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[anonymous]11y-20

Yes: social democracy.

Social democracy does not involve capitalism? Sweden (or whatever your favorite example is) is not a capitalist country?

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23 On Walmart, And Who Bears Responsibility For the Poor

by ChrisHallquist

27th Nov 2013

3 min read

512

23

Note: Originally posted in Discussion, edited to take comments there into account.

Yes, politics, boo hiss. In my defense, the topic of this post cuts across usual tribal affiliations (I write it as a liberal criticizing other liberals), and has a couple strong tie-ins with main LessWrong topics:

It's a tidy example of a failure to apply consequentialist / effective altruist-type reasoning. And while it's probably true that the people I'm critiquing aren't consequentialists by any means, it's a case where failing to look at the consequences leads people to say some particularly silly things.
I think there's a good chance this is a political issue that will become a lot more important as more and more jobs are replaced by automation. (If the previous sentence sounds obviously stupid to you, the best I can do without writing an entire post on that is vaguely gesturing at gwern on neo-luddism, though I don't agree with all of it.)

The issue is this: recently, I've seen a meme going around to the effect that companies like Walmart that have a large number of employees on government benefits are the "real welfare queens" or somesuch, and with the implied message that all companies have a moral obligation to pay their employees enough that they don't need government benefits. (I say mention Walmart because it's the most frequently mentioned villain in this meme, but others, like McDonalds, get mentioned.)

My initial awareness of this meme came from it being all over my Facebook feed, but when I went to Google to track down examples, I found it coming out of the mouths of some fairly prominent congresscritters. For example Alan Grayson:

In state after state, the largest group of Medicaid recipients is Walmart employees. I'm sure that the same thing is true of food stamp recipients. Each Walmart "associate" costs the taxpayers an average of more than $1,000 in public assistance.

Or Bernie Sanders:

The Walmart family... here's an amazing story. The Walmart family is the wealthiest family in this country, worth about $100 billion. owning more wealth than the bottom 40 percent of the American people, and yet here's the incredible fact.

Because their wages and benefits are so low, they are the major welfare recipients in America, because many, many of their workers depend on Medicaid, depend on food stamps, depend on government subsidies for housing. So, if the minimum wage went up for Walmart, would be a real cut in their profits, but it would be a real savings by the way for taxpayers, who would not having to subsidize Walmart employees because of their low wages.

Now here's why this is weird: consider Grayson's claim that each Walmart employee costs the taxpayers on average $1,000. In what sense is that true? If Walmart fired those employees, it wouldn't save the taxpayers money: if anything, it would increase the strain on public services. Conversely, it's unlikely that cutting benefits would force Walmart to pay higher wages: if anything, it would make people more desperate and willing to work for low wages. (Cf. this this excellent critique of the anti-Walmart meme).

Or consider Sanders' claim that it would be better to raise the minimum wage and spend less on government benefits. He emphasizes that Walmart could take a hit in profits to pay its employees more. It's unclear to what degree that's true (see again previous link), and unclear if there's a practical way for the government to force Walmart to do that, but ignore those issues, it's worth pointing out that you could also just raise taxes on rich people generally to increase benefits for low-wage workers. The idea seems to be that morally, Walmart employees should be primarily Walmart's moral responsibility, and not so much the moral responsibility of the (the more well-off segment of) the population in general.

But the idea that employing someone gives you a general responsibility for their welfare (beyond, say, not tricking them into working for less pay or under worse conditions than you initially promised) is also very odd. It suggests that if you want to be virtuous, you should avoid hiring people, so as to keep your hands clean and avoid the moral contagion that comes with employing low wage workers. Yet such a policy doesn't actually help the people who might want jobs from you. This is not to deny that, plausibly, wealthy onwers of Walmart stock have a moral responsibility to the poor. What's implausible is that non-Walmart stock owners have significantly less responsibility to the poor.

This meme also worries me because I lean towards thinking that the minimum wage isn't a terrible policy but we'd be better off replacing it with guaranteed basic income (or an otherwise more lavish welfare state). And guaranteed basic income could be a really important policy to have as more and more jobs are replaced by automation (again see gwern if that seems crazy to you). I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.

