Is a Job at Starvation Level Wages a Job?
October 2, 2019 9:29 AM   Subscribe

“The question is straightforward: does it matter what the official unemployment numbers are if the people who are working are dependent upon food aid?” Brian Romanchuk wonders. (Found Via Joe Weisenthal’s Twitter).

“Under current institutional arrangements, the presumption that private employment is efficient is misguided. We have employers who are incapable of paying their workers a starvation level wage, and this is obviously unsustainable. However, charities and government assistance are bailing them out. These firms are destroying capital, and are undermining the profitability of legitimate firms. Euthanising these firms will raise domestic productivity. A Job Guarantee that pays a living wage will accomplish exactly that, whereas the ‘reserve army of the unemployed’ strategy preferred by neoclassicals leaves those firms in place.”

On Twitter, Ted Frank disagrees: “The food stamps aren’t stopping the worker from seeking a higher income. It’s the lack of skills that are stopping the worker from obtaining a higher income.”
posted by sallybrown (94 comments total) 42 users marked this as a favorite
 
“The food stamps aren’t stopping the worker from seeking a higher income. It’s the lack of skills that are stopping the worker from obtaining a higher income.”

In my head I'm hearing Yzma snarling "you should have thought of that before you became peasants!"
posted by EmpressCallipygos at 9:38 AM on October 2 [38 favorites]


Every time I hear discussions about welfare, there's the endless rhetoric of "Get a job." One thing I learned working as a welfare clerk is that the vast majority of welfare recipients have jobs—and many of those jobs are jobs that pay terribly, but need to get done. People need child care. People need haircuts. People need to have home health aides. The problem isn't skills, it's jobs that don't pay a living wage!
posted by SansPoint at 9:49 AM on October 2 [106 favorites]


If the answer is for every individual to just get a better-paying job by "up-skilling," who's going to work at Walmart?
posted by Kitty Stardust at 9:50 AM on October 2 [25 favorites]


Yes, to me Frank doesn’t get it. In his worldview it is some level of acceptable for a business to pay a worker less than necessary to keep the worker alive. And in fact he puts the fault on the worker (a certain level of skills justifies a wage at or below starvation levels). The burden is on the society to make up the gap for moral reasons rather than (or in addition to) economic ones.

Whereas Romanchuk’s argument is a refusal to accept a scenario of starvation wage. Provide a job guarantee that at least clears the starvation wage level, and you will force every firm to attract workers by paying at least that, ending the need for food assistance programs and the like (probably only in theory...there are lots of complicating factors here...and of course any job/wage guarantee would trigger all sorts of other effects).

But it’s an interesting argument, at least from my perspective as a non-expert. It matches well with the new attitudes toward treating homelessness: just give people money!

These discussions also make me wonder how many of the people involved have actually worked at a job paying below a minimum wage or tried to support a family on that.
posted by sallybrown at 9:52 AM on October 2 [9 favorites]


the problem is never unskilled labor, it's just undervalued labor.
posted by FirstMateKate at 9:55 AM on October 2 [113 favorites]


If the answer is for every individual to just get a better-paying job by "up-skilling," who's going to work at Walmart?

The cognitive dissonance here is huge. I follow a site called "Not Always Right", which lets people write in about misbehaving customers in all industries, and you wouldn't believe how many stories come from shop clerks who are being scolded by their customers for "working on a Sunday" or "not wanting to do anything more with yourself than being a shop clerk," as those customers are in the very act of purchasing something from those shop clerks.

Only once do I recall one of those stories coming with another customer tapping them on the shoulder and saying "If they weren't working on a Sunday, how would you be getting your damn coffee in the first place, lady?"
posted by EmpressCallipygos at 10:00 AM on October 2 [48 favorites]


Yes, if we all have more skills, we will all, without exception, be able to find work as highly-paid programmers, surgeons, tenured faculty, etc.

It's funny how all these bootstraps people are market fundamentalists except when it comes to mouthing platitudes about getting skills. They understand supply and demand perfectly well the rest of the time.

~~
But actually, the real thing is that they're not willing to say "society is a zero-sum game; if you're not smart enough both to "get skills" and out-strategize all the other people who have "gotten" the same skills, you deserve to starve". Ruthlessness and knifing other people are necessities of their worldview. They don't say this out loud because it's deeply unpalatable and obviously unjust, while the other has a sort of air of truthiness to it.
posted by Frowner at 10:02 AM on October 2 [60 favorites]


People on some form of food aid working low-wage jobs are only the obvious members of an undervalued labor force. Nevermind the people that don't apply for the aid in the first place regardless of their eligibility. Honestly I'm more scared for and worried about those people because they're more likely to be exploited by their employers. At least folks receiving aid are eating.

The mind boggles at folks who are aware of the aid and are too prideful to take it in the first place. I know people like that and it's infuriating.

Fuck capitalism, and the entire right wing while we're at it.
posted by Ephelump Jockey at 10:04 AM on October 2 [8 favorites]


I don't have enough background to evaluate the technical argument here, but I don't see why, in general, we shouldn't let everyone receive public assistance for the minimum requirements of survival such as food, shelter, and health care, as long as we can afford to provide that assistance. If the burden of survival is decoupled from the everyday economic decisions of individual workers and businesses, then those decisions can be made more freely, which should improve the efficiency of the labor market. For example, if people did not need to depend on a possibly capricious or abusive employer to keep a roof over their heads, we wouldn't need to set an arbitrary minimum wage--such a wage would be automatically determined by the market. Plus, that market price would be free to vary regionally, and could be higher or lower depending on local cost of living, which would address the concerns of critics of national minimum wages being infeasible for areas with low cost of living.
posted by J.K. Seazer at 10:05 AM on October 2 [6 favorites]


The mind boggles at folks who are aware of the aid and are too prideful to take it in the first place. I know people like that and it's infuriating.
That was me for a while. And the reason was pretty simple: where I lived at the time I'd have to go through a rigorous audit of all my income and spending going back months and months to qualify, which was the same process I had to go through every six months for my student loans. It sent me into a tailspin of anxiety, guilt, and depression. I honestly couldn't handle it and decide it was easier to only eat one meal a day.
posted by Fish Sauce at 10:11 AM on October 2 [42 favorites]


Having worked at horrible starvation level jobs, I can tell you some SOB thinks they need these jobs done, but that they don’t need to pay a fair wage. I see social aid as revolution prevention. If people can eat and have shelter and medical care they don’t revolt. This in case the rich have been too stupid to notice is a Good Thing.
I’ve spent time places where there has been war. I know it’s a Good Thing to remove the material causes of revolution and violence.
I think that it might be more efficient to go with a generous UBI Universal Health Care and stop subsidizing large companies who refuse to pay fair wages, have fair hours. One stupid boss trick is to raise wages but cut hours. Any business doing that needs all their CEOs lined up and shot as far as I’m concerned. Stop letting landlords rent disgusting, infested slums for more than people can earn. All the things Conservatives don’t want to do. Andrew Yang’s UBI amount is too small to be helpful. By the time you add up my SS/SSI Medicaid+Medicare, SNAP and housing, it’s way more than $1000. I personally can’t at this point work enough hours to make up the difference.
My life literally was ruined from the start by a combination of not being able to drive a car and therefore not being able to keep and hold halfway decent jobs. I truly resent the system which just uses people until they break and then throws them out like trash.
I get that people who are able should work if they can, but pay people enough to live and then only people in hard circumstances would even need or want social benefits.
posted by Katjusa Roquette at 10:17 AM on October 2 [39 favorites]


They are jobs, but they are not employment. Not that I'm splitting hairs or anything. Just calling attention to the word games that have gone on since at least the Reagan years.

Labor department manipulating definitions so that measurements can reflect a politically desirable outcome is nothing new, and the public have gone along with it the whole time. But that doesn't convert a lie into the truth., and the public are denied the facts they want to hear: how many people are earning a living, versus how many are relying on something else?
posted by rustipi at 10:17 AM on October 2 [7 favorites]


Frank seems very much not to get it by diving straight into immigration policy. It's not lack of skills, it's the zero hours contract that means you have to be available for work but only at the pleasure of the employer.
posted by scruss at 10:25 AM on October 2 [9 favorites]


If the burden of survival is decoupled from the everyday economic decisions of individual workers and businesses, then those decisions can be made more freely, which should improve the efficiency of the labor market.

Economic decisions like: Be a stay at home parent, or work at a job with flexible hours to pay the utility bills? Pursue my art now or defer my dream a few years to pay off student loan debt? Take care of a sick family member or spend hours away from them working a job to pay a caregiver plus put food on the table?

Economic Security Project: It’s time to end poverty and rebuild the middle class in America. We believe cash is an effective way to achieve that.
posted by otherchaz at 10:25 AM on October 2 [7 favorites]


That was me for a while. And the reason was pretty simple: where I lived at the time I'd have to go through a rigorous audit of all my income and spending going back months and months to qualify, which was the same process I had to go through every six months for my student loans. It sent me into a tailspin of anxiety, guilt, and depression. I honestly couldn't handle it and decide it was easier to only eat one meal a day.
And to a certain kind of scumbag this is the system working as intended. I'm sorry you went through that.
posted by Ephelump Jockey at 10:27 AM on October 2 [28 favorites]


I literally spent hours at the fair talking to stupid conservatives who think the employment numbers are great. If one person needs three jobs to eat, that’s not great. They are wearing themselves out worse, burning gas driving all over to get to these 3 jobs which each pay too little. You have to wonder what drugs they are on not to get this. It is *not* an improvement. In fact it is way worse than a rat-race.
posted by Katjusa Roquette at 10:27 AM on October 2 [16 favorites]


One thing I've recently figured out is that when pundits say "skills", what they really mean "proof that they have jumped over some arbitrary hurdle that lazy HR reps rely on to screen candidates."

I always told my bosses, when hiring a mechanical engineering tech (a good blue collar job that pays a living wage), that I absolutely didn't need anyone with a bachelor's degree. And work experience at an auto body shop or the like would trump an AA. But HR didn't know how to run a phone screen to look for soft skills like problem-solving or lateral thinking, so an unneeded degree stands in for those.

