had to deal with the time and money costs of moving a family, including finding suitable housing, sustaining employment throughout, and dealing with furniture and appliances? You're using "easier" here to skip straight to implication of "easy", but it's not, especially not for anyone not already living somewhere with plenty of space like the suburbs.
>It is unclear why the default position is someone should (1) be doing the similar work as Cratchit (2) possibly with less responsibilities and (3) earning more money in real terms.
Because if he is barely supporting a family in near poverty with a sick child with not system for social spending it follows that he is not able to put money aside for his eventual retirement / sudden death. Thus if he were run over by a horse and carriage and died from his injuries his family would be definitely in poverty and probably go to the poor house.
Also as I recall the story the ghost of Christmas present says that if Tiny Tim does not get treatment he would die, but he is not getting treatment because Cratchit is barely supporting the family as it is.
Finally nobody is saying that social policy should be based on stories like this one, because it is hard to legislate supernatural beings showing up to make misers better people. Stories are used to indicate possible problem areas for which solutions should be formed.
At the end I would agree that near-poverty while supporting family is acceptable as a societal result for a small part of society, as long as there are social systems in place to help in case of the person doing the supporting not being able to support any more or to help in case of severe health problems which near-poverty cannot solve and as long as there exist non-supernatural or not completely luck based means (like winning lotteries) whereby it might be supposed the person doing the supporting might be able to move that family to a middle class lifestyle.
>legislate supernatural beings showing up to make misers better people.
Sometimes this might be the only type of legislation that would have a chance.
Since well before the time of Dickens there have been major organizations controlled by influential elites which have always been dependent on the kind of expolitation that can only be maximized up the chain when there exists at least a certain amount of this type of poverty toward the bottom.
Even when there are more than enough resources to go around.
Even sometimes when there is no maliciousness involved. The tradition is that deeply ingrained.
Employed workers like Cratchit were not suffering as badly from the full prevailing poverty at the time. Their financial disadvantages were great, but not nearly as bad as the vast unemployed had to face in order for their services to be made available to elite ventures when needed at relatively insignificant cost with little notice.
The unwashed masses really are masses and sometimes will need to include white-collar professions more than others. When it becomes possible for enough working-class people to rise financially through mere education and/or merit, then adjustments will be made by those whose control did not arise from merit in order to keep the distance and maintain the status quo.
Miserliness is not the same as greed. Miserliness is about refusing to spend money, not about making money. It may overlap with greed when it comes to paying low wages, but miserliness doesn't, in general, mean exploiting people.
Sometimes exploitation can still be the root cause if it extends far enough up the food chain, many business owners can't afford to spend money any more freely than their employees or those at the very bottom.
a small note - in the story Scrooge did rise by 'merit' as it were, he came from poverty and succeeded by working longer and harder than everyone else (ruining his life in the process) as well as having a more astute financial sense which he exploited to the detriment of others and his own gain.
>In short, I'd question why near-poverty while supporting family is unacceptable as a legal minimum. There are a lot of people who don't have a family.
Because most people only choose to start a family once they already have the financial stability to support one.
If the average 20-something male without a family earned more (or there was a drop in the cost of living), he'd be more likely to start a family, do it earlier and have more (and healthier) children.
> Because most people only choose to start a family once they already have the financial stability to support one.
This has been true for something like the last hundred years out of all of human history. It's not something you'd want to try to architect a society around.
Also, it's not really about having the financial stability. People are terrible at estimating that; they are putting off starting a family until many, many years after they can afford to do it. There's a mass delusion of inability to afford a family -- but there isn't much inability.
>This has been true for something like the last hundred years out of all of human history. It's not something you'd want to try to architect a society around.
Unfortunately I think the horse has already bolted there. Short of restricting contraceptives, the only thing we can do to increase fertility is give people a greater sense of stability.
>There's a mass delusion of inability to afford a family -- but there isn't much inability.
I honestly think you might be right there. A good friend of ours who had their first at the same time we did are on a single income, part-time wage and they are able to get by living frugally. He does miss out on certain experiences as a kid, though, and will have great difficulty trying to get ahead when he's a young adult as his parents won't own assets.
> Because most people only choose to start a family once they already have the financial stability to support one.
US GDP per capita is four times higher than in 1950. People did not have trouble supporting families then. If you want to have a very high standard of living by historical and global[1] standards that is indeed difficult.
> If the average 20-something male without a family earned more (or there was a drop in the cost of living), he'd be more likely to start a family, do it earlier and have more (and healthier) children.
That might be true if women couldn’t work but with two income families it certainly isn’t now. Greater wealth gets eaten up by positional goods, keeping up with the Jones, good schools as detailed in Warren’s Two Income Trap[2]. Wealthier countries don’t have more children.
People in the US in 1950 were aware on some level that they were the richest society in the world. Many of them were probably aware they were the richest society in human history. They were five years into a boom that lasted well into the 70s. I kind of doubt there was widespread worry about being able to afford to support a family. The historical record doesn’t show much evidence of it. The Baby Boom kind of militates against that idea too.