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On Walmart, And Who Bears Responsibility For the Poor

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[-]Jack11y450

None of the major political ideologies are particularly consequentialist in the way they approach policy. Progressives by and large see the world through the following lens: There are some people who are oppressed and others who oppress them. Government policy ought to focus on emancipating the oppressed and punishing/overthrowing the oppressors. Criminal Justice: white people oppressing brown people. Abortion: Christian men oppressing women. Foreign policy: America oppressing the rest of the world (unless it's America saving some oppressed foreigners from an oppressor). Housing policy: landlords oppressing tenants. Labor: captital oppressing unions. Taxes: the one percent oppressing the 99%. Marriage equality: straight Christians oppressing LGBT people. Progressives aren't generally concerned about utility: they're concerned about justice. Even the Animal Rights movement, essentially founded by arch-Utilitarian Peter Singer is focused on the class relations between animals and the humans who oppress them.

In this case, the oppressors are wealthy business owners who are exploiting the labor of the poor and helpless AND exploiting the rest of us by placing the burden for care on taxp... (read more)

[-]Brillyant11y120

None of the major political ideologies are particularly consequentialist in the way they approach policy.

I like your whole comment, but disagree with the first sentence.

Apart from reading about it explicitly on LW, I was also able to approach politics as less of a mind-killer once I realized that different ideologies approach issues believing different outcomes would be ideal. But neither side realizes that (or how very different "ideal" is to each), so one just says, "ABC will work! XYZ is crazy!!" and the other says, "What?! ABC will never work! History shows XYZ is clearly the best policy!" Each side means something different by "work", and so spiralling mind-kill ensues...

Actually, I've found my best friends, with whom I end up discussing politics with, are very consequentalist, and care very much about what ends up "working best". Those who disagree with me simply don't define "working" or "best" in the same way I do, and so we really ending up talking past each other and giving each other funny, mind-killed looks.

For instance, as a liberal, I concede de-regulation is better for maximizing economic growth... (read more)

5NancyLebovitz11y

The other half of this is that you and your friends presumably don't assume that those with opposing political views have the (real or hypothesized) ill effects of their preferred policies as primary goals.

1Jack11y

Yeah, on reflection 'consequentialist' is probably too broad.

-6Eugine_Nier11y

[-]ChrisHallquist11y120

None of the major political ideologies are particularly consequentialist in the way they approach policy.

Political ideologies are big squishy categories that contain more consequentialist and less consequentialist strains. So I think that's the wrong way of looking at it.

E.g. amont libertarians, there are those who focus on supposed good consequences of libertarian policies, and those who focus on arguing coercion is always wrong even if it leads to good consequences. And among progressives there are people who are basically as you describe, and people like Matt Yglesias and myself and I think Yvain (I think it's fair to call Yvain progressive).

[-]Jack11y130

Political ideologies are big squishy categories that contain more consequentialist and less consequentialist strains.

I mentioned those strains. But they're a very small minority-- over-represented among wonks, bloggers and people smart enough to be in your social circles-- but still small. Yglesias drives people to his left nuts with his stuff. And you and Yvain are not representative progressives for what I think are obvious reasons, right?

You can put me in that category of progressive too (though I like left-libertarian or liberaltarian as well). We should also be skeptical that we are actually progressives for consequentialist reasons and not merely coming up with consequentialist rationalizations for our progressive intuitions. Disagreeing with non-consequentialist liberals seems like a nice start, though.

How small that group is, sort of isn't the point though. The point is that one dimension along which you differ from many other progressives is whether you look at policy chiefly through a lens of consequences or a lens of oppressor-oppressed. As such it is unsurprising that you find yourself disagreeing with progressive talking points from time to time.

-3ChrisHallquist11y

Fair enough. It is true that most people, regardless of their politial ideology, are not consequentialists. But this looks like a case where failing to look at the consequences leads people to say silly things.

