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Raising Floor for Minimum Wage Pushes Economy into the Unknown

nytimes.com

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Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#51

Post by bryanlarsen »

JonFish85 wrote: post #37
toomuchtodo wrote: post #27

Earlier quoted context omitted.

> Great. Then what? Everyone currently making over $1m a year will cut their salary to $1m. Do wealthy individuals in other countries with a heavier tax burden (Europe, Scandinavia to be specific) do this? Would be nice to see evidence of this behavior before outright dismissing raising taxes.

If the tax rate is 95%, a company would have to pay someone a $21 million dollar salary to pay that person $2m. I suspect that no company would do such a thing, as it's just throwing money away.

5% of a very large number is still a large number. Very few people are going to say "don't give me that extra $20 million because the government will take $19 million." $1 million is still a lot of money.

And of course, there are lots of deductions. You could give that $20 million to a charity and the government would get none of it. You wouldn't get any either, but you could certainly get a lot of indirect value out of giving away $20M.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#52

Post by JonFish85 »

crdoconnor wrote: post #48
JonFish85 wrote: post #24

Earlier quoted context omitted.

"Make more than a million dollars a year? 95% marginal tax rate." Great. Then what? Everyone currently making over $1m a year will cut their salary to $1m. Then you gotta start taxing the upper middle class -- what rate do you want to tax people making over $500k? $250k? $100k? Those are the ones that will pay for this program. As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay…

>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.

"The point of taxing them is to mute the inflationary effect of letting them keep their money."

What? How is it inflationary to let "the wealthy" keep their money vs. artificially raising the wages of the minimum wage workers?

"The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again."

Also--what? Being that we're on Hacker News, the majority of people here are probably making $100k+ a year and are solidly in the top 10% of wage-earners in the country. We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#53

Post by JonFish85 »

bryanlarsen wrote: post #51
JonFish85 wrote: post #37

Earlier quoted context omitted.

If the tax rate is 95%, a company would have to pay someone a $21 million dollar salary to pay that person $2m. I suspect that no company would do such a thing, as it's just throwing money away.

5% of a very large number is still a large number. Very few people are going to say "don't give me that extra $20 million because the government will take $19 million." $1 million is still a lot of money. And of course, there are lots of deductions. You could give that $20 million to a charity and the government would get none of it. You wouldn't get any either, but you could certainly get a lot of indirect value out…

What company is going to pay that? It's just silly. If you felt that a CEO/athlete/whatever was worth $30m a year, you'd have to pay that person $581 million dollars. They'd find some other way, that money wouldn't go to the government.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#54

Post by crdoconnor »

JonFish85 wrote: post #52
crdoconnor wrote: post #48

Earlier quoted context omitted.

>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.

"The point of taxing them is to mute the inflationary effect of letting them keep their money." What? How is it inflationary to let "the wealthy" keep their money vs. artificially raising the wages of the minimum wage workers? "The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again." Also--what? Being that we're on Hacker News, the majority of people…

>What? How is it inflationary to let "the wealthy" keep their money

Because they spend it.

>We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend.

Both are. The few people with hundreds of millions of dollars will buy large properties in central locations in multiple cities, shrinking the available housing stock for the rest of us.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#55

Post by [deleted] »

erkose wrote: post #40
Someone1234 wrote: post #18

I think the minimum wage is a helpful tool or has been historically. But as others have said when you raise the minimum wage, prices increase, and by far the largest groups that consume the same goods/services are also relatively poor themselves (so essentially you increase pay but also costs to the poorest in society). More as a thought experiment than anything: What would happen if, instead of increasing the minimu…

Ben & Jerry's use to do this https://en.wikipedia.org/wiki/Ben_%26_Jerry%27s#Wages

[deleted]

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#56

Post by moistgorilla »

erkose wrote: post #40
Someone1234 wrote: post #18

I think the minimum wage is a helpful tool or has been historically. But as others have said when you raise the minimum wage, prices increase, and by far the largest groups that consume the same goods/services are also relatively poor themselves (so essentially you increase pay but also costs to the poorest in society). More as a thought experiment than anything: What would happen if, instead of increasing the minimu…

Ben & Jerry's use to do this https://en.wikipedia.org/wiki/Ben_%26_Jerry%27s#Wages

Yep, and they stopped it because the CEO they hired to replace Ben (or Jerry I forget) was horrible and mismanaged the company

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#57

Post by toomuchtodo »

JonFish85 wrote: post #53
bryanlarsen wrote: post #51

Earlier quoted context omitted.

