Actually, we have farm subsidies because the oversupply was increasing the price of food. There were so many suppliers with so much land they had to take a loss on land (missed profits) and would risk a loss on production. Basic prisonner's dilemma: 10 farmers each producing 100 tons of food, but only 800 tons are bought; each farmer can't get an agreement with the other farmer, so they all produce 100 tons of food instead of 80 tons, because if you can sell your 100 tons then you can make more profits. Unsold food means unrecovered expenses in irrigation, pesticides, crop maintenance, seed costs, and so on; the risk of unsold food translates to costs, and the costs are rolled into the food price, so the cost of food goes up. Consumers pay for 1000 tons of food, but only buy 800 tons of food.
The only way for removing minimum wage to reduce what a worker is paid is if the labor supply is being restricted by minimum wage, thus increasing the price given the supply/demand.
The labor supply isn't restricted. We have a huge labor supply; it's the money or job supply that's restricted.
You think denying people a paying job ($0/hour) is better than them having a paying job?
It's complex.
As I said, people now must have a job to have a survivable income. A job without a survivable income is still going to help you scrape by; it raises your chances, and is better than nothing. Thus you don't have enough negotiating power to negotiate for fair compensation: If the labor will KILL you, but food and healthcare will sustain you, the proper payment is the cost of food and healthcare that will sustain you, PLUS compensation for your time; however, without an income, starvation will kill you faster, so you will work a job where you pay $10 worth of your health and receive $5 in compensation, thus dying more slowly. This is, conceptually, what happens in our current system.
It becomes complex when you consider rebalancing. Raising minimum wage does create some job scarcity, but only where the worker is less valuable than an alternative (e.g. automation, although there are many management strategies which are more expensive but more effective than others, and so become cost-effective when labor is expensive). This happens when the net profit using the worker is lower than the net profit by other means (when unprofitable, net profit by not doing anything is $0, and net profit by employing labor is negative). This means a minimum wage raise has an effect of moving money from some laborers to others.
With that in mind, you must consider: One million laborers slowly killing themselves; or half a million starving, half a million surviving? In one model, we conceptually lose everyone: no one is really better off; they merely suffer longer. In the other model, we outright give up on half of them.
This is why I prefer to ensure survival outright, to disconnect life from work. The comforts of life should be tied to employment; living itself, uncomfortable and unsympathetic, should not. Then we have no dilemma: all laborers, even unemployed, are cared for; and laborers can reject unfair employment terms, negotiating a fair deal, requiring no intervention by the government on their behalf. A great many moral questions are eliminated, as are many economic uncertainties, and many risks, many costs, and many ineffective social safety nets which try to address these problems in current.
Increasing supply is not always a good thing. We have farm subsidies to prevent farmers from producing too much food; the US Government buys 500,000 tons of sugar every year specifically to reduce supply in the market.
If the supply meets demand at 500 million tons of grain, producing 20 million tons more won't do anything but create too much grain. Other suppliers will have excess, and will store it as seed grain; the next year, they'll cut back on production. They'll purchase less new seed grain.
Wealth only increases if there is actual scarcity and a new method of production reduces energy. If you invest 5 units of effort to create 10 units of product, you can increase wealth by learning to invest 4 units of effort to create 10 units of product. If you stand up a new facility which must invest 5 units of effort to create 10 units of product, you are still investing 10 units for 20, or 1 unit effort per 2 product. Wealth has not increased; scarcity may decrease. If, however, supply meets demand, adding more production facilities only consumes finite resources while creating oversupply, which doesn't increase wealth (may decrease wealth by creating waste).
Removing minimum wage right now would leave the poorest under the threat of a worse situation than a horribly low salary. The salaries they would be offered would be below tolerable, but better than nothing.
You should negotiate based on your best alternative to a negotiated agreement. When the best alternative is having nothing, anything is something. That's why we have minimum wage. My observation was that we can immediately repeal minimum wage when the best alternative to a negotiated agreement is functionally superior to working the grease fryer at McDonalds for $2/hr; we can do that by separating unemployment from death, and instead attaching it to stability and security with extreme discomfort. Our current welfare system retracts its offerings when you get a job, and can even permanently remove your security (e.g. if you get a job and lose it again, or it's actually horrible and you quit, you lose unemployment), and so pursuing employment when on welfare comes with the risk of lost stability; removing this risk but leaving discomfort and security means people will be highly motivated to seek employment, and highly motivated to refuse or abandon employment which is ill-compensated.
We don't provide an alternative to work. I want to provide one that encourages employment, but that does allow you to give anyone and everyone the finger if they refuse to hire you on fair terms.
I worry about how much of that would simply be funneled to the casinos and liqueur marts. Maybe they are acceptable parasites. I imagine it would help some people. But some of the homeless are down'n'outers are there because they can't get their act together, and handing them money isn't going to necessarily help them do so.
I abandoned this argument long ago, when I realized I could use an EBT card to buy a lot of Tide laundry detergent that I can then sell. Back in 1912, Winston Chuchill said that old-age pensions (Social Security OASDI) and unemployment insurance wouldn't save anybody; but that it would provide hope, which would encourage people to save. That's exactly what happened: people gained hope. Show people what should be a clean shot to survival--or at least a guaranteed resource that they very probably can scrape by on, and if not then they can get by with minimal help--and they will be encouraged to survive, rather than to booze out. It may still happen, but it will happen less; moreover, I do not need to put my sympathies with people whose bad decisions cost them their livelihoods when their livelihood has been bought and paid for completely by society's good graces.
If that was true, then there really wouldn't be any problems when factories had massive layoffs. And when they do eventually find work elsewhere, the extra competition drives down wages.
What of the delay between losing millions of jobs and finding a new way to capitalize on all of this available labor? Should the factory worker put aside his need for food, shelter, and clean water for three, maybe five years, until the market discovers a new way to employ them?
Except that there is work for people with real skills. Tech schools, trade schools, STEM degrees, and less so with philosophy or anthropology.
