Actually, with regards to energy expenditure compared to return, they likely make more than Jeff, per hour. Good system.

with regards to energy expenditure compared to return, they likely make more than Jeff, per hour. — Book273

Are you really that fucking stupid? Jeff earns about £1 billion a week. Out of work benefits are about £300.

That's a few million times more. There isn't enough energy turnover in the human body for Jeff to be working a million times harder that anyone who isn't in a coma.

I'm fascinated to know what went through your head when you wrote that? I mean, did you think it through at all? Was there even a flicker of some rational process starting before you thought "Nah, I'll just stick to parroting bits of Ayn Rand"?

Yes, otherwise there will be an overabundance of inefficient firms in the marketplace; putting pressure on companies that do operate efficiently and pay fairly for their inputs. If minimum wage were truly unnecessary, then it would exist and no one would be making it. Full stop. But it is necessary because people that supply labor can be forced to accept below market value due to an inability to effectively negotiate against the better positioned buyer. It also prevents a race to the bottom where accepting greater suffering is a competitive edge in getting work.

you said jeff makes 800/hr. Based on your numbers, those that fill out the benefits and do nothing else make more hourly than he does. Deal with it. Work for a few minutes and get 300/wk. Good bloody deal! No way anyone makes that in the private sector. But hey, Maybe in the UK it takes 30+ hours a week to fill out the benefits paperwork, so 10/hr. Not so awesome then.

It's ok though, you can keep on hating Jeff. And corporations. No worries eh!

you said jeff makes 800/hr. — Book273

Turns out according to https://www.businessinsider.com/how-rich-is-jeff-bezos-mind-blowing-facts-net-worth-2019-4?r=US&IR=T it's more like a few million.

But hey, Maybe in the UK it takes 30+ hours a week to fill out the benefits paperwork, so 10/hr. Not so awesome then. — Book273

What's required in the UK for eligibility for Universal Credit;

https://www.gov.uk/universal-credit/your-responsibilities

Do you see just five minutes of paperwork there?


You've not answered my question. What process did you follow to conclude that benefits recipients get a better return than rich CEOs? Did you look anything up, for example? Read any research? Did you do anything at all to check before just spewing up a load of shite to insult some the poorest people in our community?

It kind of feels like minimum wage should be made livable that a person working 40 hours a week should require no public assistance — TiredThinker

Look at it this way. If you give every renter in your town an extra $1000 a month, with no corresponding increase in the number of available rental units, they'll just bid up the cost of rents and eventually absorb the $1000. In other words you get inflation, which is simply an increase in the money supply with no corresponding increase in the availability of goods, resulting in higher prices.

The only way to make such a system work long term, is to give everyone free money and simultaneously implement rigid price controls. And then you create shortages. If everyone has an extra $1000/month for rent and there is no increase in available housing and there is no increase in rents, the available units will quickly be filled to 100% capacity and there will be no place to live despite the extra money in your pocket.

A variant of that argument applies to "price gouging" during emergencies. If the price of water goes way up, people are incented to supply more water. The price is higher, but everyone can get the water they need. If you artificially cap the price, then nobody gets "gouged," but many people can't get water; because there is no incentive for anyone to supply more water.

Likewise congestion pricing for services like Uber. If there's a lot of demand, prices go up. Prices go up so more drivers decide to go out and work, providing the market with more supply. If you outlaw congestion pricing, everyone pays the same but you can't find a ride, because you've removed the incentive for drivers to go out and work instead of staying home.

I don't follow you. You say...

If everyone has an extra $1000/month for rent and there is no increase in available housing and there is no increase in rents, the available units will quickly be filled to 100% capacity and there will be no place to live despite the extra money in your pocket. — fishfry

...and also...

