You missed the point. I'm not only saying don't frame is as a handout, I'm saying a handout is not what is being proposed: For example: Requiring companies to pay a living wage so the taxpayers do not have to subsidize the labor costs does not interfere with the free market, rather it forces widget makers to properly price the widget which costs include those labor subsidies and the cost of disposal.
Why stop at a living wage? If $15/hr is good, then $20/hr is better, right? I mean, how much profit did McDonalds make last year? They can afford to pay the pimple-face burger-flippers $30/hr. Then we might be on the right track to fix our society and the issue of poverty.
Someone who claims to understand logical arguments should know that the argument, "if more is better a lot more is a lot better," is fallacious.
No, I'm more interested in the thought process that eventually stops people like you from stealing from others.
Yes. But the problem is in a free market system things which cause the widget to be falsely underpriced interfere with the free market forces. The widget factory owner's profits are not the measure of a successful free market when taxpayers are subsidizing that profit. It's corporate welfare just as much as individual welfare is. When your taxes pay for pollution abatement, or your medical insurance premiums include costs the hospital shifts to paying patients from those that received care they couldn't pay for, when WalMart tells its employees how to file for food stamps, those are flaws in a laissez faire free market. It's not the free market it appears to be.
Without pumping more money into the system, wouldn't it balance out? If widgets cost more, the public spends more without a tax break; the cost of living goes up. If widgets cost the same, the public spends the same without a tax break, the gov't pays for pollution, medical, etc. Or, would there be less taxes involved in making the corporations pay the employees more?
It was meant for Simpson who gave several American instances and then spoke of corporations, but I do not see what corporations (directly) have to do with state action, which are the subsidies in this case. They were arguments from a specific point of view, that being the USA. It does not add much to Guy Standing's proposal, which should be approached in a universal manner. ''The government'' is not homologous if you span it over multiple countries/continents. When I read Simpson's argument, it stems from a wish for the government providing that which is necessary. In other words: basic needs, but in my point of view that does not align with an argument for the proposal of this topic, nor does it verify its validity, because this prerogative is already met through other means.
This is what the widget makers would like the public to believe. Take for example, the claim higher minimum wages means less jobs. There are some shifts, and perhaps more investment in labor saving production devices. But the assumption here is that the widget maker will charge more for widgets when there is an equally valid argument they will take less profit. The factory owner wants to maximize profits. That sets the price of the widget. The widget price, the cost of labor and the size of profits are all flexible, not just one of the three. As long as taxpayers subsidize those labor costs, there is no incentive for the factory owner to lower profits. If higher labor costs were passed on to a higher widget cost, it might lower sales, sure. But would lower sales and laying people off maximize profits? Or would absorbing the higher labor cost out of profits thus keeping sales high be better? Theses are things the free market finds the balance for. It's to the factory owner's advantage to make the equation all about less jobs. Look! Squirrel! Don't look at the full economic picture. Now add to that a couple things, one the minimum wage has lost ground to inflation, so it's currently underpriced. And, the economy is suffering from lack of demand, not lack of supply. It makes sense to raise minimum wage as it would directly increase demand. Inflation is not something we need to worry about at this time.
When did it become the company's responsibility to guarantee jobs? The company provides a good/service. Jobs are a byproduct of industry. The wages for the jobs are then decided based on several factors. If labor accounts for 50% of your revenue and your profit is 10%, what does that mean for the company if it costs a 10% increase in labor to match this imaginary living wage?
Indeed there would. Keeping people poor produces waste, very often waste that is paid for with taxes. - The waste of medical conditions that never needed to get to the point of expensive treatment if cheap treatment had been provided. - The waste of under-educated kids who therefore under-contribute in adulthood. Education requires some at-home support that isn't practical when two parents are spending most of their hours working just to provide rent and food. - The waste of poorly-fed kids with expensive health problems because Mom and Dad can't afford anything but cheap food and don't have the education to know what's wrong with that food. - The waste of crime and law enforcement and incarceration for the kids who don't overcome the challenges of poverty and kids who were born damaged because their mothers were unable get decent prenatal care. - The waste of drug and alcohol treatment--the same. - The waste of astronomically expensive and extraordinarily poorly maintained housing for the homeless. - The waste of foster homes and government care for children whose parents never learned to be parents, and who therefore lose their children. - The waste of government support for mothers of unplanned children who, if they'd had better education and access to medical care, would have waited for those children until they could support them theselves. Poverty bleeds money. Unless you're willing to let countless people die in the street and just look away, poverty costs the average person far more than paying the higher prices that would result from paying a decent wage would.
