Paycheck To Paycheck workers

[Esperdome]

Why are over 40% of American workers working paycheck to paycheck?

[JoeEllison]

Because prices keep going up, and wages stay the same?

[Esperdome]

Because prices keep going up, and wages stay the same?

I feel you there, brother. I'm trying to negotiate a cost of living raise right now myself.

[JoeEllison]

I feel you there, brother. I'm trying to negotiate a cost of living raise right now myself.

You're lucky. I doubt most people have that option. Most are just hoping that they don't get sick, since they have minimal or no health insurance.

[Boo]

Even if you do have insurance, which I do, co-pays eat up a major portion of my budget. Then there are medications and the services that Insurance doesn't want to pay for because of how they are billed. If I have $10 left in my pocket and my account is in the black when the next deposit hits, it's been a good two weeks. Quite often I'm scraping change and driving on fumes when payday comes around.




Boo

[JoeEllison]

Even if you do have insurance, which I do, co-pays eat up a major portion of my budget. Then there are medications and the services that Insurance doesn't want to pay for because of how they are billed. If I have $10 left in my pocket and my account is in the black when the next deposit hits, it's been a good two weeks. Quite often I'm scraping change and driving on fumes when payday comes around.
Boo
Don't even get me started on gas. The price has doubled in the last 6 years, while wages have been pretty flat for almost everyone in the bottom 90%.

[plumjam]

low level of effective unionisation?

[Esperdome]

Don't even get me started on gas. The price has doubled in the last 6 years, while wages have been pretty flat for almost everyone in the bottom 90%.

I don't know what part of the world you live in, but here in Houston, craft wages have gone up to extent that a skilled journeyman working some OT could see $75,000 this year. I agree that inflation numbers don't reflect actual inflation, but that's still good money.

I'm all for adjusting min. wage up to reflect reality.

[JoeEllison]

I don't know what part of the world you live in, but here in Houston, craft wages have gone up to extent that a skilled journeyman working some OT could see $75,000 this year. I agree that inflation numbers don't reflect actual inflation, but that's still good money.

I'm all for adjusting min. wage up to reflect reality.
I'm talking about nationally, across the board. The median household income is around $45,000, and has been for several years.

Where I live, people who work in some of these towns can't actually afford to live in them, so they have to drive 20-40 miles one way to work. Gas costs are a pretty big deal when you're spending up to $12 a day in gas. Add to that the fact that the yearly cost of living raises barely cover inflation plus the extra you have to pay into the insurance plan every week, and it is pretty obvious why a lot of people are living pretty close to the edge.

[thatguywhojuggles]

I've always lived paycheck to paycheck. Of course when you're waiting tables, it's not your paycheck, it's tips!

[Roadtoad]

Right now, I'm struggling to make it to the end of the month with the paycheck I've got. I've got more month than money.

[Boo]

I intentionally went looking for work in the small town I live because I couldn't afford the gas for a longer commute. Child care costs are the primary reason why I don't work two jobs. During the summer and on days when school is out approximately two-thirds of the money I make that day goes to child care. It's cost prohibitive to work longer hours or a second job.



Boo

[Boo]

Right now, I'm struggling to make it to the end of the month with the paycheck I've got. I've got more month than money.


Right there with you, RT.



Boo

[jimtron]

Why do you guys hate America? Why are you engaging in class warfare? You should be happy that you're not working for $1/day in a third world country. The rich are getting richer--you must not be trying hard enough. ;)

[Francesca R]

Why are over 40% of American workers working paycheck to paycheck?Due to the relative bargaining power of labour versus capital.

[Esperdome]

Why do you guys hate America? Why are you engaging in class warfare? You should be happy that you're not working for $1/day in a third world country. The rich are getting richer--you must not be trying hard enough. ;)

That was nearly my opinion when I started this thread.

I'm a big "By your bootstraps" type person, (no offense, Boo), and have an idea that any of us can make it rich if you apply yourself. We are after all the country that was instrumental in winning WW 2.

Input from some of you I like and respect a lot is changing my mind. :(

[jimtron]

I'm a big "By your bootstraps" type person, (no offense, Boo), and have an idea that any of us can make it rich if you apply yourself.I'm not so sure about that. Certainly a lot of folks have applied themselves and not gotten rich. I know some very talented, very hardworking people that don't make much money. I'm not sure if capitalism necessarily rewards the smartest, hardest working people; or the people who benefit society the most. See: scientists, school teachers, policemen, soldiers vs. Paris Hilton, et al.

[Francesca R]

I'm a big "By your bootstraps" type person, (no offense, Boo), and have an idea that any of us can make it rich if you apply yourself. We are after all the country that was instrumental in winning WW 2.Not sure if the two are related at all. Your first idea there is that any individual can prevail over the rest, but your proof-statement about WW2 is one of organisation for collective action producing a victory over other nations.

Any individual can make it rich, without that changing your 40% statistic. To change it materially would require some public policy or group action (IMO)

Also, I don't know if "apply yourself" would encompass "benefit from extraordinary good luck" or "exploit others" since those can work.

[Wolfman]

Well, I can comment on one of the biggest differences I found in regards to salary and finances when I came to China. In Canada, there tends to be a credit-based mentality. You get loans for university. You get loans to buy your car. You get loans to buy a house. Etc., etc., etc. Most people are paying off various loans until they're well into their 50's. You buy now, pay later. The result of this is that the majority of the paycheck goes to making payments on your various loans, then using whatever is left for your daily living.

"Saving" money is not a huge priority; even when people have a budget where they can save money, there is a tendency to look at "leftover money" as an excuse to treat yourself, to splurge on something special.

In China, for the most part, it is completely the opposite. The focus is on saving money, they spend it like misers. And they only spend it when they have enough money to afford it (ie. don't take loans). With pensions and social support for the elderly almost non-existent, there's also huge pressure to save money to pay for themselves when they get older.

I remember when I was in university (in Canada), I got a job working at a lumber mill for a summer. I was one of the few white guys there; the majority of the workers were Vietnamese. Those guys were paid less than me; yet always, without fail, saved far, far more from their paycheck than I did from mine. I was single, responsible only for taking care of myself; they were responsible for caring for wives, children, relatives, etc. Yet they always saved more than I did. I lived pretty much from paycheck to paycheck; they were saving up for their children's university, or to buy a house, etc.

Much of it comes down to living style, and your own mindset. It is notable that in cities like Beijing and Shanghai, the younger generation are rapidly shifting to a mindset much more similar to that in Canada -- live for today, let tomorrow take care of itself. They are taking out loans for buying apartments and cars, and incurring significant personal debt.

[Mick Houlahan]

I'm a working stage actor. 'Nuff said.

[Blue Mountain]

I'm talking about nationally, across the board. The median household income is around $45,000, and has been for several years.

Where I live, people who work in some of these towns can't actually afford to live in them, so they have to drive 20-40 miles one way to work. Gas costs are a pretty big deal when you're spending up to $12 a day in gas. Add to that the fact that the yearly cost of living raises barely cover inflation plus the extra you have to pay into the insurance plan every week, and it is pretty obvious why a lot of people are living pretty close to the edge.

I was about to ask why people were driving 20-40 miles to work, until I noticed your comment about not being able to afford to live in the city in which they worked.

Now here's a strange thing. I have a brother living in Vancouver, which is not a cheap place to live. He's worked a series of odd jobs in the years since the steady job he had disappeared along with the company that provided it. But he's still living in Vancouver and doesn't even own a vehicle, relying instead on public transit to get around.

It it possible the people who are living 40 miles out of town are doing so because they don't want to lower their standard of living? Because they're so caught up in the "I must have a house and back yard" mentality that they can't think of any other way to live?

Part of my reason for asking is because I consider myself to be fortunate. I make better money than the median, live in Winnipeg (which is inexpensive) and have been able to find jobs that are within three kilometres of where I live. In the summer I ride a bicycle to work; in the winter I take transit or walk. So it's really outside of my experience to have to drive an hour or more to get to work. I can walk it in 40 minutes.

[Boo]

Esperdrome,


No offense taken. I did not go to college because I could not afford it. I do not own a house, I had bought one but lost it to foreclosure during a nasty divorce. I have worked my entire life in a field that never brought me even close to the median income. Any savings tend to get eaten away not in buying stuff but in covering unexpected expenses such as car repairs, medical bills, etc. If you have two or more events in a short period of time any savings is now gone and quite often there is still money owed after the savings are gone.


As an example, my daughter injured her shoulder. This required multiple visits to the doctor in less then a month, physical therapy three times a week and an MRI. The co-pays for these ate up any extra money in the budget and thus there was none to go towards a saving account. Then she needed surgery, even with insurance it was over $3,000. Two months later my 12 year old vehicle finally died, the tax return that was going to pay off the medical bills now became the down payment for reliable transportation. Six months later, my daughter became ill, again necessitating more office visits with various Doctors and ended once again with surgery. There are still medical bills that need to be paid off and those eat up whatever extra I might have now that could go towards a savings account. Oh and did I mention that my daughter is looking to go to college? We are looking at every means possible to finance this without getting caught up in the student loans trap. This mean filling out quite a few scholarship and grant requests, many for just $1k. It's worth doing because each one she gets is that much less we may need to cover with a student loan.


It doesn't take much to throw a tight budget, even one that includes a savings plan, right out the window.




Boo

[Esperdome]

I realize that everyone has certain necessities they must spend money on, food, clothing, health care, housing, etc. If your paycheck is equal to or less than these, you've got a serious problem. But I see co-workers all the time spending money on big screen TVs, chrome rims for their car, dinners out at fancy restaurants, etc. and then complain they can't stretch their paycheck till payday. I'm not suggesting anyone posting here is like that, but it seems a good number of the 40% living P to P match this description.

I'm convinced some people, if you gave them a five dollar an hour raise would still live P to P, they would just have more bling. About 25% of Americans making $100,000 a year are still living P to P. There is something very wrong with this.

[jimtron]

I'm convinced some people, if you gave them a five dollar an hour raise would still live P to P, they would just have more bling. About 25% of Americans making $100,000 a year are still living P to P. There is something very wrong with this.

I agree--I think people have a tendency in this consumer-driven culture to spend as much as they have.

[Hawk one]

Yeah, this is a problem with several aspects.

Now, personal responsibility is of course a good concept. You take an action, you face the consequences. But, in this case, I think much of the problem is that you need to learn more about the consequences.

Let's talk about the thing most people - especially young people - will do when they get a raise: Spend it. Why? Well, frankly, because I don't know many places that teaches you about personal economy when you're in a period of life where that advice is useful. Sure, they skim over it in school, but humans as a whole won't always pay that much attention to stuff that doesn't affect them here and now. I could envy those people who, when going to the military, have a sergeant or officer willing to offer them the advice they sorely need.

And frankly, some of the smarter lessons are so simple, one tends to forget how to tell them to young people, assuming that "common sense" will take care of it. It won't. In the western world, most people will need 12 years of school just to be able to cope with the world as it is today. We -need- to -learn- about how society works.

So, going back to the example about a raise. How do you prevent someone simply spending it on treats for themselves? I never learned about that in school, that's for sure.

But one possible - and simple - solution is as follows: Once you get a job, open not one, but two (maybe three) bank accounts. One account is the bill account, in which the paycheck directly goes into. Not possible to use except logging into your bank. The other account is the spending account, in which you automatically transfer a certain amount each month. That way, your bills should be easier to pay, (barring you getting an accident in a country with a bad public health system, of course).

And the possible third account is one where you can also transfer some money each month, and never use until a big decision is made. Although not necessary, it can be helping you keeping control over how much money you are able to spend. If you get a raise, then maybe you'll decide to transfer most of this money into this third account, leaving a small amount to spend on extra treats.

It looks very simple, doesn't it? Well, like I said, I found out about this trick pretty much by accident. I'm one of the people who will eventually simply spend my paycheck if left unguarded, but who's capable of keeping things in order now that I have this system. I'm sure lots of other people would as well. But who's teaching them this?

[qayak]

I live paycheque to paycheque because I choose to. I make pretty good money, always have, but I spend all of it. I have no savings and no investments but I have a huge wealth of experiences that most of my better off friends lack.

When I was raising my three kids there were some pretty lean times but we made it through with little or no help from anyone. ($1100.00 a month for daycare tends to cut into the pocketbook) I have never been denied things like loans but I was always charge significantly higher rates because I get paid "flat rate" as opposed to hourly and I wasn't married. (4 percentage points is significant in my view.) Consequently, I buy everything cash. The last loan I had was 12 years ago for a new car. Everyone else was paying 7%, I had to pay 11. That's the last time I borrowed anything.

I always have money simply because my income far outweighs my needs. I suppose, if I ever get married, I will regret the lifestyle I have chosen. People tend to look for security in a mate and I am definitely not that! :D

[JoeEllison]

It it possible the people who are living 40 miles out of town are doing so because they don't want to lower their standard of living? Because they're so caught up in the "I must have a house and back yard" mentality that they can't think of any other way to live?

Not really. I'm talking about people living in crappy trailers 40 miles outside of town, because the crappy housing near work costs nearly double. People are driving that far to make $12-15 an hour, in a town where a single-wide trailer can cost you $800 a month. And, there's not much in the way of public transportation, so that's not an option either.

[JoeEllison]

I realize that everyone has certain necessities they must spend money on, food, clothing, health care, housing, etc. If your paycheck is equal to or less than these, you've got a serious problem. But I see co-workers all the time spending money on big screen TVs, chrome rims for their car, dinners out at fancy restaurants, etc. and then complain they can't stretch their paycheck till payday. I'm not suggesting anyone posting here is like that, but it seems a good number of the 40% living P to P match this description. Is it fair to blame everyone for the mistakes of some?

I've seen those people. I've also seen people driving old cars, packing a cheap lunch to work, never buying anything, and still just barely getting by. Getting sick once can wipe out your savings. Getting sick twice and you're screwed.

[JoeEllison]

A lot of this conversation reminds me of the idiocy of that Suze Ormon monster. A couple of years ago, she put out a list of things you could do to "save $5000 a year, easily!"

Then she proceeded to list things like "have one less $18 martini per week", and "Have a $120 haircut every 5 weeks instead of once a month". You know, stuff we can all do! :rolleyes:

Some people are really, really out of touch with reality... and those are the people who drive our public discourse on these matters.

[Roadtoad]

Esperdrome,


No offense taken. I did not go to college because I could not afford it. I do not own a house, I had bought one but lost it to foreclosure during a nasty divorce. I have worked my entire life in a field that never brought me even close to the median income. Any savings tend to get eaten away not in buying stuff but in covering unexpected expenses such as car repairs, medical bills, etc. If you have two or more events in a short period of time any savings is now gone and quite often there is still money owed after the savings are gone.


As an example, my daughter injured her shoulder. This required multiple visits to the doctor in less then a month, physical therapy three times a week and an MRI. The co-pays for these ate up any extra money in the budget and thus there was none to go towards a saving account. Then she needed surgery, even with insurance it was over $3,000. Two months later my 12 year old vehicle finally died, the tax return that was going to pay off the medical bills now became the down payment for reliable transportation. Six months later, my daughter became ill, again necessitating more office visits with various Doctors and ended once again with surgery. There are still medical bills that need to be paid off and those eat up whatever extra I might have now that could go towards a savings account. Oh and did I mention that my daughter is looking to go to college? We are looking at every means possible to finance this without getting caught up in the student loans trap. This mean filling out quite a few scholarship and grant requests, many for just $1k. It's worth doing because each one she gets is that much less we may need to cover with a student loan.


It doesn't take much to throw a tight budget, even one that includes a savings plan, right out the window.




Boo

I'm there, too, Boo.

In spite of making more money than I have ever had, I have significantly higher expenses now.

In trucking, I'm literally keeping two households, one of which needs to be washed every month, and requires additional maintenance that other people take for granted with their cars. An oil change for a truck, for example, can run as high as $300, and you don't even want to ask what happens when I hit 80k miles, and I need a valve readjust. I also need to pay for permits, bridge tolls, etc., and it comes out of my pocket for the most part. Add to that the food I have to buy, bedding, cleaning supplies, personal hygiene stuff, the cost of showers, (yes, unless you have a discount/payback card from the various truck stops, you pay for showers), and Ed knows what else, and you can begin to see where it all goes. You basically pay for the privalege of driving for a living.

Then there's the fact that I'm a company driver. If the company decides they need to work on my rig, I sit. Since I'm paid by the mile, I get paid nothing while they work on the rig. Once I buy a truck, (and I'm still looking at the financing of a Kenworth T2000 through the SBA), things become even more interesting. Even though I'll get some terrific tax breaks, they'll get eaten up with stuff the IRS won't allow to be deducted. (And if we get Hillary in office, I might as well park the truck and continue to make the payments. I'll come out money ahead that way.)

I know this road, Boo. I still don't even have cable, and the only reason I have a cell phone is because I'm required to have one for this job.

[Roadtoad]

A lot of this conversation reminds me of the idiocy of that Suze Ormon monster. A couple of years ago, she put out a list of things you could do to "save $5000 a year, easily!"

Then she proceeded to list things like "have one less $18 martini per week", and "Have a $120 haircut every 5 weeks instead of once a month". You know, stuff we can all do! :rolleyes:

Some people are really, really out of touch with reality... and those are the people who drive our public discourse on these matters.

Yup, right after I park it for the night, I drop in for a $50 steak dinner and have a couple of $20 Manhattans to wash it down.

Dumb b****.

[Blue Mountain]

Not really. I'm talking about people living in crappy trailers 40 miles outside of town, because the crappy housing near work costs nearly double. People are driving that far to make $12-15 an hour, in a town where a single-wide trailer can cost you $800 a month. And, there's not much in the way of public transportation, so that's not an option either.
Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.

[balrog666]

I agree--I think people have a tendency in this consumer-driven culture to spend as much as they have.


If you can't "drive" yourself, you're screwed. And most people don't even try.

[Roadtoad]

Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.

Been there with that one. Kids require good education, and they need time and a place where they can play safely. Then you add in the transportation costs, and you begin to realize just how tough things can get.

You mentioned your brother lives in Vancouver, BC. Where abouts? My son's father-in-law owns Robbins Trucking on the northern end of the island.

[JoeEllison]

Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.
When you have kids, you really try to live someplace better, which means you spend more than the minimum. So, you won't live in the bad neighborhood, in the tiny apartment... which the creeps who blame poor people for being poor seem to expect.

