'To My Fellow Plutocrats: You Can Cure Trumpism'

[JJ Husker]

But I guess that's my point, until we straighten out our values (economic & social), the value we put on things and where we focus our efforts, I don't see much headway being made on policy or negotiating power or income/wealth disparity. Basically, I believe our economic system has settled in right where our values have allowed it to. Just as our government has settled into the condition where we have allowed it to.

 

I probably don't need to point it out but my football example is just one of many where I feel we are wasting our economic potential. If we increased our value of things that mattered and decreased the value we placed on things that really don't, I think there is a whole bunch of good that could come of it. And without that fundamental change I don't think much will be accomplished. I'm not saying that cheaper tickets or what Bob Kraft does with his money is the answer. The answer is a society that doesn't allow Bob Kraft, or a QB or a CEO or a pharmaceutical company or Hollywood or a doctor or whoever to make bajillions off of what they do while everyday schmoes work their ass off for less than a living wage. We all need to be more cognizant of the fact that Jimmy and Joe can't have such drastically different value to society for what they do, no matter what it is they do. Raising wages for low income people is great but it will matter little if we allow those on the top end to keep vastly out pacing everyone else and I don't think that can be sufficiently addressed through policy alone. It has to come from how we value people. We can't allow the poor to be so destitute and downtrodden and we can't allow the rich to exist in a completely different universe and we can't allow our government to continue maintaining such an unequal playing field.

[zoogs]

Well, policy can change without requiring people to be less interested in the NFL and Keeping Up With the Kardashians. That's straightforward, and fighting for one thing does not require the other. It's not even clear how it would help.

 

But yeah, I really agree about what we're wasting, collectively as a culture, when so much of our rapt attention, brainpower, and emotion is spent eviscerating GMs for stupid trades and debating the skillsets of so-and-so minor league prospects and so forth.

 

I also appreciate your mentality of "allowing people to make bajillion off of" others. Like generally I think this sort of behavior is called rent-seeking; you wind up in a position where you can sort of passively rake in unending buckets of cash, and then you work to consolidate that position so the flow never stops. Somewhat separately, I think I've become a lot more sensitive to the argument that what the most comfortable enjoy depends on keeping a lot of other people stuck, trapped, and powerless to partake in similar things if they're not totally destitute. That's a status quo that doesn't need to be vigorously defended, and yet through the perpetration of various convenient myths, we do it.

[JJ Husker]

I don't think you're understanding what I'm saying. I think you're only taking it at a superficial level. Or maybe it's just a case of me being captain obvious and you're over analyzing it. I'll try to state it more simply.

 

How can we adopt the correct policies if we don't value them enough to adopt them? Who's going to do it? I don't think either one of us expects this congress to implement any beneficial policy. So why is that? It's because they don't value the poor person. They don't value limiting the excess wealth of the overly rich. They don't value doing anything that will make them (congress) more like the common folk. And it's not just this congress, it's been our government as whole for quite awhile. If senator so and so doesn't desire in his heart that the ditch digger has as much right to a basic quality of life as the Fifth Avenue CEO, policy isn't going to fix it because the correct policy will never be realized. That is what I mean when I say our values as a society are the source of the problem. Unfortunately I'm not sure how you change that condition.

 

I think your expecting me to be arguing with you. I'm surprised you aren't agreeing with me. I'm being about as liberal and progressive as is possible for me. I'm feeling like a dang socialist....it's kind of scary actually.

[zoogs]

Ah. I think we are mainly agreeing. And you do sound like a dang socialist! It's great

 

So what I was trying to say on culture is that we aren't going to stop being a world where rock stars and sports icons are mega-famous/mega-rich and the nation's top HS math teachers are known only within certain circles (video related). Those are consumer patterns that seem immutable to me. So if that's the fight, it's hopeless. But I don't think that's the fight.

 

The fight is what you talk about in your post, and what the author talks about in this OP. In this case I don't think it's a culture problem so much as a reality problem. Many people do want those values that you say. But they don't have their hands on the levers of policy, and they've lost negotiating power to better their own lives. You'd think they could just vote in policy in response, but the belief that the current state of things is necessary to avoid economic collapse is very powerful. As the author says, it's a strong and standard negotiating tactic: "accept this, or you'll have no job."