And yes, this is beside the fact that so-called "unskilled" labor is clearly devalued. The purchasing power of minimum wage has declined since 1968, when today's politicians were flipping burgers and bagging groceries.
posted by muddgirl at 10:31 AM on October 2 [38 favorites]


I wonder if it'd be possible to tease out what unemployment rates are if you factor in this logic of starvation wages. Or when people are forced to work multiple part-time minimum wage jobs. Maybe if you determine whether, in each MSA/state/whatever, the minimum wage meets certain basic needs and then filter out all jobs at that wage. I suspect it would paint an interesting narrative.
posted by Godspeed.You!Black.Emperor.Penguin at 10:49 AM on October 2 [7 favorites]


sallybrown: "“The food stamps aren’t stopping the worker from seeking a higher income. It’s the lack of skills that are stopping the worker from obtaining a higher income.”"

Sure! Like my sister. She has a 4-year college degree, which I would not agree represents a "lack of skills". She can't find a job that pays well enough to support her 4 kids, because the jackass father won't pay any support. So she receives assistance. And if she DOES find a job that pays better, her assistance is cut because she is "working" - which means that she CAN'T work more, because she is in an area where the base salary is not high enough to live off of her income alone - she needs assistance. Which she can't get if she works more. But assistance alone is not enough so she needs to work more... which cuts her assistance to zero. And clearly this catch-22 is her fault.

Unemployment rates are bullshit. Working a job that limits you to 39 hours a week with no benefits is bullshit. Paying the equivalent of a new car every year, out of pocket, for your own healthcare, is bullshit.
posted by caution live frogs at 10:51 AM on October 2 [38 favorites]


I don't know if a job at sub-starvation wages is a "job," but I do know that a business that can only keep running by paying its employees less than they need to stay alive is not a "business" but a racket.
posted by Aardvark Cheeselog at 11:05 AM on October 2 [34 favorites]


something something repeal Taft Hartley something.
posted by corb at 11:30 AM on October 2 [9 favorites]


There's really no reason to take anything Ted Frank says seriously, ever. Just another self-appointed blowhard caping for the ruling class he barely registers as a minor lackey of.
posted by praemunire at 11:37 AM on October 2 [9 favorites]


Katjusa Roquette: “If people can eat and have shelter and medical care they don’t revolt. This in case the rich have been too stupid to notice is a Good Thing.”
In the immortal words of Pope Guilty, “Taxes are that fairly minor fee that the wealthy pay to keep their blood inside their bodies. You'd think they'd figure it out eventually.”
posted by ob1quixote at 11:48 AM on October 2 [43 favorites]


“The food stamps aren’t stopping the worker from seeking a higher income. It’s the lack of skills that are stopping the worker from obtaining a higher income.”

Oh, I don't know about that, Ted Frank. It doesn't seem to have slowed you down from hanging out a shingle, and you've got the intellect and charisma of a raw potato.
posted by Mayor West at 12:00 PM on October 2 [5 favorites]


Rule of thumb in economics: No single factor ever accounts for 100 percent.

The traditional Econ 101 argument: In a free market, workers earn their marginal product - that is, what they contribute to the economy through their work. Low wages reflect the workers' low productivity. Sure, the market isn't completely free, but it's close enough that more government intervention will backfire. For example, if we raise the minimum wage too much, employment will decline. Therefore, if we want people to work and get good wages, the government should let employers pay the market wage and then supplement those wages, for example through the Earned Income Tax Credit or SNAP benefits. This is partially true.

The far-left argument: Employers are using their market power to pay lower wages. This is being exacerbated by the decline in labor union power and government regulation and is showing up in increasing corporate profits. This is also partially true, and mainstream economists now think this is a more important factor than they did, say, a decade ago.

There's no reason that we can't have complementary policies that address both issues. I mean, except for reality.
posted by Mr.Know-it-some at 12:00 PM on October 2


Ted F here, since I’ve been invoked, and then hit with some ad hominems by people unwilling to address economic reality. I make my living keeping millionaire lawyers from ripping off lower- and middle-class consumers, and have foregone millions of dollars of income to win hundreds of millions of dollars for consumers and shareholders, so the ad hominems aren’t even close to right.

The OP is simply wrong economically. Government payments to the social safety net are not “bailing out” those who pay low salaries. Those social safety net payments reduce the supply of low-wage workers (who are facing effective marginal tax rates of over 50% as benefits phase out), which in turn requires employers to pay more to induce people to work for them. That’s the opposite of a bail out.

If the social safety net disappeared, Walmart wouldn’t start magically raising wages. The poor people no longer getting food stamps would find cheaper housing or tighten belts elsewhere so they could afford food.

Demanding that employers pay $15-20/hour to people who only have $10/hour skills is what gets those employees replaced by self-checkout kiosks. The real minimum wage is $0, as Seattle is finding out the hard way.

In reality, the vast majority of people in minimum wage jobs in the US are not the primary breadwinner in their families. The demand for a “living wage” deprives many poor teenagers who can’t afford to take internships the opportunity to prove themselves, and gain experience and skills that allows them to get better jobs later.

Note that I took no policy positions in the Twitter thread. Maybe you think it’s more important for the government to use guns to prevent people from voluntarily working for $8/hour than to let people choose to agree to that. But at least make the policy choice based on a true understanding of the costs and benefits, rather than on the fiction that the government is subsidizing low-wage employers, a fiction based on mathematical illiteracy.
posted by thf2 at 1:11 PM on October 2 [4 favorites]


Whole lot of white collar jobs out there that don't pay enough to live on either. I have a BA. In fact I have 1.75 BAs - I'm only a semester of student teaching away from a 2nd one. And I have an office job. Yet I make just $200 annually too much to qualify for SNAP - that $17 a month is certainly enough to cover groceries. My coworkers and most of my friends are in the same boat and it's nationwide. Can't make it in North Carolina, can't make it in Oregon.

Nobody is really making it today. But it always gets framed in the media as "the working classes" or "the working poor" or "minimum wage workers" when the reality is just about everyone is crashing, burning, falling down the collapsing socio economic ladder. Having a decent job means shit when you can't pay your bills and buy food and I'm not even going to mention healthcare because AAAAURGH.
posted by mygothlaundry at 1:13 PM on October 2 [12 favorites]


Mr. Frank:

I'd like to ask a few questions about your comment if I may.

If the social safety net disappeared, Walmart wouldn’t start magically raising wages. The poor people no longer getting food stamps would find cheaper housing or tighten belts elsewhere so they could afford food.

This would be the case if there were cheaper housing to be had or a place for belts to be tightened. How is it you are certain that this is universally the case? (Are you?)

Demanding that employers pay $15-20/hour to people who only have $10/hour skills is what gets those employees replaced by self-checkout kiosks.

What is the process by which those skills have been valued at only $10 an hour? Might it not simply be by virtue of the public having become accustomed to the current minimum wage being approximately that rate? Personally, I recall less than $10 an hour as my wage during my McDonald's job at the age of 16, during the 1980s, so clearly we raised the minimum wage from something else to $10 at some point, for the same set of skills, so it stands to reason that those skills' "value" is something that has been raised before with no ill effect. Therefore, if we have managed to raise the minimum wage from a lower rate to $10 an hour without any serious disruption to the economy as a result, might we not also expect the same if the minimum wage is raised from $10 to $15?

In reality, the vast majority of people in minimum wage jobs in the US are not the primary breadwinner in their families. The demand for a “living wage” deprives many poor teenagers who can’t afford to take internships the opportunity to prove themselves, and gain experience and skills that allows them to get better jobs later.

Can you clarify why raising the minimum wage "deprives many poor teenagers who can't afford to take internships the opportunity to prove themselves," as opposed to "provides many poor teenagers the opportunity to save even more for a college education"? Also, might the problem you are pointing out not be solved by also paying interns?
posted by EmpressCallipygos at 1:24 PM on October 2 [26 favorites]


The real minimum wage is $0, as Seattle is finding out the hard way.

I assume this is in reference to the widely publicized UW study about the effects of Seattle's minimum wage legislation which was largely negative, but those results have been heavily contested. The same team that published the initial paper also published a follow-up which discussed a more complicated picture as more data became available. It's not at all clear that we're finding out anything "the hard way" related to the increased minimum wage here.
posted by vibratory manner of working at 1:33 PM on October 2 [12 favorites]


Ted, thank you (genuinely) for joining in. I would agree with EmpressCallipygos that there is no real thing as “people who only have $10/hour skills.” And to add to her point, the same excellent (if I may say so) customer service skills that made me the best retail worker at my high school minimum wage job also made me a very popular associate billed out at hundreds of dollars per hour once I got a law degree and a firm job. While it was the law degree that seemed to make the big difference, in my day to day work I can tell you knowing how to treat a client was my most prominent skill. Even as a high school minimum wage worker like the kids you discuss, I would have been labeled “person who only has $8/hour skills.” People change and the value of their skills change depending on context, not just on advancement or training.

I guess primarily I disagree with you that any of this is simple, other than the fact that I want to live in a country where people’s employment crosses the very low bar of enabling them to eat enough food.
posted by sallybrown at 1:37 PM on October 2 [34 favorites]


In reality, the vast majority of people in minimum wage jobs in the US are not the primary breadwinner in their families.

Citation needed. In my state the second largest employer is Walmart, just behind medical facilities. The third largest employer is a company that "contracts" with home health and residential workers for elderly and disabled folks. Those people are also paid minimum wage. The vast majority of people filling those jobs are not "poor teenagers" they are single moms and dads and grandmas and grandpas who've taken in grandchildren affected by the opioid epidemic.
posted by Gyre,Gimble,Wabe, Esq. at 1:38 PM on October 2 [33 favorites]


In reality, the vast majority of people in minimum wage jobs in the US are not the primary breadwinner in their families. Citation needed.

I wondered about this too, but it appears to be true, though it depends on what you mean by "vast majority."

"Low-wage workers are sometimes characterized as “secondary earners,” suggesting that their work earnings are discretionary or inconsequential to their family’s financial health. The data show that this is not at all the case. Roughly half of all workers who would be affected by raising the minimum wage to $15 by 2024 are either married or have children, and these workers earn, on average, 51.9 percent of their family’s total income." (Note that this means of those half who are married or have child, they earn on average about half, so overall, the average is less than half.)

"Most of the workers who earned the minimum wage were not from poor families. Using data from the Bureau of Labor Statistics Current Population Survey, the median family income of those earning the minimum wage was $49,500 in 2017 – the poverty level of income for a family of four was $24,600.
posted by Mr.Know-it-some at 2:11 PM on October 2 [3 favorites]


The poor people no longer getting food stamps would find cheaper housing or tighten belts elsewhere so they could afford food.