And, too, the schools out there in the sticks aren't as good as the ones where the homes cost $250,000, which continues the cycle.

[jimtron]

If you can't "drive" yourself, you're screwed. And most people don't even try.

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific? One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.

In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.

[JoeEllison]

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific? One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.

In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.
That's my position as well. The common "get a better job" nonsense is hateful and stupid. Someone has to cashier at the supermarket, prepare our food, pick our fruit, and all the other jobs that don't get much respect in this country. Those jobs should simply pay more, instead of people having to work two of them to make ends meet.

[Jimbo07]

I've driven myself.

I've got the better job.

We live paycheck to paycheck, because we've decided I should make punishing student loan payments (much higher than the bank would like even, because they'll lose interest in the long run).

I'd do it all again, without hesitation.

[jsfisher]

Those jobs should simply pay more, instead of people having to work two of them to make ends meet.


It doesn't work, though, does it? What has raising the minimum wage, for example, ever really accomplished over the long run?

[balrog666]

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific?


Ambition? Yes. Or simply plan for the future, even a little. Control your spending, set goals and pursue them. It's not like anyone is going to do that for you.


One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.


It depends on what you mean by "high paying".
Plumbers work around "poop" all day long. They generally get paid well.
And some doctors don't earn squat.


In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.

As an aside, I might dispute that countries aren't rich; people are but ...

generally, rewards are commensurate with productivity. The application of capital generally leads to greater productivity and greater rewards.

Soldiers? Who get free room and board? Or the married ones who decided to have six kids?
School teachers are unionized, so while proficiency and productivity are not rewarded, they get paid all too well.
And cashiers? In a land of universally bar-coded merchandise, cash registers with pictures of food items, and a trend towards automated checkouts?

[JoeEllison]

It doesn't work, though, does it? What has raising the minimum wage, for example, ever really accomplished over the long run?

They should have raised it higher, and established a maximum wage as well. *shrugs*

[balrog666]

That's my position as well. The common "get a better job" nonsense is hateful and stupid. Someone has to cashier at the supermarket, prepare our food, pick our fruit, and all the other jobs that don't get much respect in this country. Those jobs should simply pay more, instead of people having to work two of them to make ends meet.


The "get a better job" nonsense is a shortcut way of telling someone to get off their lazy bum and learn a productive skill.

There is no real demand for people with no skills and no ambition, so they do not command a high price. And they never will.

[Morrigan]

I have never been a paycheck-to-paycheck worker. Of course, getting a $3k check for finishing my studies in the minimum amount of time (for once our government has been generous - see, the IT program (and someo thers) had so many failures and drop-outs, that they awarded money to students who finished the program in the 3-year minimum... sure is a nice incentive) and then staying with my dad for the first few months of my career (before I eventually found a nice apartment with my boyfriend) allowed me to save up quite a bit of money before I entered the bill-paying world, but nonetheless, I have never been in debt and never paid a single cent of interest (that might change only if I buy a house), and while I am not a completely careless spender who eats out every day, I am not stingy or anything: I spend freely on chocolate cookies and niceties at the supermarket, I eat out once or twice a week on average (lunch or dinner), I buy a lot of CDs and books and recently bought a new computer. I can afford to travel to Europe and stay in a decent hotel. I plan to buy an Xbox 360 soon. I take kendo classes, and last year I spent $700 on a shiny new high-quality bogu. That's not counting the rest of the equipment.

To be fair, we have no car (public transportation is more than enough to get around in Montreal) and no children, only a kitten. And we don't smoke or drink. But I know several people like me, no cars and no children, but who live paycheck-to-paycheck. One co-worker with a similar salary (possibly higher since he's been there for longer than I) eats out for -every- meal. He has nothing in the fridge except beer sometimes, it all belongs to his roommates and he never touches. But he's smart enough to realize it does cost him more (he also smokes) than it would. He realizes it's his lifestyle choice, he prefers it that way and accepts it's more expensive, and does not complain. Others I know, though, are not so firmly stuck in reality, but max out their credit card by buying PS3 games or World of Warcraft subscriptions. :boggled:

[jsfisher]

They should have raised it higher, and established a maximum wage as well. *shrugs*


I'd predict that would not have a positive impact you expect.

[JoeEllison]

The "get a better job" nonsense is a shortcut way of telling someone to get off their lazy bum and learn a productive skill.

There is no real demand for people with no skills and no ambition, so they do not command a high price. And they never will.

So, you're saying that no one needs to cook your food or pick your crops, it will just happen on its own? Buildings will clean themselves, hotels will have magical self-cleaning rooms, and your trash will carry itself to the dump?

[JoeEllison]

I'd predict that would not have a positive impact you expect.

Sure it would. Why not? Do you think people will refuse to work if they ONLY make $50,000,000 a year?

[Geek Goddess]

My aunt was the caseworker/social worker for the Salvation Army in a city of about 100,000 for almost 20 years. Everyone who needed assistance came through her doors. There are people in desperate straits -the working poor who had troubles making ends meet, especially when one disaster struck -usually a large medical bill. She herself had such a high medical bill, when her husband got cancer and ended up dying. Her own wages were just about what the official poverty level was, so that she could not qualify for the assistance she was giving others. The hospital ended up writing most of her bills off.

Because of problems with her knees and hips, she decided to take early retirement. Except, being two years short of Medicare, she decided not to pay for Cobra on her insurance, and let it drop. She determined it was too expensive to afford, and so decided to forgo insurance. I love my aunt, but she made some really stupid decisions. She has diabetes, and decided to not pay for insurance, or to not stick it out and work two more years. However, she has cable, high speed internet, four large dogs that need feeding and vet care, and has 1,548 UNIQUE feedbacks on ebay. (Unique in that it doesn't count multiple transactions from the same seller). She doesn't sell, that's purchases she has made in four years. It's a sickness. I looked at what she has bought - and the amount she spends exclusive of shipping would have paid for her insurance premium. And yet she whines endlessly about how poor she is, how no one cares if she died from her diabetes, and how she can't even afford groceries. She told my mom the total of her credit card payments is more than her and her current husband's combined social security and retirement checks, so she used money she got from the sale of my grandmother's house and her lump-sum distribution from her retirement to make the minimum payments on the cards, until that money ran out. Then she filed for bankruptcy. Within three months, someone had sent her a credit card, and she's back to buying on ebay and eating out. She also smokes heavily. Aren't cigs about $6 a package??

I contrast that with people who work very hard, frequently at two jobs, have children they are supporting, bills to pay, medical bills, and don't have needless expenditures like cable, and live on the edge. In my mind, those people need help with tax breaks, etc., not people like my aunt who chose to do really stupid stuff, her entire life, and constantly looked for other people to bail her out. BTW, she has both a bachelor's and a master's degree, which she earned when she was in her 30s.

[jsfisher]

Sure it would. Why not? Do you think people will refuse to work if they ONLY make $50,000,000 a year?


You are ignoring the other half of your proposal. You said we should have raised the minimum wage much, much higher. Ok, how high? If that's all it takes to eliminate poverty, let's do it. There are nothing but positive consequences, right? Would $50/hour be enough? May be not. Why not $5,000/hour?

[jimtron]

Ambition? Yes. Or simply plan for the future, even a little. Control your spending, set goals and pursue them. It's not like anyone is going to do that for you.

True, this is important for everyone, no matter how much money you make. There are at least two issues here--saving/planning, and income inequality. I'm sure we're all in agreement that it's important to save and plan ahead.

It depends on what you mean by "high paying".
Plumbers work around "poop" all day long. They generally get paid well.
And some doctors don't earn squat.
I'm glad to hear that plumbers get paid well; I imagine they deserve it. Could you provide an example of doctors that don't earn squat? Which ones, and how much do they make?

As an aside, I might dispute that countries aren't rich; people are but ...
Yes, people. Many millionaires and and more than a few billionaires.

generally, rewards are commensurate with productivity.

How do you define "rewards" and "productivity"? There are people working very hard in low paying jobs producing lots of stuff. Good school teachers are very productive and are doing one of the most important jobs of anyone. Why do they get paid 1/3000 of what Tiger Woods gets paid? Is he 3,000 times more productive than teachers? Howard Stern makes roughly 1,000 times more than a cop or soldier or teacher, which makes perfect economic sense, but not ethical sense IMHO.

Soldiers? Who get free room and board? Or the married ones who decided to have six kids?All of them. They're putting their lives and health at risk. Does anyone have a source for what American soldiers get paid? This seems hard to believe, but according to Alternet grunts get $7.50 a day. Why do game show hosts and Paris Hilton and pro athletes make thousands of times more than soldiers? Again, I understand the economic sense of it, but ethically it stinks.

School teachers are unionized, so while proficiency and productivity are not rewarded, they get paid all too well. I disagree. Especially good teachers in bad public schools. We need to encourage really bright, talented people to teach our kids--so far we're not doing such a great job. I think teaching is one of the most important jobs of all and they should be rewarded for it. I don't think Paris Hilton or Donald Trump are 500 or 1,000 times more valuable to society than teachers or soldiers.

And cashiers? In a land of universally bar-coded merchandise, cash registers with pictures of food items, and a trend towards automated checkouts?
Why should people in a rich country, who work full time, live below the poverty line without adequate health care? I'm not against people getting rich, but can't we make sure that everyone who is working full time gets paid a living wage with health care, and then let people get rich? Last time I checked, the income gap was growing. How much is too much of a gap?

[JoeEllison]

You are ignoring the other half of your proposal. You said we should have raised the minimum wage much, much higher. Ok, how high? If that's all it takes to eliminate poverty, let's do it. There are nothing but positive consequences, right? Would $50/hour be enough? May be not. Why not $5,000/hour?

Why not try to be mature about it, instead of lashing out at the idea of fair wages? Here's an idea: figure out what a living wage is, and make sure that everyone working a 40 hour week gets that. Why is that not an automatic in one of the world's richest countries?

[balrog666]

So, you're saying that no one needs to cook your food or pick your crops, it will just happen on its own? Buildings will clean themselves, hotels will have magical self-cleaning rooms, and your trash will carry itself to the dump?

Yes, in time.

We already have industrialized fruit and vegetable picking with modified genetics for plants to ripen consistently and bear up to the extra beating they take. Fruits and vegetables are increasingly being cleaned, scanned, sorted, and packed by automated machinery.

We have commercial MRE's that "cook themselves" and get increasingly cheaper and better.

We have a dozen competing models of robotic vacuum cleaners, floor scrubbers, and dish washers. Looks like a big market there too.

Trash pickup increasingly uses automated trucks and standardized containers to drastically increase productivity in the waste management world.

All those little niches of crappy jobs are increasingly disappearing as the cost to have people do those chores spirals out of control due to inflation, regulation, taxes, and, oh, let's not forget mandating lifetime full medical care coverage too.

Welcome to the future you've been overlooking for a long time.

[JoeEllison]

Yes, in time.

We already have industrialized fruit and vegetable picking with modified genetics for plants to ripen consistently and bear up to the extra beating they take. Fruits and vegetables are increasingly being cleaned, scanned, sorted, and packed by automated machinery.

We have commercial MRE's that "cook themselves" and get increasingly cheaper and better.

We have a dozen competing models of robotic vacuum cleaners, floor scrubbers, and dish washers. Looks like a big market there too.

Trash pickup increasingly uses automated trucks and standardized containers to drastically increase productivity in the waste management world.

All those little niches of crappy jobs are increasingly disappearing as the cost to have people do those chores spirals out of control due to inflation, regulation, taxes, and, oh, let's not forget mandating lifetime full medical care coverage too.

Welcome to the future you've been overlooking for a long time.
Are you claiming that all the low-paying jobs are being replaced one-for-one with higher paying jobs? Are you saying that there is a higher paying job for every or even most people who are currently working lower paying jobs? Can EVERYONE make more money at a better job, or are there a limited number of slots, no matter how many people go to college and get better training for better jobs?

Or are you ignoring reality in favor of an antisocial "screw you, I got mine" attitude?

[jimtron]

Pay info (http://www.goarmy.com/benefits/money_basic_pay.jsp) from Goarmy.com.

[balrog666]

True, this is important for everyone, no matter how much money you make. There are at least two issues here--saving/planning, and income inequality. I'm sure we're all in agreement that it's important to save and plan ahead.


No, we aren't. You and I might agree but 90% of the people out there live and die without any such thought process.

As for income inequality, the market decides who gets rewarded, not me.
And I don't have a problem with that.


I'm glad to hear that plumbers get paid well; I imagine they deserve it. Could you provide an example of doctors that don't earn squat? Which ones, and how much do they make?


The bad ones. Sometimes they earn as little as 13 cents/hour (in a prison).



How do you define "rewards" and "productivity"? There are people working very hard in low paying jobs producing lots of stuff. Good school teachers are very productive and are doing one of the most important jobs of anyone. Why do they get paid 1/3000 of what Tiger Woods gets paid? Is he 3,000 times more productive than teachers? Howard Stern makes roughly 1,000 times more than a cop or soldier or teacher, which makes perfect economic sense, but not ethical sense IMHO.


Rewards = money.
Productivity = Production - Cost.
That's the way the market operates.

Why introduce ethics at all? The market knows no ethics only people do.

You want to pay unionized teachers more for poorer student performance? Go ahead - with your money. I will happily decline.

All of them. They're putting their lives and health at risk. Does anyone have a source for what American soldiers get paid? This seems hard to believe, but according to Alternet grunts get $7.50 a day. Why do game show hosts and Paris Hilton and pro athletes make thousands of times more than soldiers? Again, I understand the economic sense of it, but ethically it stinks.

Military pay scales are right here:
http://www.dfas.mil/militarypay/2006militarypaytables/2007MilitaryPayCharts-1.pdf

Of course, base pay does not include housing allowances, flight pay, combat pay, enlistment bonuses and a few other incentives to go with that free room and board, career training, medical care, and so forth.

As for game show hosts, they get every dollar that the market will bear. Just like the soldiers.

I disagree. Especially good teachers in bad public schools. We need to encourage really bright, talented people to teach our kids--so far we're not doing such a great job. I think teaching is one of the most important jobs of all and they should be rewarded for it. I don't think Paris Hilton or Donald Trump are 500 or 1,000 times more valuable to society than teachers or soldiers.


Talented people tend to do what is in their own best interest and gravitate towards where they are best rewarded.

Again, the market doesn't care what you think, only how you spend your dollars.


Why should people in a rich country, who work full time, live below the poverty line without adequate health care? I'm not against people getting rich, but can't we make sure that everyone who is working full time gets paid a living wage with health care, and then let people get rich? Last time I checked, the income gap was growing. How much is too much of a gap?


It's not your money, so it's not your decision.

How much is too much? You want to put everyone on a minimum dole?
Or prevent people from earning the just fruits of their own labor?

[jimtron]

Why introduce ethics at all? The market knows no ethics only people do.

Why don't we just pay people 10 cents a day like in third world countries? Why have regulations and laws? We are a society and nation of people. I realize that the market does not "know ethics," but the citizens and government should.

How much is too much? You want to put everyone on a minimum dole?
Or prevent people from earning the just fruits of their own labor?
No. How much do you think is too much of an income gap, or is there no such thing as too big a gap? Is it OK for CEOs to make 1,000 times more than their average worker? 10,000? A million? As long as the market is humming?

[balrog666]

Are you claiming that all the low-paying jobs are being replaced one-for-one with higher paying jobs? Are you saying that there is a higher paying job for every or even most people who are currently working lower paying jobs? Can EVERYONE make more money at a better job, or are there a limited number of slots, no matter how many people go to college and get better training for better jobs?


No, I didn't say that.
No, I didn't say that.
No, I didn't even say that.
And, no, I didn't say that either.
Perhaps you would like to question some more things I haven't said?

Or are you ignoring reality in favor of an antisocial "screw you, I got mine" attitude?


Let me repeat the lessons of capitalism ...

You want a good job? Learn a valuable skill.

You want some of my money? Don't beg for it, earn it.

[JoeEllison]

No, I didn't say that.
No, I didn't say that.
No, I didn't even say that.
And, no, I didn't say that either.
Perhaps you would like to question some more things I haven't said?




Let me repeat the lessons of capitalism ...

You want a good job? Learn a valuable skill.

You want some of my money? Don't beg for it, earn it.

Wait, which is it? You have to choose a position. Can everyone earn more money, or not? Not "can anyone", can EVERYONE? If they work hard enough?

[Lithrael]

I'm paycheck to paycheck at the moment cause I quit my awesome but dead end job to move to another state for a good job in the field I went to college for. And then the company went out of business. And of course I don't qualify for any kind of unemployment assistance in that situation. I just got a new job, and I'm sharing a car w/ my partner and basically doing a double commute till I can save up for a place closer to the new job, and another car, but it'll take a while to polish off the debt I got into from the move and sudden unemployment.

On top of all this I'm paying a mortgage that's killing me because I was sooooo responsible I was in a good situation to purchase a house four years ago... before the company I worked for THEN went out of business. And I can't sell it now cause the housing market in FL is such **** thanks to the insurance companies and the high forclosure rate.

And I don't have medical insurance so seeing a doctor for a checkup and a scrip for some Xanax to help with the panic attacks I started getting hurt my pocketbook too.

Now, I'm not about to die or anything, but this really sucks. If I'd stayed home in the dead-end job hauling beach umbrellas around for tourists I would be happy and getting by fine, I even was about to get medical there. I tried to improve my situation and got a big pile of rule8 in my lap.

[balrog666]

Why don't we just pay people 10 cents a day like in third world countries?


It's against the law.

Besides I can contract with a company in a third world country and let them pay their employees 10 cents a day. /facetious

Why have regulations and laws? We are a society and nation of people. I realize that the market does not "know ethics," but the citizens and government should.


I disagree with minimum wage laws from an economics standpoint.
And yes, people have ethics but I don't think that having government mandate "ethics" works.


No. How much do you think is too much of an income gap, or is there no such thing as too big a gap? Is it OK for CEOs to make 1,000 times more than their average worker? 10,000? A million? As long as the market is hummin


How high is too high? How deep is too deep?
I see it as a meaningless question.

[qayak]

Teach your kids that no matter what they were told, society does not want them to succeed. Society wants a bunch of minimum wage, worker drones who toil their whole lives and die as soon as they are no longer useful (the day they retire, for those who can't keep up).