 

So in short, I don't think our culture fundamentally doesn't value the downtrodden. I think it does. To me there are two issues: one is we're convinced that this is the only way; it sucks, but life's hard and we can't have it all. The other is that the people who don't really believe that lash out in the wrong directions: by voting for people like Trump. Bad results, and still a serious mountain to climb, but it won't take a cultural makeover (a la the excellently aspirational K&P below). If it did, the threat of pitchforks wouldn't ever be there. I think it just takes defeating myths. And certain political schools of thought do get discredited, over time.

 

[RedDenver]

Great discussion in this thread.

 

I've recently begun learning about Karl Marx and Marxism, and the discussion about workers not being paid what they're worth could come straight from his writings. Marx contended that "profits" are the difference between what the worker's work is worth and what the worker gets paid for his work.

[RedDenver]

On another note, the minimum wage increase hasn't hurt Seattle thus far. From the article:

When the ordinance passed in June of 2014, Seattle’s unemployment rate already stood at a healthy 4.5 percent; in April 2017, it hit a record low of 2.6 percent (basically a labor shortage). Seattle is now the fastest growing big city in America. Our restaurant industry is booming, second only to San Francisco in the number of eateries per capita, with food service industry job growth far outpacing the nation. Restaurateurs who once warned against raising wages are now complaining about how hard it is to fill the positions they have. Around the corner from my office, the sandwich chain Jimmy Johns is paying drivers $20 an hour plus tips, well above the mandated minimum rate. Are there many factors at play? Of course. But our city has proven that raising wages does not automatically kill jobs. In fact, of the 10 largest counties in the nation, King County, Washington had the largest year over year job growth in 2016 (3.8 percent), and was the only one of the 10 counties to see over-the-year growth in wages (3.5 percent).

How can this be? Because that is how capitalism works. Because when workers earn more money, businesses have more customers and hire more workers. Because a thriving middle class is the source and cause of growth in capitalist economies. Because when restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, it’s great for restaurants!

[JJ Husker]

On another note, the minimum wage increase hasn't hurt Seattle thus far. From the article:

 

 

When the ordinance passed in June of 2014, Seattle’s unemployment rate already stood at a healthy 4.5 percent; in April 2017, it hit a record low of 2.6 percent (basically a labor shortage). Seattle is now the fastest growing big city in America. Our restaurant industry is booming, second only to San Francisco in the number of eateries per capita, with food service industry job growth far outpacing the nation. Restaurateurs who once warned against raising wages are now complaining about how hard it is to fill the positions they have. Around the corner from my office, the sandwich chain Jimmy Johns is paying drivers $20 an hour plus tips, well above the mandated minimum rate. Are there many factors at play? Of course. But our city has proven that raising wages does not automatically kill jobs. In fact, of the 10 largest counties in the nation, King County, Washington had the largest year over year job growth in 2016 (3.8 percent), and was the only one of the 10 counties to see over-the-year growth in wages (3.5 percent).

 

How can this be? Because that is how capitalism works. Because when workers earn more money, businesses have more customers and hire more workers. Because a thriving middle class is the source and cause of growth in capitalist economies. Because when restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, it’s great for restaurants!

 

That would indicate my thoughts may be incorrect, so that can't possibly be right ;-P

 

But seriously they haven't addressed all of my concerns. I don't think it's been widely applied enough to cause the consequences I anticipate. Or I'm just wrong....but I definitely do agree that a thriving middle class is paramount for a growing thriving economy. But I don't think $18 or $20 per hour places a person in the middle class but I suppose it could buoy the economy and have some positive impact for the middle. I would be interested to know how it is affecting the quality of life for the low income folks there. I'm not sure the improved unemployment rate or wage growth tells the whole story but those can't be bad things.

[JJ Husker]

Great discussion in this thread.

 

I've recently begun learning about Karl Marx and Marxism, and the discussion about workers not being paid what they're worth could come straight from his writings. Marx contended that "profits" are the difference between what the worker's work is worth and what the worker gets paid for his work.

