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

[PepsiFree]

Originally Posted by RichieRich

Whilst there's no doubt that costs of living have increased, it cannot be discounted either that the North American society (and likely others) has become an insane consumer of goods based mostly upon wants rather than needs. There is planned obsolescence with so so many goods too. Advertising has convinced so many that they need their daily coffee, internet subscriptions, data packages, tv packages, bigger better TV's and electronics every couple of years, heck throw in "starter" homes that "need" upgrades and eventually larger homes, same with vehicles... where does it end? Why don't we have conversations and education around the opportunity costs of so many non-essential goods and services?


So in our world rife with expectations where the answer is always more more more, it's easy to be convinced (either externally or internal dialogue) that the answer is always that we are being underpaid and someone is grossly profiting. Why is the answer that those richer/wealthier than ourselves somehow have an unfair advantage and hence "DESERVE" to be taxed more heavily? that's another whole thread I suppose...
In any case, some jobs have been deemed unskilled, or have lower level of importance assigned to them, or require different levels of life-experience and/or education. It's why I expect to get paid more than many other fields... at the cost of job uncertainty though.

Logically compensation will range immensely according to type of job but also general cost of living in a particular area. Should a coffee barista need to be paid less working in Airdrie or more working in downtown Banff where making ends meet is much harder? What about owners expectation of profit and margins?
Although AB minimum wage is ~$15/hr... that's an immense amount of money to a teenager/student living at home. But to a single parent it's barely enough. There's no "right" or "easy" answer, and I certainly don't want to go the socialist route of "a job for everyone, no pay for over/under performance, same pay regardless of job" as that's quickly racing to the bottom. Continuously aggressively raising minimum wage is also a race to the bottom for most starting business' who may not be able to afford staff or have the endurance to themselves work 80 hour weeks.

What you're describing is essentially the result of largely unchecked capitalism. More capitalism, or solutions developed within a capitalist ideology are not going to fix it. You may not want to go a "socialist route" but a balance is required, which naturally means the infusion of solutions drawn from socialist ideologies. It's unavoidable.

There is no fix for this otherwise.

You can say this or that is a race to the bottom, but we're racing to the bottom as we speak.

And I would argue that your perception of a consumerist society (daily coffee, new TVs, starter homes, new vehicles) is completely from a point of privilege. The problem isn't the consumerist society, it's... sadly... that large sections of the population no longer have the option to even participate in that consumerist society. I agree that what you mentioned is a problem, but it's a very middle-upper class problem. There are people who work 40+ hours a week and cannot afford any of what you've mentioned. That's the issue.

It also seems like a constant red herring. Older generations seem fixated on consumerism as a key problem holding young people and people with lower incomes back. "Stop buying the new phone every year! Stop with the avocado toast!" It's a sign to me that someone has no clue how people are actually living and the significance of the problems they face. The issue is not that people need to be paid more because they're wasting money on a new phone every year.

Whether the solution is higher taxes across the board (I favour a flat income tax and a high sales tax that fully exempts essentials), increased subsidies, programs like UBI, better housing regulation, or whatever else, the solution is not coming from capitalism, and it is not coming from pulling up your boot straps and minding your spending.

[rubecube]

Originally Posted by PepsiFree

Whether the solution is higher taxes across the board (I favour a flat income tax and a high sales tax that fully exempts essentials), increased subsidies, programs like UBI, better housing regulation, or whatever else, the solution is not coming from capitalism, and it is not coming from pulling up your boot straps and minding your spending.

I think what people fail to understand about issues such as the wealth gap and climate change is, if you happen to currently reside in a privileged class, you're going to end up paying for these things one way or another. The longer we wait to address these issues, the more costly it's going to be when the bill finally comes due.

[81MC]

Originally Posted by Sliver

I do like the principle for sure. Let me think about it.

I'm concerned my thoughts are going to a more selfish place where I want them to be better off than average and not just part of the herd struggling and toiling away. I know that sounds pretty sh$%ty, which is why I want to think for a bit and maybe see some other responses.

That doesn’t sound ####ty at all. There’s nothing wrong with wanting to provide the best possible future for your children, and for some people that means having the means to attend university without a life of debt, or pursue meaningful careers without the worry of how to pay rent.

I doubt it’s anyone’s intention, but don’t let anyone make you feel bad for doing your thing now so your family can do their thing in the future. That’s far more admirable than buying yourself a new pickup truck.

[blankall]

Originally Posted by Sliver

Can you expand on this one a bit? I get it in principle, but my wife and I are planning and working really hard to give our kids a leg up. Like, I could have a bigger/better house and newer cars if I wanted, but my financial goals are more directed at my kids. I want to help them buy their first houses, pay for their university educations, and just generally help them move forward in life moreso than making things materially better in my own.

I look at any wealth my wife and I accumulate as familial wealth, since you can't take it with you. I'm planning and hoping we can start some generational wealth in my family for my kids and their kids by making really long-term decisions now versus just decisions that affect me until I'm 85, say. I wouldn't want a system where I'm incentivized to buy a new car to just blow my money over saving, growing and transferring wealth from one generation to the next.

Like, I want to buy my kids and future grandkids more financial security. Some people rather travel and live in a huge house. I don't want to take a tax kick to the nuts because of how I'm choosing to spend my money.

Could be I just don't get what you mean, though.

Everyone works to get a leg up. The issue is that the cost of living and capital is rising so dramatically, that the gap between those with a leg up and those without is becoming insurmountable. That gap gets harder and harder to close everyday. The difference in buying power between generations is immense, and the wealth of older generations will simply upset any changes we attempt to make. For example, if someone without the leg up does their best to put together a funds to make a purchase, someone with wealthy parents can just outbid that person. When the wealthy parents have access to multi-millions, it doesn't matter how hard the others are working.

