[Washington Post] Bernie Sanders to announce plan to guarantee every American a job

This is nonsensical. You can't double the cost of labor in most industries and have those businesses survive as-is - their pricing has been built on a specific cost structure that's been driven down by competitive pressure. The businesses can be viable - but they all will just have to jack up prices, which means the $15 that those employees now will make will not buy them nearly as much, and they'll be close to where they started (though a little better off since the relationship is not linear).

The slogan-based $15/hr stuff is as stupid as this jobs plan or the corporate tax cuts. If you want to make low-wage employees' lives more livable, there are much more efficient ways to do it that don't require screwing over the whole economic system: dropping SS/Medicare taxes on the first $30-$40k of labor and adding it to the $100-$160k range, for example, immediately gets 15% more income into the hands of the poor and encourages more job creation without screwing up business economics or pricing. It also encourages hiring two $50k employees instead of one $100k employee - we currently do the opposite. Or even slow/steady inflation-based minimum wage hikes work well.

But just throwing a wrench into the system because a slogan sounds good is a horribly stupid way to make economic policy.

 

Guaranteed Minimum Income is a pretty old idea, and endorsed even by many in Austrian circles.

 

The only question I have about it is that consumers have to get paid in order to buy products, services etc. If AI puts the market out of business why have the robots there? Nobody will be buying the products made or partaking of the services provided.

 

To be fair, you're still alive/economy doing fine, but you also haven't implemented the increase you're talking about yet. The city will adapt, certainly. But whether the net buying power of those people will increase and how it will affect local business won't be known until 2022 at the earliest, and likely much later as the new economy settles. You're also starting from $11.25 and a history of annual inflation-adjustments, whereas many places will be starting from $7.25.

Seattle is a good test case because they've already mostly (?) implemented it, I believe. There have been mixed results, from what I understand, but it's still a work in progress figuring out the effects since it's come alongside a growing economy so a lot of stuff can be tolerated more. I think the big test happens when there's a recession.

 

The other thing I just wanted bring up is that it isn't a handout. The people would be working for their money. That's not a handout. We'd have clean parks, repaired roads, safe bridges, railways, buildings, and many other possibilities.

 

All this AI and self running cars will be fuled by all the 5G they're rolling out, untested and with unknown effects on humans and animals. F'in terrible idea...

 

Exactly. Let's build some roads, fix the parks, and get to work.

The destruction of our country that the Dotard-in-Chief has set in motion is going to require a lot of clean up.

 

Exactly. Let's build some roads, fix the parks, and get to work.

 

Aiming for a number like $15 is not as important as adjusting for Purchasing Power Parity. Not accounting for it makes comparisons less accurate. Just in my own experience, when I left Tel Aviv, it had a similar cost of living to Paris, but wages were about a third as much. In any case, there are plenty of economies to compare to, like Australia's, that make a strong case for a livable minimum wage not hampering growth.

 

Well who is proposing $15 immediately? Seattle implemented a phase in for smaller businesses with an immediately implementation for larger businesses. But that's a city with a completely different cost of living curve. Seattle is close to 50% more expensive for low income residents. The phase here is a lot slower but that's perfectly reasonable.

For us, the state of Minnesota phased into $9.50 from the federal wage over 3 years and has had inflation increases ever since. Minneapolis then jumped to 11.25 via law and is phasing in to $15. its admittedly a long phase in but its still $1 a year until 2022 with inflation increases after that. That's a perfectly sound model for implementation. And most states have tip credits so a large part of the minimum wage economy is only marginally affected. I just think the fear mongering is getting out of hand.

 

Theoretically you would have AI and robots do vast majority of the production and services and humans will just sit back and enjoy themselves, the government will give a monthly living allowance to everyone. However, if that is the case, in a few hundred years, humans would be no better than monkeys today and we would be doomed.

 

Agreed - that's my big issue with the $15 campaign. There are better ways to get people to a livable wage. Adding a bunch of wages and a bunch of inflation is not the best way.

