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U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

bloomberg.com

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Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#11

Post by macspoofing »

whateveracct wrote: post #4
exabrial wrote: post #3

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom mi…

> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?

I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#13

Post by xirbeosbwo1234 »

exabrial wrote: post #3

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom mi…

Are you suggesting that raising the minimum wage will increase inflation? That seems theoretically plausible to me, I suppose, but I haven't seen any evidence for it happening in practice. We have had plenty of natural experiments where one region has raised the minimum wage while its neighbours have not. Do you have any information about what happened to inflation in those cases?

I am entirely convinced that an increase to the minimum wage (perhaps not as high as $15/hr) will have no major effect on employment. That idea is contradicted by all the empirical evidence we have. I have not seen enough evidence to draw a conclusion on inflation.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#14

Post by ihsw »

whateveracct wrote: post #4
exabrial wrote: post #3

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom mi…

> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?

There is only so much money for businesses to allocate towards labor, it is not infinite.

Eg: $15K per month for staffing translates to $3750 per week, which translates to $125 per hour at 30 hours per week on average, which translates to ~10 staff at $12 per hour.

At $15 per hour that is reduced to 8 staff. Alternatively the hours for 10 staff would be reduced from 30 hours per week to 24 hours per week.

The money doesn't come from thin air, raising minimum wage for 10 staff at $12 per hour to $15 doesn't mean there will be no layoffs or reduction in hours.

Increasing prices of products sold or services rendered would result in a reduction in products sold or services rendered. Again, the money doesn't come from thin air -- either prices are raised or staff costing is reduced through cut hours or cut headcount.

Who gets cut is another question too -- more than likely it is tied to appearance, education, likeability, or seniority. Who gets hired is another question too -- if the bar is too high for an uneducated black youth then they will simply not get hired. An increase in the minimum wage can result (and has historically resulted in) in higher unemployment among black youth.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#15

Post by __blockcipher__ »

macspoofing wrote: post #11
whateveracct wrote: post #4

Earlier quoted context omitted.

> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?

I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.

Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#16

Post by macspoofing »

api wrote: post #10
macspoofing wrote: post #9

Earlier quoted context omitted.

Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.

Very very few Americans do this. They should, but they don't. Everything in the culture encourages people to spend.

It's a perplexing attitude. OP just threw it out there as if it's an obvious fact that "people living in poverty don’t have “savings”". That is such a blatantly false statement. Poor people in developing countries have savings. I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did.

Poor people aren't idiots. They think about the future. They plan for the future. If they need to save, they will save.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#17

Post by war1025 »

api wrote: post #10
macspoofing wrote: post #9

Earlier quoted context omitted.

Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.

Very very few Americans do this. They should, but they don't. Everything in the culture encourages people to spend.

Further, if you tell them it's possible they will attack you for suggesting such a thing could even be possible.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#18

Post by machiaweliczny »

exabrial wrote: post #3

This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom mi…

I just started reading Pikkety and at 2010 already private owned capital was at 600% of GDP (almost reaching pre WW1 lvl). I wonder how it's now when stock rised 4x in the last 4 years (probably will rise more with next relief). They have some DB online with such info. I'm of opinion that work is no longer profitable (and I have top non-exec salary).

I'm not from US but IMO federal wage is stupid but on state lvl I would urge you to implement it. I'm from Poland and I think that keeping our own currency was good for staying competitive. If we had federal EU minimum wage we would be in ruin. Actually EU mandated minimum wage recently but it's defined as 50% of average salary which we have in our country already. Gemany has min at 41% or something like that for example.

Re: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

#19

Post by ClumsyPilot »

__blockcipher__ wrote: post #15
macspoofing wrote: post #11

Earlier quoted context omitted.

I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.

Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.

The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
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