If your kids want anything different, they are going to have to get off their ass and go get it themselves. No one is going to give it to them.

[jimtron]

It's against the law. Right. In my view, it's appropriate to sometimes regulate the market.

I disagree with minimum wage laws from an economics standpoint. And yes, people have ethics but I don't think that having government mandate "ethics" works.
How about from an ethical standpoint? Are you for any regulation? None? Science doesn't "know ethics" either, but it's important for scientists to use science in an ethical manner. Don't we need to regulate corporations to avoid more Enrons?

How high is too high? How deep is too deep?
I see it as a meaningless question.
No, we're talking about economics in the U.S. How deep is too deep is an abstract, meaningless question. How much of a gap between rich and poor in the U.S. is a meaningful, relevant question. Does it concern you that the gap is widening? Is that OK as long as the market is doing well? Why should some full time workers live below the poverty line, without health care, while Tiger Woods and Paris Hilton make many millions a year? I know that's how the market works, but is it ethical?

[Boo]

I'm trying to understand a point here....

People like RT and I, who have basic schooling and training in our professions with at least 20 years of experience, deserve to make less then the median because we are too lazy to go and find a more valuable skill set? RT is a long distance hauler, not everything gets moved automatically from place to place and I work in a medical office; triaging phone calls, assisting people with getting the medications they need, drawing blood, etc. Before that I worked on ambulances as a Paramedic as well as in ER's.


I guess our skills aren't very valuable by your standards since we make less then the median income.



Boo

[JoeEllison]

I'm trying to understand a point here....

People like RT and I, who have basic schooling and training in our professions with at least 20 years of experience, deserve to make less then the median because we are too lazy to go and find a more valuable skill set? RT is a long distance hauler, not everything gets moves automatically from place to place and I work in a medical office; triaging phone calls, assisting people with getting the medications they need, drawing blood, etc. Before that I worked on ambulances as a Paramedic as well as in ER's.


I guess are skills aren't very valuable by your standards since we make less then the median income.



Boo
Yep, some people just deserve to be poor. Or, more accurately, some people believe that some people deserve to make less than a living wage, no matter how hard they work.

[jimtron]

I guess are skills aren't very valuable by your standards since we make less then the median income.This is the problem in my view. When I bring up issues like how much Paris Hilton makes compared to soldiers, people often say, "that's how the market works--Paris brings in money for her bosses" (or something like that). Yes, but is the market the most important thing? What if the market values rock stars and tv stars and pro athletes and porn stars much, much, much more than teachers and soldiers and cops? Isn't something wrong with that?

eta: And by the way, AFAIK no one here is talking about handouts for those that don't want to work. We're (at least I'm) talking about full time workers.

[JoeEllison]

This is the problem in my view. When I bring up issues like how much Paris Hilton makes compared to soldiers, people often say, "that's how the market works--Paris brings in money for her bosses" (or something like that). Yes, but is the market the most important thing? What if the market values rock stars and tv stars and pro athletes and porn stars much, much, much more than teachers and soldiers and cops? Isn't something wrong with that?

eta: And by the way, AFAIK no one here is talking about handouts for those that don't want to work. We're (at least I'm) talking about full time workers.

I was pretty sure that we lived in a society... a country... not a market.

And, yeah, I'm talking about working folks, not people looking for a handout.

[jsfisher]

Why not try to be mature about it, instead of lashing out at the idea of fair wages?

You are the one stooping to insults in place of discussion, not I. How should I gauge your maturity?

Here's an idea: figure out what a living wage is, and make sure that everyone working a 40 hour week gets that. Why is that not an automatic in one of the world's richest countries?

Figuring out what constitutes a living wage would be problematic, but let's take that as a given. That still leaves two issues. The first is that not every job is worth a living wage. The second is that fundamentally capitalistic economy will correct itself in time.

[JoeEllison]

That still leaves two issues. The first is that not every job is worth a living wage. The second is that fundamentally capitalistic economy will correct itself in time.

Both of your issues are wrong and frankly disturbing. You seem to be saying that some people deserve to live in poverty, even though they work full time jobs. You're also parroting my "free market" myth. The only think that unregulated capitalism does is transfer wealth to the wealthy and from everyone else.

So, since neither of your points is valid to any sort of society that decent people would want to live in, what else have you got?

[balrog666]

Right. In my view, it's appropriate to sometimes regulate the market.


Of course, workplace safety, fraud, many places. Minimum benefits, minimum rates of pay? I disagree with that because those who cannot measure up to that standard of productivity are left out.


How about from an ethical standpoint? Are you for any regulation? None? Science doesn't "know ethics" either, but it's important for scientists to use science in an ethical manner. Don't we need to regulate corporations to avoid more Enrons?


Ethics, integrity, basic honest are valuable commodities in both employees and employers. And scientists.
But do I have an ethical requirement to pay employees significantly more than they are capable of producing? No.

Enron? Crooks are already legislated against.

No, we're talking about economics in the U.S. How deep is too deep is an abstract, meaningless question. How much of a gap between rich and poor in the U.S. is a meaningful, relevant question. Does it concern you that the gap is widening? Is that OK as long as the market is doing well? Why should some full time workers live below the poverty line, without health care, while Tiger Woods and Paris Hilton make many millions a year? I know that's how the market works, but is it ethical?


Which rich person's earnings do you object to and why?
Which poor person do you measure poverty with?

The poverty line is an arbitrary (and capricious) designation.

The market pays those who produce and that includes Tiger Woods and Paris Hilton. Is that ethical? By definition.

[balrog666]

This is the problem in my view. When I bring up issues like how much Paris Hilton makes compared to soldiers, people often say, "that's how the market works--Paris brings in money for her bosses" (or something like that). Yes, but is the market the most important thing? What if the market values rock stars and tv stars and pro athletes and porn stars much, much, much more than teachers and soldiers and cops? Isn't something wrong with that?


Isn't something wrong with that? No. Feel free to demonstrate otherwise.

eta: And by the way, AFAIK no one here is talking about handouts for those that don't want to work. We're (at least I'm) talking about full time workers.


That's a cop-out when I can always hire two part-time workers instead of one full-time worker.

[JoeEllison]

The market pays those who produce and that includes Tiger Woods and Paris Hilton. Is that ethical? By definition.

There's no such thing as "the market"... you've bought into that fraud as well, I see. :rolleyes:

[Boo]

That still leaves two issues. The first is that not every job is worth a living wage. The second is that fundamentally capitalistic economy will correct itself in time.


So who decides which jobs are worth a living wage? Who decides what workers get those jobs and don't deserve to earn a living wage?





Boo

[Z]

We're living paycheck to paycheck at the moment, which is largely because a number of incidents hit at the same time, causing us to go through our meager savings in a few weeks. Replacing two windows on the van, then having the transmission blow and take the engine with it has already cost us $800, with a potential $6500 for the engine work... which we really can't afford. Prior to that, one of our incomes was stalled while a company bought out the company that our roommate worked for; for almost a month, no one got paid, so we had to live partly on savings to cover that. When the savings ran out, there were still issues with how she was being paid - instead of direct deposit, she was handed a check, and because of the hours she works, she couldn't put it in the bank. Needless to say, several bills were auto-processed before she could get to the bank, resulting in several hundred in NSF fees.

On top of all that, the gas prices locally have jumped from an average of $1 per gallon to well over $3, and with both ladies working at least a half-hour away, that's a LOT of gas. Plus two kids in preschool (which means no bussing) 15 minutes away, and that's a huge cost in gas. We're filling a 15 gallon tank about every other day.

Thanks to increased fuel costs, our power bills are higher now than ever before, and we were already using every cost-saving trick we could.

We're diligent coupon and specials shoppers, and buy the cheapest foods we can get away with. We do eat out - about once a month - but usually at CiCi's, where the buffet for everyone works out to about $20 or so. But with several members of the household being on special diets, we're still spending a lot more than is comfortable.

Now, our budget (not taking into account the van issue) has us getting a savings back by mid-October (a small one), and if we wanted to lower our standard of living, we could get a much larger one, sure. But what could we cut out? Our phone line, cable, and internet are all on a bundle; we could trim the cable TV out, but the savings would be minimal. My son is virtual-schooled, and my wife is taking classes via internet at the local university, so we have to have decent internet access. Our cable phone line is also wired into the home security system, so that has to stay, too.

We are occasional drinkers - I think I buy a six-pack of beer once every other month. I smoke a pipe - and one ounce of tobacco lasts me about a month.

We still have the same TV we bought three years ago when our old one died (it had actual tuning knobs and a wooden cabinet!). My computer is about three years old, and I've hobbled together improvements in fatter times to keep it running. Their computer is newer, but cost all of $300 at Sam's Club, and is a piece of crap.

We were given a PS2 as a Christmas present one year. It's the only console we own. Likewise, there's two GameBoys - both presents.

The kids have two or three games for each system.

Both of the ladies are in management; one is working in the lowest-paid retail in the U.S., trying to earn a few years under her belt before moving on. The other makes fair money, but has very few benefits.

I stay at home to cook, clean, and take care of the kids. Day-care costs would be extremely prohibitive, and frankly we've had nothing but bad experiences with day care.

We've managed finally to get off of public assistance, except for Medicaid. That makes me happy!

But for now, it's paycheck to paycheck. If everything goes alright in the next few months, we'll be OK - but I still have that van to worry about. Especially since we'll still be paying for it until April 2009.

I wonder - could I get away with not paying it, since it's basically totalled? Of course, it'll mess up my credit, but what's worse - a black mark on your credit that will be gone in seven years, or two more years of paying $320 a month for a van that doesn't run, with an expired warranty?

This is just life for a lot of folks - no bling, no expensive toys, but always living hand-to-mouth. And when we do get up, even a little bit, something hits us and drags us back down.

[jsfisher]

Both of your issues are wrong and frankly disturbing. You seem to be saying that some people deserve to live in poverty, even though they work full time jobs. You're also parroting my "free market" myth. The only think that unregulated capitalism does is transfer wealth to the wealthy and from everyone else.

Those are lovely strawmen.

So, since neither of your points is valid to any sort of society that decent people would want to live in, what else have you got?

What evidence do you have that your approach would work?

[JoeEllison]

Those are lovely strawmen.

Nope. You can't just call reality a "strawman" because you don't like it.

[Jimbo07]

As for income inequality, the market decides who gets rewarded, not me...

Why introduce ethics at all? The market knows no ethics only people do.


So... it doesn't bother you that a system that "knows no ethics" "decides who gets rewarded?" :boggled:


Of course, base pay does not include housing allowances, flight pay, combat pay, enlistment bonuses and a few other incentives to go with that free room and board, career training, medical care, and so forth.

Yeah, those big ol' softies...


Besides I can contract with a company in a third world country and let them pay their employees 10 cents a day. /facetious


No problem with ethics here... :rolleyes:


I disagree with minimum wage laws from an economics standpoint.
And yes, people have ethics but I don't think that having government mandate "ethics" works.

No, it might not "work," but it might at least establish a lowest-common-denominator for people who don't have a robustly developed sense of ethics.


The market pays those who produce and that includes Tiger Woods and Paris Hilton. Is that ethical? By definition.

But wait a minute, you just said that "The market knows no ethics..." Which is it?

...

To paraphrase: You keep using this word, ethics. I do not think it means what you think it means...

[balrog666]

There's no such thing as "the market"... you've bought into that fraud as well, I see. :rolleyes:


The "market" is the superset of all people and companies that engage in the commercial exchange of goods and services.

Haven't you ever studied economics, even superficially? :boggled:

[jsfisher]

Nope. You can't just call reality a "strawman" because you don't like it.

The strawmen comment arose because you misrepresented my position. As for your version of reality, I ask again: What evidence do you have that your proposal should work?

[JoeEllison]

The "market" is the superset of all people and companies that engage in the commercial exchange of goods and services.

Haven't you ever studied economics, even superficially? :boggled:

Yep. On paper and in real life. Funny how the two don't always match. Doubly sad how many people insist that the theories are right even in the face of reality, as though reality is somehow wrong when it contradicts someone's economic ideology.

[JoeEllison]

The strawmen comment arose because you misrepresented my position.if so, I apologize. Can you explain where my error was?

As for your version of reality, I ask again: What evidence do you have that your proposal should work?
Common sense, mixed with empathy and a whole mess of hope, combined with a realization that the current system is a complete failure.

[balrog666]

[snip]

To paraphrase: You keep using this word, ethics. I do not think it means what you think it means...


Maybe I only know about economics... :whistling

[Jimbo07]

Maybe I only know about economics... :whistling

You know, as vitriolic as my post was, I don't have that firm a stance (one way or the other) on a minimum wage. There were a few things in your posts that caught my attention and I commented on.

Of course, in Alberta, a lot of the... umm... schlub jobs that seem to be under discussion here are going for much higher that the recently increased provincial minimum wage. You can't get good help for cheap anymore! Anyone will recognize this when they are served their donuts by a 12-year-old (true story)!

However, I do think there are some merits, in some places, to minimum wages. There are times when "the market" clearly fails the people that make it up. I disagree with JoeEllison.

We do live in a society, we do live in a country... and we also live in a market.

...

It's funny, Alberta was just called "socialist" by an American pundit, based on a report, and the government hasn't even done anything yet!

[JoeEllison]

I disagree with JoeEllison.

We do live in a society, we do live in a country... and we also live in a market.

Since you disagree with me, you're wrong, Tigger! (how's THAT for an ad hom? :D)

Seriously, though, while I can see your point, I feel that "the market" should be a component of the society, instead of a replacement for it. Some people seem to think that this mythical "market" IS society, in a way, that it creates and sustains positive societies. All it does is move money, goods, and services around... and, unrestricted, it eventually moves all the money in one direction.

[jsfisher]

However, I do think there are some merits, in some places, to minimum wages. There are times when "the market" clearly fails the people that make it up.

That is a very reasonable statement. Capitalism is not without its flaws. If government limits its "interference" to what is appropriate to keep the dark side in check, I'm happy.

[Jimbo07]

Capitalism is not without its flaws.

To paraphrase again: Capitalism is the WORST economic system in the world... except for all the other ones! :D

[balrog666]

You know, as vitriolic as my post was, I don't have that firm a stance (one way or the other) on a minimum wage. There were a few things in your posts that caught my attention and I commented on.


Vitriolic? I didn't see any of that - maybe your avatar fooled me.

And my word use was inconsistent - but I don't think an ethos can defined without a context from economics, although perhaps that's just a personal foible.

Of course, in Alberta, a lot of the... umm... schlub jobs that seem to be under discussion here are going for much higher that the recently increased provincial minimum wage. You can't get good help for cheap anymore! Anyone will recognize this when they are served their donuts by a 12-year-old (true story)!


There are no minimum wage jobs here either - it has been left far behind by both inflation and demand.

However, I do think there are some merits, in some places, to minimum wages. There are times when "the market" clearly fails the people that make it up. I disagree with JoeEllison.


A one-size-fits-all rule inevitably leaves some out.

The last minimum wage boost here in the US all but put some ARC's out of business. That's the various state Association of Retarded Citizens that tries to provide some employment to such citizens. Afterwards they got a special dispensation (in some places).

And speaking of vitriol ...

We do live in a society, we do live in a country... and we also live in a market.


We do indeed. I would encourage everyone to be the best citizen they can in the best manner they can. But I would never mandate it.

It's funny, Alberta was just called "socialist" by an American pundit, based on a report, and the government hasn't even done anything yet!


Sorry, missed it.

[UserGoogol]

I think a fairly nice compromise would probably be to lower or perhaps even eliminate the minimum wage but increase earned income tax credit (or replace with something comparable like a negative income tax or whatever) to the point where anyone working full time receives a living income. Having the money come from the government (that is, the economy as a whole) assures that employers aren't forced to either pay workers "more than what their work is worth" or not have workers at all.

After all, if we look at minimum wage laws by saying that "society as a whole" has decided that the working poor deserve a basic income, then it is quite reasonable from a brute economic point of view that it be "society as a whole" that foots the bill. Additionally, this way you don't have to worry about the minimum wage taking jobs away because of businesses being priced out of the labor market. There is, of course, the concern that whatever tax is used to fund this might have a negative effect, but there at least the damage is spread out.

[Jimbo07]

The last minimum wage boost here in the US all but put some ARC's out of business. That's the various state Association of Retarded Citizens that tries to provide some employment to such citizens. Afterwards they got a special dispensation (in some places).


See? Regardless of various political views, it's statements like these (especially in threads where humour is not in abundance), that make one look like one has little regard for other people...

[Geek Goddess]

Both of your issues are wrong and frankly disturbing. You seem to be saying that some people deserve to live in poverty, even though they work full time jobs. You're also parroting my "free market" myth. The only think that unregulated capitalism does is transfer wealth to the wealthy and from everyone else.

So, since neither of your points is valid to any sort of society that decent people would want to live in, what else have you got?

No one *deserves* to be poor. I, like some others here, once worked three jobs to make ends meet. I don't have to do that now, but it's not because I *deserve* better, it's because I just happen to have a particular skill set that is a bit rare and is in demand right now. At one time, my industry was so slumped that the number of workers in the industry dropped by nearly 50% in two years. I managed to keep a job in my field, but I had been willing to put up with a lot of hard times and years without salary increases. Many of my friends eventually found jobs in other fields, making much less money.

The company I work for just raised one particular job, our construction superintendents, rates by $4 per hour. It was to keep them from leaving for competitors. Our rate sheet (the rates we pay for all the different jobs) had a 28% increase in 2006. Our average employee got a 28% increase LAST YEAR. The AutoCad techs got a $5 per hour raise last year. I do not know if they *deserve* the raise - some of the employees work much harder than others, but everyone got the raise, because the industry is so terribly short of skilled workers that in order to keep doing our business, we have to compete for the workers through salaries. Code welders now make $35 per hour, and most work a minimum of 70 hours per week. With overtime that is almost $3000 per week, plus they charge the company a rate to use their own welding rigs. If they are traveling out of town, we pay them per diem. We either supply them a truck or they charge the company a rate to use their own truck. In fact, one of the reasons we raised the construction superintendent's wages was because the welders, who they supervise, were making more money than they were.

The welding schools have waiting lists, and new graduates, who have no experience, have job offers before they even graduate. In 2-4 years, there will be a surplus of welders, and the wages will drop, or the welders who aren't as experienced or good will have a hard time finding work.

