I did look, of course. High minimum wages, serious social support for unemployed or unemployable, high taxes, generally a more collectivist mindset among citizens than what we have in the US.
Additionally, the US has a very backwards system of social support, which cuts off benefits abruptly, so earning slightly more makes you suddenly quite worse off, instead of weaning you off the support smoothly as your income grows. It's literally a trap. Raising the minimum wage may trigger this for some, too, so staying at the same job at a higher hourly rate results in a lower total income than being unemployed and living entirely off benefits.
I see. But not touching the minimum wage, and instead making the same amount of benefits provided gradually instead of having a sharp boundary (as now) would go a long way.
It won't make any businesses die; to the contrary, the people who won't take a slightly better job now would grow at work, and maybe eventually grow out of poverty entirely. Currently it's only possible by either taking a hit in income among the way, or by suddenly jumping to a much better job.
Big businesses are usually more efficient, even simply due to scale. They need fewer employees for the same amount of sales. Raising the minimum wage squeezes away the least-qualified employees, who are constrained in various ways (language, education, health, etc). The more qualified employees may and do of course benefit.
High minimum wages work well with a strong social security network, and higher taxes to support it. It's not what we have in the US though.
Really? Please back that up with actual data or studies. If labor costs go up equally then a business isn't at a competitive disadvantage. Small businesses also often get tax breaks and the like as part of minimum wage increases. In the end they often get helped by a minimum wage increase. At a minimum it isn't a slam dunk in any way that 'they make small businesses unviable' while it is very clear that it makes lives better for employees [1].
Finally, if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist since those employees are likely being subsidized by taxpayers for the gap between what the business is paying and what they need to live on. Put simply, I don't want to subsidize a business so that it can avoid paying its employees.
> If labor costs go up equally then a business isn't at a competitive disadvantage
The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
> if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist ... I don't want to subsidize a business so that it can avoid paying its employees.
I doubt you meant it this way, but that's a fascinating argument against progressive taxation.
> The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
And meanwhile there will be more people with more money in their pockets able to now go out and get a meal somewhere. The secondary effects are many and you can't isolate price increase without looking at the new demand created. It may seem odd, but when you pay people more they end up spending more. [1]
Additionally, part of the problem here is the perception that 'The classic low wage job is flipping burgers.' with the implication that that is just for high school kids so not a real job. Unfortunately this whole country runs on gig and minimum wage jobs (or worse). Enabling these jobs is just a route to funneling money up and increasing the wealth gap. People are doing an honest day's work and should be paid enough to live on that. Any argument to short-change them is an argument that society has to pick up for the slack of the employer. Are you suggesting we increase taxes to pay for that gap? Because that is what actually happens. So, why not. But instead of taxing me for a bad employment model, let's instead put a huge wealth tax on businesses that pay less than a minimum wage and then use it to pay for all the social programs that are needed to keep that workforce alive. I don't personally like that idea but at least then the costs of cheap labor would be put onto the places abusing it and not me.
Instead of subsidizing a business that provides some value and pays some wages, we then end up without the business, and with unemployed folks. These folks don't cease to exist, we don't want to tell them "go away and die", do we? So now the taxpayer pays the whole cost of keeping these folks alive, instead of a part of it, and the folks are possibly worse off, unless they find something to do with their time to earn an extra buck. And that something is usually not a legal employment.
Your assumption that the business will fail was the assumption I initially challenged. That assumption isn't well backed by data. As I pointed out, small businesses often actually get benefits from a minimum wage increase and people that get wage increases spend more money so it isn't a slam dunk that small businesses will be worse off much less automatically fail.
Yeah. Economic effects are rarely cut and dry and the actual impact of a minimum wage increase is highly dependent on a lot of factors so pretty hard to say one way or another. But one thing is clear, minimum wage increase do help the employees. So we have one clear benefit to employees, no clear benefit or detractor to employers and a clear benefit to me personally (which is what I really care about) in that I don't have to subsidies bad businesses. With all that in mind it looks clear to me that increasing the minimum wage to a living wage is the right answer.
At least in America, entitlement programs, once enacted, are so popular they have been impossible to remove, as most recently evidenced by the attempts to get rid of obamacare. See also social security and medicare.
More precisely, it pays out more in benefits than it collects in taxes. If it reaches insolvency in 2034, Gen-X will be the big losers, but that bloc was never big enough to swing elections.
as an outsider, it is fascinating how much of a broad consensus there is in the US for "socialism for the old" - especially government funded/run healthcare and 'u'bi, vs doing anything at all help to the young and/or poor.
Yes, but I would be interested in the gross income of IT vs other occupations and how that is impacting overall economy.