And, even if the widget maker takes the same profit, it's not as if the cost of the widget is directly proportional to the cost of labor. The widget maker is also paying for land, buildings, raw materials, widget making machines, patent royalties, advertising, and a thousand other things. Doubling wages, and passing that cost straight through to the cost of the widget, might increase the cost of widgets by only twenty percent. Or five. Or almost imperceptibly.
Wow, really. It's almost as though teaching people to swim is more effective than throwing them in and hoping that they teach themselves how to swim.
I see a lot of assumptions about taxpayers and corporations and poor people - and it all seems to center around this wonder "tax dollar" that appears out of nowhere and is so abundant it can be handed over to anyone who asks. If you want to talk about huge corporations and their net profits, you guys might have a case for increasing wages. But most businesses that employ most people are not huge corporations. And yeah, wages and benefits are huge costs to those companies. Land, equipment, etc - that's all amortized and depreciated over time. But wages and benefits go on every year, for every employee, for as long as that employee works for the company. So yes, like it or not, for many companies an increase in wages can mean the difference between breaking even and going broke - which means unemployment. That's not to say that increasing the minimum wage is A Bad Thing - but let's not shove all corporations into the Mega Corp group, because most are not. As to the government guaranteeing a basic income - I don't care how one phrases it, it still comes down to tax dollars and tax dollars don't grow on trees. Someone has to pay those taxes. If you keep saddling business with more taxes, they pass those costs on. Don't think for one damn minute they won't. Either that or they start sending their jobs overseas and then there are even more people in dire straits. So then the burden gets shifted to individuals along with businesses, right? And that means less net income for everyone - including those receiving this "basic income". Basically, I just don't want the government involved in my life any more than is absolutely necessary. I didn't like being dependent on them before and I hope I never have to be again. Maybe some people like having Big Brother taking care of them, handing in reports and forms and the like on a constant basis so they get their perceived share of the pie - but the more people become dependent on the government, the less likely they are to try and be independent.
I notice you didn't address my point about your taxes subsidizing corporate profits when the minimum wage is not a living wage. And as for most employers, either you want a free market or you don't. An employer will, if allowed, shift costs to the taxpayer. That includes the true cost of labor as well as other shifted costs like air and water pollution and disposal costs of the product. It's fine if the consumer of the product pays for the disposal, but that means no disposal or recycling costs should be subsidized. Or if they are, it makes more sense to tax a corporation to pay disposal costs picked up by the taxpayer than to burden taxpayers who neither benefitted from or profited from that product, don't you think?
Taxes subsidize a lot of things - like the businesses that otherwise wouldn't locate in Podunk Holler, but do because they get tax benefits. And that means folks in Podunk Holler and the surrounding villages have jobs they can afford to get to. If you want to have this "All corporations are EVIL" attitude, I can't stop you. I don't have to buy into it, of course. There hasn't been a "free market" in anything but theoretical discussions since somebody thought up the phrase. Just like communism or socialism or capitalism - one can rant about the very basic economic theories in order to prove their point (whatever that may be), but there is no pure system. As to taxes and benefits, well, hell - I don't benefit from the highway in Arizona, but my federal taxes paid for part of it. Should I tell Arizona they can't have that square foot of asphalt my taxes paid for? Well, anyway, kiddos, this discussion really doesn't belong in the lounge. Not sure (as someone else mentioned, I believe) why these things keep popping up here instead of the debate room. At any rate, go ahead and continue debating systems that don't actually exist in reality. I'm sure it will keep you all entertained for some time yet. Me - I got writing to do...