[-]Desrtopa11y100

Progressives by and large see the world through the following lens: There are some people who are oppressed and others who oppress them. Government policy ought to focus on emancipating the oppressed and punishing/overthrowing the oppressors. Criminal Justice: white people oppressing brown people. Abortion: Christian men oppressing women. Foreign policy: America oppressing the rest of the world (unless it's America saving some oppressed foreigners from an oppressor). Housing policy: landlords oppressing tenants. Labor: captital oppressing unions. Taxes: the one percent oppressing the 99%. Marriage equality: straight Christians oppressing LGBT people. Progressives aren't generally concerned about utility: they're concerned about justice.

I think you're rather generalizing Social Justice Movement mentality to progressives as a whole. They're a vocal subset, but I think a lot more people would identify as "progressive" given an explanation of the options than would ascribe to the oppressed/oppressor lens.

1Jack11y

If you have to explain the options to them, they're not ideological. I'm talking about the people setting agendas and writing talking points. I'd also second what Eugine said.

0Desrtopa11y

Most "progressives" do not self describe in terms a reactionary would use, and in particular members of the Social Justice movement are far more likely to self identify as "liberal" than "progressive." I also think most people who would self identify as "progressive" without an explanation of the terms would not frame political matters with the same lens as members of the Social Justice movement, but I don't think that identification with the terms we're using is a good way of isolating the ideologically active segment of the population, unless we choose to define it in not-very-useful ways.

2Jack11y

??? "Progressive" re-entered our political vocabulary as a term of self-identification for the anti-war left in 2003. It existed to both distinguish them from pro-war democrats and as a re-branding of what had/has become an incredibly unpopular label: "liberal". I know because I was part of that group. Because it has so many more positive connotations it is increasingly used by high-information left-of-center Americans to describe themselves. And that's why the senate and house don't have "liberal" caucuses-- they have "progressive caucuses." So I'm not using terms a reactionary would use and while "progressive" is maybe slightly less common than liberal still I'm quite sure self-identified progressives are disproportionately part of the Social Justice movement.

0Desrtopa11y

In that case I apologize for the misunderstanding (when I encounter the term in Less Wrong circles, it's generally being used in Reactionary terms, which are to the best of my understanding rather broader,) but I would say that this is still overgeneralizing the outlook of a minority of liberals.

0Jack11y

My understanding --I'm quite confident but a reactionary might correct me-- is that they use the term "progressive" because that is probably the most popular term among the left's in crowd (certainly 5-6 years ago it was, people seem to care less about branding after winning the White House). This isn't really in the form of evidence I can incorporate. I am/was pretty strongly embedded in left of center political culture, so single instances of disagreement don't really tip the scales at all. If you want to analyze mainstream left-wing political discourse in a way that distinguishes it from what you call the Social Justice movement-- that might help me see where you're coming from.

0Desrtopa11y

I don't think there's a single, easily expressed lens that sums up either mainstream liberalism or conservatism, so I don't think it's easy to draw a contrast between the social justice movement and mainstream liberalism which holds across every issue. But I think that on many issues where a person involved in the Social Justice Movement would see a case of oppression by one group against another as a moral wrong to address, a more mainstream liberal might see as a case of harms caused by self perpetuating forces which should be corrected by deliberate intervention. In the specific case of racial inequality, for example, where a Social Justice Movement advocate might see a case of wrongful oppression of black people by white people, the view I understand as being more mainstream would be something like "historical circumstances put black people in a disadvantaged position, and the Matthew Effect ensures that things will continue to stay shitty for black people unless society makes a concerted effort to rectify this." I can't say with any confidence that I have representative enough experience to describe the ideological demographics of progressives in general, but most people under the broad "liberal" umbrella aren't involved in the social justice movement, and while some people certainly have more ideological investment in certain political issues than others, most people have a substantial cluster of political values that they care strongly enough about that, whether or not it has much bearing on their daily activities, they can still get mindkilled over them when matters touching on them are raised. So I think in a meaningful sense very few people are "not ideological."

