I wanted to call notice to this piece at The Hill by Jacque Porter both because it illustrates some assumptions and patterns of thought and because it’s so consistent:
Minimum wage is a topic that draws a lot of attention, especially in California, a state that has one of the highest minimum wages in the United States.
In a debate Monday night, Rep. Barbara Lee (D) defended her previous advocacy for a $50 minimum wage.
“In the Bay Area, I believe it was the United Way that came out with a report that very recently $127,000 for a family of four is just barely enough to get by,” Lee said. “Another survey very recently: $104,000. For a family of one, barely enough to get by low income because of the affordability crisis.”
A wage of $50 an hour would total $104,000 over the course of a year.
“Just do the math. Of course we have national minimum wages that we need to raise to a living wage,” Lee said. “We’re talking about $20, $25 – fine. But I have got to be focused on what California needs and what the affordability factor is when we calculate this wage.”
Here are some of the assumptions made:
- It assumes that the price elasticity of demand for labor is zero.
- It assumes that the price elasticity of demand for a Big Mac is zero.
- It assumes that fast food franchise owners make a lot more money than they actually do.
- It assumes taxes as a percentage of GDP can be raised indefinitely OR that we can extend credit to ourselves indefinitely without adverse effect.
If those things were not being assumed, Rep. Lee would recognize that were the minimum wage raised to $50/hour it would either decrease the number of minimum wage jobs sharply or people who employ workers at minimum wage would raise prices to make up the difference or take a pay cut or both. I don’t believe that the price of a Big Mac can be increased to say, $25 without reducing the number of Big Macs sold. I also recognize that the margins on fast food franchise are in fact quite tight or, said another way, the owner can’t take a pay cut for such a large raise to minimum wage earners without reducing his or her earnings to zero.
But it’s enormously consistent. I suspect she believes that you can increase the number of low-wage workers indefinitely without putting downwards pressure on wages, that these low-wage workers should be able to support a family on minimum wage, and that if the number of low-wage jobs decreases drastically as a consequence of an excessively high minimum wage, the government should make up the difference, either with tax dollars or borrowing.
Ms Lee is free to believe what she wants (although I doubt she could recite or understand those four dot points ) but none of them are true, as you well know.
It’s farcical.
The sad point is that there will be many nodding their heads in agreement with Ms Lee.
Did the debate include Ms Lees views on unicorns as well?
Flip side, Drew, is the belief by prosperous urban Americans that we do not have an entrenched caste system in place.
I say run the experiment in the Bay area and see what happens. If it’s a great success, then others will rush to emulate it. If not….
While I actually support the idea of cities experimenting this is so stupid I dont see the need to run the experiment.
Steve
The entrenched caste system is based on genetics.
Bob…
When speaking about minimum wages we are discussing the portion of the caste that IS willing to work. But still can’t afford shelter, a problem in the Bay Area, Seattle, New York.
In my mind, the better solution is for the less compensated to leave for a non- sanctuary city. But I do understand wanting to be near family and such.
If you have time, search YouTube for interviews with Thomas Sowell, author and educator. Currently 93-94 years old he’s sharper than anyone running for office and talks about the nature vs nurture thing in society.
Anything the government does tends to distort the market. High minimum wage laws will squeeze out marginal workers. On the other hand, businesses can take advantage of workers by relying on the government to step in to alleviate working poverty.
Eliminating the minimum wage, but providing true universal health care along with an earned income tax credit (which can be federal plus state and local to adjust for local conditions) may be the best mix of policies consistent with market forces.
I advocate “true universal health care” for a limited menu of services. I don’t believe that anything beyond that is practical. I also think that “true universal health care” for a limited menu of services is politically impossible—it would mean drastic reductions in Medicare benefits.
If you think it is practical, you need to explain how we will afford the costs of a healthcare system that increase faster than the non-healthcare system for the entire world because that is what we would be facing.
Dave Schuler: If you think it is practical, you need to explain how we will afford the costs of a healthcare system that increase faster than the non-healthcare system for the entire world because that is what we would be facing.
The alternative is to deny health care to the poor—beyond “a limited menu of services”. If you provide, for instance, surgery for amputation, but not diabetes care, you end up with more amputations and more disabilities.
You haven’t explained how we pay for it. Or how we provide it without the excess capacity in the healthcare system.
“Medicare for All” (including “asylum seekers” and those here illegally) would be a powerful inducement to come to the United States.
Claiming that something is beneficial does not make it possible much less practical.
Dave Schuler: “Medicare for All” would be a powerful inducement to come to the United States.
