What do you want to do with the little people?

[WAB]

This topic is about what a society should do with work-marginalized workers/citizens


There are a lot of discussions about how mega wealth is okay because they "did something" that made them deserve to reap benefits on the labors of people who are not paid enough to live decently.
There are also discussions of how automation is a great thing in pursuit of lower cost products and higher margins for investors.
There are also discussions about how we need to stop using fossil fuels and go to nuclear, which needs far less labor.
There are also discussions about how today's economy needs higher education or training to remain viable in a living wage.
There are discussions about replacing fossil fuels with renewables that move the jobs to geographically new (and potentially crowded and expensive) areas.
There are discussions about how a "market wage" is justifiable as the intersection between what a powerful employer will offer and a powerless worker will accept.

There are many more discussions of various stripes that have one thing in common:
They advocate for the reduction in jobs (or pay level) for those who are not trained to work on the Right Thing (tm)

Here's my question for discussion and producing a viable answer:

What do you DO with the people unable to train or move?

Maybe they can't move because they are a caregiver for a disabled or elderly person who needs to remain.
Maybe they can't go to college and become a programmer because they are in the lower half of intellectual capability - they just plain aren't smart enough.
Maybe they can't go to college because they are a caregiver.
Maybe ADHD makes them unable to perform a trade, and working at a big box store is what they can do - and they'd be happy there if only it paid enough to live on.
Maybe they got sick from coal mining and would not be hired by a windmill firm due to the impending obligations?

So what you we propose that we DO with all of these people?

Do we want them to just die from starvation after their job are automated?
Do we want to empty out the rural states and force all of the people there to move to squalid tenements near a factory in a high cost dense population?
Do we want people who aren't smart enough to become engineers and doctors to just die of preventable diseases because they can't afford health care or a safe house?


I think about all these people who are against progressive taxation or universal income or raised minimum wages, and I wonder
(a) what is it you think will happen to all of these people? You think they'll suddenly become suitable for college? or
(b) are you actually okay if they all just die?
(c) what are justifiable reasons to allow someone to live (or be raised in) abject poverty?
(d) if we don't think that, what should we DO to plan for them to continue living without abject poverty?
(e) other? What else? What do you think should happen to them?

I say we use them as food.

 

[bilby]

The fact that we need to even have this discussion is fucking depressing.

We need a minimum wage, indexed in such a way that we don't have to have this battle every time we want people to not have to suffer (I say we index it to congress' pay).

AND we need UBI. UBI should be indexed in such a way as to always be equal to minimum wage.

Taxes would start at 2.5X UBI, and be a exponential formula that caps out at ~95% around $2 million.

An exponential formula never reaches 100%, so it never needs to 'cap out' at all. There shouldn't be an upper bound to the marginal tax payable on the next dollar.

 

[Worldtraveller]

The fact that we need to even have this discussion is fucking depressing.

We need a minimum wage, indexed in such a way that we don't have to have this battle every time we want people to not have to suffer (I say we index it to congress' pay).

AND we need UBI. UBI should be indexed in such a way as to always be equal to minimum wage.

Taxes would start at 2.5X UBI, and be a exponential formula that caps out at ~95% around $2 million.

An exponential formula never reaches 100%, so it never needs to 'cap out' at all. There shouldn't be an upper bound to the marginal tax payable on the next dollar.

Yeah. I phrased it that way for the non-math people.

 

[Jason Harvestdancer]

Fascinating how I can dodge questions that were never asked.

Yeah, no one else has ever asked you a question.

Do you wonder why your posts are considered the most dishonest here?

Every now and again I say "I've answered a bunch of your questions, now how about you answer one of mine. Oh you won't answer one of mine? Well I just won't answer any more of yours until you answer one of mine. So now you say I'm a dishonest dodge because I'm trying to get you to actually answer one question."

That's why everyone thinks I'm almost as dishonest as you actually are

 

[Bomb#20]

Wish you were credible enough for that.

That's strange since you are consistently being accused of dishonesty here.

And what is that worth, the accusation of a left winger? You're very funny, Highness.

 

[Bomb#20]

If a company behaved like a labor union it would be called price fixing and they would be punished and forced to stop doing it.

Companies behave like labor unions all the time without it being price fixing and without being forced to stop doing it. It's not as though Warren Buffett and I are competing with each other to offer our customers lower prices. In our negotiations with our employees, suppliers and customers, he and I and the gazillions of other Berkshire Hathaway shareholders put up a united front, because that's a better strategy. When employees do the same, sauce for the goose, sauce for the gander.

(If you're talking about a UAW-style union where all the companies in an industry have to buy from the same union, then you're right, companies aren't allowed to behave like that. But there's no reason unions have to behave like that. My father spent most of his career in a union that only represented employees of one employer.)

