#LivingWage #EconomicPolicy #MinimumWageDebate
Hey everyone! 💭 Have you ever wondered what would happen if every employer started paying a living wage? I’ve been pondering this lately, and I have a genuine question that I’d love to hear your thoughts on.
So let’s say the US raises the federal minimum wage to $25 or introduces a $2000/month UBI. 🇺🇸 What’s to stop companies from simply increasing prices to offset the higher income for consumers? 🤔 Wouldn’t we just end up back at square one, with low-income individuals struggling to make ends meet?
Here’s some food for thought:
– Would competition among companies prevent massive price hikes?
– Could government regulations help control price increases?
– What role could consumer demand play in keeping prices fair?
In my opinion, a possible solution could involve a combination of regulations, competition, and consumer advocacy to ensure that a living wage actually leads to a better quality of life for all. What do you think? Let’s discuss! 🌟🗣️
And that pretty much sums up Capitalism.
Nothing. You’re describing what has been happening for the last two hundred years.
Things like UBI and a living wage only really work if there is a strong social safety net. Many European countries that we laud for living wages actually have lots of government housing, free healthcare, etc. Basically the necessities are more or less guaranteed by the social safety net. I’m not talking luxuries here, just basics for a decent and dignified life. Once that’s in place, it’s a lot easier for people to vote with their dollars and not buy overpriced crap until it becomes priced correctly. There is still some increase, but it’s limited.
There are other mechanics that can be used. For example, company stock as mandated wages. not options, actual shares. So if the company tries to gouge, the employees actually get part of the gouge so it balances out. There’s also mandated pricing for necessities (e.g. bread in France), better use of subsidies to keep prices low, VAT taxes, etc.
What’s stopping companies from increasing prices, like they already are? Nothing. They’re doing it now, they’ve been doing it. Wages have not kept up.
Besides, employee wages are a drop in the bucket when it comes to costs for larger corporation.
This is the cycle… if there isn’t some cap on greed there is never going to be a living wage for a large swath of Americans.
Instead of the execs and investors making less money to allow the majority to make a living wage, they just increase prices to keep (or increase) their same level of profit/compensation.
Nothing.
Honestly, minimum wage should be tied to inflation. If inflation goes up, so do wages.
In the end though, the whole push for increase in pay is really about pulling value back from higher ups.
The c-suite’s compensation should be capped at something like 25x the lowest paid employee.
Stock buybacks should be made illegal again.
Businesses should be heavily fined if any of their full time employees qualify for public assistance.
Simply raising the minimum wage alone will not achieve anything. There needs to be something more.
That’s the world we already like in. Where I live minimum wage has doubled since I was a teenager and, quite frankly, so have costs
first your rent goes up to take more from you than the highest government tax rate /s
There are two ways to make life affordable. First, raise wages and second, control prices. Neither is something that anybody in America wants to do. Let’s not even talk about socialism or capitalism. We don’t have to. We live in country that, on so many levels, refuses to recognize that unfettered greed and lack of community responsibility are causing life here to suck for so many people.
I have a friend who grew up in East Germany (DDR.) She would regularly visit her cousins in the west and they would take her to all the stores and show her all the cool things they buy. Life looked very good in comparison to what she had in the east. However, her cousins never told her how much they paid in RENT. In the DDR, there was no such thing as rent or tuition or medical bills.
A nation can decide how it wants to treat its citizens but America is not controlled by citizens but by the greedy and those citizens fighting harder to ban books than they ever would to get rent controls.
found the manager trying to find reasons not to pay people
It’s supposed to be stopped by competition.
If McDonald’s raises prices, Wendy’s can give a discount and steal customers. Unfortunately, those companies often collude (illegally) and the Federal government doesn’t always stop them.
The best way, honestly, is unions. If one company sews up an entire market, the only thing that can really stop it are it’s own employees simply refusing to work.
Backing strong unions is ultimately the best way to build a more livable country.
i mean…basic economics….for one. The reasons are very complicated, but it won’t be a straight increase because it’s raising the floor, not everybody’s income, so not everything would be able to increase by the same percentage.
The base pay for my employer has roughly doubled since I started, but our prices are up about 50% (and before the covid inflation they’d only gone up about 10%) so case in point.
Beyond that, like the same argument being used in regards to the cost of schooling, the answer is you don’t JUST increase wages/forgive debt. You also put legislation in place that makes pricing a function of operating costs.
At least in my area bus fares can’t exceed a certain profit margin, so they remain affordable for the poor folks that primarily use them. Do the same for schools and those employers. Prices stop being market driven and instead become based on providing a modest profit for the company. Not based on the maximum profit the market will tolerate.
Then it’s no longer a living wage.
>> If the theory is that companies will charge as much as people can pay
No, companies charge as much as the market is willing to bear, there’s a difference.
And the answer to your question is the living wage isn’t fixed. It will require recalculation and updating.
This happening already. Have you seen what “fast food” costs these days? I wanted to try Sonic as I hadn’t been there in years. A simple burger, frings, and a shake was over $15. Heck for that amount I could go to Red Robin and get an actual good burger of many varieties, unlimited fries, and my shake.