Of course this is anecdotal, but it's my own experience in the past 20 years of trying to find certain job skills that are needed. Unless you are independently wealthy or have some sort of celebrity position (acting, for example), your job is based on a market demand and the number of people who are available and willing to do it for that rate. It is not right that people can't afford the necessities of life. The market tends to level *over time* but that doesn't mean that it works for individuals very well.

[JoeEllison]

It is not right that people can't afford the necessities of life.
I think that pretty much says it all. People can cite "the market", or whatever other rationalizations, but it comes down to the fact that it isn't right that people can work 40+ hours a week and still barely scrape by, living one emergency away from homelessness.

[plumjam]

I go with Churchill, who said (paraphrasing): any employer who can't pay their employees a decent living wage shouldn't be an employer

[jsfisher]

I go with Churchill....

Winston Churchill also said, "Those who aren't liberal by the time their thirty have no heart and those who aren't conservative by the time their forty have no brain."

[plumjam]

Winston Churchill also said, "Those who aren't liberal by the time their thirty have no heart and those who aren't conservative by the time their forty have no brain."

what does that have to do with what I wrote?

[Jekyll]

Winston Churchill also said, "Those who aren't liberal by the time their thirty have no heart and those who aren't conservative by the time their forty have no brain."

No he didn't.
http://en.wikiquote.org/wiki/Winston_Churchill#Misattributions

[jsfisher]

No he didn't.
http://en.wikiquote.org/wiki/Winston_Churchill#Misattributions


Ok, now you've piqued my curiosity. Any idea who may have actually said it?

[Francesca R]

Why introduce ethics at all? The market knows no ethics only people do.Ethics, integrity, basic honest are valuable commodities in both employees and employers. And scientists.If you value these things, and lets suppose the average market participant gives them a net positive value too, then the market will place a positive value on ethics, and will pay to "buy ethics". By what guage do you then say: "the market knows no ethics"?

it's appropriate to sometimes regulate the market. Of course, workplace safety, fraud, many places.Why enforce these things if not for ethical reasons?

[Z]

Ok, now you've piqued my curiosity. Any idea who may have actually said it?

Some idiot conservative, probably.

[SomeGuy]

Me and my wife work for a combined 7 days a week (I work 4, she works 3), and we are currently living from paycheck to paycheck, but that's because we've been decorating a new baby room. Even if I say we live paycheck to paycheck, that's not taking into account that the first thing we do after each paycheck is put 50 euro's in our own saving account, 75 euro's in our son's saving account, and 75 euro's in the still unborn child's saving account.

Now that we're done with the baby room, I suspect that we can slowly go back to spending some money on luxurities the last week before the paycheck rolls in rather than trying to live of 5 dollars (4 euro's) a day for that last week.

Of course cost of living is slightly lower here than in the state we can do this on a gross income of roughly 50k euro's a year (66k us$).

So I checked: I'm living paycheck to paycheck, but it's temporary.

[LordoftheLeftHand]

Hope you don't get yourself into my position. I have health insurance, but I've developed a serious medial condition. If I ever lose my current job I'll never be able to get health insurance again!

LLH

[Francesca R]

Of course cost of living is slightly lower here than in the state we can do this on a gross income of roughly 50k euro's a year (66k us$).Are you kidding? At current exchange rates the Euro-zone is ferociously expensive relative to the US.

(By the way, at today's rate that conversion would be $70,500) :)

[Esperdome]

The company I work for just raised one particular job, our construction superintendents, rates by $4 per hour.

Do you still have my card?

I'm trying to get a long overdue raise out of my boss, and I don't think he takes the threat of me going elsewhere serious. This is partially my own fault for sticking with the company through thick and thin for sixteen years now. So much for being a loyal employee. :rolleyes:


Our rate sheet (the rates we pay for all the different jobs) had a 28% increase in 2006. Our average employee got a 28% increase LAST YEAR. The AutoCad techs got a $5 per hour raise last year. I do not know if they *deserve* the raise - some of the employees work much harder than others, but everyone got the raise, because the industry is so terribly short of skilled workers that in order to keep doing our business, we have to compete for the workers through salaries. Code welders now make $35 per hour, and most work a minimum of 70 hours per week. With overtime that is almost $3000 per week, plus they charge the company a rate to use their own welding rigs. If they are traveling out of town, we pay them per diem. We either supply them a truck or they charge the company a rate to use their own truck. In fact, one of the reasons we raised the construction superintendent's wages was because the welders, who they supervise, were making more money than they were.


Its definitely boom times now. Make it while you can. When I first moved to Houston, 1985, you could buy a rig truck for a song. Some welders were trying their hand at door-to-door sales to keep from losing their houses.

[quixotecoyote]

Where's the option for 'living off loans'?

[Geek Goddess]

Do you still have my card?

I'm trying to get a long overdue raise out of my boss, and I don't think he takes the threat of me going elsewhere serious. This is partially my own fault for sticking with the company through thick and thin for sixteen years now. So much for being a loyal employee. :rolleyes:




Its definitely boom times now. Make it while you can. When I first moved to Houston, 1985, you could buy a rig truck for a song. Some welders were trying their hand at door-to-door sales to keep from losing their houses.

I did see it a couple weeks ago, but have no idea where I put it. If you are serious, PM me or email me with a resume and I'll give it to the construction VP.

[shalomsteph]

I was a single parent for many years, in between divorcing and remarrying my husband. (Same guy.)

I was NOT a minimum wage worker by any stretch of the imagination. I actually made a fairly decent income, received child support every month on time, and had medical and dental insurance and a 401K. Still, I lived paycheck to paycheck.

I can give several reasons.

Day care expenses. I made too much to qualify for any type of government assistance, but had two kids in day care. This was a new expense, as I had been a SAHM prior to the divorce. I remember the figures exactly, from 1995. I earned $1550 a month, after taxes, insurance, etc. I received $495 in child support. I lived in a small 2 bedroom apartment in a good neighborhood. Here is how it was broken down: (for those math deficient, I netted $2045/month)

$650-rent
$800-day care

That leaves just under $600 for food, utilities, clothing, diapers, toys, car payment & insurance, etc. Remember, we got NO help at all. If I had not gotten child support, I don't know how we would have survived it at all.

When the kids were no longer in day care, things did get easier, but something always sucks up the money. And I was LUCKY...I was well educated and had lots of stamina. I eventually bought a house, but the day care bill sort of continued, because I put the kids in private school. (Their dad paid half of that, though)

I think single parents have it the roughest. If I knew then what I know now, I would have stayed married, especially since I ended up marrying him again anyway. :o But there are more and more single parents out there, and less and less help for them. Medical insurance premiums keep rising, and more companies aren't even offering it anymore. Day care expenses are a killer, yet it is neglect to leave kids at home for an hour after school.

Oh, and don't get me started on Payday loans, check cashing places, and all of those wonderful contributions to society.

[Darat]

That was nearly my opinion when I started this thread.

I'm a big "By your bootstraps" type person, (no offense, Boo), and have an idea that any of us can make it rich if you apply yourself. We are after all the country that was instrumental in winning WW 2.

Input from some of you I like and respect a lot is changing my mind. :(

Sadly it appears the "American Dream" really has become just that, a dream : http://www.lse.ac.uk/collections/pressAndInformationOffice/newsAndEvents/archives/2005/LSE_SuttonTrust_report.htm

(PS - We never even had the dream in the UK :( )

[Gregoire]

I think a fairly nice compromise would probably be to lower or perhaps even eliminate the minimum wage but increase earned income tax credit (or replace with something comparable like a negative income tax or whatever) to the point where anyone working full time receives a living income. Having the money come from the government (that is, the economy as a whole) assures that employers aren't forced to either pay workers "more than what their work is worth" or not have workers at all.

After all, if we look at minimum wage laws by saying that "society as a whole" has decided that the working poor deserve a basic income, then it is quite reasonable from a brute economic point of view that it be "society as a whole" that foots the bill. Additionally, this way you don't have to worry about the minimum wage taking jobs away because of businesses being priced out of the labor market. There is, of course, the concern that whatever tax is used to fund this might have a negative effect, but there at least the damage is spread out.

Finally a post I can agree with. I mean no disrespect to the knowledgable skeptics on this forum, but I was beginning to worry that only a few posters on this thread actually knew very much about the "dismal science" aka the Science of Economics.

We don't have to reinvent the wheel here, this issue has been studied by economic scientists for a long time.

It is true that one certainly can find differences of opinion regarding policy among academic economists, however, it is very well established that there will be trade offs you need to consider when you discuss price controls. And yes, the Science of Economics views the minimum wage as a price control.

Clearly, as you point out, the vast majority of economic scientists have concluded such a price control will increase the unemployment of unskilled workers. And clearly for the reasons you state, many economists view the EITC as less detrimental to said unskilled workers.

I would urge anyone to consult an Economics 101 textbook if they doubt this. (I know the media does a terrible job at reporting about the Science of Economics (just as they often misreport about the Science of Evolution), so I would not expect skeptics to believe this just because I said so.)

For what it's worth, the one I most recently consulted about minimum wage laws is by Samuelson who is definitely not a conservative economist by any stretch.


Of course, Economics has been branded the "dismal science" since it is not always comforting to read about trade offs, the "market" or the "Law of Supply and Demand". But then, skeptics are not looking for comfort when they go to science; they are looking for knowledge and understanding.

[Gregoire]

I go with Churchill, who said (paraphrasing): any employer who can't pay their employees a decent living wage shouldn't be an employer

When I was in High School, I was making minimum wage after school for a medical supply company. Yes, when the minimum wage went up, I did indeed get a raise. But I don't think I would have has that job if the "Living Wage Law" had been in effect.

[JoeEllison]

States have been independently raising the minimum wage, and nothing horrible has happened... so it is a flat-out blatant lie to claim that a national increase will do any damage either.

Sweet Satan, is capitalism really that evil at its core, that billionaires feel like they HAVE to screw over the average worker, to preserve some tiny percentage of their overall profits?

[Gregoire]

[......Of course this is anecdotal, but it's my own experience in the past 20 years of trying to find certain job skills that are needed. Unless you are independently wealthy or have some sort of celebrity position (acting, for example), your job is based on a market demand and the number of people who are available and willing to do it for that rate. It is not right that people can't afford the necessities of life. The market tends to level *over time* but that doesn't mean that it works for individuals very well.


Very well said.

[Freethinker]

You ought to hear the union workers here squawk when overtime gets scaled back. Many of them are check to check even working 20 hours of OT in a week. Drive two new vehicles and eat out almost every meal and can't figure out why they spend so much. They think I'm not good at managing my money because my truck is 10 years old.

[quixotecoyote]

I think a fairly nice compromise would probably be to lower or perhaps even eliminate the minimum wage but increase earned income tax credit (or replace with something comparable like a negative income tax or whatever) to the point where anyone working full time receives a living income. Having the money come from the government (that is, the economy as a whole) assures that employers aren't forced to either pay workers "more than what their work is worth" or not have workers at all.

After all, if we look at minimum wage laws by saying that "society as a whole" has decided that the working poor deserve a basic income, then it is quite reasonable from a brute economic point of view that it be "society as a whole" that foots the bill. Additionally, this way you don't have to worry about the minimum wage taking jobs away because of businesses being priced out of the labor market. There is, of course, the concern that whatever tax is used to fund this might have a negative effect, but there at least the damage is spread out.


I don't think this will work. The only taxes your target people are paying are like the social-security tax; exempt from credits. I do my own taxes and I find that I could get refunded all my withholdings with a couple hundred to spare. That was nice, but because I only opted for a minimal withholding in the first place, it didn't help much.

Those extra tax credits didn't help me at all because they only annul eligible taxes that you've already paid and for your population, that is probably non-existent.

[balrog666]

You ought to hear the union workers here squawk when overtime gets scaled back. Many of them are check to check even working 20 hours of OT in a week. Drive two new vehicles and eat out almost every meal and can't figure out why they spend so much. They think I'm not good at managing my money because my truck is 10 years old.


:)

[plumjam]

When I was in High School, I was making minimum wage after school for a medical supply company. Yes, when the minimum wage went up, I did indeed get a raise. But I don't think I would have has that job if the "Living Wage Law" had been in effect.

why would you think that?
If a minimum 'living wage' law was brought in it would apply to all medical supply companies... in fact ALL companies.. so the playing field would have been kept level for everyone across the board. The net effect is just a slight redistribution of the money from those at the top and middle to those at the bottom (who need it most)

if people can't live decently, out of poverty, in return for working full time at the minimum wage level.. then that level should be raised until they can

[balrog666]

why would you think that?
If a minimum 'living wage' law was brought in it would apply to all medical supply companies... in fact ALL companies.. so the playing field would have been kept level for everyone across the board. The net effect is just a slight redistribution of the money from those at the top and middle to those at the bottom (who need it most)


It doesn't work that way - no one's salary is going to be reduced because the minimum wage goes up.

However, low skilled positions would tend to be eliminated or farmed out to lower cost subcontractors. Ooh, they might even hire illegals off the books!

if people can't live decently, out of poverty, in return for working full time at the minimum wage level.. then that level should be raised until they can


Of course, every unskilled 18-year-old deserves a big apartment, a shiny new car, a state-of-the-art hi-def TV, and a satellite dish, don't ya know! And no more domestic beer!

[Polaris]

I live paycheque to paycheque because I choose to. I make pretty good money, always have, but I spend all of it. I have no savings and no investments but I have a huge wealth of experiences that most of my better off friends lack.

When I was raising my three kids there were some pretty lean times but we made it through with little or no help from anyone. ($1100.00 a month for daycare tends to cut into the pocketbook) I have never been denied things like loans but I was always charge significantly higher rates because I get paid "flat rate" as opposed to hourly and I wasn't married. (4 percentage points is significant in my view.) Consequently, I buy everything cash. The last loan I had was 12 years ago for a new car. Everyone else was paying 7%, I had to pay 11. That's the last time I borrowed anything.

I always have money simply because my income far outweighs my needs. I suppose, if I ever get married, I will regret the lifestyle I have chosen. People tend to look for security in a mate and I am definitely not that! :D

That sounds like a good way to get money management across (and make it stick) with the kiddies: "The opposite sex won't like you if you aren't good with money."

[jimtron]

Of course, every unskilled 18-year-old deserves a big apartment, a shiny new car, a state-of-the-art hi-def TV, and a satellite dish, don't ya know! And no more domestic beer!

Has anyone here (or anywhere) made such an argument? I certainly don't think 18 year olds need these things.

[jsfisher]

Has anyone here (or anywhere) made such an argument? I certainly don't think 18 year olds need these things.

It has been made multiple times, typically in the form of "anyone working full time should earn a living wage". I believe "anyone" would include "18 year olds". Many 18 year olds, still living off their parents' income, would be free to spend their living wage income on whatever they wanted....

[jimtron]

Of course, every unskilled 18-year-old deserves a big apartment, a shiny new car, a state-of-the-art hi-def TV, and a satellite dish, don't ya know! And no more domestic beer!

Is the equivalent of:anyone working full time should earn a living wage

Huh? You really think by "living wage" we mean that 18 year olds should own a bunch of luxury items? That's certainly not what I mean when I say "living wage," and I very highly doubt that's what others who share my views mean. I'm talking about living above the poverty line, and having decent health care. Not state of the art hi-def TVs and brand new cars.

[plumjam]

It doesn't work that way - no one's salary is going to be reduced because the minimum wage goes up. it would.
comparatively speaking the wages of the poor would rise slightly, in relation to the salaries of the middle class and upper class.

However, low skilled positions would tend to be eliminated
some might, but most are not amenable to replacement by machine or robot.
and wonder of wonders those who lost their jobs could walk off happily, in the knowledge that the next job they get will at last pay them decently.
Furthermore in the USA, I understand, some people have to work 2 or 3 jobs to live decently. If the minimum wage was raised to a living wage these people would only have to work 40 hours, and may well go down to only working 1 job. Thus a lot of these surplus 2nd or 3rd jobs would be freed up, to be filled by those seeking work after their job was made unviable.

or farmed out to lower cost subcontractors. how? the subcontractors would have to pay the living wage too.
if you mean by going overseas... then I doubt it, as overseas wages (latin america, china etc..) are already far far lower than in the USA.


Ooh, they might even hire illegals off the books! yeah, and the employers could then be arrested and prosecuted. Send some to jail and this would be drastically reduced, I suspect.


Of course, every unskilled 18-year-old deserves a big apartment, a shiny new car, a state-of-the-art hi-def TV, and a satellite dish, don't ya know! And no more domestic beer! Lol.. this has to be the most blatant example of a straw man I've seen on this forum. In fact, it's so blatant I almost admire you for it.
All I said was to live decently, out of poverty.
Oh yes, and (me being a European) the right to health care, without the worry of bankruptcy.

[shalomsteph]

Is the equivalent of:

Huh? You really think by "living wage" we mean that 18 year olds should own a bunch of luxury items? That's certainly not what I mean when I say "living wage," and I very highly doubt that's what others who share my views mean. I'm talking about living above the poverty line, and having decent health care. Not state of the art hi-def TVs and brand new cars.

If my 18 year old were living with me and had a new car and tons of luxuries, I would give the kid the boot.

I am all for having a different wage for people under 18 and people over 18. My high school kid does not need to earn as much per hour as someone out on his own, and is not as available. That should be reflected in wages.

And I live in a metro area, so no one actually is paid minimum wage here...no one would take it. But even $8 or $9 an hour is not livable.

[plumjam]

It has been made multiple times, typically in the form of "anyone working full time should earn a living wage". I believe "anyone" would include "18 year olds". Many 18 year olds, still living off their parents' income, would be free to spend their living wage income on whatever they wanted....

It would be entirely up to the 18 year old how he spent his money. (Isn't the USA supposed to be the Land of the Free? ;) )

Are you arguing that if an 18 year old works a full time job his parents should still be held responsible for allowing him to live decently?
In other words, his parents subsidising the 18 year old's employer.

[jsfisher]

Are you arguing that if an 18 year old works a full time job his parents should still be held responsible for allowing him to live decently?
In other words, his parents subsidising the 18 year old's employer.

I see you are skilled at erecting your own strawmen.