You mean that whole crippling debt thing, with the 3-5 years out of college delay to find a job, with deferred loan payments accruing interest, leaving skilled laborers with something akin to a 30-year mortgage, endless debt that will suck their paychecks dry? It delivers the upside of having dropped STEM salaries from ridiculous numbers such as $150k or $220k down to the reasonable range of $50k-$80k. I've known many Nursing students who had Nursing master's degrees, and could attain a full $40,000 annual salary... in Washington DC, where salaries are high. This when we supposedly have a nursing shortage.
Well.... I highly doubt that it wouldn't be a contentious issue and be tweaked up and down on a regular basis at the whims of the politicians and the voting blocs.
My simulations indicate that a partial dividend is viable, because I leave state welfare alone as a huge risk control: the state welfare system, in a predictable failure mode, may shrink to 10% or smaller if the dividend is not quite enough for the unemployed to survive. The single impedance I've encountered is a landlord's explanation that landlords usually don't underwrite leases of more than 1/3 of the tenant's income, as a risk control; and I find this dubious because I qualify a Citizen's Dividend as a "Right to Life" provision, guaranteeing access to all basic needs, and thus would provide it statutory immunization from taxation and court-ordered garnering of all kinds.
The landlord risk is, essentially, that the tenant may have an unpredicted medical expense, or spend their money on booze, or some such; but you can't refuse life-saving medical treatment, you can't garner this income source, and I provide an additional mechanism for two parties to agree to divert part of the payment first. This mechanism is such that the two contact the Social Security administration, sign a co-agreement to divert some dollar amount to a third party (e.g. landlord) each month, and will each be immediately notified if either party contacts to cancel the agreement (which is unilaterally effective by both parties). The risk of non-payment is
Dividends often come from stock markets, or from board members who own a lot of common stock and get paid in stock options. Most investment nowadays isn't venture; venture investment is actually a very small portion of the investment market.
If a person wants to be a dairy farmer, he's entering a market of dairy farmers. What value is he bringing but the chance to take business (and value, and profits) away from other dairy farmers, and thus the chance to make himself and his venture backers rich?
Imagine you require 100 people working 10 hours at $10/hr to build a car. The car costs $10,000. There are 2080 work hours in a year (40*52), so these persons can afford to buy a car in 173 days or about 5.75 months. They must produce about 876.5 cars in that time: the economy must support other services, providing a market for about 776.5 cars, so that these 100 people can buy the cars they're building. This is, essentially, the Ford model.
Now imagine you automate half of that. You have 50 people working 10 hours at $10/hr to build a car. The car costs $5,000. These people can now afford the car in 87 days; but the other 50 have to find other jobs, or else can't afford the car. Their other jobs may be less lucrative: they may make $8/hr, so have to work 108 days to afford the car.
If you want to pay the worker based on improved productivity--that is, the productivity of the machine, which is not an employee and not paid and does the work of 50 men--you pay them $20/hr. 50 people working 10 hours at $20/hr, the car costs $10,000, and it still takes them 87 days to afford it. The other 50, if they've found other jobs which have not experienced such improvements, again working $8/hr, will require 216 days to afford the car.
Both of these situations carry out. In the first, after the 87 days, less money has been paid for the car, and so the other $5,000 usually paid for the car in the next 86 days is owned by the workers (they work, they get paid, but the car cost half as much for them to buy); the 50 who have fallen to janitorial jobs will take 108 days instead of 173 days, and come out with about $3,000 at the end of that whole period. In the second, the worker pays $10,000 in 87 days, but still has $10,000 after the next 87 days--he comes out a full $10,000 ahead, instead of $5,000 ahead; while the other workers, in lower jobs, require 216 days to pay that $10,000, falling behind by about $2,000.
In essence, when we automate jobs and divert the pay to the worker whose job wasn't excessed, we are diverting the money from the pockets of the poor (the excessed laborer) into the pockets of an elite class of laborers whose jobs are still important. In the most basic sense, you move money from consumers to laborers; consumers may be those with little money, especially since you are excessing a lot of jobs. If we improve efficiency all the way down, those lower jobs evaporate; we're left with unemployed laborers who can't afford goods, and expensive goods.
You remove them, or put in dysfunctional ones, and see what happens.
A large business without middle management is like a global command economy run by three people: it works great on paper, but three people cannot account for the needs and functions of every individual township.
Think about managers like CPU cores devoted to the task of scheduling processes, and laborers like CPU cores devoted to executing application code, with each task they're assigned being a thread in a process. You have a hundred thousand CPU cores and a million tasks; do you think a single-threaded CPU scheduler would handle this? Or would you need to devote 10 or 50 or 100 CPU cores to a multi-threaded, non-locking scheduler?
Dividends are paid out to shareholders. Good question. The only labor shareholders of common stocks have applied is buying stock. Same with capital gains, except trading stock market is just gambling and not really trading a product.
Thing is these things don't actually provide any value. They have no value. They are not goods which can be traded, and cannot do anything except siphon money. At the end of the day, you have an auto mechanic fixing your car, or you have a hamburger; if McDonalds pays out dividends, that's sort of like salary to non-working shareholders, but it doesn't technically count as labor. Trying to call it value, however, also doesn't work.
Amusingly, a competitor could simply not pay dividends, re-investing the money in the business, and sell a cheaper hamburger. That opens up a whole counter-debate where I can just accuse you of bringing up broken shit that doesn't follow the rules, because we can discount it by starting up a competing business in the same market and thus show it's all imaginary. Which then becomes stubborn and unpleasant.
You raise interesting points. As poverty is both absolute poverty, being the real condition of not affording basic needs, and relative poverty, being the imaginary condition of having less money than average for an arbitrary standard of living considered to be attainable, I will say the same about value: things like food and steel and auto repair have real value; things like investments and dividends and capital gains are imaginary. My position works perfectly for things with real value.