If the price of water goes way up, people are incented to supply more water. — fishfry

...Which is it? When the demand goes up (the 'bidding up' of rents has to be demand led, yes?) you don't theorise an increase in supply to match demand (and so consequent deflation in the original price bubble), but when theorising about water, you assume rising prices will lead to a subsequent increase in supply. Either rising prices lead to an increase in supply or they don't. If they do, then rising rent prices is not a problem (supply will simply meet demand and so stabilise prices eventually), or rising prices are not necessarily met by rising supply (the market monopolises to limit supply in order to artificially sustain high prices), in which case caps on pricing could work perfectly well in some circumstances.

Both are possible, but what seems unlikely is they the choice of which will conveniently happen to be whichever makes market economics sound most reasonable.

...Which is it? — Isaac

Two separate cases. If people have more money for rent but rents are capped then there's no incentive to provide more housing. If water is scarce and the price of water ISN'T capped then people have an incentive to provide more water. You compared the price-controlled case to the non-price-controlled case.

In the real world we always see rent control accompanied by severe housing shortages. If you artificially cap the market price of housing, landlords don't build more of it.

It's just that you said...

The only way to make such a system work long term, is to give everyone free money and simultaneously implement rigid price controls. And then you create shortages. — fishfry

...Why would you need price controls? Supply would just go up do meet demand and so bring prices back down. Or it wouldn't (because people can conspire to limit supply), but then the same would happen with water.

Basically, what's different between houses (where you predict a rise in prices will lead to shortages) and water (where you predict a rise in prices will will met by a rise in supply and so even out)?

The problem (in our country, anyway), is not that people can't afford rent, it's that their inability to afford it is covered by the state. Since it's not in the state's best interests to just let people go unhoused (it needs a ready-to-work workforce in 'reserve' to accommodate economic growth), it has to pay landlords where the unemployed and low wage earners can't afford to. The landlords know this and so set the rent accordingly.

Prices are not set in a vacuum. If I have figs to sell in the market, I don't pick a price point at random and then see how they go. I pick a price point using my knowledge of the world. I know figs are quite common, I've bought them myself in the past etc. In a world where there was a minimum wage system in place, that would be one of the bits of information about the world I would use to set my prices. If I put my prices so high that some people can't afford them, the RPI would go up, minimum wage would go up, corporation tax and wages would go up to cover it, and I'd end up making a loss.

All minimum wage is is a system for ensuring that there's no economic gain to be had from a corporation pricing it's essential goods beyond that which it's lowest paid workers can afford. If they do, the system simply corrects the wage to meet it so no increase in net profit is possible that way. Profits have to be made on luxury items instead.

...Why would you need price controls? Supply would just go up do meet demand and so bring prices back down. Or it wouldn't (because people can conspire to limit supply), but then the same would happen with water.

Basically, what's different between houses (where you predict a rise in prices will lead to shortages) and water (where you predict a rise in prices will will met by a rise in supply and so even out)? — Isaac

Excellent point. In the abstract, no difference. In practice, huge difference. Water is liquid (no pun intended); housing isn't.

In a water shortage, price controls prevent "gouging" so nobody has to feel they're being treated unfairly. But nobody has an incentive to truck in water from the next county. So the price of water remains low, but nobody can get any.

If the price is allowed to rise to meet demand, the newspapers will complain of "gouging," but entrepreneurs will truck in water to take advantage of the potential for profits. Prices go up but supply matches demand and everyone who can afford it gets a drink. I suppose there can be government subsidies for those who can't afford the new prices. Hard to know what to do about these cases.

Housing is highly illiquid. If you give everyone more money and impose rent control, rents will rise and many people will be unhoused. If you let prices float upward, it won't help much because you can't truck in new housing. It takes years to get new housing developments approved, especially in cities where the problem is the most acute. And counterintuitvely, new housing is often opposed by low-growth advocates of the leftist persuasion, and upscale liberals who want more housing for the poor, just not near them. We see this in real life all the time. Cities impose rent control and then make it difficult or impossible to build new housing, resulting in massive housing shortages.

