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comment by wasoxygen
wasoxygen  ·  1330 days ago  ·  link  ·    ·  parent  ·  post: Salary Subsidy Quiz

1) Thanks for the thoughtful reply!


    Is the independently wealthy person likely to choose work over other uses of time, say, volunteering?

Probably not, it’s less likely. Outside income, regardless of the source, makes a person less likely to see going to work as a good use of time, and more likely to choose volunteering, hobbies, or television. People who receive outside income need additional incentive to work, compared to those who don’t. Imagine how much you would have to offer the wealthy person to get them to report to the office, instead of participating in satisfying volunteer activities.

    whether or not we, as taxpayers, subsidize others via public health (etc) benefits, thereby allowing McD's to pay low wages, and also allowing those who use such benefits to accept jobs at McD's that would otherwise be untenable from a monetary perspective

I think the word “allow” is key here. People do not do something because it is merely possible, because they won’t starve by doing it; they choose the alternative that they judge will best satisfy their desires. If their desire for a warm bed is already met, it reduces their desire to perform work to get money to pay for a warm bed.


    The independently wealthy not only can afford to pass on a job offer

Exactly. Someone must accept a low salary in order for it to be a low-paying job. Outside benefits make a person more comfortable, and give them the luxury of being more selective in their employment. Almost everyone will work if the alternative is homelessness and hunger. If the alternative is unemployment with basic housing with basic food, some people will take that option (or at least quit their second job), and employers will have to make better offers to attract employees.

_refugee_  ·  1330 days ago  ·  link  ·  

I had a sleepy nighttime lightbulb.

If we are going to argue that gov't benefits allow employers to pay lower wages because citizens are being subsidized, couldn't we make a similar and fun argument that the ready availability of consumer lines of credit (credit cards, helocs, heck even ODP-LOCs, and let's not even look at other, less savory lending options like payday loans) also allow employers to pay lower wages than their employees can truly live on? At least temporarily - really depends on how the math plays out, how much credit, minimum payments and so on, so let's just go back to 2007 when everyone could get shit tons of credit if they crossed their legs and smiled.

When credit is readily available and in large quantities to the average consumer, he or she is enabled to live beyond their actual monetary-hard-earned-cash means. Depending on how one does it, one could rely on a (not-insignificant) credit line on a regular basis to supplement and/or fill dietary needs, purchase clothes, and in other ways fulfill the basic needs of a person or family unit. As long as one is making at least the minimum payment, and we could even be generous and assume that sometimes one pays extra, regular, long-term/sustained use of credit to supplement income (supplement though - only supplement) is quite possible and does allow the average consumer to live outside/above their technical means (minimum payments are generally a fraction of the line balance unless you barely owe anything on the line; so long as the min pay remains less than the amount of credit used each month, which is possible without necessarily forcing the balance to balloon up to/past the credit allowance on a short-term time frame - IF you are not using the credit rashly, which you wouldn't if you're using it for those extra groceries you need but debit just can't swing this month) as provided by their employer.

So really, what I'm saying is, let's blame the banks.

JK JK JK, lots of factors including consumerist culture, but let me know what you think of this thought. Am I crazy? Can't widely available and universally accepted credit also be considered a mechanism which does, in a sneaky way, allow for employers to pay lower wages?

Wanna dig up some historical data of wage rates during credit booms and see whether any, especially low-income or low-barrier-to-employment, pay rates were impacted in any way? Could be fun to take a look. Maybe I'm just nuts.

But hey, if we are going to argue that getting things for free or reduced price subsidizes lower rates, then we do have to admit that credit enables that readily. And credit is real easy for most people to get.

Credit: Buy Now, Pay Later.

_refugee_  ·  1330 days ago  ·  link  ·  

Read it twice, see what you're driving at.

2) - Maslow's hierarchy, yup. However it's not like most humans' list of wants stops - ever. Right? Sure, I have a warm bed and I don't need to buy another one, but I sure would like a new iPhone, or laptop, or whatever. As the list goes on yes the desires must get less essential and more frivolous and eventually, it's likely a given person would reach a point at which they felt they had achieved enough even if they never did get that unicorn birthday party that costs $100k, and they can stop/maintain at the current level of income. But I don't think that stops at a warm bed. I think our society encourages us to want more, to earn more, to buy more. So just because even the vital tiers of the hierarchy might be met and satisfied by benefits, I do think people generally have an innate desire for 'more' that's also amplified by social conditioning.

3) I kind of feel that we are assuming that the impoverished who rely on gov't benefits don't have other debts or bills, like child support, legal issues, payday loans or other "non-vital" lending obligations (like credit cards). Article Basically I just don't think that the level of benefits we currently offer is significant and wide enough in order to do much except slap an off-brand bandaid on wounds that are range from "moderate" to "gushing."

I am fine with the idea of basic income, or basic housing and basic food, for each person. But - and I admit I say this without much hard numerical concept of unemployment payments, food stamps, etc - I think that these benefits often add only barely enough for struggling people and families to make it by.

Aren't there things like teenagers ready and waiting to swoop in for these vacated second jobs? A teenager generally is still a dependent and their income can be both much lower than an independent adult and can consist mostly of discretionary funds (variable, of course). I think this is dissimilar from an independently wealthy adult because of the situation - a teen has no workforce experience, so their potential jobs will be on the menial end. A teen has no work experience and therefore probably lowered standards. Etc. We could also talk about retirees who work to supplement savings etc but I think that gets closer to "independently wealthy individual" than what I am driving at here.

FWIW I am for benefits, basic housing, basic food, free and available schooling, etc, for all. But the fact that benefits might allow someone to quit a second job doesn't equate to me as occupational movement. Employer 1 can keep paying exactly what he was before. Employer 2 simply has to find someone who is willing to accept less than "enough money to feed, clothe, and maybe pay bills for" an independent unit, whether that be one person, a person with a child, whatever.

To be honest while I enjoy this conversation I mostly feel like I am fumbling around in it.

wasoxygen  ·  1328 days ago  ·  link  ·  

You mention many things that can influence a person's employment decisions: their desire to earn ever more, outside debts, legal issues, difficulty making ends meet, teenagers ready to accept the job offers before they do.

To focus on the question of whether a welfare benefit allows low-paying employers to pay employees even lower salaries, I think we have to assume that all these other factors are identical in both cases (with or without the welfare benefit).

All else being equal, does the presence of welfare income influence people toward accepting lower salaries?