The truth of the matter is costs come from risks, material mark-up, Government taxes, etc. But all these things translate back to labor: Somebody has a job in which they receive those funds. Risks are controlled with funds which occasionally pay out to cover risk events, reducing the insurance premiums for transfer risk (e.g. we'll accept the 99.999% likely loss of less than $1M/year, but the insurer will pay anything beyond that in such rare cases); risks turn into the purchase of other goods from other businesses. Mark-up on materials pays other businesses, which goes into the same system, and also pays executive salaries and taxes and such. Taxes pay the Government to spend money paying people and businesses to do things for the good of society.
Costs which don't eventually turn into salary go into a vault to never be spent.
Upper management is one of the most important parts of any business.
Our business is dysfunctional due to old-school upper management which has not moved with modern trends; they haven't integrated a technical officer or a risk officer, and so the business now has no strategy for handling risk. We have executives who seek to capitalize on purchases of other business assets, who seek to capitalize on markets, and so on; they sit at the table arguing who is most important, what strategies need the most emphasis, and how they work together. That's what executives do.
Nobody discusses how to build our technology infrastructure to handle it, and so Finance runs two hundred thousand legal contracts by the manual labor of clerks and filing cabinets--meaning clerks must remember, in their heads, that certain contracts must be fetched from the cabinets and manually examined to remember to pay bills, lest we enter breach of contract. Likewise, nobody looks around the boardroom and cries out that all of the shit we're doing has risks, may destroy the company, and needs controls in place to prevent that. This is what CTOs and CROs are for, and these are what we don't have.
Another issue I've seen is a lack of project management--middle management and lower management, in a sense. Project managers directly work with people, while program managers and portfolio managers align projects and the entire portfolio of projects in a business to avoid overlapping work and make sure the business is only doing things that support the business strategy. Because we have none of this, the business bleeds money like crazy; I've worked at Government agencies, and respect them for their extremely high level of monetary efficiency, because this place is approximately 3% as efficient at getting anything done as Social Security or the IRS.
Corporate governance is a fascinating topic. Project managers study a lot about human resource management and stakeholder management; it turns out you need to keep your laborers happy and continuously develop their skills, or else your business fails. Team building is a big part of project management, but so is individual human resource management: you should know that certain people are interested in certain projects, and disinterested in others, and so you assign them as best you can where their skills and interests align so they actually work. This includes people having interests in some projects because they impact other projects they're interested in: you want the new IT fiber network upgrade to go through properly because you are a storage nerd and highly interested in this new SAN system you're installing on the new 10GbE backend, so we're assigning you as a design resource to make sure the switches and networks and cabling take storage networks into account and can properly back our VM farms.
Everyone thinks their job is more important than everyone else's job. If it were, we would fire everyone else.
Actually, if you can get everyone a barely survivable standard of living by default, you can repeal minimum wage. Minimum wage gives a standard of fairness to cite in negotiation; when people can survive just fine without it--albeit, not comfortably--they will look at wages and only accept wages high enough to improve their quality of life, discounting the cost of having to work. That includes the time sink (40 hours/week is a lot of time compared to not working) and the personal irritation (cashier in an air-conditioned K-Mart is worth a lot less money than hauling bricks and shoveling shit in the hot sun).
In these conditions, a minimum wage is a figure to show a standard of fairness: these laborers want $10.15/hr, but the Government says these unskilled jobs are worth $7.25/hr; more laborers will accept $7.25/hr, and those who won't will accept considerably lower wages than they would usually demand, because they're aware they're making unusual demands above the established baseline of fairness. Without a published minimum wage, the baseline of fairness is whatever each party envisions when coming to the table; the employer and employee both think each are being unreasonable, and only begrudgingly compromise to the whims of the person across the table. You will compromise less toward the solution offered by some asshole who doesn't want to pay you than you will toward the solution published as known-fair.
The key to this is you don't need a job: welfare doesn't run out, and welfare is always there, and welfare is there to ensure your survival. Today, welfare doesn't do that; you need a job, you are desperate, and so you will take unreasonably low wages just to have something to stave off death. Minimum wage is needed when the employee is at such a disadvantage; but put the employee at advantage, and minimum wage supports the employer instead.
So if those who work get more than those who don't work, but those who don't work survive, you get a lot of power into the hands of the laborer. Currently, the laborer is threatened by death for unwork.
Low-precision human labor means throwing out parts that don't pass QA. If they're from raw steel, you have to expend more energy (cost) to remelt them again and again. The same goes for higher quality and consistency--which is precision, anyway; quality is the degree to which a deliverable satisfies requirements, and high quality is satisfying those requirements in the cheapest and most effective way. This includes opportunity requirements--that a result 20% more expensive is of attributes which make another, expressly-desirable but not necessarily required venture 50% cheaper--so you may elect to make something of higher grade than necessary for Project A because it reduces the aggregate cost of Project A and Project B. If not, making the thing of higher grade is gold plating: it's a waste of money and does nothing useful.
Safety is a cost factor. People will sue you, or you will need to pay to retrain lost workers. Either way, this costs money; it may happen infrequently enough that solving the safety issue is more expensive.
A task not directly possible with human labor can be done in another way for high expense (lots of labor), or can take too long (missed opportunity), or is a missed opportunity by being not humanly possible (lost profit). All of these cost money.
This is what a universal basic income or citizen's dividend is for. Consumers are the big movers in economy, and producers are the big makers; a portion of all income (individual and corporate) is taken and divided up among everyone (for some definition of "everyone"), stabilizing the bottom.
Imagine if all the homeless and unemployed had a fixed amount of income. Maybe $500-$600/mo. At $1.33/sqft (significantly more than I last rented), a livable microunit housing for a single individual would leave just barely enough for food, utilities, clothing, etc. Just barely. I think I have $50 of leeway in there at 17% of corporate and individual income (eliminating about half of taxes, including OASDI payroll tax, and applying a 17% flat to replace it). Right now, they have nothing, so can't buy anything; in this scenario, they have just enough to buy what they need to live.