 

[Bomb#20]

By "don't allow unions to form", you mean "advise employees to vote no"? Do you perhaps also think it's fascist for anyone to run against your preferred candidate?

Are you <expletive deleted> naive? People get fired for trying to form unions. Intelligent people can see through your <expletive deleted>.

My, such a wordsmith. Firing people for trying to form unions is illegal, and your link was to an article about a company that wasn't doing that. If some companies do it, well, beating up scabs is illegal, but some unions do that.

 

[Bomb#20]

Bomb, do you have anything at all to say on the topic of what you think should happen to people who lose jobs to automation and are not able to train for something more complex?

Do you have anything to say on the topic of people who cannot survive on minimum wage and are unable to qualify for higher paying jobs?

The Conservatives' suddenly-tied-tongues and refusal to honestly engage with your question do not come as a surprise to me;

Why did you write that? There aren't any conservatives in this thread. Is "Conservative" your go-to categorization for everyone who disagrees with you? And whom are you talking about when you say "suddenly-tied-tongues and refusal to honestly engage"? You appear to be talking about me. The fact that you are unwilling to keep up with the thread and the fact that you don't give a rat's ass whether you're telling the truth about those in your outgroup do not make it okay for you to trump up false accusations.

I also think [string of unevidenced ad hominem attacks snipped]

 

[Bomb#20]

Somewhere between Moogly's appetizing suggestion...

For the benefit of any who didn't recognize it, TGGM was riffing on an 18th-century essay called A Modest Proposal.

Spend enough time here and you will come to realize that the mythical "conservative who tends toward commitment to intellect and rational thought" is an extinct species. In fact, "Higher caliber conservative" is an oxymoron in this post-Trump world.
I would hold up Dwight D Eisenhower has a "higher caliber conservative" but today he would be regarded as a left wing socialist extremist by everyone to the right of the President Of Antifa.

Spend enough time here and you will see a great many accusations like that one, long on self-congratulatory choir-preaching and short on factuality.

 

[Bomb#20]

Your ideological adherence to illogical economic theories does not make you an expert on what I do, don't or can't know. We already had this argument back in the Adding rights thread. I asked you a question there. You declined to answer it, but the question didn't go away. For your convenience, here it is again:

Do you think each worker making $10/hour is generating at least $15/hour in extra revenue?

I do not know what you do. I know the CBO has estimated job losses should a fifteen dollar an hour minimum be set. But this is an estimate. And yes I will admit I have an ideological adherence to people making a living wage. That no one should live off of starvation wages and social services.

That's a moral judgment, not an economic theory. The economic theory I was talking about you being ideologically committed to was the theory that it's reasonable to think raising the minimum wage isn't going to put a bunch of people out of work. A great many people put the cart before the horse and decide what a policy will result in based on whether they approve of it, instead of vice versa. It's wishful thinking. From the premises "Raising the minimum wage is good." and "Making poor people lose their jobs is bad.", it's quite popular to infer "Raising the minimum wage will not make any poor people lose their jobs."; but it's unsound reasoning. People reason that way because the alternative is accepting guilt for the consequences of their choices; and everybody wants to be the hero of his own narrative.

Should the CBO estimates pan out, then we will deal with it if it needs dealing with.

Well, you tell me if that would need dealing with. Rhea seemed to feel whether such things need dealing with is only a question her opponents need to address; she appears to be one of the above-mentioned wishful thinkers.

I do not understand the point of your previously ignored question other than to steer the conversation.

The point of it is that anybody who refuses to answer it is unqualified to have an opinion about whether raising the minimum wage will put people out of work. It's the horns of a dilemma. "Yes" implies counterfactual observations. "No" implies inevitable job losses.

If a business cannot survive while paying it's employees a living wage then it does not deserve to.

That's another moral judgment, not an economic theory. "Your business failed because it deserved to" is not an argument that your former employees now have well-paid jobs.

But I think having to absorb the cost is what is at the root of the argument against a living wage. Just a guess.

Guessing the opposing arguments is a technique for convincing yourself you're right, not a technique for proving you're right.

 

[Bomb#20]

So I’m wondering about the minimum wage people and the less skilled laborers. What are ways we can make sure they thrive.

I do think there is a set of math that says, when we automate to a certain extent, we find that humans don’t need to work 40 hours a week to produce what is needed for this life. So can’t we say, the work week is 20 hours, and a factory has multiple shifts of 20-hour people, and 20 hours of work pays a living wage. Is there some law of physics that says we have to make people work 40 hours - when we could feed and clothe ourselves with the production of 20 hours? What if the work day was reduced to 6 hours? What if factories ran 4 shifts instead of 3? Or if you worked 2 twelves a week?