[Jekyll]

I don't think this will work. The only taxes your target people are paying are like the social-security tax; exempt from credits. I do my own taxes and I find that I could get refunded all my withholdings with a couple hundred to spare. That was nice, but because I only opted for a minimal withholding in the first place, it didn't help much.

Those extra tax credits didn't help me at all because they only annul eligible taxes that you've already paid and for your population, that is probably non-existent.

The other reason it wont work is because business don't pay people what they're worth, they pay what the market will bear, so if you subsidise wages people will get paid less.
You can see this effect looking at supermarket prices and farms in the EU.

[plumjam]

I see you are skilled at erecting your own strawmen.

No, I was asking the question.

[Metullus]

I have never been paycheck to paycheck,but only because when I was a very young man I made it a policy to take jobs that few people wanted in places that nobody wanted to go. I made pretty good money and put it away so that I would be able to work as I pleased later in life. It has worked out.

[blutoski]

Now here's a strange thing. I have a brother living in Vancouver, which is not a cheap place to live. He's worked a series of odd jobs in the years since the steady job he had disappeared along with the company that provided it. But he's still living in Vancouver and doesn't even own a vehicle, relying instead on public transit to get around.

It could be a timing thing: does he own or rent?

I think the consensus right now about Vancouver is that the high job vacancy rate (maybe 15% of positions are unfilled right now) is almost entirely caused by the high real estate prices: young people are not going to take a $6/hr job in a city where a 350 sq ft batchelor suite costs $1200/mo.

On the other hand, if you're lucky and bought twenty years ago, you're probably paying $350/mo for a comfortable 2500 sq ft four-bedroom house. Of course, you'll rent the rooms out for $1000/ea. Why work at all?

Housing cost makes a big difference as to whether you're 'able' to live in the same city where you work, and that's all about timing.

[Blue Mountain]

It could be a timing thing: does he own or rent?

I think the consensus right now about Vancouver is that the high job vacancy rate (maybe 15% of positions are unfilled right now) is almost entirely caused by the high real estate prices: young people are not going to take a $6/hr job in a city where a 350 sq ft batchelor suite costs $1200/mo.

On the other hand, if you're lucky and bought twenty years ago, you're probably paying $350/mo for a comfortable 2500 sq ft four-bedroom house. Of course, you'll rent the rooms out for $1000/ea. Why work at all?

Housing cost makes a big difference as to whether you're 'able' to live in the same city where you work, and that's all about timing.
Unless things have changed in his life in the last few years, he rents. I'm not really sure how he does it if a bachelor's goes for $1200/mo. I know he's not in a desirable part of town, so that may put downward pressure on the amount his landlord can charge.

[Tsukasa Buddha]

I don't make paychecks :) !

I've never had a job, and the people at my University never called me back...

I listed every hour I didn't have class as free!

I have done volunteer work though :p .

But so far I have $1,500, $1,300 of which is in savings.

My school debt so far will be $50 bucks a month for ten years, though I expect it to reach 200 by the time I graduate.

My projected salary will be 40-50k. Though I am sure my starting salary will be much lower.

But if I agree to work in a high-risk school, they'll forgive 10k in debt :) !

Also, I am so stingy. So stingy. You really have no idea. In the past month I have spent 15$. And that was for train fare, nothing else (Food's included, so I would be stupid to eat out).

But OMG no one else saves here. Everyone has credit cards! I think they are teh devil :mad: .

Students are morons at saving (Excluding me and the devout Muslim girl).

[UserGoogol]

I don't think this will work. The only taxes your target people are paying are like the social-security tax; exempt from credits. I do my own taxes and I find that I could get refunded all my withholdings with a couple hundred to spare. That was nice, but because I only opted for a minimal withholding in the first place, it didn't help much.

Those extra tax credits didn't help me at all because they only annul eligible taxes that you've already paid and for your population, that is probably non-existent.

My impression was that the earned income tax credit is a refundable tax credit, thus you if you don't pay any taxes you just get a check in the mail. I don't really have a great understanding of it, though, and it sounds utterly reasonable that it would have some complexities I'm not aware of. But if that's the case, there's no reason why they couldn't just create a new system where tax is completely irrelevant to the system.

Personally, I like the idea of a guaranteed minimum income that gives everyone some amount of money completely regardless of whether they work, (although people of higher income would ultimately pay more in taxes than they get) but I figured that since this thread is specifically about the working poor rather than just poor people in general, setting something more EITC-ish where the income phases in as you move towards full-time work and then phases out as you become wealthy enough that you don't really need it anymore.

[Jaggy Bunnet]

I am all for having a different wage for people under 18 and people over 18. My high school kid does not need to earn as much per hour as someone out on his own, and is not as available. That should be reflected in wages.

So two people doing exactly the same job should be paid different amounts for it based purely on their age? Wow.

Do you not think this might create an incentive for employers to have lots of part time jobs for low paid under 18's instead of employing over 18's at a higher rate?

[Jaggy Bunnet]

My impression was that the earned income tax credit is a refundable tax credit, thus you if you don't pay any taxes you just get a check in the mail. I don't really have a great understanding of it, though, and it sounds utterly reasonable that it would have some complexities I'm not aware of. But if that's the case, there's no reason why they couldn't just create a new system where tax is completely irrelevant to the system.

The UK tax system may be similar to what you are talking about. Normally taxes are withheld at source by employers and paid over to the government. For low paid workers, there are tax credits (Working Tax Credit, Child Tax Credit) which are effectively paid through the same system (either by reducing the amount withheld from their salary or by "negative reductions" if the credit is more than the withholding due, meaning they get more than their gross salary.

Of course this has led to huge problems in adminstration because the computer system was never designed to deal with such credits, the credits are available to families with incomes that few people would consider to be low (up to £66k - somewhere about $135k) and it leads to some eye-wateringly high marginal tax rates (70%, even before taking into account impact on any social security benefits) for low income earners, which understandably reduces the incentive to work additional hours or trying to find a higher paying job.

However it does allow the Chancellor to claim that benefits are not increasing as fast, and that income tax revenue has not been increased by treating these government handouts not as benefit payments but as a reduction in tax revenues.

[Almo]

They should have raised it higher, and established a maximum wage as well. *shrugs*

Maximum wage won't work for many reasons. But, I like the idea Ben and Jerry's was using: Top-paid employee can't make more than some number times the amount the lowest-paid employee makes. So if the CEO wants a pay raise, all the little guys get one, too. Since it's a ratio, there's still incentive for people to take the responsibility that goes with the higher positions. It just makes sure the rank-and-file don't get ignored as a company's profits increase.

[JoeEllison]

Maximum wage won't work for many reasons. But, I like the idea Ben and Jerry's was using: Top-paid employee can't make more than some number times the amount the lowest-paid employee makes. So if the CEO wants a pay raise, all the little guys get one, too. Since it's a ratio, there's still incentive for people to take the responsibility that goes with the higher positions. It just makes sure the rank-and-file don't get ignored as a company's profits increase.

Sounds like what I had in mind: maximum wage set as some multiple of minimum wage.

Right-wing "free market" nutters will try to claim that no one will want to be a corporate executive for "only" a few million dollars. They'll tell you that Bill Gates will pack it in and shut down Microsoft if he has to give up even 1% more money in taxes. Hell, Bill Gates won't even claim that...

[balrog666]

Maximum wage won't work for many reasons. But, I like the idea Ben and Jerry's was using: Top-paid employee can't make more than some number times the amount the lowest-paid employee makes. So if the CEO wants a pay raise, all the little guys get one, too. Since it's a ratio, there's still incentive for people to take the responsibility that goes with the higher positions. It just makes sure the rank-and-file don't get ignored as a company's profits increase.

It didn't work for Ben and Jerry's, as they found out when they tried to hire a new CEO.

[jimtron]

It didn't work for Ben and Jerry's, as they found out when they tried to hire a new CEO.

I know (iirc) that Ben & Jerry's no longer does this, but in what way did it not work? What was the problem with it?

[Gregoire]

States have been independently raising the minimum wage, and nothing horrible has happened... so it is a flat-out blatant lie to claim that a national increase will do any damage either.

Sweet Satan, is capitalism really that evil at its core, that billionaires feel like they HAVE to screw over the average worker, to preserve some tiny percentage of their overall profits?

Have you ever studied the Science of Economics? I am sorry to say this, but your reference to "lies" sounds just like a fundy challenging the Science of Biology. Do you think there is a conspiracy too?

As I stated it is very well accepted that the aforementioned small raises in the minimum wage do cause small increases in unemployment in unskilled workers. If you don't believe me, check out any Economics 101 textbook. All the ones I have seen graph it out in exquisite detail.

Does this mean one can't find any Economic Scientists who dispute this? Of course not. There were even two studies in the 90's which reflected the counter position, but most believe these studies were seriously flawed. Still, you are free to come up with theories about why you think differently. It is just that calling the solid majority opinion a "lie" makes absolutely no sense.

[Gregoire]

why would you think that?
If a minimum 'living wage' law was brought in it would apply to all medical supply companies... in fact ALL companies.. so the playing field would have been kept level for everyone across the board. The net effect is just a slight redistribution of the money from those at the top and middle to those at the bottom (who need it most)

if people can't live decently, out of poverty, in return for working full time at the minimum wage level.. then that level should be raised until they can


Thanks for the question. I can see where you are coming from. But I think you have to look at the entire market of unskilled labor.

While a medical supply company can simply raise its prices and sell only slightly fewer items (its supply and demand curves are "inelastic"), other businesses will have a harder time.

For example, when fast food restaurants raise their prices, their sales will decrease a lot more. So the fast food restaurant industry, among many others, will employ fewer workers.

Fewer workers employed means much greater competition of unskilled workers for fewer jobs. A 16 without any job experience and no past employment references will probably be viewed not well as most other unskilled workers.

(Please note, this effect was not very noticable with small increases in the minimum wage. Indeed the market clearing price for unskilled labor often exceeds this. But living wage laws require much larger increases so the effect would be much more apparent.)

[Gregoire]

My impression was that the earned income tax credit is a refundable tax credit, thus you if you don't pay any taxes you just get a check in the mail. I don't really have a great understanding of it, though, and it sounds utterly reasonable that it would have some complexities I'm not aware of. But if that's the case, there's no reason why they couldn't just create a new system where tax is completely irrelevant to the system.



That is my understanding of the EITC too. Others have discussed the "negative income tax" which I think is a variation on the same theme.

I hope those on this board understand that I am not challenging the question of whether to help the poor. The question is how best to help the poor which will have the least amount of ill effects.

[balrog666]

I know (iirc) that Ben & Jerry's no longer does this, but in what way did it not work? What was the problem with it?


It worked as long as one of the founders believed in it and was willing to accept such a salary cap for his own labor; but, in their defense, an owner is the last one to be paid in any event, so it is quite typical for a new owner to undervalue his worth in the job market.

But, in the end, it failed when they needed to hire a new CEO. The ones who would accept that salary were judged unsuitable or incompetent and the rest refused to accept such a pay cut for assuming such responsibility.

[plumjam]

Thanks for the question. I can see where you are coming from. But I think you have to look at the entire market of unskilled labor.

While a medical supply company can simply raise its prices and sell only slightly fewer items (its supply and demand curves are "inelastic"), other businesses will have a harder time.

For example, when fast food restaurants raise their prices, their sales will decrease a lot more. So the fast food restaurant industry, among many others, will employ fewer workers.

Fewer workers employed means much greater competition of unskilled workers for fewer jobs. A 16 without any job experience and no past employment references will probably be viewed not well as most other unskilled workers.

(Please note, this effect was not very noticable with small increases in the minimum wage. Indeed the market clearing price for unskilled labor often exceeds this. But living wage laws require much larger increases so the effect would be much more apparent.)

No problem. :)

Taking the fast-food restaurants example... introducing a living wage throughout society wouldn't, I think, have the effects you say. I don't believe they'd sell less food. People would still eat away from their homes.. and fast-food is just about the cheapest option for this. It would remain about the cheapest option.
Most patrons of fast food restaurants are not high earners, they are average or below average earners. With the introduction of the living wage it is this section of the society that would gain the most, comparatively, and would have more disposable income available. They'd most likely eat at fast food restaurants more regularly. I believe the net effect would be beneficial for fast food.

A similar effect would pertain throughout society. Less money would be spent on the kinds of things bought by the rich and the middle class, and more money would be spent on the kind of things bought by the poor.
Porsche car dealers might sell a few less cars, Gucci sales might drop a bit.. I don't think 99% of society would care about that.

[jsfisher]

It would be helpful if some of those advocating the "living wage" minimum wage would clarify what it would cover. I, for one, would not have expected frequent dining at fast-food establishments would be included.

Also, would the minimum very by circumstance? Would a single mother with 3 children qualify for a high minimum than a married couple with no kids? Does the minimum wage in New York City need to be high than in Topeka?

[Z]

It would be helpful if some of those advocating the "living wage" minimum wage would clarify what it would cover. I, for one, would not have expected frequent dining at fast-food establishments would be included.

Also, would the minimum very by circumstance? Would a single mother with 3 children qualify for a high minimum than a married couple with no kids? Does the minimum wage in New York City need to be high than in Topeka?

Well, I've tried this one before myself. This is my opinion:

Living wage should cover those basic expenditures needed to survive in a healthy and safe living condition - rent in a reasonable location (no slums), sufficient healthy food to make meals (based on local discount stores), energy costs, water costs, waste costs, transportation (say, the cost of a month's public transportation pass every month), etc. for a single person.

It should NOT cover eating out every meal, or hi-def TV, or cable entertainment, or any 'bling'.

Ideally, it should vary by circumstance, but keeping track of those circumstances might be unbelievably hard. It definitely should be defined at the city level, as cost of living varies so much between cities.

I'd say that child care assistance and such should be differentiated based on current level of pay - that is, if a single mother with one child earns minimum wage, the state pays for child care; if she earns, say, minimum plus half of what child care costs, the state should pick up the other half.

Of course, we could use a similar system for all public assistance - that whatever you make short of living wages, the state makes up in the form of food stamps or rent assistance or whatever - because currently, public assistance is broken, very very badly.

It's important, I think, to remember that not all minimum wage earners are teenagers living at home with mom and pop. An awful lot of them are middle-aged former-housewives, or ex-military with non-translatable skills, or people too poor to pursue higher education. They're single moms and married with kids and everything in between.

[quixotecoyote]

I'd say that child care assistance and such should be differentiated based on current level of pay - that is, if a single mother with one child earns minimum wage, the state pays for child care; if she earns, say, minimum plus half of what child care costs, the state should pick up the other half.

Of course, we could use a similar system for all public assistance - that whatever you make short of living wages, the state makes up in the form of food stamps or rent assistance or whatever - because currently, public assistance is broken, very very badly.


So explain to me the motivation to work for an upgrade in pay that is still short of the living wage?

I agree with the concept in general, but your particular conceptualization seems to be flawed.

[earloke]

I have 2 years of college and in 1998 was making 60000 a year and in the union ,Became disabled. Now I see the people doing the same kind of work making $ 14.00 PER HOUR and the unions have colapsed . Im starving to death on social security disability. One medication I take cost $18.00 a day. Check to check ,yes and I own my own home and my own cars .

[Z]

So explain to me the motivation to work for an upgrade in pay that is still short of the living wage?

I agree with the concept in general, but your particular conceptualization seems to be flawed.

The motivation isn't to work for an upgrade in pay that is still short of the living wage; the motivation is to work for an upgrade in pay that moves past the base living wage.

But as I said, that was hypothetical... the actual proposition was regarding child care costs versus the living wage - that the state would cover the additional costs beyond what you earned (and in my proposal, you'd be earning at least living wage).

[Jaggy Bunnet]

I'd say that child care assistance and such should be differentiated based on current level of pay - that is, if a single mother with one child earns minimum wage, the state pays for child care; if she earns, say, minimum plus half of what child care costs, the state should pick up the other half.

For example if she works 30 hours, she makes the "living wage" and the state pays all of her childcare. If she works 40 hours, she makes the "living wage" + 50% of her childcare costs which she now has to pay.

Post childcare, her income is identical whether she works 30 hours or 40. In effect a 100% marginal tax rate - why would she bother to work additional hours for absolutely no income?

[balrog666]

Living wage should cover those basic expenditures needed to survive in a healthy and safe living condition - rent in a reasonable location (no slums), sufficient healthy food to make meals (based on local discount stores), energy costs, water costs, waste costs, transportation (say, the cost of a month's public transportation pass every month), etc. for a single person.


You left out health insurance, which is the most prominent reason that activists advocate for a "living wage".

And I think that sounds like all of that will buy one hell of a shiny car (or even bling) for an 18-year-old with no skills and no real expenses. And then he will need more for car insurance too. Oh, and add more for a retirement fund just for giggles. Oh, and assume he lives in San Francisco or Manhattan or will move there and live 25-to-a-house like the illegals - even better pay now!

Wheeeee, it's party time - let all the kids with no future ride that subsidized pony!

:boggled:

[JoeEllison]

For example if she works 30 hours, she makes the "living wage" and the state pays all of her childcare. If she works 40 hours, she makes the "living wage" + 50% of her childcare costs which she now has to pay.

Post childcare, her income is identical whether she works 30 hours or 40. In effect a 100% marginal tax rate - why would she bother to work additional hours for absolutely no income?
No more overtime? You say that like it is a bad thing.

Certainly, I have to say that anything that makes employees more like human beings, and less like cattle for their employers to exploit, is a good thing... and, I think that's what the objections from the predatory "capitalists" really boil down to. They want and need employees to be virtual slave labor. That's the logical conclusion to the "unregulated free market" philosophy.

[Segnosaur]

No more overtime? You say that like it is a bad thing.


Ummm... wait a second...

First of all, it looks like the person was not suggesting the worker have to work overtime. They were comparing a situation where they worked 30 hours vs. 40 hours/week, neither of which should be considered 'overtime'.

Secondly... who exactly says overtime is always a bad thing? If I had the choice, I'd gladly work a few extra hours, with the idea of saving it and having the ability to retire early.

[Z]

You left out health insurance, which is the most prominent reason that activists advocate for a "living wage".

And I think that sounds like all of that will buy one hell of a shiny car (or even bling) for an 18-year-old with no skills and no real expenses. And then he will need more for car insurance too. Oh, and add more for a retirement fund just for giggles. Oh, and assume he lives in San Francisco or Manhattan or will move there and live 25-to-a-house like the illegals - even better pay now!

