Re: Guest Post - Living Wage

1

The legislature here just passed a bill to raise the state minimum wage (currently one of the lower ones) to $9.50 an hour over a couple of years (so approximately up to what the UK has now). That would work out to an annualized, 2080 hours/year salary of about what I make now (since I don't work full time), and I do alright, I suppose. I don't have a kid of course, so that would be a bit different, and Mpls. isn't really such an expensive place to live by large-US-city standards. It should still be higher though.


Posted by: Natilo Paennim | Link to this comment | 05- 4-13 6:54 AM
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I think just raising the minimum wage would be simpler and more sensible.


Posted by: James B. Shearer | Link to this comment | 05- 4-13 7:25 AM
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I'm pretty sure it's the norm for minimum wage increases in the US to come coupled with business tax breaks.


Posted by: Minivet | Link to this comment | 05- 4-13 8:01 AM
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3

I'm pretty sure it's the norm for minimum wage increases in the US to come coupled with business tax breaks.

It appears this is correct as least for the most recent increase . However individual firms don't get a choice which is what I thought was being proposed in the UK.


Posted by: James B. Shearer | Link to this comment | 05- 4-13 8:11 AM
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Sneezing in the US comes coupled with business tax breaks.


Posted by: heebie-geebie | Link to this comment | 05- 4-13 8:22 AM
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6

I love the counter-proposal.


Posted by: clew | Link to this comment | 05- 4-13 8:40 AM
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I'm having a hard time getting exactly what is envisioned in the linked article, but if companies get to choose (as opposed to being offered tax breaks in a political bargain), that's ridiculously milquetoast and contrary to the collective-action mechanics of the minimum wage that make it actually help business.


Posted by: Minivet | Link to this comment | 05- 4-13 8:46 AM
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Maybe we should just nationalize the means of production.


Posted by: Spike | Link to this comment | 05- 4-13 9:11 AM
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9

re: 7

There's a already minimum wage, companies are going to be offered some tax breaks if they pay a specified rate higher than the minimum wage. So it's supposed to provide incentives for companies to pay better wages, with the minimum wage there as a floor set at a lower level.


Posted by: nattarGcM ttaM | Link to this comment | 05- 4-13 9:30 AM
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So, if a company is given $x in tax breaks, is the expectation that the increase in aggregate wages would be some number greater than $x?

If so - that's good - but what is the mechanism for this, and where will the money for the additional wages be coming from?

If not, they why is the money getting funneled through the company, rather than just being given to the workers directly?


Posted by: Spike | Link to this comment | 05- 4-13 9:56 AM
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The money is given to the company on condition that they spend it on training or R&D and don't just pay it to their directors as a bonus. The company is not out of pocket for the wage increases, but neither an it spend the amount given in compensation on socially wasteful shit.


Posted by: chris y | Link to this comment | 05- 4-13 10:02 AM
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re: 10.last

There's already lots of money given directly to workers, via housing benefits, tax credits, and so on. I guess this is just another mechanism, via a carrot offered to the corporation to pay higher wages.


Posted by: nattarGcM ttaM | Link to this comment | 05- 4-13 10:03 AM
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11 > 10 last. Also, most companies in pratice expect the government to foot their training budget if any, anyway. So the government might actually save on the second pass if they felt that training in the relevant sector was important enough to subsidise under present conditions.


Posted by: chris y | Link to this comment | 05- 4-13 10:05 AM
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If the workers really need more training because they are under-skilled, why not give directly give them scholarships, and let them choose the training they feel they would most help them in their career, instead of giving their boss the money to spend on potentially unaccredited contractors teaching less transferable skills?


Posted by: Spike | Link to this comment | 05- 4-13 10:22 AM
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14 -- Because scamsters will provide useless training? The idea, I suppose, is that an employer is only going to provide subsidized training for positions it expects to put people in.


Posted by: CharleyCarp | Link to this comment | 05- 4-13 10:33 AM
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So then - and maybe this sounds crazy - but why not use the funds to support some sort of system whereby a variety of accredited institutions provide instruction and credentials to people seeking to acquire skills that would enable them to advance their careers and be more productive in the workplace? Some of these institutions might even be publicly run...


Posted by: Spike | Link to this comment | 05- 4-13 10:56 AM
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NMM to Tom Knapp.

|>


Posted by: gswift | Link to this comment | 05- 4-13 11:18 AM
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9: Right, I didn't think the existing minimum wage would be removed. But it's still counterproductively complex: if a single company without market power raises wages, that's a competitive disadvantage to them; if every company is forced to, that raises everyone's purchasing power and makes everybody better off. So if half an industry takes the government up on its offer, they become worse off by more than just the added wage costs.

Also, what happens to workers at restaurants and other small business that don't have the leisure or habits to annually examine all the possible tax breaks and decide what works best for them (or find tax evasion gives more return on effort than tax optimization)?

The minimum wage works as policy; now isn't the time to start acting like it's a regrettable imposition on the poor little employers.


Posted by: Minivet | Link to this comment | 05- 4-13 11:33 AM
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A low-bureaucracy version of this is to just print money and give everyone enough of it to live on. Then you could even abolish the minimum wage, since its goal would already be achieved.

We have a lot of spare productive capacity and we should be able to bring more online quickly, especially when it comes to food and other necessities of life. So it won't create massive inflation, since you're not bidding up a limited stock of goods. More goods can easily be manufactured to fit the demand. Let the robots make the stuff and let most people do as they please.


Posted by: Neil the Ethical Werewolf | Link to this comment | 05- 4-13 12:01 PM
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Semi-OT: has the Niall Ferguson thing come up here yet? (I couldn't decide between this or the Sherman Alexie thread.)


Posted by: lurid keyaki | Link to this comment | 05- 4-13 12:48 PM
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Ferguson has apologized.


Posted by: parsimon | Link to this comment | 05- 4-13 1:13 PM
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Jus/tin Wol/fers just linked to two parts of a Ferguson book:

Keynes, as noted already, had started out an optimist about Britain's prospects. But his mood quickly changed.... Even his sex life went into a decline, perhaps because the boys he liked to pick up in London all joined up. (Pity of War p. 327)
There is, however, no question that a series of meetings with one of the German representatives at Versailles added an emotional dimension to Keynes' position. Carl Melchior was Max Warburg's right-hand man.... It may be that Keynes' subsequent declaration that he 'got to love' Melchior during the armistice negotiations at Trier and Spa obliquely alluded to a sexual attraction. As we have seen, Keynes was an active homosexual at this time. (p. 400)

Posted by: Minivet | Link to this comment | 05- 4-13 1:49 PM
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Also, I'm shocked, shocked.


Posted by: Minivet | Link to this comment | 05- 4-13 1:52 PM
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24

How about we demand full employment?


Posted by: Benquo | Link to this comment | 05- 4-13 2:39 PM
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Demand of whom?


Posted by: Eggplant | Link to this comment | 05- 4-13 3:13 PM
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The Man?


Posted by: Spike | Link to this comment | 05- 4-13 6:54 PM
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No way. That guy's an asshole.


Posted by: Stanley | Link to this comment | 05- 4-13 7:03 PM
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25: In the US, your member of congress, senators, and the President. In the UK, I guess your MP or something.


Posted by: Benquo | Link to this comment | 05- 4-13 8:57 PM
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