That's a productive suggestion.

A minimum wage, like a union, does not work the way leftists tend to imagine: by forcing employers to pay more than market rate. It works by driving the market rate itself upward, by means of scarcity, i.e., by reducing the amount of labor purchased. Since labor demand tends to be inelastic, this transfers more money from the employer class to the less skilled laborer class, which of course is what the proponents of a minimum wage hike have in mind; but it does it unevenly. Some of the workers lose their jobs and get nothing, but most of the workers keep their jobs, and these gain so much from the wage raise that there's an overall gain to the class, even though some of the workers are screwed out of what little they were getting. To activists who care only about class struggle, this may be a trade-off worth making; but it isn't reasonable to expect the newly unemployed to meekly accept their fate, sacrificed on the altar of the interests of the proletariat as a whole. (Which of course is why we're talking about minimum wage hikes instead of simply unionizing the workers: it takes government coercion to compel the unemployed to refrain from competing on price for the remaining jobs.)

Still, since there's a net gain to the class, it seems there ought to be a solution that still gets the extra money from the employers, but that instead of dividing it among the lucky (say) 90% who keep their jobs, and throwing the unlucky 10% out on the street, divides up the money evenly. What's needed is a solution that accomplishes the same reduction in the total amount of labor purchased as a minimum wage hike would -- because it's the reduction in supply that drives up the price that employers will pay -- but that does it without throwing anyone out of work. In order to do that, it would need to reduce every worker's labor by 10% instead of reducing the number of laborers by 10%.

Which is to say, we'd need to shorten the work week.

 

[Swammerdami]

If a company behaved like a labor union it would be called price fixing and they would be punished and forced to stop doing it.

It is very common for companies to form contracts with each other in restraint of trade: " ... and in return Company A agrees for the next five years to buy all its Widgets from Company B." Yes, union contracts can seem especially strict but this was accepted deliberately during America's Rational Era because of a major imbalance: the huge bargaining disadvantage individual laborers would be under if unable to unionize effectively.

~~~~~~~~~~~~~~~~~~~~~~

My, such a wordsmith. Firing people for trying to form unions is illegal, and your link was to an article about a company that wasn't doing that. If some companies do it, well, beating up scabs is illegal, but some unions do that.

Didn't I read recently that Boeing was refusing to hire people who had previously been member of a labor union? Is that legal?

~~~~~~~~~~~~~~~~~
I note that the recent stimulus gives 100% of the benefit ($1400 ?) for an individual making $75k and 0% for individuals making $80k with, presumably, some steps in between. I've no opinion on whether $50k or $100k would be a better threshold than $75k, but doesn't the all-or-nothing between $75k and $80k (only slightly larger than $75k) seem wrong? I hate "cliffs." This isn't quite a cliff, but close to it.

Yeah. I phrased it that way for the non-math people.

I like smooth sensible functions, and I think you're agreeing with me!

Lotfi Zadeh, IIRC, used a differentiable spline of two quadratic functions (an up-parabola and a down-parabola) between 0 and 100% cut-offs. Is that smooth enough for you? If this parameterization isn't flexible enough, use three quadratics ... or three cubics! The complication shouldn't matter: printed tax charts (or computer programs) handle the details.

I hate the "cliffs" that sometimes show up in tax or welfare programs. Some people need to turn down a pay raise that would cost them money! Is Congress really so ignorant that they can't avoid such cliffs?

 

[Loren Pechtel]

The fact that we need to even have this discussion is fucking depressing.

We need a minimum wage, indexed in such a way that we don't have to have this battle every time we want people to not have to suffer (I say we index it to congress' pay).

AND we need UBI. UBI should be indexed in such a way as to always be equal to minimum wage.

Taxes would start at 2.5X UBI, and be a exponential formula that caps out at ~95% around $2 million.

An exponential formula never reaches 100%, so it never needs to 'cap out' at all. There shouldn't be an upper bound to the marginal tax payable on the next dollar.

I suggest you check a dictionary.

 

[T.G.G. Moogly]

This discussion is beginning to remind me of the joke about opening a can of food where the economist says, "Assume a can opener."

 

[Bomb#20]

Didn't I read recently that Boeing was refusing to hire people who had previously been member of a labor union?

Could be; I haven't heard of that case but Boeing gets accused of a lot of labor law violations. It recently fired six guys who claim it was for union activities; Boeing claims it was for unrelated reasons. Last I heard, the NLRB was still investigating the charges.

Is that legal?

Nope.

I hate "cliffs." ... Is Congress really so ignorant that they can't avoid such cliffs?

...yep.

 

[Bomb#20]

To answer someone’s question earlier - are those people going to produce $15 worth of goods in that hour?