As for the average US household consumption it’s marginally lower than in the city state of Hong Kong with its much smaller households, and almost $10,000 a year higher than Switzerland, the number three. The US is the richest society in human history, as has been true since it’s consistent parts were British colonies.
It takes a quick google search to learn about poverty in the 1950s. The poverty rate was 22% - about 40 million folks in the US at the time. I'm pretty sure poverty makes you worry about not supporting a family, and I'm pretty sure that over a fifth of the population being in poverty is more than just a few folks. "The richest society in the world" can still contain a lot of poverty. None of the things you said mean poverty wasn't an issue. They are just numbers without context nor comparison.
Low debt levels inevitably lead to a golden age. The way money is set up we will always have a debt problem because savings interrupt the economy. To continue the economy you have to bridge over the transaction that was delayed and this is done via debt. There is literally no mechanism in our economy that lets us pay off debt which is why we do the inflation nonsense.
No, a gold standard doesn't solve the debt problem.
>US GDP per capita is four times higher than in 1950. People did not have trouble supporting families then. If you want to have a very high standard of living by historical and global[1] standards that is indeed difficult.
I may be somewhat biased, as I'm based in Melbourne AU, but I don't think you've given proper credit the explosion in the cost of Real Estate (both rent and mortgage costs; keeping in mind that you cannot lock in a set interest rate for 10+ years in other countries like you can in the US).
>That might be true if women couldn’t work but with two income families it certainly isn’t now.
You're not wrong there, but I was specifically looking at male incomes, which (at least when looking at localised populations) are strongly correlated with fertility.
My sympathies on your government but that’s democracy. The people get what the people want. If that was viewed as a problem worth solving Melbourne could look to Tokyo with its flat house pieces over 20 years while population increased 50%, or it could enact a land value tax. Either of the Tokyo style sane zoning system or not rewarding being lucky enough to own property where the economy happens to grow works fine.
> US GDP per capita is four times higher than in 1950.
Ok, now factor in that the mass entry of women into the workforce nearly doubles GDP per capita, plus the rising costs of education, health care, and housing. I think you'll start to see where the affordability issues come into play.
Households that don't want to conscript every possible family member into the workforce wouldn't reap as many of those per capita benefits. And even those that do are probably gaining less advantage than when a single breadwinner was more common.
It's simple math. People were supporting families in the 1950s with half as many people working. The same "per capita" effectively went almost twice as far.
You mean supporting families with half as many people working outside the home?
Household work is hard work. Modern technology has made it much easier.
(And that's the bigger story here: the reduction of in-household workload. The consequence of women entering the workforce is a comparatively smaller effect.)
My nerves are showing here, but economic-policy-by-literary-allusion is, I kid you not, a bad idea. Policy questions should be decided by cause, effect, evidence and discussion. "You've got sympathies for Ebenezer Scrooge!" is possibly the bottom of the barrel of counters if you seriously want good outcomes.
Scrooge isn't an archetype for cruelty though, he is miserliness. And that also goes to why allusion is a bad approach - interpreting a story isn't that much less political than politics except the topic gets derailed into a literal fantasy hypothetical.
Dickens didn't exactly take a statistical sample of the people in London to come up with the story, he had a conclusion and was constructing a situation where it made sense. The fact he did so in an eloquent and entertaining way is not basis for attempting to come up with a policy. Nobody should be using 1850s popular literature as a serious contribution. We've got more than 150 years of policy experiments and records of outcomes when it comes to labour policy since then. Someone who has read up on that should be leading the debate, not the Ghost of Christmas Past.
>Scrooge isn't an archetype for cruelty though, he is miserliness.
He absolutely is an archetype of cruelty. Not in the sadistic sense, but in the sense that he was completely unsympathetic to the plight of those around him and allowed them to suffer needlessly (until the three visits).
>Dickens didn't exactly take a statistical sample of the people in London to come up with the story
He didn't need to. A statistical sample of the city of London "measured him", in a way, when they all read the book and it resonated with their experience.
>Nobody should be using 1850s popular literature as a serious contribution.
Nobody is suggesting we base economic policy on a fictional story from 150 years ago. I am, and I suspect parent is as well, reminding you that your argument sounds cruel and miserly. This is a valid and useful heuristic, especially considering that your argument is:
- Deliberately misleading (or at best, ignorant) with the "2%" statistic
- Completely ignorant of the human experience (You actually argued that people leaving behind their friends, family and community to "move to a low cost of living area in this era of fantastic communication and easy travel" was somehow progress, as well as suggesting that workers shouldn't be paid enough to support a family because not everyone has a family - the logical outcome being that people cannot afford to start a family and their lineage simply dies.)
- Lacking in substance in general (you don't provide a single reason or shred of evidence as to how or why your ideal world would actually have a more prosperous, or stable, or healthy, or "better" society in any way - just that it would align better with the way you think the world should be.)
>We've got more than 150 years of policy experiments and records of outcomes when it comes to labour policy since then.