This hypothetical creates an enormous market: if you fall to the bottom and lose everything, you still have the shirt on your back, enough money for a new shirt, and enough to rent a sardine can to live in (224sqft microunit; I may be able to get fancy without appreciably increasing costs, too...). Businesses can profit off this, while the mental and physical health problems of being homeless and hungry--starvation, unsanitary conditions, etc.--are lifted off the back of society.
On top of that, producers who fully automate are collecting profits. Automation reduces labor: it costs less to maintain a robot because it takes a collective 10,000 man-hours to produce a robot and 1,000 man-hours per year to fuel and maintain it (including mining fuel, refining fuel, shipping fuel, generating power, transmitting power, maintaining the power infrastructure, mining all the steel for the robot parts, refining steel, shaping steel, and sending maintenance people), but the robot does 50,000 man-hours of work in 10 years. 20,000 is less than 50,000, so that's 40% as many employment hours--40% as many jobs, if you will--for the same useful production.
This labor reduction by efficiency improvements includes far more than automation; for example, Toyota saved 45 seconds from a 65-second process building seats by using a shorter hose (raises the steam temperature) and installing the bolts in a different order (easier, faster access by the tech, who installs bolts and then steams the seats to drive out volatile manufacture chemicals). Many such optimizations allow the same humans to use the same tools to build the same things, but in 80% of the time overall, or 60%, or 40%; thus you only need half as many humans to build as many things in as much time.
The reduction of laborers and the increase in productive output means goods can come cheaper, but consumers are poorer. Fewer consumers exist. A citizen's dividend doesn't free us from work; it leaves us poor, but alive. It frees us from the terrible economic crash that comes when new management styles and processes. We will always find new use for laborers; but this comes after we put laborers out of jobs for a good while, and in the process destroy the labor force. Providing some return to the consumers for being consumes is, thus, advantageous to businesses: it provides them target markets to invest in, avoiding the economic problems of making higher-end goods for the working class which has just become the unemployed, and suddenly not having anyone to sell anything to.
A universal basic income, or a Citizen's Dividend in particular, is the solution to this conundrum. Universal vocational education--that is, college education--touted as a solution, is an exacerbating problem: laborers pay higher taxes or take on enormous debt to flood the market with cheap, skilled labor, giving employers the advantage of lower salaries as unemployment for a skilled labor class increases. Welfare, as a qualified service, takes on more operating cost as more people collect; while a universal income always pays at 100%, and is thus immune to the fluctuations of economy.
Pretty much. You can get more money doing X, so you do X. This is why free markets raise prices above the minimum when competition is hot, instead of doing an infinite downward spiral.
In negotiation, we use a tactic of carrying about public standards of fairness to negotiate. This is why I argue for a repeal of minimum wage: once we've instituted a Citizen's Dividend, a minimum wage becomes a tool for hiring managers to pin all basic labor jobs to a published figure, which increases the belief that this figure is "Fair" even though most people would flatly refuse to work for so little if such a figure weren't published. It's the same with published standard rates: that looks like a fair rate, drivers feel it's unfair to get paid much less, and passengers are encouraged to not blame the driver for the rate being high (and to believe more that the rate is fair, or at least more fair than they would otherwise think).
This is why published standards are dangerous when done wrong and when done in the wrong market. Minimum wage is the poster child for context-sensitive effect: in scarce employment markets, people are desperate and will take low wages, and so a minimum wage increases unemployment but sets a minimum standard of working-man income; in markets where demand for employment is more casual (i.e. you don't absolutely need a job, but life is considerably bad without one; or there are hundreds of jobs for you to take), people will argue for higher wages, and minimum wage helps managers convince people that $8/hr is silly and demanding and that they only deserve the $7.25 standard minimum wage for a minimum wage job.
Uber is just suffering from published baselines. It's impossible not to have market input; but it's authoritative when someone runs the numbers and sets a de-facto standard for drivers and passengers to reference.
Pat Robertson: My new economic plan will improve worker's rights without raising costs to businesses.
Ralph Nader: BULLSHIT! Your new economic plan involves raising minimum wage to $25/hr and mandating ACA healthcare for all workers, even $1/hr workers, from day one!
Pat Robertson: BULLSHIT! I clearly outline that workers who have received ACA healthcare cannot have it removed until next open enrollment, avoiding immediate cutting of hours to evade the ACA. This will completely eliminate Forever-21ization.
Ralph Nader: BULLSHIT! Forever-21ization will simply roll into standard hiring practice. Underemployment has skyrocketed since the ACA, and higher wages only increase that. If you raise the minimum wage, more workers will be hired, with fewer hours, so they'll make less in total, and won't get any benefits. This is already happening in San Francisco, where Obama's new plan to increase minimum wage to $10/hr has resulted in a drastic increase in the number of jobs but a drastic cutback in hours, resulting in employment numbers inflated by underemployment and by persons holding multiple jobs.
What I hear is 57,000 cabbies want to take money out of the mouths of families to feed their families, claiming their families are more important than other families. When you supply a service for $500, and the next guy supplies it for $250, the next guy can eat, and the people you were fleecing have $250 and can also eat. If they could eat already, they spend that $250 at the cobbler for shoes, and the cobbler can eat.
The cabbies should get a new job. Their business model is old and outdated. The CDAA needs to stop trying to prop up an obsolete business model that the consumer has already abandoned.
Slashdot Mirror
Actually, we have farm subsidies because the oversupply was increasing the price of food. There were so many suppliers with so much land they had to take a loss on land (missed profits) and would risk a loss on production. Basic prisonner's dilemma: 10 farmers each producing 100 tons of food, but only 800 tons are bought; each farmer can't get an agreement with the other farmer, so they all produce 100 tons of food instead of 80 tons, because if you can sell your 100 tons then you can make more profits. Unsold food means unrecovered expenses in irrigation, pesticides, crop maintenance, seed costs, and so on; the risk of unsold food translates to costs, and the costs are rolled into the food price, so the cost of food goes up. Consumers pay for 1000 tons of food, but only buy 800 tons of food.