That is most definitely basically true. I sell my employees labor for a much higher hourly rate than I pay them. Of course that is not all profit, there are overhead costs etc. that difference also covers but there definitely would never be any profit without markup on materials and the inflated labor rate I charge. As an example look at what the labor rate is for a car mechanic compared to what that mechanic is paid. I don't think they are making anywhere near the $90ish per hour consumers have to pay but if they are making $25 that also sure doesn't translate to $65 per hour profit either.

[RedDenver]

 

Great discussion in this thread.

 

I've recently begun learning about Karl Marx and Marxism, and the discussion about workers not being paid what they're worth could come straight from his writings. Marx contended that "profits" are the difference between what the worker's work is worth and what the worker gets paid for his work.

That is most definitely basically true. I sell my employees labor for a much higher hourly rate than I pay them. Of course that is not all profit, there are overhead costs etc. that difference also covers but there definitely would never be any profit without markup on materials and the inflated labor rate I charge. As an example look at what the labor rate is for a car mechanic compared to what that mechanic is paid. I don't think they are making anywhere near the $90ish per hour consumers have to pay but if they are making $25 that also sure doesn't translate to $65 per hour profit either.

 

You're correct that there are additional costs besides labor. I think Marx subtracted those from the income to get to what the worker's work is worth (trying saying that ten times fast).

 

And as for rising worker pay causing inflation, your analysis holds if the profit margin is maintained so that the cost of goods must go up. If instead the raise in wages cuts into the profits without raising prices (i.e. the employer can tolerate the profit loss), then there shouldn't be inflation. That's obviously really simplified, but I think you get the idea.

[Danny Bateman]

Another thing we must keep in mind is the state of play of the issue.

 

Present day Republicans won't touch minimum wage increases with a 20 foot pole. Several GOP-controlled state legislatures are actually moving to lower minimum wage increases passed at the local or state level.

 

At the other end of the spectrum, progressive and Bernie-ites are calling for a federal $15 minimum wage.

 

I've always been a fan of regional increases to minimum wage to reflect cost-of-living. I'm not super comfortable supporting a federal $15 minimum wage when there are places that may be able to (or choose to) get by with less. Though it should be noted that MIT's map reflecting cost of living vs. minimum wage doesn't calculate a single county in the US where a living wage is under $20, at least based on my ability to navigate it.

 

But I'm thankful that the left is fighting this fight, because most Republicans are trying to drag us in the wrong direction. The original article zoogs posted makes a reasonable case that despite rhetoric, wage increases (even large ones) don't negative affect economic growth or employment.

I certainly don't propose widening the gap. Why would anyone?

[RedDenver]

Another thing we must keep in mind is the state of play of the issue.

 

Present day Republicans won't touch minimum wage increases with a 20 foot pole. Several GOP-controlled state legislatures are actually moving to lower minimum wage increases passed at the local or state level.

 

At the other end of the spectrum, progressive and Bernie-ites are calling for a federal $15 minimum wage.

 

I've always been a fan of regional increases to minimum wage to reflect cost-of-living. I'm not super comfortable supporting a federal $15 minimum wage when there are places that may be able to (or choose to) get by with less. Though it should be noted that MIT's map reflecting cost of living vs. minimum wage doesn't calculate a single county in the US where a living wage is under $20, at least based on my ability to navigate it.

 

But I'm thankful that the left is fighting this fight, because most Republicans are trying to drag us in the wrong direction. The original article zoogs posted makes a reasonable case that despite rhetoric, wage increases (even large ones) don't negative affect economic growth or employment.

 

I certainly don't propose widening the gap. Why would anyone?

FYI, that MIT map is for a single income family of four. I agree with your general concept that the minimum wage should be adjusted for region and cost of living.

 

Another thing to keep in mind is that raising the minimum wage in an urban area like Seattle tends to help the economy because there are so many more people with more money to spend. And a lot of those jobs are service industry (restaurants for example). That doesn't look like it would hold for a lower population/rural area with far fewer service industry jobs.

[JJ Husker]

Republicans, most in our government and many at the top end of the food chain sure seem to try to widen the gap any chance they get. Why? Probably greed.

 

I will buy that increasing the minimum wage will not adversely affect employment or economic growth but I am not so sure the effects it will have on inflation or income/wealth disparity.

