Let's Talk About Minimum Wage, Class Warfare, Wage Gaps, etc.

[troutman]

Presenter: Well now we come on to our special gift section. The contestant is Karl Marx and the prize this week is a beautiful lounge suite. (curtains behind the presenter sweep open to reveal a beautiful lounge suite; terrific audience applause; Karl comes out and stands in front of this display) Now Karl has elected to answer questions on the workers control of factories so here we go with question number one. Are you nervous? (Karl nods his head; the presenter reads from a card) The development of the industrial proletariat is conditioned by what other development?

Karl: The development of the industrial bourgeoisie.
(applause)

Presenter: Yes, yes, it is indeed. You're on your way to the lounge suite, Karl. Question number two. The struggle of class against class is a what struggle? A what struggle?

Karl: A political struggle.
(Tumultuous applause.)

Presenter: Yes, yes! One final question Karl and the beautiful lounge suite will be yours... Are you going to have a go? (Karl nods) You're a brave man. Karl Marx, your final question, who won the Cup Final in 1949?

Karl: The workers' control of the means of production? The struggle of the urban proletariat?

Presenter: No. It was in fact, Wolverhampton Wanderers who beat Leicester 3-1.

[GirlySports]

Originally Posted by MarchHare

This is entirely wrong and shows ignorance of history. Here's what President Franklin Roosevelt said about the minimum wage when he passed it as part of the New Deal (large portions of which were subsequently copied by Canada and other nations) back in the 1930s:

"It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level - I mean the wages of decent living."

Source: http://docs.fdrlibrary.marist.edu/odnirast.html

Yes, but I think during the depression, workers were really really abused. And all wages for all jobs were relatively the same. But at some point in time some jobs really outpaced certain other jobs which remained abused without these protections.

Maybe I don't go back far enough, and yes, that is my lack of historical knowledge, but in my generation, when i was 16, minimum wage jobs were not full time or a career such as it has become now.

[blankall]

Originally Posted by Lubicon

I'm not an economics guy but don't these two thing conflict? How do you encourage small business but at the same time limit them?



Care to elaborate?

My point was that many corporations are not being used by businesses at all. They are being used by anyone who earns above $200k or so to shelter their taxes. There needs to be more limits on who can own a low tax corporation. I mean yes, you can look at a wealthy CEO as a business onto themselves, but that's not the intent of tax breaks for the closely held corporation. They were meant to help small business build operating income, not allow Donald Trump to pay a $750 tax bill.

[edslunch]

Originally Posted by Locke

Oh. So now you get to choose where they live because it determines how much you pay them?

What if they live in a Condo on Riverside Avenue? Are you going to pay your dishwasher ~$70K a year?

Thats what it costs him to live! You cant tell him where and how to live, but you're responsible for his wage!

Yes, obviously pay cheques will be adjusted for your street address. So will your all of your expenses .... postal code will be the new SIN.

[iggy_oi]

Originally Posted by SebC

Taxing the rich. Inequality has exploded because we stopped doing that.

True, and I’m not going to argue against raising taxes on the rich, but unfortunately raising their taxes isn’t going to address low wages and worker exploitation.

[blankall]

The issue isn't just with cost of living. It's also access to capital. My good friend's father is a lawyer. He used his first pay cheque to buy his office building. He know owns a dozen offices and multiple residences. The average lawyer I know, now spends 5-10 years saving a down payment for their first condo. They have no hope of owning office space.

These are lawyers, who earn considerably more than average.

There's a vast shortage of not just residential space, but also commercial and industrial space. It's not just supply and demand causing the issue, it's also zoning. Aging NIMBY types refusing to allow restaurants or other commercial spaces in what they consider to be their personal living environments. Meanwhile there are armies of serfs paying taxes to support the roads and infrastructure necessary for those spaces.

[edslunch]

Originally Posted by RichieRich

I've always been confused as to what constitutes "affordable housing".
Because to some that might mean a reasonable purchase price. or rent.
but reasonable is very relative to ones incomes and free cash flow.
free cash flow is tied to needs and choices.
some people don't think medications or treatments are choices, but are needs.
Is it reasonable to expect everyone to want to buy a place to live? are they capable of what that entails? does it meet their needs? are they picky about their neighbors, or does nobody want to be their neighbor?

So, to me, affordable housing means making some base assumptions on family needs (ie based on # of people and any medical issues), then setting the rental rate at something that's demographic/geographically acceptable, and then policing accordingly?? but does that lead towards socialism/communism again?

There’s nothing wrong with socialist policies if they make sense, on a case by case basis. It’s when socialism is mandated as the only solution to everything that you end up with communism IMO. Socialism shouldn’t be they boogie man anymore than unfettered capitalism is the panacea.

[CliffFletcher]

Originally Posted by Sliver

Is it not reasonable to expect to be able to live and support yourself if you work full time?

Having a roommate doesn't sound like an unreasonable thing to expect a single, low-income earner to have to have, though.

Up until recently, single-adult households were rare. If we want to elevate that to being a basic right, we should recognize that we are elevating the standards.

[stone hands]

Originally Posted by _Q_

As I said in my previous post

You can make it work, in Calgary, but its extremely tight.