Wheeeee, it's party time - let all the kids with no future ride that subsidized pony!

:boggled:

It's better than starving single adults near to death. I'd much rather a few kids whose parents are too lazy to make them leave the nest get some bling, than a single adult who can't afford college have to take two or even three jobs just to be able to afford a slum apartment, ramen for his or her one meal per day, NO health insurance of any kind, and too damned bad that he ends up dying of malnutrition and pneumonia, oh well.

If some 18-year-old is 'riding a subsidized pony' the problem isn't with the wage itself, but with the parents or landlords letting it come to that. And if they're stupid enough to let that happen, why shouldn't the kids benefit?

What do you have against 18 year olds, anyway? Did you skip and go straight to 40?

[JoeEllison]

I like the way people get angry about everyone making a decent living, while they have no problem with executives making tens of millions a year for doing nothing much.

Why is it a good idea for anyone to suffer.

[Z]

For example if she works 30 hours, she makes the "living wage" and the state pays all of her childcare. If she works 40 hours, she makes the "living wage" + 50% of her childcare costs which she now has to pay.

Post childcare, her income is identical whether she works 30 hours or 40. In effect a 100% marginal tax rate - why would she bother to work additional hours for absolutely no income?

That's her choice, in that case. I see no problem with it.

But what if by working 40 instead of 30 hours, she makes living wage, all childcare cost expense, plus 10% again. She's profitted. And eventually, if raises are steady (and employees who aren't absolutely incompetent SHOULD get raises, the longer they work), she can't help but profit.

Besides all that, why SHOULD she have to work 40 hrs instead of 30 hrs?

Just an aside, I'm trying to figure out if my memory is just that poor, or if working hours have changed a LOT since I was a kid. I seem to recall part-time work being 25 hrs per week, and full time being 40 hrs per week; and people didn't work LESS than those numbers, because that was being lax. But now it seems like the idea is, no MORE than 25/40 hrs per week - instead of no LESS than. Was it always like this? I admit that my memory isn't at ALL what it should be...

Of course, when I was a kid, the people my dad worked for expected you there for 40 hrs per week regardless of other issues. If you couldn't manage that - you could find another job.

Things must have changed, all things considered.

[balrog666]

It's better than starving single adults near to death. I'd much rather a few kids whose parents are too lazy to make them leave the nest get some bling, than a single adult who can't afford college have to take two or even three jobs just to be able to afford a slum apartment, ramen for his or her one meal per day, NO health insurance of any kind, and too damned bad that he ends up dying of malnutrition and pneumonia, oh well.

If some 18-year-old is 'riding a subsidized pony' the problem isn't with the wage itself, but with the parents or landlords letting it come to that. And if they're stupid enough to let that happen, why shouldn't the kids benefit?

What do you have against 18 year olds, anyway? Did you skip and go straight to 40?


There are food stamps, free food banks, and many charities here - the only one starving is someone who has chosen to do so. Look at the typical "poor" in the USA; they are the fattest poor people on Earth and there is no shortage of clothes, cars, housing, or bad taste there.

If someone is unable (or unwilling) to manage their money, shoveling more money their way isn't going to solve their problems. And politically mandating that they pay their utility bill, pay off their car loan, buy car insurance, or buy health insurance won't work either. Even paying those bills for them doesn't work and I really don't know why anyone would think it would.

More than 50% of all minimum wage workers, to the extent that there even are any of those any more, are unskilled, young people, brand new to the work force. Very few of them remain at the pay scale for more than a year or two because they get experience, learn a few skills (like showing up), or decide they don't want to wash dishes, or chase grocery carts around a parking lot in the rain, for the rest of their lives.

[Geek Goddess]

I like the way people get angry about everyone making a decent living, while they have no problem with executives making tens of millions a year for doing nothing much.
Why is it a good idea for anyone to suffer.

Can you point me to one of those jobs?

[Esperdome]

Ummm... wait a second...

First of all, it looks like the person was not suggesting the worker have to work overtime. They were comparing a situation where they worked 30 hours vs. 40 hours/week, neither of which should be considered 'overtime'.

Secondly... who exactly says overtime is always a bad thing? If I had the choice, I'd gladly work a few extra hours, with the idea of saving it and having the ability to retire early.

That's my view of it too. Every day I work overtime brings me three days closer to retirement. But the closer I get, the less it will help. (expected return on investments over time)

If I could get a high enough paying hourly job working 7-12's, I might ride that pig until I never had to work again. :D

[JoeEllison]

Can you point me to one of those jobs?

Imagine my finger, pointed at the upper floors of any skyscraper... right over THERE!

[quixotecoyote]

Imagine my finger, pointed at the upper floors of any skyscraper... right over THERE!


But joe! Those execs spend their days gathering information and making decisions!

[JoeEllison]

But joe! Those execs spend their days gathering information and making decisions!

Planning where to eat a $100 lunch, figuring out if one can settle for a gold-plated bathtub, and buying a villa in Spain for a three week vacation in Madrid, and then laying off 500 employees to pay for it, doesn't count as "gathering information and making decisions"

[quixotecoyote]

Planning where to eat a $100 lunch, figuring out if one can settle for a gold-plated bathtub, and buying a villa in Spain for a three week vacation in Madrid, and then laying off 500 employees to pay for it, doesn't count as "gathering information and making decisions"

But joe! If the execs were paid less, then the company wouldn't be able to recruit from the ever shrinking pool of people willing to run a company! Those perks ensure filled positions.

[balrog666]

Planning where to eat a $100 lunch, figuring out if one can settle for a gold-plated bathtub, and buying a villa in Spain for a three week vacation in Madrid, and then laying off 500 employees to pay for it, doesn't count as "gathering information and making decisions"


Well that explains why you aren't one of those "gathering information and making decisions!

[JoeEllison]

But joe! If the execs were paid less, then the company wouldn't be able to recruit from the ever shrinking pool of people willing to run a company! Those perks ensure filled positions.

I know... I mean, who would even show up for 10-50 times the median income?

[Z]

There are food stamps, free food banks, and many charities here - the only one starving is someone who has chosen to do so. Look at the typical "poor" in the USA; they are the fattest poor people on Earth and there is no shortage of clothes, cars, housing, or bad taste there.

You are WOEFULLY ignorant of the charity situation, at least in the U.S.

Let me give you some info about Cincinnati, for example.

Food stamps: Yes, and they are readily available - IF you are working or actively looking for work (good policy, IMHO). The catch is, if you earn too much - say, if you work 40 hours a week at current minimum wage - they reduce your food stamps. The amount they reduce it is usually significantly more than the amount you can now afford to put toward food. We ran into this problem when we were using them - my wife's job gave her a raise equalling about a dollar a month, so they reduced the food stamp amount per month by about $50. It's a broken system.

And if you can't work, for whatever reason... no food stamps.

Soup kitchens and food closets get practically no budget, and largely rely on donations. Unfortunately, that means that soup kitchens are open about once a week, and food closets on average can offer a week's worth of food, about once a month, to about fifty people - and in Cinci, there's only three that I know of. They tell you that, from the time they open to distribute food, you have about six hours before it runs dry.

Other charities are spotty, and many require you to be Christian, or at least be willing to convert, before they'll help at all.

We've been through that merry-go-round. It doesn't work.

The same may not be true in other places - I can only speak from experience about Cincinnati, OH, Lawton, OK, and Fayetteville, NC.

If someone is unable (or unwilling) to manage their money, shoveling more money their way isn't going to solve their problems. And politically mandating that they pay their utility bill, pay off their car loan, buy car insurance, or buy health insurance won't work either. Even paying those bills for them doesn't work and I really don't know why anyone would think it would.

If someone isn't getting enough money to manage - which is a common situation - it would help tremendously.

More than 50% of all minimum wage workers, to the extent that there even are any of those any more, are unskilled, young people, brand new to the work force. Very few of them remain at the pay scale for more than a year or two because they get experience, learn a few skills (like showing up), or decide they don't want to wash dishes, or chase grocery carts around a parking lot in the rain, for the rest of their lives.

While I don't doubt that figure, I'd like to see your source. However, even if 10% of the minimum wage workers aren't that, it's worth the effort to make that 10%'s life more livable.

"Are there no prisons? Are there no workhouses?"

You come across as someone who has never been in hardship; someone who's had it pretty easy your whole life. I'm guessing you've never lived on a tight budget, with only, say, $150 budgetted for electricity, only to have the company suddenly jack up rates to $300 one month? It happens all the time, and is one of the most common source of problems, not counting personal irresponsibility. Or to be working in a town without public transportation, with a job 20 miles away, to suddenly have your car need $600 in repairs to be usable?

We're not even at minimum wage any more - both women in the house are managers with fairly good pay. And we still need public assistance sometimes to get by. No bling here - my wife is driving a used car given her by her parents. My roommate takes the bus to work and home - usually after midnight. We're buying our house - thanks to her father putting up the payments and us paying him back when we can. Our budget is TIGHT, and we're constantly having to forego or stall parts of it to make end meet.

But some of you live in a white tower, and think that the only poor people want to be poor. Yeah, right.

[Jaggy Bunnet]

No more overtime? You say that like it is a bad thing.

More than 30 hours is overtime? Wow.

However for the benefit of anyone who thinks it is unreasonable to work more than 30 hours a week, what about an incentive to get a better paying job with the same hours? Under the proposed system unless she gets a huge rise there is absolutely zero benefit to her in doing so. All additional earnings go to pay for childcare which was previously "free".

So in addition to having no incentive to work longer, there is no incentive to work smarter. Good system.

[Jaggy Bunnet]

That's her choice, in that case. I see no problem with it.

You really see no possible reason why it is a bad idea for the economy for people to have no incentive to work harder, or to get better paying jobs?

How long would you work if the tax rate was 100%? That is what you are proposing as a marginal rate for poor people - if they get better qualifications and a better job, they are no better off. If they work longer hours, they are no better off.

But what if by working 40 instead of 30 hours, she makes living wage, all childcare cost expense, plus 10% again. She's profitted.

She has. However she has had to put in a massively increased effort for a very minor increase in disposable income. This is one of the problems with the UK system - it is not uncommon for poorly paid people to be paying a far higher marginal tax rate (70%+) than those earning much more (top UK income tax rate is effectively 41%). Funnily enough this tends to result in a strong disincentive effect to working harder or getting a better paid job. Result is a poverty trap.

And eventually, if raises are steady (and employees who aren't absolutely incompetent SHOULD get raises, the longer they work), she can't help but profit.

Completely disagree. Seniority should have absolutely no impact on wages. If you are doing the same job to the same standard that you did five years ago, then there is absolutely no reason to expect higher wages just because you have been doing it for five years.

Of course if in that time you have gained experience that means you do the job better, that is a different matter.

Besides all that, why SHOULD she have to work 40 hrs instead of 30 hrs?

I didn't say she should.

I do however think that a system that imposes a 100% tax rate (at any level, but especially low levels of earnings) and therefore means there is absolutely zero benefit in working harder or getting a better job is a bad system.

Presumably there is some minimum number of hours that would need to be worked to get the living wage?

[Z]

You really see no possible reason why it is a bad idea for the economy for people to have no incentive to work harder, or to get better paying jobs?

Strawman ignored.

How long would you work if the tax rate was 100%? That is what you are proposing as a marginal rate for poor people - if they get better qualifications and a better job, they are no better off. If they work longer hours, they are no better off.

Again, ignored.

She has. However she has had to put in a massively increased effort for a very minor increase in disposable income. This is one of the problems with the UK system - it is not uncommon for poorly paid people to be paying a far higher marginal tax rate (70%+) than those earning much more (top UK income tax rate is effectively 41%). Funnily enough this tends to result in a strong disincentive effect to working harder or getting a better paid job. Result is a poverty trap.

But that sounds like it's across the board. We're talking here about someone who needs child care. For someone who doesn't need that care, there's no problem.

Consider this: she pays, say, $500 a month in child care expenses, either way. Assuming a minimum number of hours (which, no, I didn't state earlier - sorry) to work to qualify, let's say that working at McStudMuffinKing 40 hrs a week at minimum wage qualifies her to receive a full day care voucher - because without that voucher, she can't afford day care, and her kid stays at home all day without ANY adult supervision.

Then she gets a raise to Junior Assistant Crew Manager, and she's now earning an extra $100 - so the state covers the $400 difference. The child still gets cared for, and the state pays less. And she's taking on 1/5 of that responsibility herself.

But what's the alternative? That she now earns 1/5 of what's needed for day care, so little Johnny can go to day care every Wednesday? How is this better?

But let's say that, as far as she's concerned, there's no incentive to work harder to earn more money. That means you're assuming that all she wants is the bare minimum for housing, food, electricity, public transportation, health care, etc. If she doesn't work harder, she NEVER gets to a level of being able to afford a TV, or to eat out, or to own a car or a home.

There's your incentive, right there.

Completely disagree. Seniority should have absolutely no impact on wages. If you are doing the same job to the same standard that you did five years ago, then there is absolutely no reason to expect higher wages just because you have been doing it for five years.

We'll just have to agree to disagree on this one. Company loyalty SHOULD be rewarded. And as long as you're working to the standard the company says is acceptable, then yes, you should expect higher wages for doing what you're asked to do.

Of course, we're now in an age where companies refuse to be loyal to their employees, so why should we expect the reverse to be true? It's sad, but that's how things have changed. Companies want disposable employees. They'd prefer slaves, but we have those pesky law-thingies.

Of course if in that time you have gained experience that means you do the job better, that is a different matter.

OTOH, if you're NOT doing your job better after a number of years, you should be fired.

I didn't say she should.

I do however think that a system that imposes a 100% tax rate (at any level, but especially low levels of earnings) and therefore means there is absolutely zero benefit in working harder or getting a better job is a bad system.

Presumably there is some minimum number of hours that would need to be worked to get the living wage?

Yeah, in case you didn't see my other posts, I was working under the general assumption that a full-time job was 40 hours minimum, not maximum.

But like I said, if the living wage is covering your basic necessities costs, with an additional supplement for day-care expenses, and you don't work to improve your position, you'll NEVER afford to eat out, buy a new wig, get your own coach-and-four, or any of the other things people want out of life. The incentive is more long-term - but it doesn't take long for people to tire of having nothing and working to earn more.

Besides - that doesn't affect those without children; but it DOES place a burden on those who decided to have children before being financially ready to deal with them, which I think is a good idea. There SHOULD be a price to pay for having a child.

[balrog666]

The surest way to stay broke is to live beyond your means.

"Are there no prisons? Are there no workhouses?"

As they say about those poor starving people in Africa, why don't they move to where there is food?

Or jobs.

[Jaggy Bunnet]

Strawman ignored.



Again, ignored.

I have no idea why you are ignoring these. They are simple statements of the consequences of having a 100% marginal tax rate - you remove a very significant part (possibly all) of the incentive for people to work harder/smarter.

But that sounds like it's across the board. We're talking here about someone who needs child care. For someone who doesn't need that care, there's no problem.

Because for someone who doesn't need childcare, there is no 100% marginal tax rate. Perhaps the problem is due to the 100% marginal tax rate for those with children?

Consider this: she pays, say, $500 a month in child care expenses, either way. Assuming a minimum number of hours (which, no, I didn't state earlier - sorry) to work to qualify, let's say that working at McStudMuffinKing 40 hrs a week at minimum wage qualifies her to receive a full day care voucher - because without that voucher, she can't afford day care, and her kid stays at home all day without ANY adult supervision.

Then she gets a raise to Junior Assistant Crew Manager, and she's now earning an extra $100 - so the state covers the $400 difference. The child still gets cared for, and the state pays less. And she's taking on 1/5 of that responsibility herself.

But what's the alternative? That she now earns 1/5 of what's needed for day care, so little Johnny can go to day care every Wednesday? How is this better?

I clearly have not explained my position very clearly. I am absolutely NOT suggesting that she should lose all support as soon as she exceeds the living wage. That would amount to a marginal tax rate in excess of 100% which is stupid (although apparently still possible in the UK when the impact of tax and benefits is combined).

However what if in the above scenario, she continued to receive state assistance not of $400 but of, say $450? In other words she gets to keep part of her additional earnings. The extra duties/responsibilities that she takes on as part of her new, higher paid, job result in her having more cash to spend.

If all of her raise is taken off her in reduced childcare contributions, why not just stay in the easier job rather than accept the new one? Or if you want to take the new job, why not ask to reduce your hours so that you earn the same salary?

But let's say that, as far as she's concerned, there's no incentive to work harder to earn more money. That means you're assuming that all she wants is the bare minimum for housing, food, electricity, public transportation, health care, etc. If she doesn't work harder, she NEVER gets to a level of being able to afford a TV, or to eat out, or to own a car or a home.

There's your incentive, right there.

Nope, it means that for the next X years, when she is going to have a need for childcare, she knows that there is no realistic prospect of her having an income above the living wage, no matter how many hours she works or how many promotions she gets. Sure in 10 years time she might be in a better position because she will no longer need childcare, but funnily enough most people are not hugely incentived by the prospect of a benefit that may arise after that timescale.

We'll just have to agree to disagree on this one. Company loyalty SHOULD be rewarded. And as long as you're working to the standard the company says is acceptable, then yes, you should expect higher wages for doing what you're asked to do.

You have been with the company five years. I start today. We both do exactly the same job, to the same standard. I see no reason whatsoever why you should be paid more - you are not producing any additional value for the company.

OTOH, if you're NOT doing your job better after a number of years, you should be fired.

Why? If it was worth the company paying you to do that job when you started, there is no reason to assume it is not worth them paying you to do it now.

But like I said, if the living wage is covering your basic necessities costs, with an additional supplement for day-care expenses, and you don't work to improve your position, you'll NEVER afford to eat out, buy a new wig, get your own coach-and-four, or any of the other things people want out of life. The incentive is more long-term - but it doesn't take long for people to tire of having nothing and working to earn more.

Besides - that doesn't affect those without children; but it DOES place a burden on those who decided to have children before being financially ready to deal with them, which I think is a good idea. There SHOULD be a price to pay for having a child.

I agree, I just think it is counterproductive at any earnings level to have penally high levels of tax. I think it is unfair to have low paid workers suffering the highest marginal tax rates.