The only way for removing minimum wage to reduce what a worker is paid is if the labor supply is being restricted by minimum wage, thus increasing the price given the supply/demand.
The labor supply isn't restricted. We have a huge labor supply; it's the money or job supply that's restricted.
You think denying people a paying job ($0/hour) is better than them having a paying job?
It's complex.
As I said, people now must have a job to have a survivable income. A job without a survivable income is still going to help you scrape by; it raises your chances, and is better than nothing. Thus you don't have enough negotiating power to negotiate for fair compensation: If the labor will KILL you, but food and healthcare will sustain you, the proper payment is the cost of food and healthcare that will sustain you, PLUS compensation for your time; however, without an income, starvation will kill you faster, so you will work a job where you pay $10 worth of your health and receive $5 in compensation, thus dying more slowly. This is, conceptually, what happens in our current system.
It becomes complex when you consider rebalancing. Raising minimum wage does create some job scarcity, but only where the worker is less valuable than an alternative (e.g. automation, although there are many management strategies which are more expensive but more effective than others, and so become cost-effective when labor is expensive). This happens when the net profit using the worker is lower than the net profit by other means (when unprofitable, net profit by not doing anything is $0, and net profit by employing labor is negative). This means a minimum wage raise has an effect of moving money from some laborers to others.
With that in mind, you must consider: One million laborers slowly killing themselves; or half a million starving, half a million surviving? In one model, we conceptually lose everyone: no one is really better off; they merely suffer longer. In the other model, we outright give up on half of them.
This is why I prefer to ensure survival outright, to disconnect life from work. The comforts of life should be tied to employment; living itself, uncomfortable and unsympathetic, should not. Then we have no dilemma: all laborers, even unemployed, are cared for; and laborers can reject unfair employment terms, negotiating a fair deal, requiring no intervention by the government on their behalf. A great many moral questions are eliminated, as are many economic uncertainties, and many risks, many costs, and many ineffective social safety nets which try to address these problems in current.
Increasing supply is not always a good thing. We have farm subsidies to prevent farmers from producing too much food; the US Government buys 500,000 tons of sugar every year specifically to reduce supply in the market.
If the supply meets demand at 500 million tons of grain, producing 20 million tons more won't do anything but create too much grain. Other suppliers will have excess, and will store it as seed grain; the next year, they'll cut back on production. They'll purchase less new seed grain.
Wealth only increases if there is actual scarcity and a new method of production reduces energy. If you invest 5 units of effort to create 10 units of product, you can increase wealth by learning to invest 4 units of effort to create 10 units of product. If you stand up a new facility which must invest 5 units of effort to create 10 units of product, you are still investing 10 units for 20, or 1 unit effort per 2 product. Wealth has not increased; scarcity may decrease. If, however, supply meets demand, adding more production facilities only consumes finite resources while creating oversupply, which doesn't increase wealth (may decrease wealth by creating waste).
Removing minimum wage right now would leave the poorest under the threat of a worse situation than a horribly low salary. The salaries they would be offered would be below tolerable, but better than nothing.
You should negotiate based on your best alternative to a negotiated agreement. When the best alternative is having nothing, anything is something. That's why we have minimum wage. My observation was that we can immediately repeal minimum wage when the best alternative to a negotiated agreement is functionally superior to working the grease fryer at McDonalds for $2/hr; we can do that by separating unemployment from death, and instead attaching it to stability and security with extreme discomfort. Our current welfare system retracts its offerings when you get a job, and can even permanently remove your security (e.g. if you get a job and lose it again, or it's actually horrible and you quit, you lose unemployment), and so pursuing employment when on welfare comes with the risk of lost stability; removing this risk but leaving discomfort and security means people will be highly motivated to seek employment, and highly motivated to refuse or abandon employment which is ill-compensated.
We don't provide an alternative to work. I want to provide one that encourages employment, but that does allow you to give anyone and everyone the finger if they refuse to hire you on fair terms.
I worry about how much of that would simply be funneled to the casinos and liqueur marts. Maybe they are acceptable parasites. I imagine it would help some people. But some of the homeless are down'n'outers are there because they can't get their act together, and handing them money isn't going to necessarily help them do so.
I abandoned this argument long ago, when I realized I could use an EBT card to buy a lot of Tide laundry detergent that I can then sell. Back in 1912, Winston Chuchill said that old-age pensions (Social Security OASDI) and unemployment insurance wouldn't save anybody; but that it would provide hope, which would encourage people to save. That's exactly what happened: people gained hope. Show people what should be a clean shot to survival--or at least a guaranteed resource that they very probably can scrape by on, and if not then they can get by with minimal help--and they will be encouraged to survive, rather than to booze out. It may still happen, but it will happen less; moreover, I do not need to put my sympathies with people whose bad decisions cost them their livelihoods when their livelihood has been bought and paid for completely by society's good graces.
If that was true, then there really wouldn't be any problems when factories had massive layoffs. And when they do eventually find work elsewhere, the extra competition drives down wages.
What of the delay between losing millions of jobs and finding a new way to capitalize on all of this available labor? Should the factory worker put aside his need for food, shelter, and clean water for three, maybe five years, until the market discovers a new way to employ them?
Except that there is work for people with real skills. Tech schools, trade schools, STEM degrees, and less so with philosophy or anthropology.
You mean that whole crippling debt thing, with the 3-5 years out of college delay to find a job, with deferred loan payments accruing interest, leaving skilled laborers with something akin to a 30-year mortgage, endless debt that will suck their paychecks dry? It delivers the upside of having dropped STEM salaries from ridiculous numbers such as $150k or $220k down to the reasonable range of $50k-$80k. I've known many Nursing students who had Nursing master's degrees, and could attain a full $40,000 annual salary... in Washington DC, where salaries are high. This when we supposedly have a nursing shortage.