If, for example, there's an estate tax of 20%, on dollars inherited about $1 million, I don't see how that would encourage people to blow all their funds before they die. It's still only 20%.

[stone hands]

Originally Posted by _Q_

I do understand that sentiment, but I also feel like that's now an outdated idea that's no longer in line with reality.

When a decent home in Calgary is now worth at least $500k, a new vehicle is at least $40k, child care costs around $1200 per child, internet and phone plans are astronomically high. It becomes close to impossible to purchase just the basics on minimum wage. Heck, a two income household making average income can't afford the average cost of things.

I agree with what you're saying in principal(costs have skyrocketed compared to wages), but I want to push back a little bit: a "decent" home doesnt cost 500k in calgary, that's a very large number and most likely way too much house in a much nicer neighborhood than required. same with 40k for a new vehicle

This idea of what middle class people should be able to afford , and even more important, what they covet to be able to afford is not sustainable and part of the reason we are in this mess as a society. We need to fix people's expectations for what "normal" is and bring it in-line with something sensible. I live in a two income household with 100~k combined salary, and we own our own home and vehicle and save over 50% of our income. Its possible and not even inconvenient

[GGG]

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?

I’ll disagree,

The question is how many people should this person be able to support and what kind of accommodation should they be supported in.

If we conditioned the statement to be able to rent a room and have no dependants and use transit for commenting and the library for internet then I would say that is a reasonable point to set it at.

Then create a government funded support system to directly assist those with dependants who need additional support and pay for it with higher corporate taxes on profits or personal taxes on people earning above median.

Alternatively I think a better way to set minimum wage is x% of median for the jurisdiction. I think it was in the US politics thread that someone linked an article to some research suggesting that minimum wage increases up to 60% increase had net economic benefit.

[GirlySports]

500k is quite a big house. Especially in the burbs, or in Airdrie!

[CliffFletcher]

Originally Posted by Sliver

Anybody working full time should be able to afford to rent an apartment, have a cell phone, eat, pay electricity/gas/water, live within a one-hour commute of work, afford a bus pass, basic wardrobe, etc. You don't need a car, plane vacations, brand name clothes, etc.; but you should be able to live a very basic and not-unhealthy life if you are working full time.

Alone? Without a partner or roommate?

[_Q_]

Originally Posted by Weitz

What things though? Average family income in Calgary is roughly (most recent I could find is 2016) $140,XXX. Median (in 2018) was $102,XXX. That seems more than enough to buy average things?

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.

[bizaro86]

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?

If you make this a law businesses will just start limiting employees to 35 hours "part time." IIRC this happened in some parts of the US when they required health insurance for full time employees.

[bizaro86]

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.

May not be able to lease a brand new vehicle during the years with two kids in full time daycare. Might have to go with a used vehicle during that time period. Doesn't seem outrageous.

[SebC]

UBI is the best way to give people a "living wage". Upzoning is necessary to fix the housing market.

[81MC]

I don’t know, maybe we shouldn’t be considering ourselves burdened before forgoing a $600 month zero return expense for putzing around town. People get trapped in this auto loan cycle and it’s crushing but rarely is anyone willing to consider it a luxury.

Hearing people with a $500+ car payment talk about being unable to get ahead breaks my heart. It’s exactly what my parents have done for years, it’s ####ed.

[_Q_]

Originally Posted by bizaro86

May not be able to lease a brand new vehicle during the years with two kids in full time daycare. Might have to go with a used vehicle during that time period. Doesn't seem outrageous.

No it doesn't.

But the days of being able to find a good, reliable, used vehicle for $5000 ĺike 15 years ago are also over.

Most people are now financing 4 year old vehicles for $25,000 for 6 years just go get the payments low enough.

We're not in 2007 anymore.

[GirlySports]

$2200 mortgage payment is high. Are you assuming the minimum down payment of 5%? That is the first mistake one makes buying a 500k house and only putting down 25k.

[_Q_]

Originally Posted by GirlySports

$2200 mortgage payment is high. Are you assuming the minimum down payment of 5%? That is the first mistake one makes buying a 500k house and only putting down 25k.

Seeing how expensive everything is, where do you propose they get the $50k - $100k from?

[stone hands]

Originally Posted by _Q_

Seeing how expensive everything is, where do you propose they get the $50k - $100k from?

You would be surprised how fast your savings grows when you're not paying hundreds of dollars a month in perpetuity for luxuries

[GirlySports]

Originally Posted by _Q_

Seeing how expensive everything is, where do you propose they get the $50k - $100k from?

Previous assets, like a smaller house. The 500k house should not be your first house.
Say you marry at 30, two incomes can get a 200k town house/condo in maybe not the best part of town. Put 10 to 20k down on that. Live there for 8 to 10 years, keep saving maybe have kids. By the time your 40, its time to upgrade to that 500k house.

Renting works too but it's slower.

[Monahammer]

Originally Posted by SebC

UBI is the best way to give people a "living wage". Upzoning is necessary to fix the housing market.

If you made the UBI strong enough you could even go beyond just dismantling other bureaucratic social support structures and into even removing minimum wage requirements entirely. If everyone has a baseline provided to them then you don't need to tie the value of doing a job arcanely to the cost requirements of living somewhere.

[Tacopuck]

While this wouldn't fix all issues entirely, I believe it would make a good dent in them:

Teach financial literacy from a young age: budgeting, forecasting, investing, 'good vs bad' debt, compound interest, risk management, deferred gratification, ect...

Combine that with wide adoption of de-centralized finance and de-coupling significant portions of the economy from the government.

Slowly the masses would be able to take control of their financial destiny.