[HN Gopher] Prices rising so much that minimum wage workers are ...
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Prices rising so much that minimum wage workers are poorer than in
decades
Author : pseudolus
Score : 45 points
Date : 2021-06-28 19:55 UTC (3 hours ago)
(HTM) web link (www.businessinsider.com)
(TXT) w3m dump (www.businessinsider.com)
| LatteLazy wrote:
| Every time prices go up and minimum wage doesn't, people on
| minimum wage are poorer than they've been since it last went up
| (eg decades ago).
| danbruc wrote:
| Wouldn't it be easier to specify the minimum wage in real instead
| of nominal dollars?
| tablespoon wrote:
| > Wouldn't it be easier to specify the minimum wage in real
| instead of nominal dollars?
|
| Yes, but then you couldn't do nothing and use inflation to
| reduce it without political host.
| foxyv wrote:
| The problem with this is, who gets to say what a nominal dollar
| is? There are like ten different versions of inflation
| calculation. It wouldn't be hard to cherry pick the commodities
| that set inflation low. Or, if you are really devious, you
| could subsidize only those commodities that are in the index as
| a loss leader for stuff people actually need.
|
| Personally I would prefer to use a percentage of the 99th
| percentile of earners. So if the rich get richer, the minimum
| wage goes up.
| TheCoelacanth wrote:
| The Federal Reserve decides what a nominal dollar is. It's
| the real dollars that are in question.
| danbruc wrote:
| This could just be part of the law. In the end it is not that
| much different than the current situation, every couple of
| years the minimum wage gets adjusted after looking at the
| numbers. Having the law state the minimum wage in real
| dollars and specifying how convert the value would in the end
| just automate this process and adjust the minimum wage every
| year or so.
| dragonwriter wrote:
| > the current situation, every couple of years the minimum
| wage gets adjusted after looking at the numbers.
|
| For large values of "couple" (counting the last few back:
| 2007, 1996, 1989, 1977.) Each of those spread out increases
| over a few years, but even then there was a wide gap
| between the last incrrease.and the next adjustment.)
| dragonwriter wrote:
| > Wouldn't it be easier to specify the minimum wage in real
| instead of nominal dollars?
|
| No, because price data (and thus conversion from "real" dollars
| to actual currency, that is, "nominal dollars", based on some
| past bemchmark) are only available retrospectively. But you
| probably want to know what the minomum wage in nominal dollars
| is before you have to pay someone.
| danbruc wrote:
| That is not really a problem as long as inflation or
| deflation is not crazy over a year or so. Just make the
| minimum wage X real dollars based on method such and such and
| the numbers from last year.
| actually_a_dog wrote:
| You would implement that by setting it to $X real and nominal
| at some base point, then using the CPI to readjust yearly or
| something. There's no problem knowing what minimum wage is or
| will be at any given time.
| jacquesm wrote:
| Here in NL where I live there is this weird concept that the
| price of housing is not part of inflation. Whereas it is the
| single largest expense that people tend to have, before food and
| transportation. This is quite frustrating because people pay more
| and more in rent, 1000 euros / month is no longer exceptional,
| which leads to a crunch in the housing market and so combined
| with the low interest rates they are forced to continue to rent.
|
| You can't win like that, if you're a single earner (because you
| are single or because only one of two spouses is working) then
| you're basically going to be squeezed for many years because you
| can not save enough for a downpayment.
|
| This sort of treadmill is extremely hard to get out of and one
| false step or bad illness and you're in real trouble.
|
| Meanwhile, rich people get to hand 105K euros tax free to their
| kids to buy a house of their own, and investors buy condos to
| rent back out at exorbitant prices because that's the only
| relatively risk free way of putting their savings to work.
|
| It's really tough.
| karakot wrote:
| Is 105K passed to your kid rich by any means?
| haskellandchill wrote:
| Yes, when compared to 0k.
| heavyset_go wrote:
| 88% of minimum wage workers are over the age of 20, with the
| average age being 35[1]. 36% are 40 and over.
|
| According to this study[2], increases of 10% to the minimum wage
| are correlated with only a 0.36% increase of prices, and minimum
| wage increases may cause some prices to decrease, too.
|
| [1] https://www.epi.org/publication/wage-workers-
| older-88-percen...
|
| [2] https://www.upjohn.org/research-highlights/does-
| increasing-m...
| koheripbal wrote:
| This analysis is flawed because it uses year-over-year inflation
| changes. ....but one year ago, we were locking down so production
| and consumption halted.
|
| A more accurate comparison against data two years ago shows that
| the change is not so dramatic.
| thrill wrote:
| It's almost like long stretches of low productivity relative to
| capital expended results in price increases.
| underseacables wrote:
| So you mean if even they paid $15/hr it sill wouldn't be enough,
| because businesses will just raise prices?! What a shock!
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(page generated 2021-06-28 23:02 UTC)