Bernie has in the past - I believe he wanted to do it nationally over 3 years, if I remember correctly? Starting at $7.25, in Texas, for example, that's a 100% increase over 3 years. Even your move from $9.50 to $15 over 5 years or so is pretty substantial, though certainly more managable.

But beyond that, my larger point is just that saying it's worked so far is putting the cart ahead of the horse. It's worked so far, but we also haven't fully implemented it anywhere, and it hasn't been tested in a recession. It's like saying the tax bill has been fine because it hasn't blown up yet - they haven't fully taken effect, new Obamacare pricing hasn't hit anyone yet, and the real debt trainwreck won't be felt until the next recession hits. We simply don't know the effects of the minimum wage hike until we hit an economic rough patch - my suspicion is that it's going to hit the poor and small businesses far harder than otherwise. Big businesses can weather the storm and just eat the losses for a while, but small businesses operate month-to-month and are going to be faced with some rough decisions when their sales drop.

 

Despite co-opting a GOP agenda that would make Ayn Rand blush, IMHO he got the bump to secure the office because of his populist promises to middle America's unemployed that he would do these things. The political class and it's paid-for proxies in the media would have us believe such ideas are far less popular with voters than they actually are. The oligarchs in the 30s also did everything they could to fight the New Deal. It's neither a communist plot or a pie-in-the-sky to imagine re-implementing something like the WPA and CCC, especially if it added student loan relief.

 

Ten dollars is feasible throughout the country. No need for back woods Mississippi to have a $15 minimum wage

Nationally the price of living would catch up to the increase having no impact. It would not be as much harmful as much as a waste of time

 

Why not test this theory out by seeing if unemployed people will perform these jobs for, say, $9 before hiking minimum wage to $15 and affecting everyone?


If they won't perform for $9, you could venture to say that at a new $15 an hour rate, eventually they're going to quit performing there, too.

The current generation of young people, the ones that would be looking for these jobs (a generation I'm certainly a member of - at 30), has a high percentage of people that are entitled and don't know the value of hard work. They would turn their nose up at any of these jobs as soon as they heard "minimum wage", whether it be $8 or $15. That's my frank opinion. Meanwhile, with a minimum wage at $15, you're taking a very good shot at making an educated person's $25-35/hour go a lot less further. And I'd venture to say that's where the majority of the population would fall.


Hell, I'd even be for starting them at or slightly above they're current minimum wage with a decent salary jump after two years of service.

But don't disrupt the economy by hiking minimum wage up for no reason other than to get voters.

 

Tony Robbins has a great video on the fallacy of simply taxing the rich to solve the deficit problem. It's a bit dated now (references 2012 budget and deficit), but the concept hasn't changed a bit.

FWIW, ALL income tax revenue is only 49% of the 2017 government tax revenue. So, clearly the top 1 and 10% can't account for 70+% on their own.

Those numbers are closer to valid if looking just at U.S. income tax revenue by income percentile , but the skew isn't quite that high.

But the real message is in Robbins' video. You CANNOT tax this problem away. It is a spending problem, not a taxation one. But liberals (and increasingly, far too many conservatives) aren't willing to say this. But the ONLY way to try to solve it through taxation is by growth. Growth not only increases tax revenue, but it also solves the problems on the other end as well...more people working, higher wages, etc. And you don't tax your way into growth.

Absolutely. Not only wouldn't it solve the problem to begin with, it (confiscating wealth from the rich) would actually make the problem a lot worse.

 

Essentially, about as soon as they get it. Too many in this country think minimum wage, oh, ok, I'll do minimum work then.

 

And that's fair. $7.25 to me is unacceptable. $10 and a permanent inflation adjustment is probably a fair middle ground. Also the tip credit wage has to go up as well. If it were up to me, the tip credit wouldn't exist but the tip wage definitely has to go up. That thing hasn't moved in ages.