I would like for you to sit down with a poor working person, some real estate listings, and a list of expenses and identify where they could find cheaper housing or tighten their belts. I am regularly amazed at how deeply my clients belts are tightened. They are so creative and frugal they are.

Demanding that employers pay $15-20/hour to people who only have $10/hour skills is what gets those employees replaced by self-checkout kiosks.

Assuming this is true, what are people with $10/hour skills supposed to do? If the answer is to skill-up to higher paying work, then who does the $10/hour work? There aren't enough teenagers in the country. What if someone wants a full-time janitor but the teenagers are all in school? Do we really want teenagers doing the low-paid (but not unskilled) child care and elder care? What if someone gets the skills but can't find the job that pays more than $10/hour?
posted by Mavri at 2:18 PM on October 2 [24 favorites]


Since Ted Frank brought up his own resume as a talking point, it is only fair to comment upon it.

Ted Frank gained some notoriety as the person who wrote the vetting report of Sarah Palin for presidential candidate John McCain.

Ted Frank was a director of the right-wing American Enterprise Institute.

Ted Frank is active in the Federalist Society which was instrumental in seating Gorsuch and Kavanaugh on the Supreme Court.

Ted Frank opposed the Lily Ledbetter Fair Pay Act passed by Obama which facilitates claims for equal-pay employment discrimination.

Ted Frank is prominent in the right-wing campaign for "tort reform" which is a fancy phrase for limiting consumers ability to seek compensation for the abuses of insurance companies, drug companies, banks and other corporations.

Ted Frank worked on the Vioxx case on behalf of Merck, a drug which killed many people from whom Merck had purposely hidden the potential side effects.

Let's just say this history does not seem to indicate that Ted has the best interests of the poor and disadvantaged as his objective.
posted by JackFlash at 2:29 PM on October 2 [61 favorites]


Ted Frank gained some notoriety as the person who wrote the vetting report of Sarah Palin for presidential candidate John McCain.

I must admit Teddy that I'm surprised you were able to find work after this that didn't involve twirling a sign on a street corner. I'm assuming you simply skilled up until you were employable again?
posted by codacorolla at 3:14 PM on October 2 [26 favorites]


In reality, the vast majority of people in minimum wage jobs in the US are not the primary breadwinner in their families. The demand for a “living wage” deprives many poor teenagers who can’t afford to take internships the opportunity to prove themselves, and gain experience and skills that allows them to get better jobs later

I work three jobs. One of them at a big box store. None of the workers there except seasonal employees (3 months summer work) don't need the income....or they wouldn't be working such a shitty job...

Many of my co-workers are older folks who have been "aged out" of their former jobs. There is no safety net for us older folks.

Juggling three jobs is another part time job in itself and needing to eat healthy is optional. But I need to eat healthy because I pay for my own crappy health insurance and the single person deductible is almost $7000.00 per year. Factor that in to the non- living wage that's all my fault.

But it's all okay because our capitalist society says so.
posted by mightshould at 5:16 PM on October 2 [28 favorites]


Any person prepared to make a claim that primary wage earners aren't paid minimum wage should also be prepared to be laughed out of any discussion composed of human beings familiar with American reality in the modern age.

For added and tasty irony, pun intended, this situation is especially rampant in the "real" America, where shitty job markets are the norm and upward mobility is nonexistent. Also, good luck moving on that minimum wage to obtain the mythical upward mobility you're supposed to ease into. As a person who only escaped that hell by the grace of another overfed piece of shit in love with his own merit, I especially resent this kind of talk.

Luckily, there's always food atop the pyramid, should we get hungry enough.
posted by Ephelump Jockey at 5:38 PM on October 2 [7 favorites]


The poor people no longer getting food stamps would find cheaper housing or tighten belts elsewhere so they could afford food.

I gotta say, this is up there with Ben Shapiro's "if the sea levels rise, the people who own homes that will be flooded will just sell them and move" in terms of how fucking stupid it is.

Don't you think that if there was already cheaper housing or another way to tighten belts, the poor would already be availing themselves of it?
posted by tocts at 5:39 PM on October 2 [25 favorites]


In a recent high N study of Walmart employees, nearly half said that they were food insecure. Surely mister facts and figures would know that. Another reading of his statement is in the mold of a cartoon miser, where he understands the implications of what he's saying about the surplus population and simply sees it as a benefit.
posted by codacorolla at 5:47 PM on October 2 [9 favorites]


Now that we've made our points, hopefully we can rerail this discussion to the FPP?
posted by J.K. Seazer at 5:58 PM on October 2


The mind boggles at folks who are aware of the aid and are too prideful to take it in the first place. I know people like that and it's infuriating.

Or the people who make $1 too much to get it. Or the people who receive a letter on 9/1 saying they're denied because they didn't call in for a scheduled phone interview on 8/30 they were never notified of after they applied on 8/29. Or the people who are so exhausted after a ten-hour day of grueling labor and cadging rides that they're too physically and mentally exhausted to do anything but sleep.
posted by The Underpants Monster at 6:20 PM on October 2 [17 favorites]


I make my living keeping millionaire lawyers from ripping off lower- and middle-class consumers,

You may have forgotten this, Ted, moving in the circles you move in, but not everyone is as viciously venal as the grifters you work for or as stupid as the people they grift upon.

"If the social safety net disappeared, Walmart wouldn’t start magically raising wages. The poor people no longer getting food stamps would find cheaper housing or tighten belts elsewhere so they could afford food." Really? Those are the only possibilities you can think of? Because all I have to do is contemplate a century or two of history to come up with several more, and some of them involve Rich People Stew. The idea that the central organizing principle of policy should be the iron conviction that corporations will forever--and should forever--stand with their feet planted firmly on our necks ruthlessly stripping away from us every scrap of value is either going to end the planet or it's going to end your pals. But they'll throw you to the wolves first.
posted by praemunire at 7:22 PM on October 2 [15 favorites]


The real minimum wage is $0, as Seattle is finding out the hard way.

The hard way being $15-$16 an hour being standard pay for unskilled labor in the region even outside the city and the grocery store still being so hard up for employees even with the automated kiosks that they're advertising hiring bonuses at every checkstand.

Now mind you the city of Seattle proper may have lost jobs, but it's probably like the local pizza chain that moved some of it's logistics from the city center out to Kirkland: jobs that haven't moved far and have moved nearer to where people who work them can afford to live. More pay and a shorter commute, how awful.

Of course rent's still going up, and I know at least a couple people who still need to work two jobs. Problem is that people are finding it hard to make rent even getting paid double what they'd make in a lower cost of living city.

Honestly, if you're an entrepreneurial or industrial capitalist, your interests here are really not aligned with the rentier capitalists in this case - you should vote in some more socialists so we can get more public housing and some rent controls or something, just so you aren't having to pay janitors enough to rent places whose prices are set by software dev salaries.
posted by Zalzidrax at 9:53 PM on October 2 [3 favorites]


there is no real thing as “people who only have $10/hour skills.”

There is also no real thing as people who have 10 000$ an hours skills.
posted by Phlegmco(tm) at 11:42 PM on October 2 [20 favorites]


Again: my only point is this. Government payments to the social safety net are not “bailing out” those who pay low salaries. Employers pay employees based on how much marginal value the employees provide. If an employee demands more in pay than what he or she can provide the employer in value, the employer won't agree to hire them. When the government provides benefits, that does not "bail out" the employer by making the employee willing to work for less, because, in fact, the potential employee is now less likely to work, reducing the supply of employees, raising the cost to the employer of hiring them. I can't find the comment, but one commenter mentioned how he knows someone who doesn't take a job because the job would make them worse off because they'd lose benefits. That's exactly my point: Government benefits increase wages, not reduce them.

No one seems to be disputing that, just throwing rude fits over other things (I remember the day when personal attacks like that resulted in Metafilter bans, but I guess everything decays). I'm trying to avoid SIWOTI obsessions, since it keeps me from real work, so I can only respond to a fraction of the responses to me, rather than get into an argument why Merck didn't do anything wrong and why the Vioxx litigation made everyone except the lawyers worse off or why rent control will make the housing crisis worse.

And to add to her point, the same excellent (if I may say so) customer service skills that made me the best retail worker at my high school minimum wage job also made me a very popular associate billed out at hundreds of dollars per hour once I got a law degree and a firm job. While it was the law degree that seemed to make the big difference, in my day to day work I can tell you knowing how to treat a client was my most prominent skill. Even as a high school minimum wage worker like the kids you discuss, I would have been labeled “person who only has $8/hour skills.” People change and the value of their skills change depending on context, not just on advancement or training.

That someone has $8/hour skills in Year X doesn't mean that they won't have greater skills in the future. The law firm wouldn't have been allowed to bill you out at hundreds of dollars an hour if you didn't have the additional seven years of schooling. I was a pretty crummy checkout cashier in high school lucky to be making $5.15/hour, and customers upset at my poor checkout skills let me know how stupid and devoid of intelligence they thought I was. (We see some of that same rudeness even here on Metafilter! With multiple likes!) And I wouldn't need to be taking that job at $15/hour or even $30/hour now. But the supermarket would've lost money paying me $15/hour when I was in high school, and simply wouldn't have hired me.

Therefore, if we have managed to raise the minimum wage from a lower rate to $10 an hour without any serious disruption to the economy as a result, might we not also expect the same if the minimum wage is raised from $10 to $15?

No. Thirty years of minimum wage increases consistent with inflation so that the real minimum wage hasn't changed very much isn't going to be that disruptive. A 50% increase in the minimum wage will be disruptive. It's been less disruptive than it could be because the economy is good right now, and a lot of those wage increases would've happened anyway, but it will hit really badly when there's a recession, or when those minimum wage increases are in the soft Fresno economy instead of the Seattle economy benefiting from Amazon and Microsoft wealth. (And even in Seattle, there have been job losses.)

Also, McDonald's workers in 2019 aren't performing the same job that McDonald's workers forty years ago did. McDonald's hires fewer workers per customer than they once did.

Can you clarify why raising the minimum wage "deprives many poor teenagers who can't afford to take internships the opportunity to prove themselves," as opposed to "provides many poor teenagers the opportunity to save even more for a college education"? Also, might the problem you are pointing out not be solved by also paying interns?

An employer willing to take a chance on an unskilled teenager for $8/hour might not be able to afford or willing to do so at $15/hour. Yes, some will, but at the margin some won't. So some teenagers will luck out and make $15/hour instead of $8. Others will be unemployed.

