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

[GGG]

Originally Posted by Locke

Have you seen the cost of UBI?

Free money and free Health Care?

You cant have both.

UBI isn’t that expensive if you go back into the last thread ion UBI we hashed out the cost. Essentially if Canada cut CPP, OAS,EI, Child benefits, lost taxation due to rrsp’s and TFSAs and spent the same % of GDP publicly as Sweden we could afford it.

This assumes that we don’t destroy the tax base because professionals decide to retire at 40. I’m much more concerned about that problem then the current economy being able to support a UBI.

2k per month would be about 720 billion or about 1/3rd of GDP, but since you are just transferring this money it really should have limited economic drag and in fact taking money from the wealthy and giving to consumers probably works like stimulus.

I think the whole thing blows up because a 60%-75% marginal tax rate for the top bracket along with 40k a per year retirement fund would lead many to work a lot less years. Once you have a house paid off you’d retire.

The other problem is that you are going to increase competition for housing by increasing the number of people who can afford X house. So unless you significantly increase the qualifying requirements for mortgages might of this UBI money just gets eaten up in asset inflation.

[blankall]

Originally Posted by Oil Stain

https://books.google.ca/books?id=RCK...page&q&f=false

According to everything I've read, the USA and their low taxes have substantially worse social mobility than places like Canada, and the Scandinavian countries.

The USA is not a model for wealth equality. Having better wealth equality than the USA is in no way a major accomplishment. If Canada's poor ever lives the way the USA'S poor lives it'll be an epic failure, and their issues go way beyond taxation rates.

[Patek23]

I don’t have much to say on the subject as I’m not in agreement with what seems like the majority of opinion here. But funny the one guy saying that an “average” house is 512k and and “average” car is 40k. When the median sales price for homes is 380k in Alberta. And there are maaaaaany models of brand new vehicles in the 20-30k range that would be more then fine for a family of 4.

Seems like a lot of people think the “average” is a lot higher then what it is. Social media can do that too you.

[PepsiFree]

Originally Posted by Flaming Homer

I don’t have much to say on the subject as I’m not in agreement with what seems like the majority of opinion here. But funny the one guy saying that an “average” house is 512k and and “average” car is 40k. When the median sales price for homes is 380k in Alberta. And there are maaaaaany models of brand new vehicles in the 20-30k range that would be more then fine for a family of 4.

Seems like a lot of people think the “average” is a lot higher then what it is. Social media can do that too you.

I’m not sure social media plays quite as big a role as having current or previous experience living outside Alberta does.

[SebC]

Originally Posted by iggy_oi

I’d really like to hear your explanation for that. Actually don’t even bother responding to the rest of my post unless you’re going to explain that.

I shouldn't really have to, because it's basically the conclusion of the rest of my post, but I will anyways.

UBI increases worker leverage. You disagree, for reasons I don't understand, because it seems self-evident to me that it's easier to quit/threaten to quit your job when you have a guaranteed income to fall back on, and that gives you power. I think you believe that increased leverage benefits workers, because you've essentially stated as much in your valuation of unions, and that you value that leverage highly. Therefore, I'd expect you to support UBI because it's logical based on what I think I know about you. Perhaps if you think of UBI as a form of strike pay, you'll see what I mean.

[CliffFletcher]

Originally Posted by GGG

UBI isn’t that expensive if you go back into the last thread ion UBI we hashed out the cost. Essentially if Canada cut CPP, OAS,EI, Child benefits, lost taxation due to rrsp’s and TFSAs and spent the same % of GDP publicly as Sweden we could afford it.

Cancelling CPP would take extraordinary political courage. It’s a dedicated, solvent retirement fund, managed at arms length. To dissolve its holdings and roll them into a general UBI program would be a serious breach of the principles under which it was set up and run. It would provoke a blizzard of legal challenges.

Originally Posted by GGG

This assumes that we don’t destroy the tax base because professionals decide to retire at 40. I’m much more concerned about that problem then the current economy being able to support a UBI.

2k per month would be about 720 billion or about 1/3rd of GDP, but since you are just transferring this money it really should have limited economic drag and in fact taking money from the wealthy and giving to consumers probably works like stimulus.

I think the whole thing blows up because a 60%-75% marginal tax rate for the top bracket along with 40k a per year retirement fund would lead many to work a lot less years. Once you have a house paid off you’d retire.

And at the other end, I expect we’d see youth unemployment skyrocket. If you’re 26 and living at home with your parents, $2k a month is plenty to cover your needs. Why take a job as a server on weekends and evenings making $2.5k when you can get by just fine not working at all?

[you&me]

Originally Posted by CliffFletcher

And at the other end, I expect we’d see youth unemployment skyrocket. If you’re 26 and living at home with your parents, $2k a month is plenty to cover your needs. Why take a job as a server on weekends and evenings making $2.5k when you can get by just fine not working at all?

I think I must be naive, but is your typical 26 year old so unmotivated that $2k a month is enough to derail any ambitions of making a life for themselves?