The problem (in our country, anyway), is not that people can't afford rent, it's that their inability to afford it is covered by the state. Since it's not in the state's best interests to just let people go unhoused (it needs a ready-to-work workforce in 'reserve' to accommodate economic growth), it has to pay landlords where the unemployed and low wage earners can't afford to. The landlords know this and so set the rent accordingly. — Isaac

Not in the US. Except in the past year, where the government is freezing rents and bailing out landlords. Making an absolute sucker out of anyone who scrimped and saved to honorably pay their rent. That's a big problem with bailouts, moral hazard. It makes a fool out of anyone who actually paid their debts. It incents people to be deadbeats.

Prices are not set in a vacuum. If I have figs to sell in the market, I don't pick a price point at random and then see how they go. I pick a price point using my knowledge of the world. I know figs are quite common, I've bought them myself in the past etc. In a world where there was a minimum wage system in place, that would be one of the bits of information about the world I would use to set my prices. If I put my prices so high that some people can't afford them, the RPI would go up, minimum wage would go up, corporation tax and wages would go up to cover it, and I'd end up making a loss. — Isaac

Housing isn't figs, as I've noted. Historically, free markets do better than controlled economies in terms of vibrance, growth, doing business, and establishing the right price. Controlled economies lead to misallocation of resources.

To be fair I'm now arguing an Austrian economics position about which I know the buzzwords but not the details. I should probably quit while I'm behind here because I'm already in a bit over my head. But controlled economies like Cuba and Venezuela don't do well. The USSR collapsed. China grew when they introduced some strange kind of state-controlled capitalism. I'm not entirely sure how their system works.

All minimum wage is is a system for ensuring that there's no economic gain to be had from a corporation pricing it's essential goods beyond that which it's lowest paid workers can afford. — Isaac

It has been argued that minimum wage laws cause unemployment. If a low-skill worker costs more than a robot, that worker can't get a job. You see this all the time in the news. I support minimum wage laws because without them it would be a race to the bottom and people would be forced to work for pennies. We don't want a society like that. But if you set the rate too high, especially in a world with a huge surplus of unskilled labor, you create massive unemployment. Which you solve with welfare programs, again making a sucker of anyone who works for a living.

If they do, the system simply corrects the wage to meet it so no increase in net profit is possible that way. Profits have to be made on luxury items instead. — Isaac

I'm sure you remember the famous story of the luxury tax on yachts passed 30 or so years ago by the US Congress. The idea was to soak the rich. What happened instead was that boatyards went out of business, causing unemployment among their blue-collar, working-class employees.

WAPO has the story, wan't hard to find, I just googled, "luxury tax yachts" and the story popped right up.

https://www.washingtonpost.com/archive/business/1993/07/16/how-to-sink-an-industry-and-not-soak-the-rich/08ea5310-4a4b-4674-ab88-fad8c42cf55b/

As a result, in its first year and a half, the yacht tax raised a pathetic $12,655,000 for the Treasury. That's enough to run the Agriculture Department for a little over two hours. Meanwhile, the tax has contributed to the general devastation of the American boating industry -- as well as the jewelers, furriers and private-plane manufacturers that were also targets of the excise tax that was part of the 1990 budget deal.

But Senate Majority Leader George J. Mitchell (D-Maine), Sen. John H. Chafee (R-R.I.), Sen. John Breaux (D-La.) and Rep. Benjamin L. Cardin (D-Md.), all of whom coincidentally represent boating states, are sailing to the rescue, and repeal of the luxury tax is included in both the House and Senate versions of the budget reconciliation bill.