There are certainly arguments that interns should be paid. My career options were certainly limited because I couldn't afford to take unpaid internships. But many of the internships wouldn't exist if they also required pay, so the same costs and benefit tradeoffs exist.

I would like for you to sit down with a poor working person

I can do better: in high school, I dumpster dived with my unemployed father. I went to public schools, worked my way through colleges (having to turn down Yale and MIT and then Yale Law and Harvard Law because I couldn't afford them), and had negative net worth into my thirties.

I don't think you realize how wealthy even the poor in America are relative to the rest of the world. If you're in the top 80% of Americans, you're in the top 1% of the world. The average American in the bottom quintile has more square feet of living space per capita, more bathrooms per capita, is more likely to own an automobile, a dishwasher, a computer, an air conditioner, etc., than the average European. Not the average European in the bottom quintile, but the average European. And Europe is in turn wealthier than South America, Asia, and Africa.

So there's always more to cut. Take in roommates to reduce your rent, move farther away and have a longer commute. Dumpster dive to support your income. It absolutely sucks, I know from experience. And I'm not proposing any policies that would require that. But billions live worse than that outside of America. If food stamps and other welfare disappeared, Walmart employees would just be a little hungrier and little worse off. Walmart would probably be able to reduce wages, because people relying on benefits instead of working wouldn't have that choice any more.

Again, my only point is that Walmart and independent book stores et al. aren't being subsidized by food stamps, and that claim 180 degrees opposite of economic reality just annoys me.

Raise the minimum wage, you make some workers better off, you make others unemployed, you raise prices, and you drive some small vendors you like such as independent bookstores barely surviving now out of business. Maybe you want to make that choice anyway, but understand the costs and benefits, rather than pretending that there's no consequences from making it illegal to hire workers at a wage you think is too low. Otherwise we could just have a $100/hour minimum wage and then everyone would be rich, right?

not everyone is as viciously venal as the grifters you work for or as stupid as the people they grift upon

I work for myself. The people class-action attorneys grift upon are you, unless you don't use Google, don't use Yahoo, don't use Apple, don't use AOL, don't own any stock, don't use Target or Netflix or Walmart or RadioShack or HP printers, don't buy breakfast cereal or diapers or laptop batteries or bluetooth headsets or Subway sandwiches, and have never been the victim of a data breach. You're welcome.

I must admit Teddy that I'm surprised you were able to find work after this that didn't involve twirling a sign on a street corner. I'm assuming you simply skilled up until you were employable again?

I did! AEI let me go after I'd been there four years without getting around to starting a war, there was no McCain administration for me to work in, I thankfully turned down a job offer from Palin, and no one else wanted to hire me in 2009. (I can write a vetting report, but I can't make anyone read it.) I went from unemployed with my only income from gambling trips to Las Vegas barely covering my mortgage to starting a nonprofit, inventing a new practice area of law and law-firm business model, and creating jobs for the stay-at-home parents who work for me as attorneys. And now I'm an experienced and successful Supreme Court attorney turning down offers to triple my pay so I can continue to focus on my pro bono work. Thanks for your concern.

Have a great day everyone. Y'all can find me on Twitter.
posted by thf2 at 5:59 AM on October 3 [1 favorite]


Thank you for coming back, sir.

No one seems to be disputing that, just throwing rude fits over other things (I remember the day when personal attacks like that resulted in Metafilter bans, but I guess everything decays).

I'm not certain why you're typifying our responses as "rude fits over other things". I do acknowledge some people have been rude, but it appears most of the questions to you have been politely phrased. Also, it appears you didn't join us until yesterday.

Thirty years of minimum wage increases consistent with inflation so that the real minimum wage hasn't changed very much isn't going to be that disruptive. A 50% increase in the minimum wage will be disruptive. It's been less disruptive than it could be because the economy is good right now, and a lot of those wage increases would've happened anyway, but it will hit really badly when there's a recession, or when those minimum wage increases are in the soft Fresno economy instead of the Seattle economy benefiting from Amazon and Microsoft wealth. (And even in Seattle, there have been job losses.)

So your position is that this wage jump is too great a jump, if I understand you correctly, and that previous wage increases were tied to inflation.

I just did a bit of research into this, and note that the last time there was a minimum wage increase that was tied to inflationary rates was in 1968; studies show that if the federal minimum wage hadn't been capped back then, and had been allowed to continue rising with inflationary rates, the minimum wage would have been about $20 per hour by now. $15 is less than that. So I admit I am at a loss to understand why you feel that a $15 an hour cap is not "consistent with inflation" - or, rather, why you feel that something that is inconsistent in a way that benefits the employers would be punitive.

An employer willing to take a chance on an unskilled teenager for $8/hour might not be able to afford or willing to do so at $15/hour. Yes, some will, but at the margin some won't. So some teenagers will luck out and make $15/hour instead of $8. Others will be unemployed.

It strikes me that this has always been the case regardless of the minimum wage. There are always companies that cannot afford to hire more employees, and there are always others who can. This would be the case even if the minimum wage were $1 an hour. For the employers who really need the extra help, however, they find a way.

It also strikes me that if a company cannot afford to pay its employees, that that is more of a reflection on the company's business success than it is on the economy overall.

I don't think you realize how wealthy even the poor in America are relative to the rest of the world. If you're in the top 80% of Americans, you're in the top 1% of the world. The average American in the bottom quintile has more square feet of living space per capita, more bathrooms per capita, is more likely to own an automobile, a dishwasher, a computer, an air conditioner, etc., than the average European. Not the average European in the bottom quintile, but the average European. And Europe is in turn wealthier than South America, Asia, and Africa.

I am uncertain why you are bringing the living standards of those living outside the US into the conversation, since we are talking about the economic policies of the United States itself.

So there's always more to cut. Take in roommates to reduce your rent, move farther away and have a longer commute. Dumpster dive to support your income. It absolutely sucks, I know from experience. And I'm not proposing any policies that would require that. But billions live worse than that outside of America. If food stamps and other welfare disappeared, Walmart employees would just be a little hungrier and little worse off. Walmart would probably be able to reduce wages, because people relying on benefits instead of working wouldn't have that choice any more.

If you will permit me to play devil's advocate:

* You say that people can "take in roommates to reduce your rent". This is not always an option for single parents with two or three children. What might they be able to do, especially if they are already living in a studio apartment?

* You suggest that people could move farther away and have a longer commute. Many suburban communities lack adequate public transportation, and many of those who are cash-poor don't have a car. So what would your suggestion be for those who don't own a car, and don't have the cash available to pay movers or rent a U-Haul?

If food stamps and other welfare disappeared, Walmart employees would just be a little hungrier and little worse off. Walmart would probably be able to reduce wages, because people relying on benefits instead of working wouldn't have that choice any more.

Just pointing out the obvious - Walmart could also raise wages by simply capping the salaries of its CEOs and board of directors. What is your opinion on that option?

Have a great day everyone. Y'all can find me on Twitter.

I somehow suspect you will make a return here as well, we'll be seeing you then.
posted by EmpressCallipygos at 6:30 AM on October 3 [16 favorites]


thf2: You also got lucky. You didn't get into a car accident, you didn't get cancer, you didn't have a sick relative or child you needed to take care of. (Or, if you did, you skipped them in your story.) You flipped a lot of coins and most of them came up heads. Good for you. But you don't seem to acknowledge the factor of luck in your situation. Someone else in your situation could have easily ended up stuck in the never-ending cycle of poverty because they had the bad luck to trip off a curb and break a leg without health insurance, or because they had a sick child.

We should, as a society, be raising the floor for how low people can fall when shit happens—as well as giving people opportunities to do better. "Skills" are still bullshit, because even low valued skills are ones that we need to make our society function. Yet, the people who have those low value skills that we rely upon often get stuck in the cycle of poverty, not because of bad decisions, but because of bad luck. Some will succeed despite everything being thrown at them. Nobody wants to deny them that. What we want is a baseline standard of living that doesn't mean a couple bad flips of the coin could ruin a life permanently.
posted by SansPoint at 6:32 AM on October 3 [17 favorites]


Raise the minimum wage, you make some workers better off, you make others unemployed, you raise prices, and you drive some small vendors you like such as independent bookstores barely surviving now out of business. Maybe you want to make that choice anyway, but understand the costs and benefits, rather than pretending that there's no consequences from making it illegal to hire workers at a wage you think is too low. Otherwise we could just have a $100/hour minimum wage and then everyone would be rich, right?

I had a response to this typed out, but I erased it and will say this instead: This sentiment is what you find in edgy teenage libertarians and it about as factually valid as you would expect from a right-wing kid living off their parents' money.

We have data that shows what happens when you raise the minimum wage. It isn't the situation you laid out, despite the bootlickers playing chicken little every time it happens. We also have history books that show us what happens to workers in an industrial society that has no minimum wage. We also have economic data that shows how much more the rich receive than the poor now compared to the so-called golden age of America.

As a matter of fact, I can't see how anyone reaches the same conclusions you do unless they start from "the poor are bad and deserve to be poorer" and reason backwards from there.
posted by FakeFreyja at 6:41 AM on October 3 [18 favorites]


And by the way, once a person starts justifying screwing over poor people because some people in developing nations have it worse, I genuinely consider that a betrayal of our country. A tiny treason.

Our society is supposed to be great, and it is nothing more than the sum of its people. Anyone who works to make it worse by worsening the plight of its people is a traitor.
posted by FakeFreyja at 6:46 AM on October 3 [8 favorites]


Employers pay employees based on how much marginal value the employees provide. If an employee demands more in pay than what he or she can provide the employer in value, the employer won't agree to hire them.

This sounds like a nice fantasy world you live in. Here in the real world, the problem isn't employers unwilling to pay the marginal value that an employee provides, it's that employers want to pay as little as possible, even if what's being asked is significantly less than the marginal value provided by the employee.

You seem to think that if an employee is producing $30 per hour in value to an employer, that employer would not have a problem with paying them $15/hr instead of $10/hr, and yet, again, over here in the real world, employers do that all the time. They're not refusing to pay more because it would make the employee a net negative, they're refusing to pay more because they like their profit margin where it is and don't want to reduce it. And yes, government subsidies on those who are being paid below a living wage are in fact subsidizing those profit margins.
posted by tocts at 7:01 AM on October 3 [20 favorites]


And yes, government subsidies on those who are being paid below a living wage are in fact subsidizing those profit margins.