 

As RedDenver points out, it's not a problem and could be beneficial if those wage increases come out of a reduced profit/hording margin but what mechanism is in place to assure that? My business is small potatoes but I can assure you if I had to increase my workers pay significantly like by $10/hr I would have to increase my sales prices and would also likely increase my pay somewhat in relation to my employee's increases. In most ways my profit margin is tied directly to my costs so profits would also increase. I just don't see where there is any inherent containment on profits in this scenario. If everyone is doing it, it just becomes the new economic reality. So I don't understand where the lowest wage workers make any progress against the current income/wealth disparity. And I can definitely see where the cost of everything would have to rise.

[Danny Bateman]

 

Another thing we must keep in mind is the state of play of the issue.

 

Present day Republicans won't touch minimum wage increases with a 20 foot pole. Several GOP-controlled state legislatures are actually moving to lower minimum wage increases passed at the local or state level.

 

At the other end of the spectrum, progressive and Bernie-ites are calling for a federal $15 minimum wage.

 

I've always been a fan of regional increases to minimum wage to reflect cost-of-living. I'm not super comfortable supporting a federal $15 minimum wage when there are places that may be able to (or choose to) get by with less. Though it should be noted that MIT's map reflecting cost of living vs. minimum wage doesn't calculate a single county in the US where a living wage is under $20, at least based on my ability to navigate it.

 

But I'm thankful that the left is fighting this fight, because most Republicans are trying to drag us in the wrong direction. The original article zoogs posted makes a reasonable case that despite rhetoric, wage increases (even large ones) don't negative affect economic growth or employment.

 

I certainly don't propose widening the gap. Why would anyone?

FYI, that MIT map is for a single income family of four. I agree with your general concept that the minimum wage should be adjusted for region and cost of living.

 

Another thing to keep in mind is that raising the minimum wage in an urban area like Seattle tends to help the economy because there are so many more people with more money to spend. And a lot of those jobs are service industry (restaurants for example). That doesn't look like it would hold for a lower population/rural area with far fewer service industry jobs.

 

 

 

Good catch on the map. I read that but forgot to include that info. Also, that is a good point you raise.

 

One thing I found interesting in some reading on this tonight: In Maine, they voted to raise minimum wage but also to remove the "tip credit rule" which allowed food service employers to keep up to half of their employees wages (meaning restaurant employees would only make $4.50 of Maine's $9.00 minimum wage). They removed that rule concurrent with the minimum wage increases, meaning even restaurant workers earned the minimum wage and employers couldn't keep half their wages.

 

Servers were ticked.

 

They worried about exactly what El D pointed out - prices for food increasing and the owners cutting shifts to offset the losses. One bartender said she was even making less in wages pretty immediately because people mistakenly thought the wage hike had already occurred.

 

So they turned around and reinstated the tip credit rule. Even Dems that voted to increase the minimum wage previously supported it... because it just made sense. I don't believe they reduced the minimum wage. But the servers will once again lose half their wages to the employer and make good money in tips.

 

I guess this debacle just illustrates how complicated economics is. Even if service industry workers will largely benefit from wage increases, they can be hurt as well if they aren't properly implemented.

 

This is why I don't support big, blanket stances on minimum wage changes. They're good to sell on the stump, but often not practical to implement.

[JJ Husker]

BTW I finally read the linked article. Excellent. I really couldn't agree more with the author. I still think there may be some issues with inflation and relative little real gains against disparity but it sure may be worth a try. One thing I struggle with though is the seeming dependence on the super rich to not act in a greedy fashion. It may well be in their long term self interest to do it but convincing them of that is another thing entirely. It likely will take the pitchforks arriving and not the mere threat of them coming.

[Danny Bateman]

Well that's the rub, right? What kind of stick and carrot we're going to need to get them to go along with it?

 

It's why I like things like Dodd-Frank and some of these reasonable minimum wage increases. I know there are mixed feelings across the spectrum about the Consumer Financial Protection Bureau (CFPB) that is the brainchild of Warren. Consumers generally like the protections they provide, and the business-minded generally hate it and think the director has too much power. But i support some types of government interventions in certain situations because I don't see many other viable solutions. I don't believe the free market will take care of it or the wealthy will get there of their own accord.