That was discussed in a previous thread. Tighten up initial asylum screening. That will reduce the number of parolees, and it will reduce the incentive to migrate for economic reasons.
Concerning incentives, society has decided they just won’t let people die rather than provide medical care. (It starts with Reagan, who signed a law that says hospitals have to provide stabilizing care regardless of ability to pay. That leads to preventive care as a cost-saving measure.) So, businesses hiring low wage workers will avoid paying for health care, dumping their health care on society. That’s the current incentive.
As for paying for it, the richest country in the world can’t afford health care for its citizens? But other countries can? Sure, it’s a big chunk of money, but either the money will be spent or poor people will do without. Rich people, of course, will continue to have their medical care.
You didn’t really respond. Does your “limited menu” pay for amputations, but not for diabetes care?
Saying things like that make me wonder if you’re an American. First, healthcare in the U. S. is much, much more expensive than anywhere else in the world. Second , does any country anywhere in the world offer a healthcare benefit more expansive then U. S. Medicare? I don’t believe it. The way that other countries keep their costs down is threefold:
1. Healthcare workers are paid less.
2. The government plan has restrictions and exclusions
3. They all have tiered plans in which the rich pay for more care (in other words they’re not as universal as you seem to think)
And you still haven’t explained how we’re going to pay for it.
As to what should be on the limited menu, IMO that’s open to discussion. I don’t think it should be MORE expansive than present Medicare and present Medicare isn’t a true universal healthcare plan. It DOES cover diabetes care. And supplies IIRC.
Dave Schuler: 1. Healthcare workers are paid less.
Why should American doctors be paid so much more? Are they that much better than Japanese or German doctors?
Dave Schuler: 2. The government plan has restrictions and exclusions
Sure. In the U.S., the restriction is that the poor don’t get coverage, except sometimes they get covered, or not. And it’s a confusing mess of overlapping programs and policies.
Dave Schuler: 3. They all have tiered plans in which the rich pay for more care (in other words they’re not as universal as you seem to think)
That varies considerably by country. But most developed countries provide universal coverage, such as mandatory health insurance with subsidies for the poor.
Dave Schuler: And you still haven’t explained how we’re going to pay for it.
There are a lot of ways, including mandatory health insurance with subsidies for the poor. The problem in the United State is the mandatory part. Apparently, the U.S. Constitution doesn’t allow forcing people to buy health care. Single payer is constitutional, though, but may not be as efficient.
Dave Schuler: Medicare isn’t a true universal healthcare plan.
Medicare typically covers 80% with private insurance covering the rest, with subsidies for the poor.
I doubt that tiering is a major reason why other countries are cheaper. The US has the most expensive health care and also the most income driven differences in care. Agree that they pay their workers less. They also pay less for everything else. The claims that other first world countries exclude lots of care touted by right wing critics are largely not true. Again, the US has the most exclusions, but of course we would since we have so many people who have no health care coverage at all. There are lots of other reasons we are more expensive. We have a higher ratio of specialists to generalists than most places. Our medicine emphasizes care that provides the best financial returns. Note that everyone is now emphasizing orthopedics. It pays well. If it’s expensive care you can get a lot of it and get it quickly. We arent so good at primary care. We forbid our govt insurances from negotiating prices for some care.
https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly
Steve
NIH:
What is that if not a restriction?
Here’s a link to a pretty fair side-by-side comparison of major national healthcare systems.
Fun fact: EU-wide out-of-pocket percentage is higher there than it is here.
Beyond that I think that in most ways the U. S. is best understood as a developed country and a developing country side-by-side within the same borders. Comparing us ONLY with Germany and France rather than with Mexico and Brazil presents a distorted picture. One of the consequences of that developed/developing split personality is the extremely low level of social cohesion which is quite different from small, homogeneous countries like Denmark or Sweden although those countries are coming more to resemble us as their percentage of non-Danish or non-Swedish, respectively, populations increase.
The Commonwealth people do much better reports. Anyway, good thing they put Costa Rica in that group so the US wasn’t the worst in everything, though we just barely beat them in maternal mortality.
It’s more of a choice than a restriction since you have to make trade offs. We could, if we wanted build a health care system where everyone had their total knee 2 days after scheduled. That system would cost twice, at least, our current system with incredible inefficiencies. Canada, and most other countries have decided to not spend as much money as we do on specialist care so you wait a few weeks longer for your total knee. Its not as if you you dont get it done in just a bit longer and its not urgent surgery. That lets you save some money. Zachriel, I believe, asked why we are more expensive and that is one of many reasons. Should I go into the fact hat since surgeons are so heavily incentivized to do knee surgery we are probably doing quite a few that arent really medically necessary?
Steve