-11Eugine_Nier11y

3ChristianKl11y

I don"t think it"s a complete strawman. Marx basically says that every social conflict is about the struggle between oppressor and oppressed. Not everyone who's political left subscribes to that ideology but it's certainly something that real people believe. It deeply buried in the core assumptions of socialist thought.

5satt11y

Marx was a liberal?!

[-]Lumifer11y110

"Liberal" is a funny word, it had quite different meanings through the history and even now tends to mean different things on different sides of the Atlantic ocean.

2satt11y

Quite true, but can you identify any reasonable interpretation of "liberal" that fits Marx nicely? As far as I can see, none of the usual meanings of liberalism I can think of (classical liberalism; neoliberalism; squishy, mainstream, contemporary welfare state left-liberalism) sum up his ideology well.

2Lumifer11y

It shouldn't be particularly difficult to establish a path from Marx to "contemporary welfare state left-liberalism". It would focus on hostility to capital and the need to help the oppressed. Marx, of course, would barf at contemporary welfare state, but he's dead so we can conveniently ignore all that :-/

2satt11y

Sure. But the path from Marx to contemporary welfare state left-liberalism is sufficiently long (and with enough branches!) that using one as a representative of the other is dubious at best. As you say, Marx himself would probably take a dim view of CWSLL, if he were around to witness it.

2Lumifer11y

Yeah, I agree. People calling contemporary progressives "Marxists" are usually just looking for a derogatory adjective. However there are certain similarities and the connection between Marx and CWSLL can be made -- it will be twisting and turning, and will require a fair amount of bending and averting eyes -- but it will probably pass the laugh test. I don't think that this connection is important or that pointing it out is useful, still, it's not quite the young-earth theory.

1[anonymous]11y

You could probably do it cladistically too. Sorel blasts Jaures as a social democrat (which AFAICT he was) in Reflections on Violence, but Jaures read and was influenced by Marx. On the other hand, Social Security was explicitly inspired by Bismarck's successful attempt to buy off the socialists... but on the other other hand, many political figures at the time, including some in high places in FDR's administration were, well, not entirely unsympathetic to the Soviets. Marx certainly wasn't a liberal, but many liberals have been influenced by people and movements far to the left of them; it could be argued (though I'm not good enough at history to argue it well) that the oppressor/oppressed mindset is one such influence.

2ChristianKl11y

American often equate liberal as being left. If I read someone on the internet writing liberal, than I usually don't think they mean the word in it's traditional meaning.

0CronoDAS11y

Just think of "The Communist Manifesto" as being a horrible warning, like Orwell's 1984, rather than a how-to guide. ;)

-1[anonymous]11y

Marx made no bones with categories of "oppressor" or "oppressed" whatsoever. He dealt in economic classes defined by their relation to the means of production: worker and capitalist. He actually despised the criminal lumpenproletariat.

3ChristianKl11y

According to Marx capitalists do oppress their workers.

-1Jack11y

That may be. Mainly, I just didn't want to argue with any progressives that might be offended.

-3Lumifer11y

You have to distinguish between what they say and what they do. The major ideologies are considerably more consequential in what they do than in what they say.

0Jack11y

You'll have to explain what that means.

7hyporational11y

My interpretation: Politicians try to say things that appeal to as many people as possible to maximize votes. Once they're elected, they can be more specific and thus more consequentalist about what they do, since for the average voter, verifying what they do is more laborious than listening to what they say.

-1Lumifer11y

There is no hidden meaning here. In politics there is a major difference between what politicians say and what they do. This is a rather straightforward consequence of the set of incentives they have to deal with. There are, of course, limits to the divergence of the words and the deeds, but these limits are pretty lax.

0Randy_M11y

Are you implying that what happens is generally what was intended (by someone) or that policy out comes are due to wrongly anticipating consequences, rather than simply neglecting to?

0hyporational11y

Both look fine to me and are not mutually exclusive. Many policies are compromises between different parties so they might not look like especially consequentialist. Consider also that the more media visibility a policy can be expected to get, the less consequentialist it will look, extrapolating from my other comment.

