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Poorest US workers hit hardest by slowing wage growth

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Re: Poorest US workers hit hardest by slowing wage growth

#261

Post by fireflash38 »

reliabilityguy wrote: post #173
Hikikomori wrote: post #143

Earlier quoted context omitted.

Long term stable tariffs yes. But you can't pretend like trumps tariffs were not done in the worst way possible?

Trump uses wild % amounts as a negotiation tactic. Is it the best way to do it? I don’t know. You can’t argue though that it does force the other side to come quickly to negotiation table to talk about the deal. So, if the goal is to get the deal now, then it’s effective. If the goal is something else, then it’s not a good tactic. I do not have enough information to definitely say whether it’s good or bad. Most of th…

You're talking out of both sides of your mouth.

You say we need tariffs to bring manufacturing back. Then you turn around and say the tariffs aren't the point, it's the deal. You even said it was silly to bet on announced tariffs elsewhere.

If the tariffs are necessary to bring manufacturing back full stop, then you don't need to "make a deal". If it's just a tool to make a deal, then they're not necessary!

You just keep moving those goalposts.

Re: Poorest US workers hit hardest by slowing wage growth

#262

Post by bombcar »

ta20240528 wrote: post #171
fzeroracer wrote: post #118

Earlier quoted context omitted.

> Good question - it has a partial answer: minimum wage is to provide a living to a single young person for a shortish period. This is false and not at all the reason why the minimum wage exists. It was created to bust sweatshops. You are making the same argument as the people that were defending sweatshops. It may be the argument proponents make now to argue against raising it, but it was not why it was created. Roo…

I may make a similar argument, but you go too far sir to imply I am aligned with evil people defending sweatshops. I agree with Roosevelt that businesses should provide a living wage for their workers. Mine does. I'm happy to have both: "minimum single-income with extended-family obligations wage" and "young, single individual minimum wage". You just won't find a lot of the former.

This is actually the policy argued for by the Catholic Church in various documents; but it results in an obvious inequality that makes many angry - two people doing the exact same job, and the single man is paid less than the married family man.

(The reality is we pretend we don’t have that, then rebuild it badly with bandaids - child tax credit, earned income tax credit, daycare credits, MFJ deductions, healthcare, etc).

Re: Poorest US workers hit hardest by slowing wage growth

#263

Post by Gareth321 »

roywiggins wrote: post #36
yalogin wrote: post #24

What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill actually makes it much worse.

As far as I can tell, over the last few years at least, that's mostly not true: wages outpaced inflation, and it outpaced inflation more for lower-income workers than higher. > In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023 https://www.epi.org/publication/swa-wages-2023/ ("real wages" are wages adjusted for inflation)

The problem with comparing wages by cohort and average inflation is that inflation doesn't affect each cohort evenly. By and large, necessities continue to outpace top line inflation, and they have done so for decades. These include food, healthcare, housing, daycare, and education. Lower income people spend more of their income as a proportion on necessities, so they are impacted more than average by inflation. In order to tell if these lower income people have indeed received wage increases in line with inflation, we would need a model which uses a lower income basket of goods and services.

If I had to put on my tinfoil hat, I presume we don't do this because it would illustrate how badly the poorest are affected by inflation, and validate the frustrations they feel and which are clearly reflected in economic sentiment surveys.

Re: Poorest US workers hit hardest by slowing wage growth

#264

Post by closewith »

trevi wrote: post #254
westmeal wrote: post #221

Earlier quoted context omitted.

But why would the manufacturer or distributor lower their margins? Charity?

Price elasticity of demand (=sensitivity to price changes). If the seller is afraid that higher prices will significantly impact sales (people won't buy the product or buy alternatives), it might accept a lower margin in order to maintain the volume. Also market competition can be a factor: if competitors are not raising prices (or by smaller amounts), you might lose market share.

The drop in demand for staples you're talking about is quite literally the poorest people eating less, using fewer basics, lowering their quality of life further.