An average, dual income home shouldn't have to just "make it work". They should be afforded you know.... an average lifestyle. Nice home, good car, safe and reliable childcare, savings, food on the table, internet, etc.

These aren't luxuries. Working full time in a fairly average job should allow you to provide the basics that I described above. If that's not happening, then there's something seriously broken with our economy.

Consider this: the "average" is unsustainable economically because what you perceive as "average" is actually "rich people stuff" that the "average" person needs to take out incredible amounts of money they don't actually posses to achieve being "average"

My rule of thumb is, aside from a home, if I cant buy it in cash, I cant afford it. If you take this mentality with everything you start to find that the "average" persons spending habits and expectations of what kind of property they should reasonably be able to have is INSANE and it's no wonder that someone could possibly think you can make 120+k in calgary and be forced to eek out a meager existence

[GirlySports]

Communism, as practiced, isn't even socialism. It's just government control-ism. I mean, what's the Chinese social security structure? Nothing. They have more wealth inequity than the US does.

[blankall]

Originally Posted by CliffFletcher

Up until recently, single-adult households were rare. If we want to elevate that to being a basic right, we should recognize that we are elevating the standards.

And up until recently, dual income houses were equally as rare, with most women staying home. Now dual income households are the norm, with two incomes unable to provide what one income did a generation ago.

[Locke]

Originally Posted by iggy_oi

True, and I’m not going to argue against raising taxes on the rich, but unfortunately raising their taxes isn’t going to address low wages and worker exploitation.

Its a bigger problem.

How do we as a society advocate for savings and investment for your future while seeing the wealthy do exactly that?

We need their cash to come back into the economic pool, but they dont have to, its not in their best interests and so they dont.

On top of that..."Save for the future!"

That usually means Heirs. Its like people starting a Monopoly game with 10 times as much money as their competitors and then doing a celebration dance when they win.

Because they think it was their 'skill' that won the game and not the outrageous amount of money they had to start with.

And people wonder why I loathe Justin Trudeau, the Trust Fund Prince.

[IliketoPuck]

The rate of wage increases for the lower and middle class has not kept pace with the affordability of items that define the class since the mid-1900s.

As a result, on aggregate, it is more difficult now for individuals in those socioeconomic brackets to climb out. Over a generational period of time, this results in more and more disparity, in perpetuity. Affording the "American Dream" of a house, car, college education for your kids, is just that.

The problem is that this is the logical manifestation of a primarily capitalistic society, focused on corporate profit and trickledown economics. If a publicly traded corporation or wealthy individual benefits from a change in tax law, it is the height of naivety to assume that they will use those funds to hire more workers (or increase wages) vs. upholding their fiduciary duty to maximize shareholder returns (in the case of corporations), or to increase their own wealth (in the case of individuals). It was inevitable that wealth concentration would accelerate on a grand scale under our current structure.

Tax reform is part of the solution. More efficient distribution of taxes focused on broader social supports for the lower/middle income brackets is also necessary.

At the end of the day it is going to be exceptionally challenging to undo a generation of government and economic policy that was designed to concentrate wealth.

But if we don’t figure this out, eventually the decision will be made for us.

[Bunk]

Originally Posted by edslunch

There’s nothing wrong with socialist policies if they make sense, on a case by case basis. It’s when socialism is mandated as the only solution to everything that you end up with communism IMO. Socialism shouldn’t be they boogie man anymore than unfettered capitalism is the panacea.

I've always viewed these poles as a false dichotomy. Virtually every system we have is a hybrid - and the hybrid is in fact usually optimal. Free enterprise? Yes. BUT - within the parameters of a sensibly regulated system.

[MarchHare]

Originally Posted by GirlySports

Maybe I don't go back far enough, and yes, that is my lack of historical knowledge, but in my generation, when i was 16, minimum wage jobs were not full time or a career such as it has become now.

That's a very privileged thing to say. Maybe that was true for you and your friends and family, but there have always been full-time adult workers struggling to get by on minimum wage jobs. You probably just weren't aware of any when you were 16.

[edslunch]

I think RESPs are a good example of a vehicle that encourages saving for the next generation, for a specific purpose. RRSPs and TFSAs are well established mechanisms to encourage saving for an individual’s future. How about a combination of those that encourages you to sock away money for the next generation, but like those other programs have limits on how much you can save. Outside of this program make inheritance tax progressively higher for different levels of wealth.

It’s a bit more complicated if your assets are property or stock...there would need to be some way to paper transfer assets without triggering sales.

[GirlySports]

Elizabeth Warren's book, The Two-Income Trap really addresses these issues. A must read.


https://www.vox.com/policy-and-polit...th-warren-book

The “two-income trap,” described

The “two-income trap,” as described by Warren, really consists of three partially separate phenomena that have arisen as families have come to rely on two working adults to make ends meet:

• The addition of a second earner means, in practice, a big increase in household fixed expenses for things like child care and commuting.
• Much of the money that American second earners bring in has been gobbled up, in practice, by zero-sum competition for educational opportunities expressed as either skyrocketed prices for houses in good school districts or escalating tuition at public universities.
• Last, while the addition of the second earner has not brought in much gain, it has created an increase in downside risk by eliminating an implicit insurance policy that families used to rely on.