However I think it DOES apply to those without children, just at a lower level - if they currently earn less than the living wage and get a top up, then a salary increase that does not take them above the living wage on its own will be taxed at 100%.

[ImaginalDisc]

As they say about those poor starving people in Africa, why don't they move to where there is food?

Or jobs.

I wish there was a thread to nominate posts in a "Most Manifestly Stupid and Cruel" contest.

[Geek Goddess]

Let's say you make $120,000 - your federal withholding taxes (non social security) will likely be in the range of $25-35,000 per year, unless you have a large number of dependents.

My son made about $12,000 last year. When he filed his income tax, he received back everything but about $135 of the tax that had been withheld in his paycheck. He lives at home and had no dependents, no child care, etc.

I went to the IRS tax calculator and made the following assumptions: $7 per hour, for 40 hours per week, no overtime, worked all year, no other income source including alimony (child support is not reportable). That is $14,560. Assumed one child in day care at a monthly cost of $500. I assumed that my withholding tax was 15%, which is the minimum marginal tax rate. The calculator came back and said that NO TAXES would be due for that year, and that my W-4 needed to be adjusted to show more dependents so that no taxes would be withheld. I did the same calculation with $10 per hour ($20,800 per year), and then again for $14 ($29,120). Same thing. The site recommended that I increased my number of withholding allowances to *8* to avoid having to wait for my refund. Here is the display for the last case.
______________________________________

Based on the information you previously entered, your anticipated income tax for 2007 is $0. If you do not change your current withholding arrangement, you will have $5,460 withheld for 2007, resulting in an overpayment of $5,460 when you file your return. If you want your withholding to more closely match your anticipated tax, adjust your withholding on a new Form W-4 as follows:
For the only job you entered (which has a projected salary of $29,120): 8 allowances.
Check the “Single” box on your Form W-4.
Assuming these recommended allowance(s) are in effect for the rest of 2007, your expected refund should be about $3,275. Following this recommendation will ensure that the amount withheld from your wages will cover all of your projected tax liability while minimizing your refund.

Caution! The recommended number of allowances will result in no income tax being withheld from your pay (because your year-to-date withholding is already sufficient to meet your anticipated tax). Therefore, you should analyze your withholding again at the beginning of 2008 (or anytime there is a change to your tax situation). If you do not check your withholding at the beginning of next year, you will likely be underwithheld for 2008.
--------------------------------------------------------------------------------
Following is a recap of information you entered on the preceding pages on which the above advice is based. Review this information for accuracy. You may want to print this page for your records. Note: some spaces in the recap table were left blank intentionally. Prepared September 28, 2007.Filing Status: Head of household Someone else can claim you as a dependent: No
Number of jobs: 1 Number of dependents: 1
Will you be 65 or older 1/1/2008: No Are you blind: No
Child & dependent care credit qualifying persons: 1 Child & dependent care credit expenses: 6,000
Eligible children for child tax credit: 1
Other credits:
Total salary: 29,120 Total retirement plans: 0
Tax withheld to date: 3,276 Projected withholding for rest of year: 2,184
Total earned income other than salary: 0 Other nonwage income: 0
Adjustments to income: Total itemized deductions: 0


ETA: Here is the link so you can check it for yourself. IRS tax calculator (http://www.irs.gov/individuals/article/0,,id=96196,00.html)

[JoeEllison]

I wish there was a thread to nominate posts in a "Most Manifestly Stupid and Cruel" contest.Why bother... it would probably be a 100-winner tie, led by the post you quoted as "first among equals"...

[Z]

The surest way to stay broke is to live beyond your means.

"Are there no prisons? Are there no workhouses?"

As they say about those poor starving people in Africa, why don't they move to where there is food?

Or jobs.

Which only goes to demonstrate your startling ignorance on the subject. So unless you have something pertinent, useful, intelligent, and educated to say on the subject, I guess we're at an end here.

[Z]

I have no idea why you are ignoring these. They are simple statements of the consequences of having a 100% marginal tax rate - you remove a very significant part (possibly all) of the incentive for people to work harder/smarter.

Because I wasn't talking about that - I was talking about child care costs being paid for by the state, until the worker can pay for it themselves. This is how it currently is in Cincinnati - you can receive day care vouchers until such time as they determine you can afford to pay for day care yourself - which, as it turns out, means being able to afford about 70% of what's on the voucher. There's that 100%+ marginal tax rate... and people do work to move beyond that income level.

Because for someone who doesn't need childcare, there is no 100% marginal tax rate. Perhaps the problem is due to the 100% marginal tax rate for those with children?

I guess they shouldn't have had children until they were financially prepared.

I clearly have not explained my position very clearly. I am absolutely NOT suggesting that she should lose all support as soon as she exceeds the living wage. That would amount to a marginal tax rate in excess of 100% which is stupid (although apparently still possible in the UK when the impact of tax and benefits is combined).

However what if in the above scenario, she continued to receive state assistance not of $400 but of, say $450? In other words she gets to keep part of her additional earnings. The extra duties/responsibilities that she takes on as part of her new, higher paid, job result in her having more cash to spend.

Yes, I could see that as a reasonable adjustment - say, 50% of your raise value is reduced from your child care assistance amount. Some might find that too generous, but I could agree that would be a better treatment.

If all of her raise is taken off her in reduced childcare contributions, why not just stay in the easier job rather than accept the new one? Or if you want to take the new job, why not ask to reduce your hours so that you earn the same salary?

Easier job? Unless they're being promoted straight into upper management, minimum wage jobs are harder, the less you get paid. Unless you think increased responsibility is 'harder' - in which case, they probably shouldn't be having kids anyway.

And a minimum hour standard settles your second question.

Nope, it means that for the next X years, when she is going to have a need for childcare, she knows that there is no realistic prospect of her having an income above the living wage, no matter how many hours she works or how many promotions she gets. Sure in 10 years time she might be in a better position because she will no longer need childcare, but funnily enough most people are not hugely incentived by the prospect of a benefit that may arise after that timescale.

Enough are that this is what they do already...

You have been with the company five years. I start today. We both do exactly the same job, to the same standard. I see no reason whatsoever why you should be paid more - you are not producing any additional value for the company.

If so - you're fired.

Why? If it was worth the company paying you to do that job when you started, there is no reason to assume it is not worth them paying you to do it now.

Because it is worth more for a worker to innovate, to become more experienced and efficient, and to remain with the company instead of jumping ship at every perceived opportunity, than for a worker to remain stagnant or quit every chance they get.

I agree, I just think it is counterproductive at any earnings level to have penally high levels of tax. I think it is unfair to have low paid workers suffering the highest marginal tax rates.

I agree there... then again, I'm personally for a flat, no-exception tax rate for all working people. I think it's unfair of anyone to have to pay a higher percentage of their income than anyone else.

I can already hear the corporate headjobs whining... "But I'll have to pay a million bucks in taxes if we do that!"

Big friggin' deal - if the tax rate is a flat, say, 10%, that means you only lost 10% of your income to taxes. What's a million bucks if you make 10 million a year? It's not like you HAVE to have every single penny of it... :D

However I think it DOES apply to those without children, just at a lower level - if they currently earn less than the living wage and get a top up, then a salary increase that does not take them above the living wage on its own will be taxed at 100%.

That's how it is now, yes. But if the living wage were the minimum wage, that wouldn't happen.

But that's really the core of this issue - so many people are working below the living wage, and are suffering this 100%+ marginal tax rate, that there doesn't seem much reason to try very hard to improve. Like you're saying, if I'm earning 20% less than the cost of living, and I get a raise so that I'm earning 18% less than the COL, I'm still earning less than the cost of living. The only way to survive is through public assistance, which then gives you an incentive to NOT perform any better, since before you actually reach the cost of living level, they're going to yank all that assistance and leave you stranded again.

[quixotecoyote]

I can already hear the corporate headjobs whining... "But I'll have to pay a million bucks in taxes if we do that!"

Big friggin' deal - if the tax rate is a flat, say, 10%, that means you only lost 10% of your income to taxes. What's a million bucks if you make 10 million a year? It's not like you HAVE to have every single penny of it... :D



You should go look up 'progressive income tax' before you say things like this.

[plumjam]

The surest way to stay broke is to live beyond your means.

"Are there no prisons? Are there no workhouses?"

As they say about those poor starving people in Africa, why don't they move to where there is food?

Or jobs.

I'm starting to think your avatar is a photograph.

[dudalb]

I am not against raising the minimum wage,but I am against limiting the amount of money an individual can make.That smacks to me more of jealousy and hatred of anybody who has some cash rather then concern for the poor.
I am not against the Goverement acting to prevent abuses by coporate powers,but I get a feeling that some people want to use this as a backdoor,underhanded route to classic,Big Brother Socialism,which I strongly oppose.

[Geek Goddess]

Because I wasn't talking about that - I was talking about child care costs being paid for by the state, until the worker can pay for it themselves. This is how it currently is in Cincinnati - you can receive day care vouchers until such time as they determine you can afford to pay for day care yourself - which, as it turns out, means being able to afford about 70% of what's on the voucher. There's that 100%+ marginal tax rate... and people do work to move beyond that income level.



Z, I enjoy reading your posts but I'm not following here. You are talking about government assistance on one hand, and then you are talking about income tax rates. I'm not sure I follow.

Are you saying that NOT receiving vouchers is equivalent to being taxed?

[balrog666]

I'm starting to think your avatar is a photograph.


This isn't exactly rocket science here.

But, hey, I can post this instead:

http://images.animanga.nu/fanart/3219/master_of_the_obvious.jpg

[drkitten]

Z, I enjoy reading your posts but I'm not following here. You are talking about government assistance on one hand, and then you are talking about income tax rates. I'm not sure I follow.

Are you saying that NOT receiving vouchers is equivalent to being taxed?

The effect is the same in terms of economic incentives.

To put simple, if imaginary, numbers on it: As mayor of Springfield, I decide that everyone who makes less than $500 a month will receive a city-funded voucher for $500 in child-care support and $500 in food vouchers. And the program is successful, in that child poverty and malnutrition is drastically reduced in Springfield --- and more importantly, I get elected to the Senate on the basis of all the headlines i get.

But now, you're working in Springfield, and you make $495 a month. A friend tells you about a new job that opened up that pays $600 a month. Do you apply for it?

If so, you run a grave risk of substantially reducing your standard of living. You'll make an extra $105 per month that you can spend how you like, but you'll also lose $500 in "free" food. What's your incentive to try to better yourself?

The amount you have on which to support yourself will be reduced by at least $500 if you take a job that pays $105 more -- by making an extra $105, you cost yourself $500 out of pocket. You lose nearly five times the value of your raise. Whether you call it "taxation" or not is largely irrelevant.

[Z]

The effect is the same in terms of economic incentives.

To put simple, if imaginary, numbers on it: As mayor of Springfield, I decide that everyone who makes less than $500 a month will receive a city-funded voucher for $500 in child-care support and $500 in food vouchers. And the program is successful, in that child poverty and malnutrition is drastically reduced in Springfield --- and more importantly, I get elected to the Senate on the basis of all the headlines i get.

But now, you're working in Springfield, and you make $495 a month. A friend tells you about a new job that opened up that pays $600 a month. Do you apply for it?

If so, you run a grave risk of substantially reducing your standard of living. You'll make an extra $105 per month that you can spend how you like, but you'll also lose $500 in "free" food. What's your incentive to try to better yourself?

The amount you have on which to support yourself will be reduced by at least $500 if you take a job that pays $105 more -- by making an extra $105, you cost yourself $500 out of pocket. You lose nearly five times the value of your raise. Whether you call it "taxation" or not is largely irrelevant.

And that, in more or less complex terms, is exactly what happens with public assistance in parts of the U.S. If you earn, say, $500 or less, you get a thousand or more in public assistance; but earn more than that, even one dollar more, and you just lost all that assistance (or at least a significant part of it).

It's a completely broken system that ends up making it worth more to you to NOT improve yourself, in the short term.

I was getting a bit confused by the use of the term 'marginal tax rate' myself, GG - but the way the term is being used is analogous, not exact. In essence, what they're saying is that it would be like having a 100% income tax on their raise for those who need child care, and receive a raise.

In other words, in the situation I originally proposed, if you earn $500, and the state pays for your child care $500... and then you earn $510 and the state only pays $490, you owe that extra $10 to your child care people. So you didn't get a raise that you can spend - you got a raise to pay part of the child care the state had been paying for you previously. It's the same effect as a taxation on your raise.

Under the situation as it currently stands, if you earn $500, and the state pays $500 for child care - and then you earn $510, the state then drops child care to $250. In other words, you end up having to spend $240 that you weren't spending prior to the $10 raise, which is basically equal to having your raise amount taxed 2400%.

However, I think under the system JB and I were just considering, if you earn that extra $10, the state cuts your child care benefit to $495 - so now you have to pay $5 from your wallet for child care, and still have an extra $5 to do with as you please, meaning your raise is effectively $5.

The whole reason we're discussing this aspect is the fact that, to simplify the minimum-living wage, you'd have to consider the living costs of a single adult; the extra costs of day care/dependents would have to be worked out some other way, so that single adults weren't getting paid for kids they didn't have. And at the same time, you wouldn't want to have the state pay for all day care, period; so you have to have some means of reducing or cutting off that support. But if you just take it all back at the point where someone is earning CoL + DC amount, then you've just neutralized a HUGE part of their wages at once. I was originally suggesting the same thing, but in increments instead (unless you get that amazing $500 raise...), but I think now a percent incremental decrease would make more sense.

[Z]

You should go look up 'progressive income tax' before you say things like this.

OK, I looked it up - I'm saying I prefer a proportional income tax, not a progressive one. Are you saying you would prefer a higher tax percentage for wealthier citizens? How is that fair? Or are you suggesting that this is what I was suggesting? Because it wasn't.

I don't want the tax rate so high that people making 200x the cost of living are still only getting the CoL back after taxes, for example; but I also don't think it's fair if the same person only pays 1% tax as opposed to 10% for the person earning CoL either. I just think a flat, unexempted income tax rate is more fair. I think flat, unexempted taxes are fair across the board - from property tax, to sales tax, to whatever tax.

Yes, this means that the wealthy supply the largest proportion of tax money in the system; but shouldn't they? The wealthy already own half the country, can buy and sell politicians like atheletes, and control most of the voting - they can darn well pay the taxes for it as well. :D

[GreNME]

Interesting discussion, regarding the tax stuff.

OK, I looked it up - I'm saying I prefer a proportional income tax, not a progressive one. Are you saying you would prefer a higher tax percentage for wealthier citizens? How is that fair? Or are you suggesting that this is what I was suggesting? Because it wasn't.

I don't want the tax rate so high that people making 200x the cost of living are still only getting the CoL back after taxes, for example; but I also don't think it's fair if the same person only pays 1% tax as opposed to 10% for the person earning CoL either. I just think a flat, unexempted income tax rate is more fair. I think flat, unexempted taxes are fair across the board - from property tax, to sales tax, to whatever tax.

Yes, this means that the wealthy supply the largest proportion of tax money in the system; but shouldn't they? The wealthy already own half the country, can buy and sell politicians like atheletes, and control most of the voting - they can darn well pay the taxes for it as well. :D

The thing is, you say you want one thing (proportional tax) but then you go on to explain, in essence, the need for progressive tax.

Then again, I support progressive taxation, even as someone who is likely a week or so away from jumping another tax bracket for the second time in three years. The reason I support it is-- and this is tied to the original posting of this thread-- I have learned the value of living an adjusted lifestyle to meet my financial needs while still moving up in salary and not facing a heavier tax burden. When I say "not facing" a heavier burden I don't mean I'm not paying more taxes, it means I've already been adjusting to the slight increase-- US taxes only tax the wages at a higher rate that are above the previous bracket anyway-- so my behaviors, saving, and spending do not significantly change in such a way that I would actually feel any heavier a burden. If anything, the more money I make the easier it gets, despite incurring heavier taxes for the higher salary.

I use myself as an example because I am a high target for taxation: I am a single, childless male who makes almost completely a taxable salary-- very little in terms of non-taxable accounts (I have a couple) and no capital gains to speak of. However, I live with someone and pay a mortgage, help pay for food, care for the three dogs (450 lb of combined dog-ness), and all the normal living expenses and regular household maintanence costs.

But there are ways to avoid tax hits and make the most of money coming in.

A reason (not the reason) "the mrs." and I aren't married, for instance, is because it avoids a tax hit. We make too close an income to take advantage of a tax break a couple with a significant income difference would make (IOW, we'd be filing separately anyway). For each incremental increase of income we make, we only adjust spending a certain percentage compared to the difference in money we will be bringing in (the percentage varies, but remains lower than 75-100%). When we have the opportunity, extra money goes into a non-taxable or lower-taxed account (like a 401k or some IRAs). Once sufficient extra income is flowing, it will go into other investments, with the eventual goal being able to have significant money flowing from capital investments, allowing our eventual retirement funds to handle the cost of living. Since we're not rich and will probably never become completely independently wealthy, this is the best plan we have so far to ensure that we will not have problems going into retirement, even if we eventually choose to do so early.

It's probably not the greatest plan, but it's a solid one and is spread out enough that it covers possible problems that could occur (say, a market 'correction' around the time of investment). It damned sure doesn't count on Social Security or any other government assistance, because as far as we (the mrs. and I) are concerned every generation after and including Gen-X is pretty much going to have to take care of themselves.

And therein is the problem with wages today: there isn't enough income for the median average wage earners for everyone to be able to plan like that. There is a possibility that there could be enough if more people were financially educated, which would allegedly increase the money flowing in the economy, which would allegedly increase the chances to earn more income, but I remain skeptical. The current US government is on its second term of 'infusions' of money in the form of tax breaks to promote more economic activity, and it's the second time a top-down method during a time of deficit spending has turned out to not show significant signs of working. The recession at the end of 2001 was blamed primarily on 9/11, but I tend to think that it being nearly the 3rd or 4th year in a row with no minimum wage adjustments for cost of living that brought about freezes in spending in the face of national crisis. The tax breaks have only served to help a little, and the economy is still nowhere near the condition it was prior to 9/11 despite the monthly and quarterly announcements of how things are getting better/worse.