Re: Poorest US workers hit hardest by slowing wage growth

#266

Post by Gareth321 »

notahacker wrote: post #251
Gareth321 wrote: post #227

Earlier quoted context omitted.

> And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive. This is not correct. The cost of tariffs are shared by the distributor and customer. The proportion is determined by the elasticity of demand. By this I mean that for goods and services which people rely on, like gas, they will pay almost all of the cost of the tariff beca…

> Because so much menial labour is currently offshored, the primary benefactor of tariffs is expected to be the poor and working classes. See, I was with you until this (OK, mostly with you, luxury goods are price inelastic so the buyer definitely pays). The primary beneficiary of a carefully designed tariff policy might be some working class people in some industries (and some wealthy owners, natch), at the expense…

That's certainly a possibility, so I agree. If the uncertainty leads to significantly lower investment over a prolonged period of time, the benefits could be offset.

Luxury items are price elastic. https://www.investopedia.com/ask/answers/040715/which-factor...

Re: Poorest US workers hit hardest by slowing wage growth

#267

Post by jalapenos »

thuridas wrote: post #247

The tax cuts for the rich will also probably mean that a lot of this money is going to buy real state as an investment rising the house prices.

The immigration crackdown and the tariffs will also mean effective reduced supply of foreign labor, and since their labor is what poor people sell, it will cause upward pressure on their earnings.

Re: Poorest US workers hit hardest by slowing wage growth

#268

Post by tornikeo »

Tryk wrote: post #250
murderfs wrote: post #58

Earlier quoted context omitted.

That's a good way of turning the poorest US workers into the poorest US unemployed. If you raise the minimum wage above the actual value of an employee, then they're just going to get fired. Even if they still provide more value than their being paid, it makes automating away their job more competitive. California tried this with a $20/hr minimum wage in fast food restaurants: the next time you go into a McDonalds, c…

So by your logic we should consider lowering the minimum wage in order to ensure employment. Employment is not a means in itself, the point of being employed is to "make a living". If a job cannot sustain a person then it should not exist. People deserve to live with dignity, earning a living wage.

>People deserve to live with dignity, earning a living wage.

Look, I get where that is coming from. But no one deserves anything, even clean air. Instead, you pay for things with other things (e.g. clean air in exhchange for slightly more expensive cars).

A (shitty) job is better than no job. Minimum wage should be lowered. You gotta help people with something else. For instance by allowing to build higher density housing.

Re: Poorest US workers hit hardest by slowing wage growth

#269

Post by JumpCrisscross »

reliabilityguy wrote: post #225
JumpCrisscross wrote: post #198

Earlier quoted context omitted.

> Which ones? Liberation Day. > can’t bet on negotiation tactic, only on the outcomes and formal agreements How about money actually invested [1][2]. [1] https://fred.stlouisfed.org/series/C307RX1Q020SBEA [2] https://fred.stlouisfed.org/series/C307RX1Q020SBEA

> Liberation Day. From four months ago?

> From four months ago?

That is when that was.

Also the ones from six months ago.

Re: Poorest US workers hit hardest by slowing wage growth

#270

Post by Gareth321 »

dasloop wrote: post #237
Gareth321 wrote: post #227

Earlier quoted context omitted.

> And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive. This is not correct. The cost of tariffs are shared by the distributor and customer. The proportion is determined by the elasticity of demand. By this I mean that for goods and services which people rely on, like gas, they will pay almost all of the cost of the tariff beca…

Why the poor and working class? Increasing benefits on local products maybe will, maybe not, move to salaries. But first necessity goods are not very elastic making that products more expensive.

> Why the poor and working class?

Because by and large, most of the jobs offshored by the U.S. have been lower skilled. As these jobs return, it is the lower skilled workers who will primarily benefit.

I agree that there are likely examples of necessities which cannot be produced cost effectively locally which will become more expensive.

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