Poorest US workers hit hardest by slowing wage growth • Hacker News Board

Re: Poorest US workers hit hardest by slowing wage growth

#321

Post by xienze » Mon, Aug 04, 2025, 3:57 PM UTC

TimorousBestie wrote: post #257

xienze wrote: post #238

Earlier quoted context omitted.

Doesn't the fact that 98.9% of all workers earn more than the minimum wage kinda highlight that it's really not necessary for the federal government to increase it? Clearly it's nearly impossible except in limited circumstance to actually _find_ workers who'll accept the minimum wage, hence the fact that hardly anyone is paying it.

> But is anyone _actually_ getting paid the minimum wage these days? Yes. > Clearly it's nearly impossible except in limited circumstance No, you exaggerate. It’s a large number of people. I wouldn’t say it’s nearly impossible to find someone from Indianapolis (pop. 879k, 2024 est.), and the number of Americans is much larger than the number of working Americans.

> No, you exaggerate. It’s a large number of people.

It's 1.1%, an incredibly small portion of the entire working population. There's never any follow up like "where in the country does this occur?" which may reveal that it's actually a livable wage. Or other follow up questions like, "does this number include illegal aliens who are happy with being paid $7.25/hour tax free?"

You're also ignoring _how_ it came to be that 98.9% of all workers manage to get paid higher than the minimum wage without it being mandated. Are the companies doing this out of the goodness of their hearts or have market forces instead found what the _actual_ viable minimum wage for various localities truly is?

Re: Poorest US workers hit hardest by slowing wage growth

#322

Post by toast0 » Mon, Aug 04, 2025, 3:57 PM UTC

reliabilityguy wrote: post #132

toast0 wrote: post #115

Earlier quoted context omitted.

The chicken tax encourages creative workarounds more than domestic production. Importing all the parts and putting them together in the US is production work, so fine. Importing chassis cab and putting a bed on in the US is silly, importing with seats discarded in the US is wasteful (Ford got dinged, but I don't think others did?) Who's making small cargo vans domestically? Nobody. So they're all 25% more expensive,…

Chicken tax was introduced earlier than all the “relaxation” of what is considered “American”. The definition of “made in USA” became more flexible for products to be considered domestic while de facto being made somewhere else, hurting domestic manufacturing. So, it’s not that the tax doesn’t work, the issue is all the things around it that made it less effective.

Chicken tax was enacted in 1964; Ford and Chevy were tariff engineering in 1972, importing trucks without beds and putting beds on in the US.

Finding loopholes and driving trucks through them is what's considered American. It's not a relaxation.

At the end of the day, the chicken tax reduces our options in the vehicle market as it was designed to do, and it's one thing if we want to exclude WV vans and trucks when we have plenty of nice options at home, but now that we don't have nice options at home, it would be nice to be able to import them without a punative tariff.

Re: Poorest US workers hit hardest by slowing wage growth

#323

Post by xienze » Mon, Aug 04, 2025, 4:00 PM UTC

agent_turtle wrote: post #258

xienze wrote: post #238

Earlier quoted context omitted.

Doesn't the fact that 98.9% of all workers earn more than the minimum wage kinda highlight that it's really not necessary for the federal government to increase it? Clearly it's nearly impossible except in limited circumstance to actually _find_ workers who'll accept the minimum wage, hence the fact that hardly anyone is paying it.

7.26 is technically more than 7.25. Further, a low floor acts as a weight, depressing wages generally. "Raising the federal minimum wage to $15 by 2025 would lift wages for over 33 million workers": https://www.epi.org/publication/minimum-wage-15-by-2025/ (For the record, 33 million is ~6 million more than the population of Australia)

A federal-level minimum wage doesn't make sense, precisely because what is considered minimum wage in LA isn't the same as what's considered minimum wage in rural Louisiana, and vice-versa. The fact that 98.9% of workers manage to receive more than the minimum wage strongly suggests the market forces have done a pretty good job of determining what a viable minimum wage for various parts of the US is (including apparently parts where $7.25/hour works).

Re: Poorest US workers hit hardest by slowing wage growth

#324

Post by Hikikomori » Mon, Aug 04, 2025, 4:29 PM UTC

guywithahat wrote: post #319

reliabilityguy wrote: post #65

Earlier quoted context omitted.

Wouldn’t the deportations increase the demand for low-paying jobs resulting in increasing salaries?

Yes, countries that go through population declines without new immigration have often seen strong wage growth. Famously after the Irish great famine agricultural wages rose ~30%, and lower-skill jobs saw strong wage growth

Serfs got slightly more after the Brits killed most of them? Sounds great.

Re: Poorest US workers hit hardest by slowing wage growth

#325

Post by hyperadvanced » Mon, Aug 04, 2025, 4:44 PM UTC

tbrownaw wrote: post #64

hyperadvanced wrote: post #33

Earlier quoted context omitted.

On this topic- last year it was somewhat common for R politicians to criticize the D regime for the “report high, revise low” strategy - if anything, I guess, this firing has been telegraphed. Anyway, those people were also called conspiracy theorists and politically motivated. There’s clearly a conflict of interest between the facts and what is politically expedient on all sides of the political system in the USA. I…

> I personally would prefer that the jobs numbers apparatus was extremely conservative in the sense that it didn’t overstate the strength of the USA economy. This sounds like a call for it to be biased low? I'd prefer zero net bias - overstate and understate equally often - and as little error as possible. (Also, I'd like a pet unicorn for the munchkin.) The problem seems to be around the preliminary numbers and how…

Biased low if it must be - a more down-home way of phrasing that is “don’t count your chickens before they hatch,” which, in any case seems like better labor-statistical common sense than the other way around.