That implies that removing government programs like SNAP would result in lower profit margins. If the corporations are profit maximizing, why would they raise pay if their workers were worse off? Rather, the lack of a safety net could only make workers more desperate, possibly allowing companies to pay lower wages.

Some people have even advocated charging companies like WalMart for the cost of government spending for SNAP and similar programs received by their employees. That's the worst possible idea: It would give a profit-maximizing company a huge incentive to fire anyone receiving those benefits.

(Yes, corporate taxes should be higher and spending to support low-income families should be higher, but that doesn't mean that the government spending subsidizes profits.)
posted by Mr.Know-it-some at 7:24 AM on October 3 [1 favorite]


It still seems to me that Ted and Brian Romanchuk (who wrote the blog post that kicked this off) are having different conversations, in that Romanchuk’s argument would so drastically change the incentives or the system itself that Ted’s arguments would no longer be operational. In a world in which there was a job guarantee that made certain everyone would make at least enough wage to render public assistance unnecessary, we’re no longer talking about the scale of changes that happen when you raise the minimum wage from $10 to $12. But frankly I lack the expertise to articulate this, as usually happens to me when I get into economics discussions.
posted by sallybrown at 7:30 AM on October 3 [3 favorites]


That implies that removing government programs like SNAP would result in lower profit margins. If the corporations are profit maximizing, why would they raise pay if their workers were worse off?

I think you're crossing a couple different streams here. I'm not arguing that government assistance is bad. I'm arguing that companies who are against the idea that you have to pay people enough to (generally) live on without government assistance (even if there's reason to then also give government assistance) are saying out loud that their business model is unsustainable without an outside force propping up their workforce.

There's a lower limit to how much you can pay people for work before they literally starve to death/freeze to death/etc. I'm not saying we want people to hit that limit. I'm saying that businesses should not be allowed to pay people at rates remotely approaching that limit, regardless of what other government assistance programs exist. If your business can't pay people enough for them to stay alive and your workers are generally having to be propped up by the government, you are basically privatizing the profits made possible only by making public the obligation that you as employer are failing to meet.

Maybe more succinctly, if you can't pay a living minimum wage your business sucks and you should go out of business.
posted by tocts at 7:39 AM on October 3 [9 favorites]


You seem to think that if an employee is producing $30 per hour in value to an employer, that employer would not have a problem with paying them $15/hr instead of $10/hr, and yet, again, over here in the real world, employers do that all the time.

No, they don't. If an employee has $30/hour skills in a competitive market, then if A tries to pay him $10/hour, then B will find it profitable to hire him away at $15/hour, and then C will hire him away from B at $20/hour, and so on until he's getting paid much closer to $30/hour.

Happened to me my sophomore summer in college. I took a job temping at $17/hour because I thought that was all that I'd be lucky to make, but there was demand for my computer skills, and I jumped from temp agency to temp agency until I was making $42/hour doing spreadsheet design instead of data entry.

Sure, the market doesn't work sometimes -- but when that happens, you don't have to just whine about it, you can prove it by opening up a business and poach all of these supposedly underpaid employees who are supposedly undervalued, and you'll make some good money. I certainly did that in the legal market, by hiring smart attorneys who wanted to be stay-at-home parents but couldn't find interesting jobs letting them have a work-life balance.

And yes, government subsidies on those who are being paid below a living wage are in fact subsidizing those profit margins

Again, repeating "2 + 2 = 5" doesn't make it so. The math shows that government subsidies raise wages and reduce profit margins.

luck

I've had luck: my grandfather wasn't killed by Cossacks, and emigrated to the US instead of Germany or Poland. Because the US didn't socialize medicine, pharmaceutical companies had the incentive to invent the drugs that didn't exist forty years ago, but saved my life; I'd be dead from bad luck otherwise. A rich businessman funded my university's scholarship program for the year I was applying to college. I've had bad luck: I sold my Apple stock at a split-adjusted $1.42 instead of being a multimillionaire, and didn't get around to mining bitcoins in 2013.

We already have a very high social safety net. You can raise it higher still, but the costs rapidly exceed the benefits.

1968

The real minimum wage was at an all-time high in 1968. The negative consequences of that high minimum wage were ameliorated by a booming economy and a military draft for the Vietnam War that reduced the supply of labor at a cost of several thousand lives a year. (Also, note that legal, tax, and regulatory costs for employees are much higher today than in 1968. An employee making $15/hour is costing his or her employer $22-$25/hour once those taxes, mandatory benefits, and legal and regulatory costs are added in. Great for me as a lawyer, not so good for everybody else.) Those sort of minimum wages would have far more drastic effects on the economy today. Which is fine for the Amazons and the Walmarts that can afford to absorb those expenses or are large enough to automate to reduce their headcount. Not so much for the mom-and-pop businesses trying to compete with them. You can say that they don't deserve to stay in business, and that only Amazon and Walmart should get to sell books, but at least recognize that the policies have costs as well as benefits, and the costs are only going to grow larger in the parts of the country that don't have a booming economy, and there are going to be many more of those parts if there's a recession.

Ted and Brian Romanchuk (who wrote the blog post that kicked this off) are having different conversations,

No, I'm pointing out that Romanchuk is basing his argument on false premises. It's a sandcastle.

I'm not certain why you're typifying our responses as "rude fits over other things"

I apologize, I should've also thanked the people who have been polite. I do appreciate that. But the comment four above this one accuses me of treason after misrepresenting my argument, and someone else just bad-mouthed me as a "right-wing kid living off their parents' money" in response to my noting my childhood dumpster diving. The place is a cesspool that doesn't enforce its own rules consistently, and it's better for my mental health and productivity if I stay out of this from here rather than getting suckered into it. Makes me thankful for Twitter's block features.

And still, no one has addressed the one point I made, other than one person who basically said "nuh-uh."
posted by thf2 at 7:42 AM on October 3


Sure, the market doesn't work sometimes

Yeah that's some heavy lifting being done by a throwaway line here. "Sometimes". Yeah.

I work in a highly competitive, highly paid field (software development), and you know what a fairly omnipresent aspect of it is? Pay is only marginally related to skill, and nearly never evenly applied. I did a fairly long stint in management (I chose to step back out of it after a while). It is extremely common to have two employees of the same level and skillset whose pay is wildly different. I'm talking 25-40% differences in pay between two people producing the same value for no reason other than the company could get away with it. Hell, I've seen people producing twice as much good work being paid half as much.

And to be clear: I'm not asking for tears for software developers. I'm simply saying that if people in a field that is that highly competitive and that highly paid are getting fucked over relative to one another, what makes you think someone paid far less and who is far more desperate to not be out on the street is going to do better?

The idea that the market will solve the problem of low pay is a self-serving fantasy.
posted by tocts at 7:50 AM on October 3 [12 favorites]


Sure, the market doesn't work sometimes -- but when that happens, you don't have to just whine about it, you can prove it by opening up a business and poach all of these supposedly underpaid employees who are supposedly undervalued, and you'll make some good money

To me this is one of the key points of disagreement. This is an assumption at the heart of a lot of economic theory that quite often turns out to be untrue for complex reasons, and is what prevents any of these questions from being simple ones. The most interesting economics scholars to me are the people working on answering the question of why this isn’t always true rather than assuming it is.
posted by sallybrown at 7:53 AM on October 3 [12 favorites]


Somehow this all seems to boil down to "the poor you will always have with you".

Okay, I'm onboard. It's not possible to compel employers to pay living wages because pf the inexorable market. (Is this universally true? How do big retailers operate in countries with stronger wage protections? Does the state give Ikea workers food stamps in Sweden, for instance?)

So since I want everyone to have decent housing, equal education, secure retirement, complete access to all necessary medical care, etc, and since I want a society without dramatic inequality between the professional and working classes, I'm opting for full communism. If capitalism-as-it-is-lived inexorably produces increasing inequality, people who are homeless while working full time, prison workers making pennies a day and so on, let's try another method.
posted by Frowner at 7:55 AM on October 3 [11 favorites]


The people class-action attorneys grift upon are you, unless you don't use Google, don't use Yahoo, don't use Apple, don't use AOL, don't own any stock, don't use Target or Netflix or Walmart or RadioShack or HP printers, don't buy breakfast cereal or diapers or laptop batteries or bluetooth headsets or Subway sandwiches, and have never been the victim of a data breach. You're welcome.

Again, I beg you to attempt to grasp that your audience here is not either grifters or white-supremacy-drunk morons, and lazy, disingenous rhetoric will not get the job done. You're lecturing a lawyer who's appeared in court to oppose aspects of certain class-action settlements herself.

What you are doing is simply a part of the sustained broader right-wing attack on class actions that's been going on for the past 20 years (and access to the courts generally for even longer), because, flawed as they are, they are one of the few effective mechanisms for calling corporations to account for the harms they cause consumers. (As Posner says, "Only a lunatic or a fanatic sues for $30.") You don't give a damn about our well-being; you care about insulating your masters from one of the few avenues of redress most people have for corporate misconduct. This is gruesomely, patently obvious to anyone who isn't getting rich off pretending otherwise. So, spare us your paternalistic "blessings," please.
posted by praemunire at 7:59 AM on October 3 [14 favorites]


Sure, the market doesn't work sometimes -- but when that happens, you don't have to just whine about it, you can prove it by opening up a business and ensuring that the government promotes fair competition by promoting workers' rights and limiting monopolistic power of employers.

The State of Competition and Dynamism: Facts about Concentration, Start-Ups, and Related Policies: "Over the past few decades there have been troubling indications that dynamism and competition in the U.S. economy have declined. ... Dominant firms can crowd out new entrants and reduce entrepreneurship; at the same time, a lack of start-ups can reduce the entrants necessary to generate competition. Thus, we examine both growing market concentration and the reduced rate of entry by firms."
posted by Mr.Know-it-some at 8:01 AM on October 3 [8 favorites]


Over the past few decades there have been troubling indications that dynamism and competition in the U.S. economy have declined

But, but, the free market will fix it! It's magical and fixes everything!

...

But no seriously, I worked for a software company (not even one of the big ones you'd think of when I finish this sentence) that basically bought every startup that could compete with them and folded them in or eliminated them. They're big but not like Amazon/Google big, and I entered their employ as an employee of something like purchase number 20 and when I left years later they'd bought something like 50 companies.

Was it a nice payout for some of those employees? Sure.