And yet the experts still fuck it up on a daily basis. Look at the response of the IMF to the Asian Crisis of 1997, or compare Europe's response to the GFC to Australia's. Lee Kuan Yew has openly stated in interviews before that part of the reason he was so successful was that he ignored international economic experts when they were trying to push numerically-backed bullshit ideology onto Singapore.
>Someone who has read up on that should be leading the debate, not the Ghost of Christmas Past.
In all seriousness, the fact that a book from 150 years ago is still seen as relevant today suggests that maybe we shouldn't just throw out its messages as worthless. Its ideas have survived almost two centuries of harsh memetic competition.
How long have the current economic ideas been around for?
roenxi: I'm not sure the minimum wage needs to be high enough to raise a 3 person family. And the strategy should look something like a Plan-Do-Check-Act rather than arguing about 1850s literature.
[???]
> I am, and I suspect parent is as well, reminding you that your argument sounds cruel and miserly.
Not really sure how we got from there to here, but I continue to hold this up as an examples of how polite and rational conversation would have been a much better bet rather than calling me names. It isn't an argument, it doesn't have evidence behind it and it is drawing the conversation away from discussing the very real non-fictional issues. It also isn't true. Argument by allusion isn't reasonable.
>polite and rational conversation would have been a much better bet rather than calling me names
Parent's comment was a gentle poke in response to what was frankly an offensive and inflammatory statement on your part. You brought up some seriously sore points for millions of people and somehow managed to not acknowledge the human aspect of it at all.
In one sentence, you mention an (admittedly fictional, but also completely realistic) example of a man who in one future sees his sick son die because he couldn't afford the treatment, and in another sees his son make a full recovery after Scrooge has a change of heart. In the next, you say it's "unclear" why someone doing similar work to Cratchit should receive a (mandated) higher wage.
In spite of this, the worst name that anybody has called you in this entire thread is "Ebenezer".
If you want a specific argument as to why you shouldn't pursue this idea, without mentioning works of fiction:
- Chronic poverty is a horrific experience, and if you needlessly inflict it on tens of millions of people eventually they'll get angry and chop off your head with a guillotine.
If you want to see what an unrestrained, impolite response to your comment looks like, walk into a country pub on a Saturday night and share it with the blokes there.
> I continue to hold this up as an examples of how polite and rational conversation would have been a much better bet rather than calling me names
The only comment in your thread that you responded to was the one calling you names. You didn’t respond (as of this posting, at least) to any of the half dozen other comments that bring up valid points. Who’s drawing the conversation away?
I don't have anything to add about those posts; they're making actual points. Often good ones, with reasoning.
But this thread was especially to point out this this sort of policy-by-literary-allusion is stupid and also exactly the sort of thing people would try once Dickens quotes get flying.
You were content to play the policy-by-literary-allusion game in your top comment. It feels like you only developed an opinion against it after being insulted-by-literary-allusion.
Quite possibly, it certainly helped crystallise to me why the original article rubbed me the wrong way. It is a relatively subtle problem but argument-by-Dickensian-allegory isn't a path to better politics. Objectives and arguments rooted in the 21st century are a much better approach.
It is a setup that subtly frames opposition as "well you're just like the antagonist of a novel!" rather than trying to respectfully sift through the relevant merits and trade-offs. That isn't a good way to think about policy.
It's not your nerves that are showing here if you can't figure out that 98% of employees make more than the Federal minimum wage because state/city minimum wage is higher than Federal in many states and cities.
That's ignoring a huge number of people making barely above minimum wage in their locality (enough to fall in that percentage, not enough to make a difference in quality of life).
I'll take economic policy by allusion to literature over economic policy by ignorance and bad faith any time of the day, thank you.
That's kind of rich, considering you kicked off a discussion about minumum wage with "Bob Cratchit had it pretty good actually". How did you expect people to respond to that?
One of the commenters suggested that today a $13/hr wage buys you “a lot more house”. I feel that’s very wrong, housing feels like the most it’s ever been.
I think that inflation isn't exactly comparable over that large periods of time. No amount of money could buy computing power equivalent to smartphone in Dickensian times. Our expectations also rises - no one wants to live in Dickensian standard of living. ;)
Also, Cratchit wasn't doing minimum wage job - AFAIR he was accountant or someone like that.
Going with the USA, apparently something like 98% of people have managed to get work that pays better than the Federal minimum wage. If people on the minimum wage are being failed by society, there needs to be some reflection on what is happening differently with this 2% and how to change that. Legislating people's favourite lucky number with reference to good literature is not the path to good policy.
Cratchit had enough money to almost-support a family with a sick son in presumably the absence of any sort of social spending - ie, he earned enough money to support 2-4 people in London with food and shelter depending on how sick Tiny Tim was, and had an office job with no physical risk. It is unclear why the default position is someone should (1) be doing the similar work as Cratchit (2) possibly with less responsibilities and (3) earning more money in real terms. I can see an argument why some 20 year old with no family doing similar work could be paid the same amount and that it would be quite reasonable. Especially since it is so much easier to move to a low cost of living area in this era of fantastic communication and easy travel.
In short, I'd question why near-poverty while supporting family is unacceptable as a legal minimum. There are a lot of people who don't have a family.