-7TheAncientGeek11y

[-]Douglas_Knight11y270

Your analysis of the short-term effects is correct, but the long term effects depend on whether "low wage workers" are permanently so. Sometimes people condemn Walmart jobs as "dead-end" and that is getting at the right point.

I've heard the claim that Costo and Sam's Club (ie, Walmart) are very similar, but Costco is famous for paying its employees twice as much. But this doesn't come out of profits - Costco spends the same amount on labor, employing half as many people, twice as productive. If Walmart could make its employees twice as productive, that would be great for society, though in the short term it would lay off half of them.

If the productivity of people is unchangeable, then Walmart is doing society a valuable service by providing a niche to people capable of no more. But if Costco employees are more productive because Costco trains them, then Costco is doing a valuable service by improving their productivity. In the first case, we want Walmart to win because only a few companies like Walmart can make use of the least productive workers. But in the second case, we want Costco to win because it is making use of the same people, but making better use. Bu... (read more)

[-]knb11y310

I worked at Walmart as a teenager. Walmart does a lot of training, but the simple fact is that they work with people who have a lot of attitude and discipline problems (like the teenage me) that would make them unemployable elsewhere.

7Grant11y

This has always been my experience shopping at Florida Walmarts: the employees are horrible. Perhaps they could be making more money with a higher minimum wage, better unionizing or what have you, but I have always viewed Walmart's ability to make their employees productive as some sort of miracle of capitalism. I can't think of another chain business I've experienced with the same or lower caliber of employee.

[-]Shmi11y200

I don't see why a vague argument against one of many political memes deserves a post in Main.

-2ChrisHallquist11y

Useful illustration of the kind of mistakes thinking in terms of consequences can help you avoid. EDIT: To elaborate - I think LessWrong could really benefit from accessible posts applying LessWrong-type ideas to topics that people who aren't already hardcore nerds about typical LessWrong topics might have heard about and care about.

5Shmi11y

I see. I guess I am having trouble following your conclusions from your premises. Walmart is in a low-margin business and it employs unskilled labor, so naturally they put as much squeeze on the wages as they can get away with. I don't see anything immoral about it, it's just business. Corporations are well known to behave like psychopaths. There is a 100 year-old solution to this issue, it is called organized labor. While unions are out of place in many other industries, Walmart is a perfect target for unionizing, since individual workers have zero leverage against the company, while a union can fight for reasonable wages and benefits. Same applies to Amazon warehouses, by the way. So, an alternative to increase in mandatory minimum wage (which ought to be increased, by the way, in the US it is currently lower in inflation-adjusted dollars than it was 30 years ago) and to a guaranteed basic income (which shifts the burden of paying the Walmart employees from the shareholders and the customers to everyone and adds some unnecessary overhead) is to enact policies making it easier to unionize unskilled labor.

0gjm9y

It seems to me that either (1) individuals working for those corporations ultimately make the decisions that screw over their ill-paid workers, in which case those individuals may be acting immorally; or else (2) actually the entities with agency here are the corporations themselves, in which case they may be acting immorally. Neither of these makes moral questions go away. (I say "may be" rather than "are" because these are complicated issues and it might e.g. turn out that one can't do better than Walmart's employment practices after all.) I think I agree with everything in your last paragraph.

0Lumifer9y

It is rather complicated. I am not sure I want the corporations to act morally because the moral system they pick might turn out to be one I strongly disagree with. Focusing on money keeps them safe and predictable. And if you want organizations to work towards moral goals, I see no reason for these organizations to be corporations.

0Strange79y

A union makes sense when the workers have specialized interests, but for unskilled labor isn't it simpler just to work through the overarching government?

3V_V9y

The government represents different and competing interests, and it's often biased towards those of large corporations. A trade union of unskilled workers, instead, only represents the interests of unskilled workers.

[-]katydee11y140

This post is almost the epitome of what I don't want to see on LessWrong, Discussion or not.

EDIT: This post was moved to Main after I made this comment. This makes me like it even less.