For example, if you drop 2 IT jobs, but each one is 150k, but you create 4x 60k jobs, it looks like you added 2 jobs, but in reality, you removed 60k worth of payroll income.
>For example, if you drop 2 IT jobs, but each one is 150k, but you create 4x 60k jobs, it looks like you added 2 jobs, but in reality, you removed 60k worth of payroll income.
But the company saves 60k, so the net (to the economy) is the same.
That is not entirely true. Whereas a company will likely bank that profit, employees are more likely to put that income back into the economy which provides a multiplier effect of the income in overall economic growth.
No, it's entirely true. The economy is a closed system. Employees can't "put that income back into the economy", because it has never left.
How it gets redistributed will vary, and you can make normative arguments about spending the money at the local coffee shop. But the net effect on the economy is the same.
This is sort of not true. The biggest example of why is the concept of the velocity of money. If you’re unfamiliar with this concept, it’s the idea of of how many times a single dollar is used in a given time period. It’s a very important measure, and it’s historic low at the start of the lock downs was why the fed dumping so much money into the economy was not a mistake (at the time). It’s an effective multiplier, and has very real impact as to the total utils that everyone in the spending chain collect.
What this means, is that when money is spent outside a country, there is a very real risk that that the local velocity of money goes down, even though the gdp of the global economy is going up.
No, its not; value (and, separately, money) can both be created and destroyed. And, when examining any scale smaller than the global economy, value and money can each enter or exit the universe of analysis from or to the outside, as well.
If that were true, then recessions and depressions would be impossible. The velocity of money moving through the economy would be a constant, like the speed of light. But recessions and depressions happen, so we know that the disappearance of certain transactions from the economy can have a negative macroeconomic effect.
I'd love to get put of IT, but there's nothing else that I can really switch to. Other good paying jobs have a high barrier to entry, terrible hours, etc.
I am beginning to think, somewhat uncomfortably, that due to industry consolidation most big corps don't have to worry about having great talent anymore. They are squeezing more money out of an established business model in a market that no longer has real customer choice, as long as they have good enough people to keep things going it's not a problem.
That's fine, they will eventually have their lunch eaten by companies that can execute with all the talent they refuse to hire. It takes time, but the wheel turns.
These wheels often take a generation or more to fully rotate. And I have no idea whether any collective or group action can materially accelerate the timeline.
I would agree historically, but I think innovation and change is happening much faster now.
10 years ago, nobody seriously thought about taking on Google in terms of search engine.
Now we are going though a phase where we are questioning if LLMs can take over that market share.
Same with Facebook in social networks, but TikTok took over pretty fast.
These companies know they could lose a lot of excellent talent, and backfill with mediocre talent. Their employer brand names will remain strong carry them through, with enough junior candidates that will backfill the "industry expert" and mostly nobody will notice.
1. It is NOT unlimited and should be illegal to advertise that
2. It is still at management discretion so it's not like you can be sure you can always take off whenever you want.
3. It is usually capped at 2 or 3 consecutive weeks so even if there is a minimum of 4 weeks you can't take all 4 at once at many companies.
4. Companies are happy to nickel and dime you but they abhor it happening to them and this is, IMO, largely a play to avoid vacation accrual and/or vacation time payout.
Then there's stuff like this:
> Paid time off (PTO) is not considered part of an employee's salary, so it can be docked without jeopardizing the employee's exempt status ... the court held that PTO is a fringe benefit with monetary value, not a component of salary under federal law.
For me it has two problems:
- Legal - in some places people has the right to take a minimum vacation days per year. If you as a manager don't enforce a minimum, then you're putting a legal risk.
- Personal - When I joined the team one person had 6 vacation days last year. She was burnt but didn't knew it. It was hard to notice since she was an hyperactive person that took long hours because she lived in a place where nothing to do. Having mandatory time off made her think about her life.
Any big sudden change will have winners and losers. Managers that have gotten by measuring butt in seat time and command and control can no longer rely on these skills, of course they would prefer to go back to the old way vs the much harder work of trying to figure out which team members are really providing the best results.
The bigger the organization the more bureaucratic it becomes. High quality performance coaching and just maintaining internal communication is hard to scale. Big organizations tend to fallback to easy to measure butts in seats and lines of code.
Based on my experiences at companies ranging from 75-5000 employees, I would dispute that. I don't think any type of company is particularly good at passing on institutional knowledge.
That's a large part of it. It's especially works well to get rid of people who are older and have families, and keep mostly fresh college graduates and singles. And those usually have a lower salaries, we're getting fresh employees who are lower cost, everything looks great on paper.
Except that the first people who would leave might also be the good experienced engineers, but that loss is a little hard to see on paper at first, to predict and so it doesn't get accounted for very well.