26 year old me (if living at home with no real expenses) would look at that $2k per month from UBI and think I should also take that server job so I could bring home $4500 a month and get out of my parents house! Or, more accurately, the real 26 year old me would have appreciated that $2k per month cushion to support me while I started my business...

[GirlySports]

Originally Posted by CliffFletcher

Cancelling CPP would take extraordinary political courage. It’s a dedicated, solvent retirement fund, managed at arms length. To dissolve its holdings and roll them into a general UBI program would be a serious breach of the principles under which it was set up and run. It would provoke a blizzard of legal challenges.



And at the other end, I expect we’d see youth unemployment skyrocket. If you’re 26 and living at home with your parents, $2k a month is plenty to cover your needs. Why take a job as a server on weekends and evenings making $2.5k when you can get by just fine not working at all?

Wouldn't you want $4.5k? Or even 3k? 4k? Perhaps one would not have to break their back working 40 hours but just 20? Also, I think UBI would cause aggregate demand and inflation. 2K might not be enough if everyone has it.

[bizaro86]

Originally Posted by combustiblefuel

It's not just Vancouver though. It's the whole damn province.

The price increases in the rest of BC are due in huge part to the price increases in Vancouver though.

People who can't afford to live there move and add demand, and people with huge capital from there are borrowing it out to buy vacation properties and rentals elsewhere.

If you deflated the vancouver bubble the rest of the province would moderate.

[blankall]

Originally Posted by Flaming Homer

I don’t have much to say on the subject as I’m not in agreement with what seems like the majority of opinion here. But funny the one guy saying that an “average” house is 512k and and “average” car is 40k. When the median sales price for homes is 380k in Alberta. And there are maaaaaany models of brand new vehicles in the 20-30k range that would be more then fine for a family of 4.

Seems like a lot of people think the “average” is a lot higher then what it is. Social media can do that too you.

Median sale price for a detached home in Calgary is now $511k. Calgary, as already mentioned, has depressed home prices due to its high unemployment rate.

Yes, you can buy a cheaper home in a very rural area. Is that feasible for most people?

I agree with you on cars though. I don't think that cars are especially pricey right now, relative to what you get. Spending too much money on cars is not a new thing though or some example of millennial extravagance. That's been going on since cars were invented. The bigger issue is the cost of food and housing.

[rubecube]

Originally Posted by you&me

I think I must be naive, but is your typical 26 year old so unmotivated that $2k a month is enough to derail any ambitions of making a life for themselves?

They aren't. This is just a narrative that hardcore free market capitalists push to justify crappy wages and stripped down social programs (aka wage slavery).

[iggy_oi]

Originally Posted by SebC

I shouldn't really have to, because it's basically the conclusion of the rest of my post, but I will anyways.

Well I appreciate your response because it’s made it pretty clear where our difference of opinion is rooted.

UBI increases worker leverage. You disagree, for reasons I don't understand, because it seems self-evident to me that it's easier to quit/threaten to quit your job when you have a guaranteed income to fall back on, and that gives you power.

The ability to quit your job does not significantly increase your leverage as an employee to negotiate better conditions, at least not as an individual. If it did teenagers who live with their parents would earn more at their jobs than adults working the same job who do not have the same safety net. IMO overall UBI would most likely be used by employers to justify maintaining lower wages, the same as they use lower costs of living to justify paying a lower wage to youth workers. While an argument could be made that if UBI created a large enough labour shortage it would lead to a temporary bump in wages, I think it’s highly unlikely enough people would stop working altogether to make it a very significant one because most people want to make as much money as they can and therefore won’t stop working all together even if they can afford to live off just UBI.

I think you believe that increased leverage benefits workers, because you've essentially stated as much in your valuation of unions, and that you value that leverage highly.

I do, however I see UBI as nothing more than a “circuit breaker” for lack of a better term that may temporarily result in an increase in wages, as some are claiming the CERB has done to some extent. But once the market has made that correction, lower wage workers will again be stuck in the same position of having little to no economic mobility without government intervention.

Therefore, I'd expect you to support UBI because it's logical based on what I think I know about you. Perhaps if you think of UBI as a form of strike pay, you'll see what I mean.

Without the collective action of going on strike, strike pay is essentially the same concept as EI and I don’t think I’ve ever heard anyone suggest EI gives workers leverage to negotiate better wages.

Anecdotally, I also don’t think I’ve ever met a person who went on strike because they would get strike pay but that’s beside the point.

Economic mobility to me is the ability an individual has to not only improve but also continue to improve their quality of life going forward, and I don’t believe a one time bump achieves that. Perhaps it could if some of the other systemic issues that lead us to this point were also addressed, but I think if you addressed the issues that currently allow for workers to be exploited you wouldn’t even need to consider a UBI.

[_Q_]

Originally Posted by _Q_

Very quick math here.