Well.... I highly doubt that it wouldn't be a contentious issue and be tweaked up and down on a regular basis at the whims of the politicians and the voting blocs.
My simulations indicate that a partial dividend is viable, because I leave state welfare alone as a huge risk control: the state welfare system, in a predictable failure mode, may shrink to 10% or smaller if the dividend is not quite enough for the unemployed to survive. The single impedance I've encountered is a landlord's explanation that landlords usually don't underwrite leases of more than 1/3 of the tenant's income, as a risk control; and I find this dubious because I qualify a Citizen's Dividend as a "Right to Life" provision, guaranteeing access to all basic needs, and thus would provide it statutory immunization from taxation and court-ordered garnering of all kinds.
The landlord risk is, essentially, that the tenant may have an unpredicted medical expense, or spend their money on booze, or some such; but you can't refuse life-saving medical treatment, you can't garner this income source, and I provide an additional mechanism for two parties to agree to divert part of the payment first. This mechanism is such that the two contact the Social Security administration, sign a co-agreement to divert some dollar amount to a third party (e.g. landlord) each month, and will each be immediately notified if either party contacts to cancel the agreement (which is unilaterally effective by both parties). The risk of non-payment is
Dividends often come from stock markets, or from board members who own a lot of common stock and get paid in stock options. Most investment nowadays isn't venture; venture investment is actually a very small portion of the investment market.
If a person wants to be a dairy farmer, he's entering a market of dairy farmers. What value is he bringing but the chance to take business (and value, and profits) away from other dairy farmers, and thus the chance to make himself and his venture backers rich?
No, doesn't work that way.
Imagine you require 100 people working 10 hours at $10/hr to build a car. The car costs $10,000. There are 2080 work hours in a year (40*52), so these persons can afford to buy a car in 173 days or about 5.75 months. They must produce about 876.5 cars in that time: the economy must support other services, providing a market for about 776.5 cars, so that these 100 people can buy the cars they're building. This is, essentially, the Ford model.
Now imagine you automate half of that. You have 50 people working 10 hours at $10/hr to build a car. The car costs $5,000. These people can now afford the car in 87 days; but the other 50 have to find other jobs, or else can't afford the car. Their other jobs may be less lucrative: they may make $8/hr, so have to work 108 days to afford the car.
If you want to pay the worker based on improved productivity--that is, the productivity of the machine, which is not an employee and not paid and does the work of 50 men--you pay them $20/hr. 50 people working 10 hours at $20/hr, the car costs $10,000, and it still takes them 87 days to afford it. The other 50, if they've found other jobs which have not experienced such improvements, again working $8/hr, will require 216 days to afford the car.
Both of these situations carry out. In the first, after the 87 days, less money has been paid for the car, and so the other $5,000 usually paid for the car in the next 86 days is owned by the workers (they work, they get paid, but the car cost half as much for them to buy); the 50 who have fallen to janitorial jobs will take 108 days instead of 173 days, and come out with about $3,000 at the end of that whole period. In the second, the worker pays $10,000 in 87 days, but still has $10,000 after the next 87 days--he comes out a full $10,000 ahead, instead of $5,000 ahead; while the other workers, in lower jobs, require 216 days to pay that $10,000, falling behind by about $2,000.
In essence, when we automate jobs and divert the pay to the worker whose job wasn't excessed, we are diverting the money from the pockets of the poor (the excessed laborer) into the pockets of an elite class of laborers whose jobs are still important. In the most basic sense, you move money from consumers to laborers; consumers may be those with little money, especially since you are excessing a lot of jobs. If we improve efficiency all the way down, those lower jobs evaporate; we're left with unemployed laborers who can't afford goods, and expensive goods.
You remove them, or put in dysfunctional ones, and see what happens.
A large business without middle management is like a global command economy run by three people: it works great on paper, but three people cannot account for the needs and functions of every individual township.
Think about managers like CPU cores devoted to the task of scheduling processes, and laborers like CPU cores devoted to executing application code, with each task they're assigned being a thread in a process. You have a hundred thousand CPU cores and a million tasks; do you think a single-threaded CPU scheduler would handle this? Or would you need to devote 10 or 50 or 100 CPU cores to a multi-threaded, non-locking scheduler?
Dividends are paid out to shareholders. Good question. The only labor shareholders of common stocks have applied is buying stock. Same with capital gains, except trading stock market is just gambling and not really trading a product.
Thing is these things don't actually provide any value. They have no value. They are not goods which can be traded, and cannot do anything except siphon money. At the end of the day, you have an auto mechanic fixing your car, or you have a hamburger; if McDonalds pays out dividends, that's sort of like salary to non-working shareholders, but it doesn't technically count as labor. Trying to call it value, however, also doesn't work.
Amusingly, a competitor could simply not pay dividends, re-investing the money in the business, and sell a cheaper hamburger. That opens up a whole counter-debate where I can just accuse you of bringing up broken shit that doesn't follow the rules, because we can discount it by starting up a competing business in the same market and thus show it's all imaginary. Which then becomes stubborn and unpleasant.
You raise interesting points. As poverty is both absolute poverty, being the real condition of not affording basic needs, and relative poverty, being the imaginary condition of having less money than average for an arbitrary standard of living considered to be attainable, I will say the same about value: things like food and steel and auto repair have real value; things like investments and dividends and capital gains are imaginary. My position works perfectly for things with real value.
Sort of.
The truth of the matter is costs come from risks, material mark-up, Government taxes, etc. But all these things translate back to labor: Somebody has a job in which they receive those funds. Risks are controlled with funds which occasionally pay out to cover risk events, reducing the insurance premiums for transfer risk (e.g. we'll accept the 99.999% likely loss of less than $1M/year, but the insurer will pay anything beyond that in such rare cases); risks turn into the purchase of other goods from other businesses. Mark-up on materials pays other businesses, which goes into the same system, and also pays executive salaries and taxes and such. Taxes pay the Government to spend money paying people and businesses to do things for the good of society.