Was it good for the market? Fuck no, it let them stamp out innovations that might have forced them to change their pricing or build new features that they didn't want to pay for. Of course, we've basically given up on the idea of anti-trust action in this country, so that fact was glossed over.
posted by tocts at 8:10 AM on October 3 [5 favorites]


So there's always more to cut. Take in roommates to reduce your rent, move farther away and have a longer commute. Dumpster dive to support your income.

What do you propose people do who are socially unable to sustain having roommates? Also, it's interesting that you mention dumpster diving - are you aware that in many locations, supermarkets and other businesses pour substances on food waste to make it unconsumable, specifically to deter those without homes or those on the margins from eating said food?
posted by corb at 8:29 AM on October 3 [9 favorites]


For a moment, let me redirect to an example that I think lays bare how willfully ignorant of reality the "let the market decide" argument is.

The same arguments for how the free market will solve for worker pay could be applied to letting the free market solve for automotive safety. Why do we need safety standards, seatbelt requirements, etc? If a given manufacturer's cars are maiming or killing people constantly, the free market will sort it out. People will stop buying those cars. Those companies will be forced to improve safety or go out of business. There's no need for government involvement!

Except ... how many people are we willing to let be killed while the market figures itself out? What's an acceptable fatality rate in areas where poor competition results in market failures , and individual consumers don't have the power to affect change? And what about people in such dire straits that they'll gamble with their lives in cars known to disproportionately kill because otherwise they can't get to their job, can't pay their rent/food bills/medical bills?

And with all that in mind: what precisely is different about this situation and that of worker pay, other than it being a slower-moving cause of death?
posted by tocts at 8:38 AM on October 3 [9 favorites]


Do away with the minimum wage - the poor can just sleep like stacked cord wood and eat literal trash.

Once you start claiming that people working full time should be able to eat food, live in a room, and not die of disease you might as well dictate a $1,000 per hour minimum wage because that is totally the same thing.
posted by FakeFreyja at 8:39 AM on October 3 [5 favorites]


The real minimum wage was at an all-time high in 1968. The negative consequences of that high minimum wage were ameliorated by a booming economy and a military draft for the Vietnam War that reduced the supply of labor at a cost of several thousand lives a year. (Also, note that legal, tax, and regulatory costs for employees are much higher today than in 1968. An employee making $15/hour is costing his or her employer $22-$25/hour once those taxes, mandatory benefits, and legal and regulatory costs are added in. Great for me as a lawyer, not so good for everybody else.) Those sort of minimum wages would have far more drastic effects on the economy today. Which is fine for the Amazons and the Walmarts that can afford to absorb those expenses or are large enough to automate to reduce their headcount. Not so much for the mom-and-pop businesses trying to compete with them.

I note with interest that you have not addressed my question about whether the Amazons and the Walmarts could offset this increased cost by capping the salaries of their Board of Directors or their executive board. May I ask this of you again?

You can say that they don't deserve to stay in business, and that only Amazon and Walmart should get to sell books, but at least recognize that the policies have costs as well as benefits, and the costs are only going to grow larger in the parts of the country that don't have a booming economy, and there are going to be many more of those parts if there's a recession.

Actually, I don't recall anyone in here saying that. The only thing I can see that resembles that claim was my earlier statement about whether a company that couldn't afford to pay its employees a living wage was possibly a reflection on the business itself; but that is not the same as saying that a mom-and-pop shop should go under and leave the field to the megastores.

On the contrary - I actually would support stricter regulations on stores like Amazon and Walmart, in order to level the playing field for the mom-and-pop shops. The corporate advantages which Amazon and Walmart enjoy likely have far more to do with their dominance over the mom-and-pop shops than does the minimum wage. (Also - it is Walmart that we've been putting forward as an example of a store that isn't paying its employees a living wage, so I'm not certain why you're putting a mom-and-pop shop forward as an example. In my own experience, it's the mom-and-pop shops that are more likely to be willing to offer competitive wages, precisely because they are trying to compete with the megastores.)

But that just re-raises the question of "how about having Walmart offset the cost of the higher minimum wage by capping the raises of its Executive staff"? Surely they can afford it, no?
posted by EmpressCallipygos at 9:31 AM on October 3 [6 favorites]


your audience here is not either grifters or white-supremacy-drunk morons

I'm regularly attacked by grifters and white-supremacy-drunk morons. They're not my audience.

What you are doing is simply a part of the sustained broader right-wing attack on class actions

Yes, that's the talking point that millionaire grifter attorneys try to use to rationalize why they should receive $3500/hour and 90% of an $8 million fund that leaves 99% of a class entirely uncompensated, but it has very little to do with reality. Or at least, corporate general counsels don't think so, and spend hella lots of money opposing me.

Lots of liberal judges side my way. I wouldn't have so much success in the Ninth Circuit if the only basis for my work was right-wing yadda yadda. Yes, I'm in the Federalist Society, but my day job is purely a question of sound public policy against rent-seeking at the expense of consumers and shareholders. I'd be happy to take money from either George Soros or the Kochs if either ever offered.

Posner

Yes, I'm well aware of Posner's writings on class actions, since they (along with Easterbrook's) were what inspired me to this line of work. I'm a former research assistant for Posner, 4-0 in oral arguments on panels where he sat (winning tens of millions of dollars for consumers and shareholders in the process), and cite him in just about every brief I write. Ask him if he thinks I'm part of the "attack on class actions."

I've gone on national tv and defended class actions. I wrote about the importance of class actions in my merits briefing for the Supreme Court.

I mean, I've done dozens of these cases of the last decades. Which is the one that's an "attack on class actions"? The Google settlement that pays the class zero, but the lawyers $2+ million and their alma maters another few million? The EasySaver settlement that pays the class $225,000, but the lawyers $9 million? The Babies-R-Us settlement where the lawyers tried to divert $15 million to a slush fund instead of the class? The Pearson case where we won the class an extra $4-5 million? The Petrobras case where we won the class an extra $90 million? It's not like my briefs are secret. Find the brief that's an attack on class actions qua class actions, rather than abuse of the procedure.

Just because I oppose food poisoning doesn't mean I oppose food.
posted by thf2 at 9:47 AM on October 3 [1 favorite]


I note with interest that you have not addressed my question about whether the Amazons and the Walmarts could offset this increased cost by capping the salaries of their Board of Directors or their executive board.

Ok, I disagree for reasons of basic arithmetic. Reducing Walmart's CEO's 2018 compensation to $15/hour and redistributing the difference to every single Walmart employee per capita would add less than $10/year to each employee's salary. (That math took two google searches and five seconds of calculation. Why couldn't you do it?) (Aside from the fact that the majority of Walmart's CEO's salary is in stock, not cash.) So, no, Walmart can't "offset the increased cost by capping the salaries of their executive board."

Beyond the math, Walmart's CEO would then quit and go work somewhere else for more money.

If you think Walmart employees are worth 20% more than they're being paid, you can start a business hiring away each of them for 10% raises, and make a huge profit on the difference. What's your business plan for doing so? Literally nothing is stopping you from doing that. There are billions of dollars of Saudi and UAE and Japanese money being thrown away on nonviable business models like Uber and WeWork, so if you have a viable business model for paying Walmart employees more money, you're wasting time arguing with me instead of becoming the next Adam Neumann.
posted by thf2 at 10:02 AM on October 3


Look, Ted Frank comes from the University of Chicago, where they take lawyers and then give them a semester of Econ 101 and combine it into a toxic libertarian philosophical stew where "the Laws of Economics" just so happen to prove that the rich deserve to be rich and the poor deserve to be poor. And then they go out into the world using their Dunning-Kruger understanding of economics to make laws and argue cases.

Sally: But frankly I lack the expertise to articulate this, as usually happens to me when I get into economics discussions.

Don't feel bad. Ted doesn't either but he has just enough Econ 101 gobbdygook jargon to mix with the law to buffalo you - ipso facto quod erat demonstratum.

Ted wants you to argue with him in good faith but keep in mind. This guy is so brilliant he thought Sarah effing Palin was qualified to be in the White House. That stink never washes off. He's not a smart as he would have you believe so don't be fooled by his intimidation.

It's rather curious how his "Laws of Economics" always seem to fall on the side of big corporations and the rich.

As when he argued to protect Merck who peddled a drug with serious possible side-effects without informing either doctors or patients.

Or when he argued that the Exxon Valdez award for damages was sooo unfair and helped them delay payments for 20 years at which time they were reduced to only 10% of the original. Note that the oil contamination from 30 years ago is still laying there on shore under the rocks.

If only everyone would understand his "Laws of Economics" all this would make so much sense.

Ted argues that "the Laws of Economics" dictate that some people are not worth $10 an hour. He doesn't want to get into the much uglier and complex reasons why there are not more jobs worth $10 an hour. It's because the economy is rigged for the rich and guys like Ted write the rules and laws that make it so.
posted by JackFlash at 10:16 AM on October 3 [11 favorites]


If you think Walmart employees are worth 20% more than they're being paid, you can start a business hiring away each of them for 10% raises, and make a huge profit on the difference.

Your business plan here ignores Walmart's dominance in many other aspects than payroll. e.g.: Chinese manufacturing and importing.

That obviously makes your business plan untenable. And I wonder if it was offered in good-faith being "not even wrong".
posted by mikelieman at 10:18 AM on October 3 [8 favorites]


I disagree for reasons of basic arithmetic. Reducing Walmart's CEO's 2018 compensation to $15/hour and redistributing the difference to every single Walmart employee per capita would add less than $10/year to each employee's salary.

....Who said anything about "reducing Walmart's CEO's 2018 compensation to $15 an hour"? My exact words were "capping their raises".

(That math took two google searches and five seconds of calculation. Why couldn't you do it?)

Because it's math that I wasn't asking for in the first place? I wasn't asking that the Walmart's CEO's compensation be "equally distributed amongst the employees" either, and I'm honestly baffled as to why you have assumed that that's what I meant.

Also, I just did one of those Google searches and I note that the "redistributing the difference adds $10 to each employee's salary" seems to be coming from a comment on Reddit. I trust you will understand my skepticism of that as a source.

But for the sake of clarity, what I meant was - instead of raising Walmart's top five executive's salaries another 6% this year, perhaps give them only a 1% raise - and devoting the other 4%, a figure of about 2 million, to raising all of the other employee's salaries by a couple dollars. Or, even concentrating it on the employees making only minimum wage. Is that not feasible?