$120,000 salary = $7700/month after tax
Average 3 bedroom detached home = $512,000 = $2200/month
Property taxes = $250/month
Average new vehicle = $40,000 = $600 lease
Child care for 2 children = $2400
Bills including TV, internet, phone, heat, water, sewage, etc. = $700
Grand total of $6150, leaving the family with just over $1500 per month for groceries, gas, savings, gym memberships, RRSPs, RESPs, paying off student loans and other debt.
That's about $350 per adult, per 2 week pay period for "discretionary" spending.

Sure.... it's doable. But it doesn't leave much room for daily coffee and avocado toast.

What ends up happening in a situation like this is things get cut out. Maybe the kids stay with their grandparents instead of daycare. Or maybe the family keeps driving their 15 year old beater. Or maybe they just say "fk it, we'll just keep accumulating debt, because what's the point?"

And this is in Calgary, where things are relatively cheap. Imagine living in Toronto or Vancouver, where average incomes are about 80% of what they are here and housing and child care are twice as expensive. No matter how many new TVs and vacations you tell yourself you won't purchase, it's not going to make any difference whatsoever.

It seems as though there's some misunderstanding of my post above.

As a reminder, this post was a response to Weitz' post from earlier claiming that the average household income in Calgary of $100-$140k is enough to be able to afford "average" things.

So I did some quick math to show that the average family that earns about $120k per year would have a very difficult time purchasing a whole bunch of "average" things. Yes, they can purchase a $350k home and a $15k car. They can find a cheaper daycare (though I have yet to find anything in this city much lower than the average). That's not the point though. The point is that if a family, making average income set out to purchase a regular 3 bedroom detached home, 1 new vehicle (though most families need 2 vehicles if they live in the suburbs) and put their two children in daycare, they would have a very rough time. In order to make it work, they would need to cut out some of those fairly "average" things and find cheaper, less desirable alternatives.

For the record, I do agree with a lot of the sentiment around here. Nobody "needs" a new Rav4. Nobody needs a $512k home. My wife and I make a fairly decent sum of money that would be considered well above average. Yet we live in a 2 bedroom condo with our 2 kids and drive a 12 year old Toyota. We're happy knowing that we dont have to struggle and live paycheque to paycheque.

[TorqueDog]

Originally Posted by you&me

I think I must be naive, but is your typical 26 year old so unmotivated that $2k a month is enough to derail any ambitions of making a life for themselves?

26 year old me (if living at home with no real expenses) would look at that $2k per month from UBI and think I should also take that server job so I could bring home $4500 a month and get out of my parents house! Or, more accurately, the real 26 year old me would have appreciated that $2k per month cushion to support me while I started my business...

My cousin is 30 and still lives at home rent-free with her mom. She doesn't even have a job. Her only afflictions are laziness and entitlement. It gets worse; my cousin is married and hubby lives in the house too.

But to answer your question if the 'typical' 26 year old is that unmotivated, oh hell no. My cousin is a massive (heh) outlier, not the norm. Yet they way you hear people talk, you'd think she's representative of the population, and it just isn't true.

[BoLevi]

Originally Posted by Sliver

Anybody working full time (40 hours per week) should be paid a living wage by their employer. Anybody disagree with that?

Two consenting adults should be able to do what they want, assuming they aren't doing physical harm to anyone else. That includes determining how they want to exchange labour for money.

[TorqueDog]

Originally Posted by BoLevi

Two consenting adults should be able to do what they want, assuming they aren't doing physical harm to anyone else. That includes determining how they want to exchange labour for money.

The employer/employee relationship is very different from the client/contractor relationship you're describing.

[Sliver]

Originally Posted by BoLevi

Two consenting adults should be able to do what they want, assuming they aren't doing physical harm to anyone else. That includes determining how they want to exchange labour for money.

Seems fair and I don't see any opportunity for abuse there. I'm convinced.

[blankall]

Originally Posted by TorqueDog

My cousin is 30 and still lives at home rent-free with her mom. She doesn't even have a job. Her only afflictions are laziness and entitlement. It gets worse; my cousin is married and hubby lives in the house too.

But to answer your question if the 'typical' 26 year old is that unmotivated, oh hell no. My cousin is a massive (heh) outlier, not the norm. Yet they way you hear people talk, you'd think she's representative of the population, and it just isn't true.

I wouldn't call your cousin a "massive outlier". Most people will try to better themselves, but not all. Also, many people, given the chance, will come up with creative definitions of employment. We'd see a lot more full time influencer types, if there was a guaranteed income. A lot of people would do things that don't pay all that much.

That's obviously great from a human capital perspective, but not so great from a collecting taxes to pay for UBI perspective.

[BoLevi]

Originally Posted by TorqueDog

The employer/employee relationship is very different from the client/contractor relationship you're describing.

Not in any way that is significant.

A minimum wage is telling two parties (individuals or groups), that they are not allowed to do something to which they both consent, and which is doing no physical harm to anyone else.

[_Q_]

If there are individuals out there that don't want to work, then why do we as a society feel compelled to force them to work?