Fast food, certain types of groceries, gas, and generally most business abound are all just fleecing the people and blaming it on covid or supply chain while recording record profits.
Be stingy with your $$$. Look for the deals and hope the companies that are taking advantage of everyone end up going out of business.
I know a lot of people belittle and down talk union jobs but you have to keep in mind if you stay long term and work through the pay steps it is livable wages. I earn more than 30% than non union jobs. These incomes are livable. Many people give up too early and quit before they see their first pay raise.
Riots
Labour costs are only a small component of the production costs of a good or service. Each company could either choose to absorb the difference (no increase in prices), or pass it along (smaller net increase in price than the wage increase). Overall, the mix of choices would mean price inflation proceeds slower than wage inflation for things like food, housing.
The story is different for luxury good like high-end smartphones, luxury houses, luxury cars and other big-ticket items. Because (in the above example) wage inflation outpaced price inflation for necessities, that means there’s more money sloshing around and people tend to want to buy things. So the excess money gets spent “bidding up” the price of luxury goods.
This is a best of both worlds scenario but it’s a delicate balancing act. You also want to encourage saving (which removes money from circulation) and investing (which puts money into speculative ventures that produce growth, ideally), both of which compete with the present value of money.
Aside from assigning a personal financial comptroller to every household with a direct line to the national economic plan, there’s not way to make sure that everyone is spending their wage “correctly” and so wage inflation can lead to surprising changes in the economic make-up.
Let’s not also forget that companies have the third option of raising prices *more* than they need to (“greedflation”), which is absolutely *not* the fault of wage increases but people often mix the two up.
Boycott greedy companies and stop buying useless shit. You don’t need Netflix to survive. This is what we doing in my country and now prices are going down and inflation is 2%. Buyers have power too… just use it you junk addicts.
If we weren’t a bunch of cowards, fear of death and dismemberment would work.
You’ve discovered the Phillips Curve
Supply and demand is supposed to keep pricing in check. The problem is this only works when there is a healthy market for people to choose from. The less realistic competition available, the less able people can vote with their dollars.
Consumer protections and government regulations are supposed to keep corporations in check and prevent the very thing we have been seeing.
This is a literally what happened during covid. Workers -finally- got a break with some wage increases and then Billionaires raised prices on everything to recoup those wage gains… and a whole hell of a alot more.
“Competition” I suppose.
Good job on summing up the probloems with the profit motive being used in every sector of life.
In my opinion, there is no simple change, no legislation, that will curb our current iissues. Our current issues are rooted in the narrative of individualism and the ruggedly independant frontiersman, regardless of how untrue these actually are, thanks Reagan. Under these ideas, the power to extract as much from something we are deemed to own is what has come to be defined as freedom, not power. To take without giving back, is to be successful.
Housing ownership has to be stripped away from corporations entirely. Health care has to be universally available to all. And duty to return to society what it has given, what we have worked to give each other, has to be felt by a signifacant portion of us in order for it to benefit a significant portion of us.
Minimum wage is almost always going to lag behind cost of living because it requires a reactionary action.
Pairing it with inflation could help minimize that lag.
This is a strawman argument. Wages are disconnected from prices.
Prices on everything already goes up regardless of wage increases.
Now, ask again with this information.
That’s the thing, isn’t it? Because of the profit motive, that is the logical thing to do in a capitalist country like the US, however in the long term it is unsustainable to do so, as the opposite reaction of increasing wages even more will make inflation rise exponentially,
However,this question jumps over the fact that the US minimum wage isn’t a living wage anymore, not in any state or counties, that is caused by the fact that the minimum wage is fixed and not adjusted to inflation,like most developed countries (and actually most countries do), leading to the situation we see today, with some considering even 25 dollar per hour to be ideal
Additionally, any company who tries that strategy of increasing prices exponentially in order to ” gain over their loss” in wages increases will incur a lot of public wrath, and while a lot of people don’t bother with such things, a lot of people do, and it will be a gamble to see if your costumers belong to either group
And so unless your company has a monopoly on the market, any attempts at sudden price increase can be met with diminished profit,
Ideally,price controls should also be established so that companies that have monopoly over products, especially essential products like food and health care, aren’t able to exploit the wage increase,
Especially with things like the makers of insulin, where 3 companies dominate 90% of the market, and while they’s no evidence, it’s clear they form a cartel (illegally) and control the price of insulin, setting it up as high as possible, leading to news of people rationing their supply,often with deadly consequences. Seriously look up the price of insulin anywhere else in the world, you’ll see that Americans are being exploited everywhere already, a wage increase will liberate a lot of people.
And that’s why Capitalism is rife with evil, greedy people, because no, they can and will charge as much as they want as long as people keep paying for whatever their product/service is.
Bro—
The companies are already doing that now!!!
SMH
Go read about how prices are coming down and a lot of companies got in trouble for price gouging during the pandemic
The answer then, like now, is regulation.