....Ironically, while I was doing the "couple of Google searches" you chided me for not making, I notice that Walmart is actually a strong advocate in favor of raising the minimum wage anyway, and was one of the initial proponents to call on Congress to pass the bill in the first place.

If you think Walmart employees are worth 20% more than they're being paid, you can start a business hiring away each of them for 10% raises, and make a huge profit on the difference. What's your business plan for doing so? Literally nothing is stopping you from doing that.

Your assertion is that the only ones with the right to an opinion on the minimum wage are those who own businesses? Your position, then, is that the employees of those businesses do not have the right to speak about how the minimum wage affects them? Is that indeed what you are saying?
posted by EmpressCallipygos at 10:26 AM on October 3 [11 favorites]


Your business plan here ignores Walmart's dominance in many other aspects than payroll. e.g.: Chinese manufacturing and importing.

That's a non sequitur. How does "Walmart's dominance in Chinese importing" reduce Walmart employee wages below their marginal contribution to Walmart's bottom line?

(The premise is false, too: less than 10% of imports from China go to Walmart.)
posted by thf2 at 10:27 AM on October 3


Your assertion is that the only ones with the right to an opinion on the minimum wage are those who own businesses?

No, I'm saying that if your argument was correct that Walmart is underpaying its employees less than they're worth, you'd be able to make a lot of money. That instead of making a lot of money you're on here arguing with me is evidence that your argument is incorrect.

Walmart is actually a strong advocate in favor of raising the minimum wage anyway

Yes. Raising the federally-mandated minimum wage will knock many of its competitors out of business. Walmart can absorb the costs of a minimum wage increase better than its competitors. It just can't unilaterally raise wages. Which is what I've been saying all along, and you pooh-poohed me for it.
posted by thf2 at 10:30 AM on October 3 [1 favorite]


Also, I just did one of those Google searches and I note that the "redistributing the difference adds $10 to each employee's salary" seems to be coming from a comment on Reddit. I trust you will understand my skepticism of that as a source.

I didn't get it from Reddit. I did the math. $22 million in compensation divided by 2.2 million workers is $10.

Since you're proposing just reducing his salary by $2 million, then $2 million divided by 2.2 million workers is $0.91/year.
posted by thf2 at 10:31 AM on October 3


No, I'm saying that if your argument was correct that Walmart is underpaying its employees less than they're worth, you'd be able to make a lot of money. That instead of making a lot of money you're on here arguing with me is evidence that your argument is incorrect.

We are not actually arguing that Walmart is "paying its employees less than they're worth". We are arguing that Walmart is "paying its employees a salary which is not sufficient for them to live on." Those are two very, very different arguments.
posted by EmpressCallipygos at 10:32 AM on October 3 [9 favorites]


Forget Walmart's CEO, even though he is grossly overpaid. The Walton family is worth over $160 billion dollars, most of whom never did a lick of real work in their lives. You spread that out to Walmart's employees and its almost $115,000 per employee. Now that's real money.
posted by JackFlash at 10:33 AM on October 3 [3 favorites]


We are arguing that Walmart is "paying its employees a salary which is not sufficient for them to live on."

I haven't said anything about that proposition. So I don't know why you're so fervently disagreeing with me if that's the point you want to make. The point I made was that Walmart is not being "bailed out by government welfare policies," because government welfare policies are increasing the costs that Walmart has to pay, which is the opposite of a bailout.
posted by thf2 at 10:35 AM on October 3


@tocts: cars are an excellent example. The market-based solution demonstrably didn't work, as it was easier and cheaper to ignore car safety and just train consumers to think of car safety issues and car-related deaths as inevitabilities rather than design defects. It took journalism and significant, aggressive government intervention for automobiles to have any kind of safety standards in their design at all. Because the market will *always* prefer you just die rather than cost a rich man money.
posted by Fish Sauce at 10:35 AM on October 3 [12 favorites]


So naturally, if I go to the Saudis and say, "I would like a giant amount of capital because I want to start a worker-coop version of Walmart where the wage scale is extremely compressed and everyone gets full benefits, I think this will be a sustainable model which will benefit society", I'll get the investment capital, right?

There's no ideology involved in who has and who gets capital, so there's no ideology involved in whether we get worker-co-op Walmart or Walton Wal-mart. There's no bloody political history, either. It's just the market, allocating capital the only way that it can be allocated; try to beat the market and you'll go down in flames.

~~
I mean, as far as I can tell this whole "market first, can't beat the market, market is best" business leads you to one of two positions - either "take care not to be poor, take care not to get sick, take care not to get old; you individually should knife other people as hard as possible so that you will have money if you get old or sick" or bloody revolution. If we can't beat the market and the market is producing our corporate hellscape, that's an argument against the market itself unless you're doing quite well personally.
posted by Frowner at 10:38 AM on October 3 [16 favorites]


I haven't said anything about that proposition. So I don't know why you're so fervently disagreeing with me if that's the point you want to make. The point I made was that Walmart is not being "bailed out by government welfare policies," because government welfare policies are increasing the costs that Walmart has to pay, which is the opposite of a bailout.

You seem to be persisting on tying the "worth" of an employee's skills to a specific figure, however, and you seem resistant to raising the minimum wage because of this "worth".

I, at least, am trying to point out that this "worth" figure which you are ascribing to these skills was one that was rather arbitrarily assigned, and that Walmart themselves are actually behind the push to assign a new figure to this "worth" - but you are resisting that figure of "worth" and I'm honestly not certain why.
posted by EmpressCallipygos at 10:40 AM on October 3 [7 favorites]


you seem resistant to raising the minimum wage

I didn't take a position on the minimum wage in this thread. I merely pointed out that raising the minimum wage has costs and benefits, and among those costs are driving independent booksellers out of business.

You clearly agree that raising the minimum wage has costs and benefits, or you'd propose a number other than $15/hour for the minimum wage. Why not $50/hour?

I, at least, am trying to point out that this "worth" figure which you are ascribing to these skills was one that was rather arbitrarily assigned

It's not arbitrarily assigned. It reflects what people are willing to pay the workers for those skills. A Toyota Prius is "worth" $35,000, because that's what people are willing to pay for it. If Toyota decided that a Prius was "worth" $52,000, they'd discover they'd sell a lot fewer of them. But the ones they'd sell they'd get more money for. Same is true for employees. The difference is that unsold Toyotas don't suffer any personal consequences if they're priced too high to be bought.
posted by thf2 at 10:54 AM on October 3


We can talk about housing costs, too, in terms of market rationale and how that relates to skills.

Housing costs are out of control in a lot of markets because housing is no longer valued based on use, but rather on exchange. So it's not about whether or not the property can house someone with dignity, or how effectively it can do that, but on how much a rich guy looking to expand his investment portfolio will pay for it and still get a decent ROI in five to ten years. One of the responses to this has been to artificially limit supply despite ENORMOUS demand, and to put minimal to no investment into the existing stock because it will have a significant ROI even without that.

So the assumption here is that we're setting wages based on skills, right? That would effectively be determining the use value of labour. But we live in a neoliberal economic system, and that's not how neoliberal economics work. Neoliberal economics explicitly place exchange value higher than use value, meaning it's not what you can do that has value, it's how you can sell me on what you can do. This is part of why credentialism is spiralling out of control, because credentials sell you the idea that I have skills, whether I actually do or not. A great example is from my own career: I have a degree in English literature, and my last job was in the infrastructure construction industry. I made a lot of money for an English major, but not a lot for a guy working on a project management team in the infrastructure industry. I did really well at that job, like, superstar well. I was just suuuuper good at it (I hated it, but that's incidental). At one point I sat down with a bunch of documentation and after about ten days saved my company's client $5 million that a skeevy contractor had convinced them they had to pay. If they'd taken all my advice they would have saved $75 million in bogus payments, but they didn't want to piss off the contractor because they'd have to work with them again. Anyway, long story short, my actual skills were dramatically better than what my credentials said they should be. The result? Not a goddamn thing, for me. The "market" still didn't understand the difference between my skill set (the use value of my labour) and my credentials (the exchange value of my labour). This is, of course, deliberate, and it's one of the ways neoliberal economics keeps the poor from gaining ground; it uses an inaccurate rubric for determining skill level to prioritize the advancement of certain classes of people.

The market does not lead to ethical outcomes, nor does it in any sense lead to equitable ones, because the market is a lie. It's a set of power relationships structured and gamed to exacerbate the inequalities in those relationships.
posted by Fish Sauce at 10:56 AM on October 3 [20 favorites]


Capitalism and “markets” are immoral. The greater good never figures into any economic equations because capitalism is extractive (especially of labor), and is dependent on continuous (infinite even) growth to succeed. You know what else does that? Cancer.
Democratic Socialism, with its concepts of things like a social safety net, preservation of basic human needs (like housing, food, and medical care) are an attempt to inject some morality into a system that Really Doesn’t Care.
posted by dbmcd at 10:57 AM on October 3 [4 favorites]


You clearly agree that raising the minimum wage has costs and benefits, or you'd propose a number other than $15/hour for the minimum wage. Why not $50/hour?

If that's on the table as a feasible alternative, Heck yes I'd support $50 an hour. Has anyone indeed proposed that, or are you just going for the reductio ad absurdum approach?

It's not arbitrarily assigned. It reflects what people are willing to pay the workers for those skills.

And there is a growing number of people who are willing to pay the workers for those skills. So where is the objection?
posted by EmpressCallipygos at 10:57 AM on October 3


Isn't it interesting how coincidentally right-wing economists are real concerned with the plight of independent booksellers when it gives them an excuse to argue against minimum wage raises, but could give basically zero fucks about independent booksellers when it comes to actually supporting them (through purchases) or investing in them?

It's almost like it's just a convenient example they use to decry minimum wage raises while pretending they're not arguing against them, they're just pointing out that there's an effect ...
posted by tocts at 11:11 AM on October 3 [12 favorites]


"right-wing economists ...could give basically zero fucks about independent booksellers when it comes to actually supporting them (through purchases)"

I didn't know there was data on right-wing economists' book purchasing patterns. I do know that data does suggest that conservatives give more to charity, though it's far from conclusive.

Their party line would presumably be that people who love independent bookstores should support them, but that they shouldn't take other people's money to give to those bookstores (which is how they would characterize using tax revenue).