This last point is really the key to Warren’s specific argument about bankruptcy, though it’s the first two that would drive her larger interest in politics. Bad things have always happened to families from time to time. In a traditional two-parent, one-earner family, there was always the possibility that mom could step up and help out when trouble arose.
“If her husband was laid off, fired, or otherwise left without a paycheck,” Warren and Tyagi write, “the stay-at-home mother didn’t simply stand helplessly on the sidelines as her family toppled off an economic cliff; she looked for a job to make up some of that lost income.” Similarly, if a family member got sick, mom was available as an unpaid caregiver. “A stay-at-home mother served as the family’s ultimate insurance against unemployment or disability — insurance that had a very real economic value even when it wasn’t drawn on.”
A modern family where mom is already working has no “give” and is much more likely to be pushed into bankruptcy by job loss or family illness unless it builds up a big financial cushion.


But most families, of course, didn’t build up big financial cushions. The main financial savings vehicle for the American middle class was the owner-occupied home in the good school district. But the only way to tap that asset is to sell it and move someplace less desirable, disrupting children’s lives and risking a tumble out of the middle class.
Consequently, families in practice try to deal with financial hardship by availing themselves of the wide range of consumer credit opportunities made available by the ongoing deregulation of the financial industry. This combination of brittle household finances, stagnant discretionary incomes, and wide availability of poorly understood debt products fundamentally explains the runup in bankruptcies.

[blankall]

The term "trickle down economics" IMO gets a bad wrap. When it was conceived the idea was to promote business, which would create more jobs and lead to prosperity for all.

The issue isn't policies that promoted business, but policies that benefited only the wealthy and strangled business. I've mentioned the issues of decreasing tax base, property prices, limited zoning opportunities, access to capital etc...these aren't trick down policies. These are policies that concentrate wealth and then put an abrupt stop any trickling down.

As for dramatic change, the main issue is that there are too many people with too many resources benefiting off the status quo. Every babyboomer with a property worth 20 times what they paid for it loves the current situation. They are appeased and believe that they've earned the wealth they have. They also form a massive voting block, and an even larger share of the total economic power. On top of that, their children don't really like what's going on, but also realize if they don't rock the boat they are in for a big pay day when their parents kick the bucket. Overall, societal pressure to solve the issue is low, and the inevitable outcome is a collapse of some kind.

[PeteMoss]

Originally Posted by blankall

The term "trickle down economics" IMO gets a bad wrap. When it was conceived the idea was to promote business, which would create more jobs and lead to prosperity for all.

The issue isn't policies that promoted business, but policies that benefited only the wealthy and strangled business. I've mentioned the issues of decreasing tax base, property prices, limited zoning opportunities, access to capital etc...these aren't trick down policies. These are policies that concentrate wealth and then put an abrupt stop any trickling down.

As for dramatic change, the main issue is that there are too many people with too many resources benefiting off the status quo. Every babyboomer with a property worth 20 times what they paid for it loves the current situation. They are appeased and believe that they've earned the wealth they have. They also form a massive voting block, and an even larger share of the total economic power. On top of that, their children don't really like what's going on, but also realize if they don't rock the boat they are in for a big pay day when their parents kick the bucket. Overall, societal pressure to solve the issue is low, and the inevitable outcome is a collapse of some kind.

I'll take your word on how it was conceived, but the whole idea when it was implemented was to help the rich.

[stone hands]

Originally Posted by blankall

The term "trickle down economics" IMO gets a bad wrap. When it was conceived the idea was to promote business, which would create more jobs and lead to prosperity for all.

The issue isn't policies that promoted business, but policies that benefited only the wealthy and strangled business. I've mentioned the issues of decreasing tax base, property prices, limited zoning opportunities, access to capital etc...these aren't trick down policies. These are policies that concentrate wealth and then put an abrupt stop any trickling down.

As for dramatic change, the main issue is that there are too many people with too many resources benefiting off the status quo. Every babyboomer with a property worth 20 times what they paid for it loves the current situation. They are appeased and believe that they've earned the wealth they have. They also form a massive voting block, and an even larger share of the total economic power. On top of that, their children don't really like what's going on, but also realize if they don't rock the boat they are in for a big pay day when their parents kick the bucket. Overall, societal pressure to solve the issue is low, and the inevitable outcome is a collapse of some kind.

Trickle down economics gets a bad wrap because it doesnt work and it defies basic logic

The reason people consider communism a non-starter is because human nature is too greedy and individualistic for it to work,people are always gonna want more than their neighbors especially if they perceive like they earned it

...however proponents of trickle down economics use the complete opposite logic that individual stakeholders who receive more profits will part with them willingly is just asinine, especially in an economic system that succeeds because of the individual quest for wealth. Additional profits has always and will always not only mean those increased profits go directly to the stakeholders(as the system is designed), but that these stakeholders now have an expectation of a baseline of growth from it

It makes for some good rhetoric(a rising tide does indeed lift all boats), but doesnt work in practice