5% of a very large number is still a large number. Very few people are going to say "don't give me that extra $20 million because the government will take $19 million." $1 million is still a lot of money. And of course, there are lots of deductions. You could give that $20 million to a charity and the government would get none of it. You wouldn't get any either, but you could certainly get a lot of indirect value out…

What company is going to pay that? It's just silly. If you felt that a CEO/athlete/whatever was worth $30m a year, you'd have to pay that person $581 million dollars. They'd find some other way, that money wouldn't go to the government.

> They'd find some other way, that money wouldn't go to the government.

And so we keep closing loopholes.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#58

Post by BurningFrog »

JonFish85 wrote: post #34
BurningFrog wrote: post #30

Earlier quoted context omitted.

The size of the country does not matter for microeconomic effects.

Changing a wage for a country, as the post said, is probably a bit more macro- than micro-

The standard Microeconomics¹ analysis is clear:

If an employee is paid $10/h and produces $12/h of value for the employer, the employer makes a profit of $2/h and will want to keep the employee. If they must pay $15/h this becomes a $3/h loss, and the employee will be fired.

It's hard to see where the size of the country would enter into this.

Of course, if a raised minimum wage causes higher unemployment etc, this will have macro economic effects, but that's secondary effects.

¹ A more descriptive name for this branch of Economics would be "Price Theory", but we're stuck with the name.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#59

Post by dragonwriter »

grecy wrote: post #13

This is absurd. The results of raising the minimum wage are perfectly known. Learn from the other countries that have done it in the last 10-15-25 years. Australia, Scandinavian countries, etc. etc. Why can't America look outside it's own borders and learn from what other countries have done and are doing? i.e. watch this John Oliver video on gun control [1] where it's stated Australia is not on this planet and Ameri…

> Why can't America look outside it's own borders and learn from what other countries have done and are doing?

The doomsaying about minimum wage increases occurs every time this is discussed in the US, and the doom fails to materialize every time. This isn't an issue about the people doing to doomsaying not learning from what other countries are doing; they are ignoring the US as much as any other country.

Its true that, if you assume no impact on spending behavior (and, therefore, on demand), minimum wage increases will be expected, in net, to make certain jobs that are currently net benefits to employers into net losses, resulting in them being eliminated, without any compensating effects.

OTOH, the contention of those that support any particular minimum wage increase is that, in the range actually proposed, the increased pay to those whose jobs remain net benefits to their employers will increase demand in sectors which drive employment less than the reduced retained employer profits will decrease demand, such that demand will be increased enough in fields with sufficient impact on employment that the benefit provided by employees working will increase enough that, while their may be shifts in the sectors of employment, net employment will not decrease.

And the facts of historical minimum wage increases have never shown the fears sold by the doomsayers being realized.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#60

Post by JonFish85 »

crdoconnor wrote: post #54
JonFish85 wrote: post #52

Earlier quoted context omitted.

"The point of taxing them is to mute the inflationary effect of letting them keep their money." What? How is it inflationary to let "the wealthy" keep their money vs. artificially raising the wages of the minimum wage workers? "The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again." Also--what? Being that we're on Hacker News, the majority of people…

>What? How is it inflationary to let "the wealthy" keep their money Because they spend it. >We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend. Both are. The few people with hundreds of millions of dollars will buy large properties in central locations in multiple cities, shrinking the available housing stock for the rest of us.

"Because they spend it."

So does everyone, they just spend it differently. Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. I don't know how to compare consumer spending vs. investments, so I can't say if one is "better" than another, but that money isn't just sitting in bank accounts.

Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this.

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