With so much to legitimately criticize about right-wing economists, there's no need to make stuff up.
posted by Mr.Know-it-some at 11:32 AM on October 3 [1 favorite]


[Folks, we are falling into that classic "interrogate the contrarian" pattern. Let's please see if we can generalize the conversation and bring in some new thoughts, and thf2, please give it a rest for a while so that can happen. Thanks.]
posted by restless_nomad (staff) at 11:33 AM on October 3 [2 favorites]


If that's on the table as a feasible alternative, Heck yes I'd support $50 an hour. Has anyone indeed proposed that, or are you just going for the reductio ad absurdum approach?

Hell yes, me too. Either workers get paid a good amount that will definitely change their lives for the better, or legitimate business as a system collapses and all goods are obtained through the black market or barter system. Which also betters the lives of the poor because even a barter system benefits them more than serfdom.

Also I would really like to see arcane corporate lawyers try to explain why their skills are worth a bag of flour after the collapse.
posted by FakeFreyja at 12:03 PM on October 3 [1 favorite]


With so much to legitimately criticize about right-wing economists, there's no need to make stuff up.

I don't think it's making things up. In the same way that agricultural policy discussions must endure a never-ending litany of disingenuous "think of the family farms!" arguments from right-wing economists/libertarians, so also is any discussion of the minimum wage plagued by disingenuous "think of the small businesses!" arguments from the same crowd. It's a transparently bad faith ploy to argue for big business friendly policies while pretending to give a shit about the little guy.
posted by tocts at 12:07 PM on October 3 [3 favorites]


CEO compensation is a red herring. More often than not it's the investor class letting someone into the door to be an investor themselves. Capital gains are the main issue. CEOs are more akin to head butlers the lord of the house sees benefit in bringing to the table so they don't have to bring any other servants in. Sure, they're grossly overcompensated for a skillset that should not exist(1), but for every 22 million to some head of staff, there are hundreds of millions if not billions funneling into the investor class. That's part of the rub: "It's these CEOs fault!" instead of "The investor class has made it literally illegal for CEOs of publically traded companies to not prioritize investor returns!"

I can't speak for other countries, but the U.S. colonies were founded as slave colonies. The only reason that stopped was because - when you own the means of production - it doesn't matter if people are your slaves. They exist in the world the owners of capital created - with all its disgusting and seemingly invisible abstractions - and they have to eat. They will work. Investors will set the terms.

CEOs suck, but not because they have all the power, they have temporary power given to them by investors. Those are the assholes that don't want minimum wage going up. Why would they? Extracting wealth off mortal bodies is half what they know.

(1) CEO skillsets in 2019 are primarily comprised of how to extract value from somewhere not on the balance sheet
posted by avalonian at 1:03 PM on October 3 [3 favorites]


... other aspects than payroll. e.g.: Chinese manufacturing and importing.

(The premise is false, too: less than 10% of imports from China go to Walmart.)

What % of Walmart stock comes from China would be a more insightful metric. Let me know what that is?

The point that you can't compare Walmart to other companies on only one dimension stands.

The question of whether it was offered in bad-faith is still unresolved.
posted by mikelieman at 1:25 PM on October 3 [1 favorite]


LoL. I had a big rebuttal typed out and suddenly I was like, "wait... who the fuck is Ted Frank?"
posted by klanawa at 5:25 PM on October 3


The essence of Ted Frank's (whoever that is) argument is "stop being poor."

I feel like he's deliberately narrowing the focus of the conversation to marginal value vs. minimum wage because without that narrow focus the argument falls apart. Yes, if you raise minimum wages, smaller businesses will fail to compete with Wal-Mart* and go out of business. That is a comprehensive, self-contained justification for capping the minimum wage if you ignore all the proximate reasons that Wal-Mart is able to absorb the cost of increased wages.

It follows from the fact that Wal-Mart could afford the increase that wages are not, in fact, determined by the workers' marginal value. Wal-Mart is extraordinarily profitable. It cannot (yet) exist without it's employees. It is extracting a lot of value from them.

It's not the wages of employees driving the moms and pops out of business, it's the other costs. Real estate, supplies, inventory, taxes, etc. (The same things that make it difficult for workers to survive on minimum wage make it difficult for small businesses to survive.) Those things, because of its size, negotiating power and regulatory influence, etc., Wal-Mart can only win on. And because of that, Wal-Mart can drive the the retail cost of goods down to a point that nobody can afford to compete and still pay their employees a livable wage. It has never been a secret that Wal-Mart does this on purpose. They're notorious demanding increased production and lower costs from their suppliers until they buckle:
This year a gallon jar of pickles is $5.
Next year, it'd better be $4.97 or we'll switch suppliers.
Oh, you built a whole new factory and hired 1000 people just to supply us?
You'll go bankrupt if the cost goes down?
Too bad for you!
On preview: less than 10% of imports from China. I'm not sure what this intended to illustrate but 10% of imports from China to one retail company is fucking nuts. That's like $50b dollars worth. Seriously.

People with a political axe to grind (or those who have a financial stake -- our interlocutor seems very anxious that we have some sense of his wealth) will narrow their arguments and hew closely to simplified models. They can talk about what whould or should happen versus what has happened or is happening (ask any doctrinaire Marxist, anarchist, Objectivist or Liberarian anything and you'll see what I mean). They talk about a single aspect of the economy and completely ignore others, as if the economy weren't an integrated ecosystem. And then they compare America to Rwanda or North Korea instead of, say, Norway or Canada, as if the status quo is an inevitability, rather than an intentional result, and we should be happy for it to stay where it is.

Which is horse shit, obviously. I don't pretend to know whether there's a solution or what it is. What offends me, as a human being, is the idea that the suffering of people who work hard while their masters reap infinite rewards is somehow just. That if there are five people in your one-room flat, you should buckle down and become ten. That working for starvation wages to support a business is somehow a worse life-choice (let alone whether it is a choice) than starting a business that requires people to work for starvation wages (whether out of "necessity" or simple greed). What offends me is just the utter mercenary nihilism of it. Like, Jesus Christ, stand up for something, will ya?

* Only using Wal-Mart as a short hand for that class of businesses.
posted by klanawa at 5:39 PM on October 3 [19 favorites]


Economics has a number of interesting things to say around thf2's arguments (both for and against) around minimum wage / welfare / wage determination as well, which haven't been brought up yet - perhaps because thf2 assumes readers have fundamental knowledge of the subject. Basically, it's the idea that yes, minimum wage introduces distortions into the labor market, but that's fine because the labor market wasn't perfect to begin with and was already subject to other distortions, and the minimum wage is an attempt to address that.

One is the simple economics 101 concept of the 2 party bargaining model, where both parties split the surplus between them if they have equal bargaining positions (obviously not true in the real world, but we'll get to that). For example, if two people A and B can cooperate to dig up a treasure chest with $100,000 in it before it gets swept out to sea, and separately they can't dig it up on their own, if they are rational actors, they would cooperate to dig it up and split the $100,000 between them 50/50. That's the ideal model of wage determination when you talk about the extra value a person brings to the firm, versus the wage they are actually paid.

thf2's argument is, what if there is an alternate treasure chest on the other side of the island that only A knows about, and he can dig it up for $30,000... but he only has time to dig up one chest. How would they split the chest then? This concept is called "best alternative to a negotiated agreement". Economic modeling of the bargaining process assumes both actors try to split the added value unlocked by the deal. In the case of no deal, A gets $30,000 and B gets $0. If they make a deal it unlocks $70,000 worth of value (a $100,000 chest vs a $30,000 chest), and this gets split 50/50 between both actors. A and B will collectively dig up the treasure worth $100,000, and split it $65,000 to A and $35,000 to B - this is because A already has a better alternative in the case of no deal, while B has nothing, so B has to compromise more. This is basically the argument that safety nets / welfare generally increases negotiated pay, because a failed deal "costs" the worker less.

Where this goes against thf2's argument is that there are other notable factors than just welfare. Let's say the $100,000 chest also contains lifesaving medicine that will keep A alive. In the case of no deal, A dies, and B gets $0. How will the $100,000 be split? Because B has a far better outcome in the case of no deal, this boosts their bargaining power tremendously. You can't spend money if you're dead. In this case, A and B will cooperate to dig up the chest, and B will get all $100,000 while A gets $0. This is basically how most minimum wage workers negotiate with Walmart - if they don't take the job (no deal), their family loses their home, while Walmart just operates slightly less efficiently until they hire another worker. Huge costs to the workers, almost none to Walmart.

This is particularly pertinent because Walmart is the majority employer in many rural sites - there isn't much of a "next best alternative" for workers there. Starvation level wages are the natural outcome of "negotiations" under these conditions, just like slavery / child labor was in the past. Talking about a $15 minimum wage is like looking at this situation where A gets $0 and B gets $100,000 and saying, well what if A was guaranteed to get $5,000 while B got $95,000 instead, isn't that a bit fairer, and B going NO THIS IS BAD, WHAT IF THEY ASK FOR $50,000 INSTEAD, WHERE WILL THIS MADNESS END, THINK ABOUT THE COSTS TO THE ECONOMY!?!?!?

... this $0 vs $100,000 result isn't too far off reality when you look at the differential in wealth between the workers at Walmart and the owners of Walmart.

... Two.... I was going to write more but this comment ended up way longer than I expected.
posted by xdvesper at 5:52 PM on October 3 [21 favorites]


The academic problem with "they'll tighten their belts somehow else" is that fails to consider employees as falable economic actors. Consider a business that needs to tighten its belt. Some succeed and some fail. Those that fail leave the market. This is capitalism working as intended to move business toward efficient systems.

Only, when it's people who leave the market, they fucking die.
posted by Richard Daly at 10:38 PM on October 3 [7 favorites]


(a bunch of good analysis by xdvesper that I won't quote in full)

I think you're spot on, but it feels worth condensing out one point that people like Ted seem incapable of grasping:

The reason economic theory frequently fails in the face of reality is that it pretends power imbalances don't exist. All of the "the market will sort it out" bullshit surrounding worker pay assumes a level of even footing between employer and employee that simply does not exist in reality. This isn't a game theory exercise; the two parties have vastly different outcomes in the case of no deal being reached, with real world consequences.

And again: when I have seen that people in a high paying and highly competitive field that I'm intimately familiar with still frequently can't effectively advocate for a wage that accounts for the value they bring to the company because of that power imbalance between employee and employer (and often because of other inter-related power imbalances re: race/gender/gender identity), the fact that people want to argue that a minimum wage worker could somehow overcome that imbalance in any meaningful way is clearly laughable.
posted by tocts at 6:47 AM on October 4 [14 favorites]


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