Of course, say the fiduciary responsibility to the shareholders necessitates some regulating and you must be a corporate hating socialist. It would help if you actually read my posts instead of assuming what was in them that I hadn't said. For the record, I'm a small business owner and have been for 23 years now. I don't hate corporations and I said some things are better when publicly run, not everything is better. Well that's good since I don't advocate for one and I agree there isn't one. That's what, "needs regulating" is all about. This is not same argument. Buying insurance and funding infrastructure like the highway system spread out the costs among the beneficiaries. One long rural highway equals a lot of city streets. In the case I am making, taxpayers are supplementing profitable businesses that don't benefit anyone but the shareholders. The payers are not in the group the benefiters are in.
@shadowwalker : You are thinking very concretely, in terms of 'tax dollars' and assuming that spending remains exactly the same as it is now. Obviously, this would be a radical change, both in mentality and economy. In Brazil, 50 million people are already receiving something like this, with astonishingly good economic consequences - it's all money that would've been previously pocketed by the few, which are now going straight back into the economy. Besides, with the enormous magnitude of tax evasion by the very rich that have been identified as a problem, unreasonable spending on wars that a lot of governments are a party to (and no, fighting with one after another country thousands of miles away doesn't constitute 'defence') and mind-boggling corporation subsidies and bank bail outs which are nothing more than the welfare payments to the rich, we actually have more then enough money for something like this without having to further raise taxes, it's just that that money has been misappropriated. But imagine for a moment that we, including businesses, all have to pay much higher taxes. With the basic income for all, the actual pay you're receiving from your job would simply be an add-on. If every employee already received his basic 15-20 k per year (tax free), the employer only pays what comes on top, and is taxed accordingly. In the UK, if expenditure was decreased due to free education, healthcare, much higher access to government housing, much lower transportation costs (which would in turn translate to much cheaper goods and services), a family could easily survive on anything from £15-20k, who knows, maybe even less. Money isn't set in stone, expenditure isn't set in stone, 'prices' and how much something costs is relative to so many factors, but if you never experienced something different to what you have now, it is difficult to imagine what it would be like. And when we don't know or understand something, we tend to fear it. But in my opinion, it shouldn't be outright dismissed without even trying. Especially when we are in deep shit economically and really need to do something different because what we've be doing hasn't really worked too well. Provided that we put in place a mechanism that would effectively curb toxic greed, the increase in taxes doesn't necessarily mean worse quality of life or less buying power. But if you make people pay for all that, and then you raise taxes, which is our only option under the current system, of course that's detrimental, but that's not what this is meant to be.
I'm not an economist, so I don't know how to apply this across the board, but I found this interesting, overly simplified, but interesting. I'm not an archaeologist either, but still managed to dig up this thread. http://www.slate.com/articles/business/moneybox/2014/04/walmart_living_wage_if_the_company_paid_its_employees_more_how_much_would.html
I didn't watch the video but there's a big flaw in the argument raising wages mean prices would rise. What do you suppose is keeping employers like Walmart an McDonalds from raising prices right now and just reaping more profits? Spoiler: Click for D'oh moment. The market. Prices are based on business model and demand. Most of the cost will have to come from profits. If you raise prices you lose business. Employers might do this, but not if demand already matches prices. You don't make less by selling less for more when you have McDonald's and Walmart's business model. If employees could be laid off, what do you suppose is keeping employers like Walmart an McDonalds from laying them off right now and just reaping more profits? Spoiler: You probably guessed this one. The market. Number of employees are based on demand. Most of the cost will have to come from profits. If you lay people off you lose business. Employers might do this, but not if demand already matches the workforce currently employed. If you buy the premise employers will raise prices and lay people off if they have to pay them more, what is stopping them from doing these things now and increasing that profit margin? There may be more investment in automation, the higher the cost of labor the break point for investing in automation moves as well. But this is offset as employees have more money to spend thus increasing demand. There will be some job shifting if you raise the minimum wage, but history shows there will not be massive layoffs and further economic depression.