That's not the question I asked. My question was:

"Do you think each worker making $10/hour is generating at least $15/hour in extra revenue?"​

It wasn't about how much goods are worth or about who produced them; I asked about extra revenue. The question is about a worker's effect on the employer's "marginal" income, i.e., how much difference there is between income with the employee's work and income without it. The distinction between what I asked and your attempted paraphrase is probably lost on anyone who's never taken Econ 101.

When I look at the math of the net profits and stockholder dividends of many large companies, the answer is yes - they did produce that much. And instead of being paid to the people who made it, it is going to an increased wealth gap.

We can calculate the increased wealth gap gained in the last 10 years and ask, “who produced that wealth?”

You can ask, but it's a metaphysical question that has no objective answer. That wealth was produced by many people cooperating synergistically; how much was produced by person A versus how much by person B is not an observable. Anyone who attempts to answer your question is not practicing science, but philosophy -- and, usually, tribal chauvinism.

In any event, it looks like you totally missed the point of my question. You've taken it as addressing the moral issue of who deserves how much; but actually I was addressing the purely non-moral question of whether a minimum wage hike would cause unemployment.

Did Jeff Bezos REALLY personally do $10B of work? Or did someone else do all that work,

And you think the only thing that produces wealth is work, do you? Have you tested that theory by trying to produce goods without any inputs but work, and seeing whether you make any goods?

and he is taking the value they produced, and keeping it from them.

"The value"? Is that a substance of some sort? Have you seen any? What does it look like? Can you explain how to measure it?

"Value" is to economic folk-theory as "qi" is to traditional Chinese medicine, as imbalances of bodily humors are to traditional European medicine, as phlogiston and elementals are to prescientific folk-theories of fire. The latter notions were falsified and have been discarded. The former have been discarded too by those who actually know something about economics and medicine respectively; but many laymen keep on believing in "value" and "qi", because they choose not to subject their folk-theories to tests. There is no rational basis for believing such entities exist.

 

[laughing dog]

That's not the question I asked. My question was:

"Do you think each worker making $10/hour is generating at least $15/hour in extra revenue?"​

It wasn't about how much goods are worth or about who produced them; I asked about extra revenue. The question is about a worker's effect on the employer's "marginal" income, i.e., how much difference there is between income with the employee's work and income without it. The distinction between what I asked and your attempted paraphrase is probably lost on anyone who's never taken Econ 101.

The distinction was lost on me, and I passed ECON 101. In ECON 101, the basic theory is that an employer will use a worker as long as the worker's additional revenue generated per additional unit of time worked (which is the additional market value of the worker's output) exceeds the additional cost of that additional unit of time worked. The market value of the output (i.e. the market price x additional output) includes the marginal profit as well as the additional expense of producing the good). So, Rhea's question comes straight from ECON 101.

 

[T.G.G. Moogly]

"The value"? Is that a substance of some sort? Have you seen any? What does it look like? Can you explain how to measure it?

My employer of the last 30 years was obviously able to measure it because I kept getting merit raises and annual performance evaluations.

For my part I went to work everyday with the aim of producing a quality product so I would have a job the next day. My focus was always on the customer. I expected to be paid appropriately depending on how profitable the business was.

That's not rocket science.

When I would evaluate a person the most important question I asked myself was if everyone was like this person how would my job be, could I stay competitive, would I be able to meet tomorrow's challenges, could the company not just survive but would it excel, etc.?

 

[DBT]

Low as it is, minimum wage was put in place for a reason.....

 

[Bomb#20]

The distinction was lost on me, and I passed ECON 101. In ECON 101, the basic theory is that an employer will use a worker as long as the worker's additional revenue generated per additional unit of time worked (which is the additional market value of the worker's output) exceeds the additional cost of that additional unit of time worked.

Yes, exactly. That's what I asked about.

The market value of the output (i.e. the market price x additional output) includes the marginal profit as well as the additional expense of producing the good).

Yes; but that marginal profit is normally close to zero, since "marginal profit" is just economists' jargon for the first derivative of the profit with respect to the quantity of the input, and owners are trying to maximize profit, and on a typical curve at the maximum point the derivative is zero.

So, Rhea's question comes straight from ECON 101.

How are you getting that? Where in her post do you see anything to suggest she's talking about additional revenue or marginal profit?

"are those people going to produce $15 worth of goods in that hour?
When I look at the math of the net profits and stockholder dividends of many large companies, the answer is yes - they did produce that much. ... Did Jeff Bezos REALLY personally do $10B of work?"​

She's evidently contemplating total profits and total dividends, and dividing by total amount of work. That's how you calculate deservingness in Labor Theory of Value folk-economics; it's not how you calculate incentive in Econ 101, at least not since about 1890.