Costs which don't eventually turn into salary go into a vault to never be spent.
Seen it.
There has always been a small percentage of aristocrats in society who do not have to work because of their amassed wealth.
You mean artisans, right? Like guild members who overcharge for labor... the labor of building a fucking useless statue.
You mean like in the Industrial Revolution, with 75% unemployment for 60 years?
Upper management is one of the most important parts of any business.
Our business is dysfunctional due to old-school upper management which has not moved with modern trends; they haven't integrated a technical officer or a risk officer, and so the business now has no strategy for handling risk. We have executives who seek to capitalize on purchases of other business assets, who seek to capitalize on markets, and so on; they sit at the table arguing who is most important, what strategies need the most emphasis, and how they work together. That's what executives do.
Nobody discusses how to build our technology infrastructure to handle it, and so Finance runs two hundred thousand legal contracts by the manual labor of clerks and filing cabinets--meaning clerks must remember, in their heads, that certain contracts must be fetched from the cabinets and manually examined to remember to pay bills, lest we enter breach of contract. Likewise, nobody looks around the boardroom and cries out that all of the shit we're doing has risks, may destroy the company, and needs controls in place to prevent that. This is what CTOs and CROs are for, and these are what we don't have.
Another issue I've seen is a lack of project management--middle management and lower management, in a sense. Project managers directly work with people, while program managers and portfolio managers align projects and the entire portfolio of projects in a business to avoid overlapping work and make sure the business is only doing things that support the business strategy. Because we have none of this, the business bleeds money like crazy; I've worked at Government agencies, and respect them for their extremely high level of monetary efficiency, because this place is approximately 3% as efficient at getting anything done as Social Security or the IRS.
Corporate governance is a fascinating topic. Project managers study a lot about human resource management and stakeholder management; it turns out you need to keep your laborers happy and continuously develop their skills, or else your business fails. Team building is a big part of project management, but so is individual human resource management: you should know that certain people are interested in certain projects, and disinterested in others, and so you assign them as best you can where their skills and interests align so they actually work. This includes people having interests in some projects because they impact other projects they're interested in: you want the new IT fiber network upgrade to go through properly because you are a storage nerd and highly interested in this new SAN system you're installing on the new 10GbE backend, so we're assigning you as a design resource to make sure the switches and networks and cabling take storage networks into account and can properly back our VM farms.
Everyone thinks their job is more important than everyone else's job. If it were, we would fire everyone else.
Actually, if you can get everyone a barely survivable standard of living by default, you can repeal minimum wage. Minimum wage gives a standard of fairness to cite in negotiation; when people can survive just fine without it--albeit, not comfortably--they will look at wages and only accept wages high enough to improve their quality of life, discounting the cost of having to work. That includes the time sink (40 hours/week is a lot of time compared to not working) and the personal irritation (cashier in an air-conditioned K-Mart is worth a lot less money than hauling bricks and shoveling shit in the hot sun).
In these conditions, a minimum wage is a figure to show a standard of fairness: these laborers want $10.15/hr, but the Government says these unskilled jobs are worth $7.25/hr; more laborers will accept $7.25/hr, and those who won't will accept considerably lower wages than they would usually demand, because they're aware they're making unusual demands above the established baseline of fairness. Without a published minimum wage, the baseline of fairness is whatever each party envisions when coming to the table; the employer and employee both think each are being unreasonable, and only begrudgingly compromise to the whims of the person across the table. You will compromise less toward the solution offered by some asshole who doesn't want to pay you than you will toward the solution published as known-fair.
The key to this is you don't need a job: welfare doesn't run out, and welfare is always there, and welfare is there to ensure your survival. Today, welfare doesn't do that; you need a job, you are desperate, and so you will take unreasonably low wages just to have something to stave off death. Minimum wage is needed when the employee is at such a disadvantage; but put the employee at advantage, and minimum wage supports the employer instead.
So if those who work get more than those who don't work, but those who don't work survive, you get a lot of power into the hands of the laborer. Currently, the laborer is threatened by death for unwork.
So, it's cheaper than human labor.
Low-precision human labor means throwing out parts that don't pass QA. If they're from raw steel, you have to expend more energy (cost) to remelt them again and again. The same goes for higher quality and consistency--which is precision, anyway; quality is the degree to which a deliverable satisfies requirements, and high quality is satisfying those requirements in the cheapest and most effective way. This includes opportunity requirements--that a result 20% more expensive is of attributes which make another, expressly-desirable but not necessarily required venture 50% cheaper--so you may elect to make something of higher grade than necessary for Project A because it reduces the aggregate cost of Project A and Project B. If not, making the thing of higher grade is gold plating: it's a waste of money and does nothing useful.
Safety is a cost factor. People will sue you, or you will need to pay to retrain lost workers. Either way, this costs money; it may happen infrequently enough that solving the safety issue is more expensive.
A task not directly possible with human labor can be done in another way for high expense (lots of labor), or can take too long (missed opportunity), or is a missed opportunity by being not humanly possible (lost profit). All of these cost money.
This is what a universal basic income or citizen's dividend is for. Consumers are the big movers in economy, and producers are the big makers; a portion of all income (individual and corporate) is taken and divided up among everyone (for some definition of "everyone"), stabilizing the bottom.
Imagine if all the homeless and unemployed had a fixed amount of income. Maybe $500-$600/mo. At $1.33/sqft (significantly more than I last rented), a livable microunit housing for a single individual would leave just barely enough for food, utilities, clothing, etc. Just barely. I think I have $50 of leeway in there at 17% of corporate and individual income (eliminating about half of taxes, including OASDI payroll tax, and applying a 17% flat to replace it). Right now, they have nothing, so can't buy anything; in this scenario, they have just enough to buy what they need to live.