Housing is highly illiquid. If you give everyone more money and impose rent control, rents will rise and many people will be unhoused. If you let prices float upward, it won't help much because you can't truck in new housing. — fishfry

Might be different in America, but here we have plenty of housing. Entire blocks of flats lie empty in London because it's more financially viable for investors to simply hold on to the property than it is for them to rent out the space within it. I get what you mean, but I don't think the lag times are as significant as you might think. I'd need to see some data on it.

the government is freezing rents and bailing out landlords. Making an absolute sucker out of anyone who scrimped and saved to honorably pay their rent. That's a big problem with bailouts, moral hazard. It makes a fool out of anyone who actually paid their debts. — fishfry

Sounds like a crazy system, but in a sense, one the minimum wage is needed to solve. People have to be housed, it's morally bankrupt to just let them live in the gutter, but also it's no good for the economy because they're not ready-to-work when there's growth and businesses need to expand their workforce. Someone has to pay to keep the potential workforce pool alive and healthy (and educated and skilled, but that's another story). At the moment, it's the government, but all that does is present a competitive opportunity for companies to compete on low labour costs. Minimum wages remove that incentive by shifting the burden of costs to the companies. Of course it makes little difference in the long run as the companies pass that cost on to their customers and people pay more for stuff instead of taxes. The important point is not making anything cheaper, it's removing the incentive to compete by scraping labour costs.

Historically, free markets do better than controlled economies in terms of vibrance, growth, doing business, and establishing the right price. Controlled economies lead to misallocation of resources.

To be fair I'm now arguing an Austrian economics position about which I know the buzzwords but not the details. I should probably quit while I'm behind here because I'm already in a bit over my head. — fishfry

Me too. My take though is that the historical perspective is too broad brush. All economies are controlled. We have acres of laws about tax, corporations, assets etc, not to mention the articles and memoranda of the corporations themselves, the government incentives, central bank involvement, World Bank, International Monetary Fund. The whole global economy is laced up so tight... I don't think 'control' is even a variable - it's happening anyway.

But if you set the rate too high, especially in a world with a huge surplus of unskilled labor, you create massive unemployment. Which you solve with welfare programs, again making a sucker of anyone who works for a living. — fishfry

Yes, I can see how that might be a problem, but personally, I think this is not even an economic issue, it's a cultural one. There's simply not that much work to be done. We're much more efficient at making stuff these days and there's a limit to amount of stuff we need. It follows inexorably that there's less work around. I think we need to deal with that culturally before we can work out a sensible way of dealing with it economically.

I'm sure you remember the famous story of the luxury tax on yachts passed 30 or so years ago by the US Congress. — fishfry

I don't actually, but it does sound exactly the kind of daft thing a government might try to paper over the cracks with. What I meant by making profits on luxury items was that this is where the corporations would focus their normal advertising, cost-competing, efforts, I didn't mean government taxation.

I think we should have a minimum wage, but not enough to support multiple children. You should work your way up the ladder BEFORE having kids - not have kids based on “what I should make”. Also, school kids that work part time don’t need to be making what adults with families do.

The minimum wage is an illusion, it contributes nothing to wealth and prosperity, or livable life. everything has a realistic market price, including wages, because that is the price of work. The minimum wage causes not too much trouble if it consistent with the realistic market value of labor, but even in this case, it makes no sense at all, because the employer always pays the realistic market price of the work, otherwise, the worker goes to an employer who pays more. People tend to forget that employers extremely need their workers either. The problem arises when the minimum wage is raised towards a realistic market price of labor. In this case, it really causes unemployment. If prosperity really depends on the minimum wage, it could be raised by a million dollars a month, or better by ten million dollar per hour for everyone. And everyone will be happy with one hundred percent unemployment.

ASP

no research at all. I used your numbers so as not to skew any results with my own numbers. And still, you are angry. Not at my math, but that I simply disagree with you. I say if you don't work, you don't eat. Simple enough, really. Which violates your bizarre utopian ideal that everyone should have what they need, and possibly want, based on...breathing I guess. Seems totally ridiculous to me, but hey, you can't seem to understand my perspective either, so there it is eh, balance!

bailouts, moral hazard. It makes a fool out of anyone who actually paid their debts. It incents people to be deadbeats — fishfry

Exactly. In Alberta during the first six months of the lockdown people that apparently could not afford to pay their utilities were allowed to "defer" their payments until such time as they could afford to slowly pay back the balance owing, thanks to the government telling them it was not legal to cut off utilities during the lockdown, to defer instead. Now, 33% of deferred bills aren't being paid back. The solution, approved by the same government that created this program, is to apply an over charge to all the customers until the owing balance is paid. So I paid my bills the entire time, and now I get the joy of still paying my bills AND the deadbeats' bills because they stopped paying theirs. Just awesome.