This is why I think progressive taxes are currently the best course of action. Significantly higher discretionary funds for those in the extremely higher brackets are not going to be adversely affected, and those with such funds above a certain level pay a large portion of their taxes as capital gains anyway (which is 15%). As a fiscal conservative myself, I don't see what the whining about the progressive tax is all about except for the verbiage which sounds (in theory) harsher but in reality is not that bad. The real hefty taxes don't even begin until well into the six-figure mark (above $300k) anyway, and by the time you're there you either have someone who knows where to put your money or you learn to put it there yourself. I have zero sympathy for seven figures or more who complain.

[Geek Goddess]

If so, you run a grave risk of substantially reducing your standard of living. You'll make an extra $105 per month that you can spend how you like, but you'll also lose $500 in "free" food. What's your incentive to try to better yourself?

The amount you have on which to support yourself will be reduced by at least $500 if you take a job that pays $105 more -- by making an extra $105, you cost yourself $500 out of pocket. You lose nearly five times the value of your raise. Whether you call it "taxation" or not is largely irrelevant.

I understand all that. If someone receives LESS government subsidies, for whatever reason, that is NOT taxation. It is less subsidies (or assistance, if that is the preferred term). It is not irrelevant, it is important to call things what they are. Calling a reduction or elimination in a subsidy a "tax increase" is wrong, unless one is trying to manipulate the perceptions of what is actually happening. In my above posting of the results of several tax calculations at various incomes $7 through $14 per hour, one child, no other deductions: in none of those three examples did the tax payer owe ANY tax for the year. If, in any of those cases, someone began receiving child care assistance, would you refer to that as a tax rebate?

Understand, I am not talking about the effect on a wallet, I am talking about identifying and labeling things correctly.


It's a completely broken system that ends up making it worth more to you to NOT improve yourself, in the short term.

I was getting a bit confused by the use of the term 'marginal tax rate' myself, GG - but the way the term is being used is analogous, not exact. In essence, what they're saying is that it would be like having a 100% income tax on their raise for those who need child care, and receive a raise.

In other words, in the situation I originally proposed, if you earn $500, and the state pays for your child care $500... and then you earn $510 and the state only pays $490, you owe that extra $10 to your child care people. So you didn't get a raise that you can spend - you got a raise to pay part of the child care the state had been paying for you previously. It's the same effect as a taxation on your raise.

Under the situation as it currently stands, if you earn $500, and the state pays $500 for child care - and then you earn $510, the state then drops child care to $250. In other words, you end up having to spend $240 that you weren't spending prior to the $10 raise, which is basically equal to having your raise amount taxed 2400%.

However, I think under the system JB and I were just considering, if you earn that extra $10, the state cuts your child care benefit to $495 - so now you have to pay $5 from your wallet for child care, and still have an extra $5 to do with as you please, meaning your raise is effectively $5.

The whole reason we're discussing this aspect is the fact that, to simplify the minimum-living wage, you'd have to consider the living costs of a single adult; the extra costs of day care/dependents would have to be worked out some other way, so that single adults weren't getting paid for kids they didn't have. And at the same time, you wouldn't want to have the state pay for all day care, period; so you have to have some means of reducing or cutting off that support. But if you just take it all back at the point where someone is earning CoL + DC amount, then you've just neutralized a HUGE part of their wages at once. I was originally suggesting the same thing, but in increments instead (unless you get that amazing $500 raise...), but I think now a percent incremental decrease would make more sense.

I agree that families need help, and that not all people who work hard have made bad choices about having children, going into debt for consumer goods, etc. However, when we keep talking about 'the state paying for child care' I hope that it will be remembered that 'the state' is YOU and ME paying for child care and the "free" food. I am not discussing in this thread that issue, just pointing out the inaccurate descriptions. The *state* has only what it receives from its citizens.
The marginal tax rates for 2007 income in the US is below - I hope the formatting comes across OK. Note, a single parent with a child, or with a dependent parent, qualifies for 'head of household' which has a lower tax rate than a single taxpayer. I qualified as Head of Household until this year, when my youngest turned 19. Note also, for example, that a head of household has a 10% tax rate on the first $11,200 of adjusted gross income, and a 15% tax on the incremental from $11,201 to $42,650 of adjusted gross income. That is the marginal tax rate - the 5% additional tax on the amount between $11K and $42K. I emphasized adjusted gross income, AGR. If your paycheck gross is $15,000, by the time you figure in your standard deduction of (roughly) $7800 for you and one dependent, that brings your AGR down to (15,000-7800) $7200, which would fall in the 10% bracket. Add the Earned Income Credit and a child care deduction credit, you would drop to owning no tax for the year (as per the examples that I calculated straight off the IRS site). The marginal rate goes to 25% after $42K, but again that is on the AGR. Currently in the US, the top marginal rate for individuals is 35%. It wasn't that long ago that was over 50% - in the 1980s


The table didn't copy correctly, here is a link to the margin tax rates for 2007

http://www.dinkytown.net/java/TaxMargin.html
Filing Status and Income Tax Rates 2007
Caution: Do not use these tax rate schedules to figure 2006 taxes. Use only to figure 2007 estimates.

[balrog666]

I agree that families need help ... [snip]


You people are a one-note-band band, and keep coming back to some hypothetical single mother with no husband, no relatives, no friends, and no future. How can you be so incredibly ignorant of basic human nature.

Yes, people who can't manage their money need help. And the help they need is in learning to manage their spending, in making choices among competing options, and experiencing the joy and sorrow of juggling the trade offs involved in making their own decisions.

It's a rare bird who can learn those lessons from watching other people make decisions and, in general, they won't learn those lessons while spending your money.

It's all a matter of marginal utility*, so, get a grip and make people spending your money think of it as their money.

* - Marginal Utility (http://en.wikipedia.org/wiki/Marginal_utility)

[Z]

You people are a one-note-band band, and keep coming back to some hypothetical single mother with no husband, no relatives, no friends, and no future. How can you be so incredibly ignorant of basic human nature.

Yes, people who can't manage their money need help. And the help they need is in learning to manage their spending, in making choices among competing options, and experiencing the joy and sorrow of juggling the trade offs involved in making their own decisions.

It's a rare bird who can learn those lessons from watching other people make decisions and, in general, they won't learn those lessons while spending your money.

It's all a matter of marginal utility*, so, get a grip and make people spending your money think of it as their money.

* - Marginal Utility (http://en.wikipedia.org/wiki/Marginal_utility)

You really aren't listening at all. That 'hypothetical' single mother is my best friend. She made it out of that bad situation by sheer luck - she got hired for a job ordinarily requiring a bachelor's degree because she had bedroom eyes and hot legs.

If there's not enough money to manage, the best skills in the world won't help.
Yes, we here your repeated assertions that it's all about teenagers living with mom and dad and wasting their income on 90 inch plasma TVs and third Ferraris. But I don't really care about them. Not one bit. I care about the folks out there starving to death because they're not getting paid enough to survive.

If Junior is smart enough to stay at home and get mommy and daddy to foot his bills while he wastes income on PS3 games and Subway four times a day, more power to him. The gravy train will end some day, and then he'll be down at Burger Time with the rest of the poor slobs trying to get a third job. Either that, or he'll inherit Daddy's business and post his idiotic wealth-obsessed opinions on Internet forums, whining about those stupid poor, starving people who are 'too lazy' to go to college and get the better jobs.

But if he's working along side of Martha, who went to college but finds the job market swamped with her fellow graduates and not enough jobs, who has to work two jobs just to survive by herself - that's what the problem is. If a person works a 40 hour work week, they should earn enough to survive a week, at minimum. That is the absolute bottom line. If they're not earning at least that much, then the system is broken.

I don't care if Daddy Warbucks makes a billion bucks an hour. If he can, fine, whatever. I don't really care whether tax is progressive or proportional, either - as long as it's not regressive. I don't think progressive taxation is fair, but I can see where it might be useful.

I don't care if someone is too lazy to keep a minimum wage job - let them starve, in that case.

What I care about is that every person willing to work, and able to work, should be able to afford the basic necessities without putting their mental, physical, or other forms of health at significant risk. At present, that's not the case - not everywhere, at least.

But once minimum wage equals the cost of living, I frankly don't care if it ever goes above CoL. If it at least matches CoL, I think that's fine.

[balrog666]

You really aren't listening at all. That 'hypothetical' single mother is my best friend. She made it out of that bad situation by sheer luck - she got hired for a job ordinarily requiring a bachelor's degree because she had bedroom eyes and hot legs.

If there's not enough money to manage, the best skills in the world won't help.
Yes, we here your repeated assertions that it's all about teenagers living with mom and dad and wasting their income on 90 inch plasma TVs and third Ferraris. But I don't really care about them. Not one bit. I care about the folks out there starving to death because they're not getting paid enough to survive.

If Junior is smart enough to stay at home and get mommy and daddy to foot his bills while he wastes income on PS3 games and Subway four times a day, more power to him. The gravy train will end some day, and then he'll be down at Burger Time with the rest of the poor slobs trying to get a third job. Either that, or he'll inherit Daddy's business and post his idiotic wealth-obsessed opinions on Internet forums, whining about those stupid poor, starving people who are 'too lazy' to go to college and get the better jobs.

But if he's working along side of Martha, who went to college but finds the job market swamped with her fellow graduates and not enough jobs, who has to work two jobs just to survive by herself - that's what the problem is. If a person works a 40 hour work week, they should earn enough to survive a week, at minimum. That is the absolute bottom line. If they're not earning at least that much, then the system is broken.

I don't care if Daddy Warbucks makes a billion bucks an hour. If he can, fine, whatever. I don't really care whether tax is progressive or proportional, either - as long as it's not regressive. I don't think progressive taxation is fair, but I can see where it might be useful.

I don't care if someone is too lazy to keep a minimum wage job - let them starve, in that case.

What I care about is that every person willing to work, and able to work, should be able to afford the basic necessities without putting their mental, physical, or other forms of health at significant risk. At present, that's not the case - not everywhere, at least.

But once minimum wage equals the cost of living, I frankly don't care if it ever goes above CoL. If it at least matches CoL, I think that's fine.


That's utter crap. Luck doesn't cut it in the real world. You can't rely on luck to feed, clothe, and educate your children to their full advantage. And anything other than 100% effort towards that goal isn't worth wasting time on.

And, gosh, believe it or not, if you can't manage $50, you sure can't manage $500.

Furthermore, relying on the government to force employers to pay you more than your are worth doesn't work either.

Frankly, listening to the pathetic sob stories of people who have made poor choices, haven't learned from that, and who then refuse to take another step to help themselves gets old. Eff 'em.

I work with people who want to change their lives for the better and who are willing to abandon their idyllic, idiotic lifestyles in order to build a better future for themselves and their families and anyone who accepts less than that, or who enables a lesser standard, deserves every stupid heartbreak they engender.

So, stick that in your pipe and smoke it for all it's worth.

[plumjam]

But, hey, I can post this instead:



please do

[GreNME]

That's utter crap. Luck doesn't cut it in the real world. You can't rely on luck to feed, clothe, and educate your children to their full advantage. And anything other than 100% effort towards that goal isn't worth wasting time on.
Baloney. Part of being an entrepreneur is a gamble-- there are no sure things out there when risking your livelihood on your own business. That's why so many don't make it

And, gosh, believe it or not, if you can't manage $50, you sure can't manage $500.
Both of which are not big deals if you can manage $5,000 or $50,000. And if you think your two figures make that impossible, you need to get out and meet more people who make more than $50,000.

Furthermore, relying on the government to force employers to pay you more than your are worth doesn't work either.
"Worth" is arbitrary. It isn't "worth" that employers are paying employees. It's "value." Very big difference.

Frankly, listening to the pathetic sob stories of people who have made poor choices, haven't learned from that, and who then refuse to take another step to help themselves gets old. Eff 'em.
Nice straw man-- a pre-emptive strike at an argument that hasn't been made. All the arguments I've seen so far have been of people who made bad choices, wanted to change their direction, and at least tried something to make it happen.

I work with people who want to change their lives for the better and who are willing to abandon their idyllic, idiotic lifestyles in order to build a better future for themselves and their families and anyone who accepts less than that, or who enables a lesser standard, deserves every stupid heartbreak they engender.
I highly doubt you speak to the people you claim to 'work with' like you are here. You likely wouldn't 'work with' them any more.

So, stick that in your pipe and smoke it for all it's worth.

I just want to note for everyone else reading that when I said earlier that I'm fiscally conservative, I personally find this kind of attitude abhorrent. the whole 'boostraps' idea is a myth for a huge percentage of people out there, because the only real fiscal option is to be able to pay their bills and essentially subsist. It's not that there aren't jobs, it's that many jobs below the median wage numbers have barely changed base rates of pay for nearly ten years, while inflation has continued to rise.

Further, the median wage numbers are skewed by the top wage earners. You can have a thousand people who make $1,000, and ten people who make $500,000. The median wage would be $250,000, the (somewhat more indicative) average wage would be $5940 and some change, and the (most significantly indicative) mode wage would be $1000. Why is the mode most significant? Because it shows the group who is most directly affected by any economic policy and subsequent changes.

[Z]

Ok, balrog, believe whatever you like. Attack that strawman some more, tilt at a few windmills, whatever.

I bet you couldn't manage half so well if I stripped you of everything and made you try to get by in Cinci during winter. I bet you would be afraid to even try.

Don't bother though - your opinions are no longer even worth reading.

[Gregoire]

No problem. :)

Taking the fast-food restaurants example... introducing a living wage throughout society wouldn't, I think, have the effects you say. I don't believe they'd sell less food. People would still eat away from their homes.. and fast-food is just about the cheapest option for this. It would remain about the cheapest option.
Most patrons of fast food restaurants are not high earners, they are average or below average earners. With the introduction of the living wage it is this section of the society that would gain the most, comparatively, and would have more disposable income available. They'd most likely eat at fast food restaurants more regularly. I believe the net effect would be beneficial for fast food.

A similar effect would pertain throughout society. Less money would be spent on the kinds of things bought by the rich and the middle class, and more money would be spent on the kind of things bought by the poor.
Porsche car dealers might sell a few less cars, Gucci sales might drop a bit.. I don't think 99% of society would care about that.


I have been working a lot and so have been unable to log on lately.:)

It sounds like you agree higher prices will decrease sales in fast food restaurants. But you are arguing there will be an offsetting increase in sales because unskilled workers will have more money to spend in these restaurants. I would argue that this appears to be quite an assumption.

And you also have to account for the fact that low wage workers work in more industries than just those where they spend their money. For example, you would see office workers and workers in expensive restaurants also losing their jobs (or working fewer hours) because their employers' higher prices decrease their overall sales. And here there would be little to no offsetting increase.

As an alternative, I have agreed that the EITC may be a better antipoverty program. One could argue against me by pointing out that the Earned Income Tax Credit (EITC) too is detrimental to employers in the sense that it is funded by taxation. (Increased taxation could lead to lower consumer spending.) But that taxation at least is spread throughout the economy rather than the Living Wage law which targets only the employers of unskilled workers.

[69dodge]

Further, the median wage numbers are skewed by the top wage earners. You can have a thousand people who make $1,000, and ten people who make $500,000. The median wage would be $250,000, the (somewhat more indicative) average wage would be $5940 and some change, and the (most significantly indicative) mode wage would be $1000.


How do you get $250,000 for the median?

I get $1000.

(Line up all thousand and ten people in order of their earnings, then look at the middle one, number 505. He earns $1000.)

[jimbob]

Can you point me to one of those jobs?

Lord Simpson of GEC (http://en.wikipedia.org/wiki/George_Simpson%2C_Baron_Simpson_of_Dunkeld)

Sell your defense arm to BAe Systems, and use that and borrow heavily to buy into telecoms just before the speculative bubble burst.

He still managed a pretty good renumeration for destroying a company's share price.

[GreNME]

How do you get $250,000 for the median?

I get $1000.

(Line up all thousand and ten people in order of their earnings, then look at the middle one, number 505. He earns $1000.)
You're right, and I should not try to do that when I'm tired. My apologies.

The national statistics for income are based on the mean, not the median, which is why they're skewed. I don't even know why I had the other numbers in my head.

[Jaggy Bunnet]

I understand all that. If someone receives LESS government subsidies, for whatever reason, that is NOT taxation. It is less subsidies (or assistance, if that is the preferred term). It is not irrelevant, it is important to call things what they are. Calling a reduction or elimination in a subsidy a "tax increase" is wrong, unless one is trying to manipulate the perceptions of what is actually happening. In my above posting of the results of several tax calculations at various incomes $7 through $14 per hour, one child, no other deductions: in none of those three examples did the tax payer owe ANY tax for the year. If, in any of those cases, someone began receiving child care assistance, would you refer to that as a tax rebate?

Understand, I am not talking about the effect on a wallet, I am talking about identifying and labeling things correctly.

Under the UK system, you receive a tax credit if your income is below a certain level. As your earnings increase, the amount of that credit is reduced. In addition you are subject to tax on the increase, meaning that you keep in many cases approx 30% of each additional pound earned. All of this happens through the tax line of your payslip - presumably you agree it is reasonable to talk about a marginal tax rate of 70% in that case?

That system replaced one where the payment was made directly from the government to the claimant following a social security claim completely separate from the tax system. The purpose of the two was identical but different methods were used - marginal tax rate allows the two to be compared in the effect they have on the indvidual. Including only tax and not benefits makes it impossible to compare the two.

Marginal tax rate is a measure of how much of each additional pound of earnings are actually available to you as increased disposable income. Not including loss of benefits in the calculation makes it meaningless - what matters is the TOTAL impact, however that comes about.

[tuc0]

I have read maybe half the thread and have to say that the emotional anti-capitalist reasoning of some people sounds very wooish. Not that they will ever admit that...

[quixotecoyote]

Generally if you're going to bump something off the 2nd page, it's nice to have something of substance to offer.

[tuc0]

So very very sorry. I just noticed the poll, read the thread and commented without knowing when the last post has been made. I hope it didn't upset you too much ;)

[Esperdome]

I wouldn't worry about it too much. Some newbies have resurrected threads 2-3 years old!

But there is a thread over in Social Issues currently discussing much of the same stuff.

[Gregoire]

I have read maybe half the thread and have to say that the emotional anti-capitalist reasoning of some people sounds very wooish. Not that they will ever admit that...



I actually tried to point something like this out noting that the Science of Economics, though not perfect, has done a great deal to empirically test some of the claims made on this thread. I was going to actually quote an Economics 101 textbook at one point, but decided against it.