Re: Poorest US workers hit hardest by slowing wage growth

#326

Post by guywithahat » Mon, Aug 04, 2025, 5:13 PM UTC

Hikikomori wrote: post #324

guywithahat wrote: post #319

Earlier quoted context omitted.

Yes, countries that go through population declines without new immigration have often seen strong wage growth. Famously after the Irish great famine agricultural wages rose ~30%, and lower-skill jobs saw strong wage growth

Serfs got slightly more after the Brits killed most of them? Sounds great.

Technically most of the Irish population emigrated Ireland, and I'm not sure I'd blame the brits for a famine but ok. Really what I'm looking at is the economic effect of decreasing population when it's not replaced by immigrants

Re: Poorest US workers hit hardest by slowing wage growth

#327

Post by Gareth321 » Mon, Aug 04, 2025, 5:35 PM UTC

notahacker wrote: post #310

Gareth321 wrote: post #266

Earlier quoted context omitted.

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...

Strictly speaking luxury goods are income elastic (by definition) but can be either price elastic or inelastic at different points on the pricing curve, with profit-maximising suppliers attempting to set prices at the level where it reaches unitary elasticity. But when we're talking about designer brands (as opposed to the strict economic definition of a 'luxury good' which encompasses most of the shoe market), they…

I don't think I agree. Luxury goods are typically defined as both income and price elastic in economics textbooks. I agree that brands can and do employ various marketing strategies like exclusivity, as you describe. This is also true of low elasticity goods like Liquid Death selling expensive water. Still, in a competitive market where the wealthy can choose other designer brands with similar class projection and quality, theory tells us that customers can and do switch, and the market finds a price equilibrium close to the pre-tariff price.

Re: Poorest US workers hit hardest by slowing wage growth

#328

Post by Paul_Clayton » Mon, Aug 04, 2025, 5:47 PM UTC

Joeri wrote: post #235

westmeal wrote: post #221

Earlier quoted context omitted.

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

In the short term: fear of reprisals from Trump, as he clearly warned them not to raise prices. In the long term markets find a new equilibrium, as they always do when a new tax is imposed, and that is probably going to be a combination of lower margins, higher prices for the consumer and lower prices for foreign suppliers.

"higher prices for the consumer" can include lower value at the same price. Size reduction seems a common method for certain commodities. This may result in reduced consumption (e.g., a consumer buying one package of ice cream every other week), as well as increase customer dissatisfaction when the change is noticed, and it can increase packaging cost per unit weight/volume.

Other ways of reducing value are possible such as reducing quality control effort, reducing quality of inputs, and reducing manufacturing costs in ways that are known to reduce product quality.

Pushing costs to effectively underregulated externalities can also avoid price increases.

It is also sometimes possible to increase efficiency. Even a long term commodity can have potential for efficiency improvements that were considered not worth exploring under stable pricing pressures. (I suspect value reduction is easier and much faster than efficiency improvement.)

Sadly, reducing value can have a disproportionate cost to consumers. Reducing manufacturing costs for a Watchman's boots by 20% may reduce the lifetime of such by 30% and reduce the quality of use by 50% (which may be related to Samuel Vimes' theory: https://en.m.wikipedia.org/wiki/Boots_theory ).

Re: Poorest US workers hit hardest by slowing wage growth

#329

Post by TimorousBestie » Mon, Aug 04, 2025, 6:15 PM UTC

xienze wrote: post #321

TimorousBestie wrote: post #257

Earlier quoted context omitted.

> But is anyone _actually_ getting paid the minimum wage these days? Yes. > Clearly it's nearly impossible except in limited circumstance No, you exaggerate. It’s a large number of people. I wouldn’t say it’s nearly impossible to find someone from Indianapolis (pop. 879k, 2024 est.), and the number of Americans is much larger than the number of working Americans.

> No, you exaggerate. It’s a large number of people. It's 1.1%, an incredibly small portion of the entire working population. There's never any follow up like "where in the country does this occur?" which may reveal that it's actually a livable wage. Or other follow up questions like, "does this number include illegal aliens who are happy with being paid $7.25/hour tax free?" You're also ignoring _how_ it came to be…

> There's never any follow up like "where in the country does this occur?"

Are you serious?

https://www.bls.gov/opub/reports/minimum-wage/2023/

Table 3. Their methodology is addressed in the technical notes.

> You're also ignoring _how_ it came to be. . .

No. You asked a specific question and I was bored enough to help you look up a result. I’m not here to engage with whatever ideological problems you have going on in the subtext.

Re: Poorest US workers hit hardest by slowing wage growth

#330

Post by somenameforme » Mon, Aug 04, 2025, 6:18 PM UTC

closewith wrote: post #264

trevi wrote: post #254

Earlier quoted context omitted.

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.

As of 2016 (first search result) 90% of food/beverage is domestically produced = no tariffs. [1] The big goal with the tariffs, outside of gaining leverage on other countries, is to motivate domestic production and alternatives. Without tariffs it simply isn't realistically possible to compete in many industries because other countries have cheaper labor and less costly regulations.

Of course the practical problem with this playing out in increased domestic production is that it's reasonably likely that in 2028 the tariffs will get rolled back, and any company that was depending on them to survive will die. That's a large amount of uncertainty for any industry where there's a significant income investment required to get going.

[1] - https://www.ers.usda.gov/data-products/charts-of-note/chart-...