I say if you don't work, you don't eat. — Book273

I agree. Seems a truism. One has to at least lift the fork.

Your bullshit is that you've got some ideological dogma that literally anything a capitalist-approved profit making enterprise does counts as 'work' and anything else doesn't count.

now I get the joy of still paying my bills AND the deadbeats' bills because they stopped paying theirs. Just awesome. — Book273

Yup. That's how it works. The wealthy can buy politicians and lawyers. The poor have no money. That leaves the working stiffs to pay for it all.

The livable wage protects against the inefficient over production of unwanted goods. If your business doesn't generate enough value to sustain the people maintaining it, then it shouldn't exist anymore. We have ignored this and now have low quality food available at every other intersection by two or more manufacturers.

As opposed to your "everyone gets a free ride" approach, wherein the main qualifier is the ability to breathe, with or without assistance. Apparently in your world no one ever has to actually think about where the money comes from, it just magically shows up, and will never result in decreased purchase power or any other economic side effects. You are smoking some really good drugs man! Carry on.

I don't have an issue with the poor having no money. I have an issue with the poor having a nicer cell phone than I have, better medical coverage, a nicer apartment, and larger tv, despite not actually working. Meanwhile I scrimp and save and my taxes pay for the stuff they have that I can't afford. Homeless people have better dental and pharmacy coverage than I do, and all of us have the same level of medical coverage. The street-walking crack addicted prostitute has better medical coverage than the nurse that treats her in the hospital. How exactly did that come about?

As opposed to your "everyone gets a free ride" approach, wherein the main qualifier is the ability to breathe, with or without assistance. Apparently in your world no one ever has to actually think about where the money comes from, it just magically shows up, and will never result in decreased purchase power or any other economic side effects. — Book273

God knows where you're getting all that from. I haven't even hinted at 'my world', all I've done is shown yours to be inconsistent, a matter which you clumsily attempt to dodge by means of this wild speculation about the potential pitfalls of whatever your fevered imagination conjured up as being 'my world'.

Next time you might just ask. Better still, address the actual thread of the argument, then ask.

I have an issue with the poor having a nicer cell phone than I have, better medical coverage, a nicer apartment, and larger tv, despite not actually working. Meanwhile I scrimp and save and my taxes pay for the stuff they have that I can't afford. Homeless people have better dental and pharmacy coverage than I do, and all of us have the same level of medical coverage. The street-walking crack addicted prostitute has better medical coverage than the nurse that treats her in the hospital. — Book273

Then quit work. Idiot.

So where does the money come from? I did answer the thread. I said No to the living wage/ handouts. You came back with the sob story about all the poor non-working sods and how crappy their life would be without handouts and all that shite. Answer that eh. If everyone stops working where does the money come from for your handout supply?

did answer the thread. I said No to the living wage/ handouts. — Book273

It wasn't a fucking Gallup poll. It's supposed to be a discussion, you support your opinion with reasons. "Me no like poor" is not a reason.

You suggested that those who did no work should get no renumeration, I agreed. You then said that the unemployed should get no renumeration despite the fact that they do, in fact, do some work. I pointed out the inconsistency. That's where we got to.

If you want to argue that only certain types of work deserve renumeration, then you'll have to make that case. So far nada.

As to your hamfisted attempt to avoid making an argument with this whataboutism...

If everyone stops working where does the money come from for your handout supply? — Book273

Why would everyone stop work? It's only you who envies the life of luxury the unemployed apparently enjoy. The rest of us want houses and cars and holidays etc.