This hypothetical creates an enormous market: if you fall to the bottom and lose everything, you still have the shirt on your back, enough money for a new shirt, and enough to rent a sardine can to live in (224sqft microunit; I may be able to get fancy without appreciably increasing costs, too...). Businesses can profit off this, while the mental and physical health problems of being homeless and hungry--starvation, unsanitary conditions, etc.--are lifted off the back of society.
On top of that, producers who fully automate are collecting profits. Automation reduces labor: it costs less to maintain a robot because it takes a collective 10,000 man-hours to produce a robot and 1,000 man-hours per year to fuel and maintain it (including mining fuel, refining fuel, shipping fuel, generating power, transmitting power, maintaining the power infrastructure, mining all the steel for the robot parts, refining steel, shaping steel, and sending maintenance people), but the robot does 50,000 man-hours of work in 10 years. 20,000 is less than 50,000, so that's 40% as many employment hours--40% as many jobs, if you will--for the same useful production.
This labor reduction by efficiency improvements includes far more than automation; for example, Toyota saved 45 seconds from a 65-second process building seats by using a shorter hose (raises the steam temperature) and installing the bolts in a different order (easier, faster access by the tech, who installs bolts and then steams the seats to drive out volatile manufacture chemicals). Many such optimizations allow the same humans to use the same tools to build the same things, but in 80% of the time overall, or 60%, or 40%; thus you only need half as many humans to build as many things in as much time.
The reduction of laborers and the increase in productive output means goods can come cheaper, but consumers are poorer. Fewer consumers exist. A citizen's dividend doesn't free us from work; it leaves us poor, but alive. It frees us from the terrible economic crash that comes when new management styles and processes. We will always find new use for laborers; but this comes after we put laborers out of jobs for a good while, and in the process destroy the labor force. Providing some return to the consumers for being consumes is, thus, advantageous to businesses: it provides them target markets to invest in, avoiding the economic problems of making higher-end goods for the working class which has just become the unemployed, and suddenly not having anyone to sell anything to.
A universal basic income, or a Citizen's Dividend in particular, is the solution to this conundrum. Universal vocational education--that is, college education--touted as a solution, is an exacerbating problem: laborers pay higher taxes or take on enormous debt to flood the market with cheap, skilled labor, giving employers the advantage of lower salaries as unemployment for a skilled labor class increases. Welfare, as a qualified service, takes on more operating cost as more people collect; while a universal income always pays at 100%, and is thus immune to the fluctuations of economy.
If a white man could get into a black body when he wanted to commit crime, he would show you what the GIFT does in real life!
Oh no! I'm 102% African, with a 2% margin of error!
Pretty much. You can get more money doing X, so you do X. This is why free markets raise prices above the minimum when competition is hot, instead of doing an infinite downward spiral.
In negotiation, we use a tactic of carrying about public standards of fairness to negotiate. This is why I argue for a repeal of minimum wage: once we've instituted a Citizen's Dividend, a minimum wage becomes a tool for hiring managers to pin all basic labor jobs to a published figure, which increases the belief that this figure is "Fair" even though most people would flatly refuse to work for so little if such a figure weren't published. It's the same with published standard rates: that looks like a fair rate, drivers feel it's unfair to get paid much less, and passengers are encouraged to not blame the driver for the rate being high (and to believe more that the rate is fair, or at least more fair than they would otherwise think).
This is why published standards are dangerous when done wrong and when done in the wrong market. Minimum wage is the poster child for context-sensitive effect: in scarce employment markets, people are desperate and will take low wages, and so a minimum wage increases unemployment but sets a minimum standard of working-man income; in markets where demand for employment is more casual (i.e. you don't absolutely need a job, but life is considerably bad without one; or there are hundreds of jobs for you to take), people will argue for higher wages, and minimum wage helps managers convince people that $8/hr is silly and demanding and that they only deserve the $7.25 standard minimum wage for a minimum wage job.
Uber is just suffering from published baselines. It's impossible not to have market input; but it's authoritative when someone runs the numbers and sets a de-facto standard for drivers and passengers to reference.
Can we do this for Presidential debates?
Pat Robertson: My new economic plan will improve worker's rights without raising costs to businesses.
Ralph Nader: BULLSHIT! Your new economic plan involves raising minimum wage to $25/hr and mandating ACA healthcare for all workers, even $1/hr workers, from day one!
Pat Robertson: BULLSHIT! I clearly outline that workers who have received ACA healthcare cannot have it removed until next open enrollment, avoiding immediate cutting of hours to evade the ACA. This will completely eliminate Forever-21ization.
Ralph Nader: BULLSHIT! Forever-21ization will simply roll into standard hiring practice. Underemployment has skyrocketed since the ACA, and higher wages only increase that. If you raise the minimum wage, more workers will be hired, with fewer hours, so they'll make less in total, and won't get any benefits. This is already happening in San Francisco, where Obama's new plan to increase minimum wage to $10/hr has resulted in a drastic increase in the number of jobs but a drastic cutback in hours, resulting in employment numbers inflated by underemployment and by persons holding multiple jobs.
Pat Robertson: BULLSHIT! ...
Cyrix was way better than Intel; Intel killed them with a SLAPP before SLAPP was illegal.
That sounds a lot like a command economy to me.
What I hear is 57,000 cabbies want to take money out of the mouths of families to feed their families, claiming their families are more important than other families. When you supply a service for $500, and the next guy supplies it for $250, the next guy can eat, and the people you were fleecing have $250 and can also eat. If they could eat already, they spend that $250 at the cobbler for shoes, and the cobbler can eat.
The cabbies should get a new job. Their business model is old and outdated. The CDAA needs to stop trying to prop up an obsolete business model that the consumer has already abandoned.
Besides, wouldn't it read "There is no God but Allah"? This is ham-fisted.
Can we at least keep the part where we burn the unethical torture technicians in a giant oven? I'm pretty solid on that part.