[-]Viliam_Bur11y120

It has a reasonable argument at its core: giving government benefits to low-income workers effectively means subsidizing the companies that pay low wages (and there are huge companies profiting from this). That's an irony, because even the voters who want to give money to low-income people usually don't want to support companies that profit by paying low wages. Giving money to low-income people regardless of their employment (via basic income or otherwise) would have a similar result, except for requiring people to work for companies that profit by paying low wages.

It has a mindkilling title: "evil" is a loaded word, and even if we insist on using it, why not use it instead on politicians and voters who enable this behavior? The problem is, each tribe has their preferences about who should be called evil, therefore the usage of the word necessarily follows the party line.

The mindkilling effect of politics is not just that it's difficult to write a reasonable article about politics... but that even if you succeed to write a moderately reasonable article on a political topic, it is still very likely to cause unreasonable comments in the discussion. -- This is why we need mo... (read more)

5ChrisHallquist11y

Oh, and another thing: Is that prediction correct? I think that this thread is full of non-mindkilled comments. The only really bad comments have been downvoted appropriately.

6Viliam_Bur11y

Yes, you are correct and I am surprised. Now the question is, how much this is reproducible. That is, how much of the quality of the discussion can be attributed to the fact that discussing politics is a taboo here, so people breaking the taboo are extra careful because they know they will be judged more ciritically. Also, the website policy until now may have filtered away those people who enjoy mindkilling debates; having the political debates more often might invite them back. But compared with the typical internet political discussion, this one is extraordinarily reasonable. (I also appreciate fixing the title.) I still feel afraid that having this kind of atricles more often would make things worse. But maybe we already passed some critical treshold where the existing community is sane enough to downvote the mindkilling comments even when their author is "fighting for the same side". EDIT: Another thing that I am afraid of, is that after writing a political article arguing (sanely) for one tribe, people from the opposing tribe would feel an urge to write an article (or preferably two articles) describing the situation from their tribe's point of view. Which would lead to an arms race in the number of articles, and the quality would gradually go down.

2A1987dM11y

That's a big “except”.

-1ChrisHallquist11y

"Evil" seems a fair description of how some people seem to view Walmart, though I'll probably remove it anyway on re-write. As for the rest, I'm just going to drop a link to what I've previously said about "politics as mindkiller." (And say how depressing it is that so many people in this community seem to have given up on doing better.)

7Vaniver11y

Better at... wasting time? (I don't know who you think is better off having the opinion "Grayson and Sanders are wrong about Walmart" than the opinion "I don't care what Grayson and Sanders think about Walmart." Anyone I can think of who benefits from having that opinion can easily determine so by social cues from people they want to impress, without having to think it through.)

2katydee11y

I've seen what you've previously said on this matter-- suffice it to say that I disagree. The fact that this is now in Main makes me sad for LessWrong.

-3ChrisHallquist11y

Argument?

[-]Ishaan11y100

Note: I didn't mind it in Discussion at all and thought it was interesting. I am of the opinion that comments + discussion should not be heavily self-censored. However, I second the opinion that it shouldn't be in Main. I'm also a relatively new user (first handle was mid 2012) so you can take my opinions on what belongs in Main with that in mind.

I think the rule of thumb is, that a post should possess at least one of the following qualities:

1) About epistemic rationality (ontology, epistemics, ethics, AI, bias reduction, scientific method, semantics, etc)

2) About instrumental rationality (self improvement, happiness, willpower, organization, social behavior, etc)

3) Furthering the Reader's Interests (Effective Altruism, textbook recommendations, etc)

4) Meta, announcements, and notifications about things of interest to LW or closely affiliated with LW.

I think politics can fall into any of these. News (News! not opinions!) about some political activity or press release relating to the Singularity institute or other prominant figures on LW would fall into 4. An analysis about whether or not voting is rational would fall into 3. Descriptions of how political groups behave would fall... (read more)

[-]Larks11y100

I thought this was generally a good post, but I suggest linking to some serious research rather than a Krugman blog. In his article he links to a survey article, and there are many other good ones. These contain the same information, but lack the unnecessary partisan attacks - "Republican leaders clearly feel disdain for low-wage workers."

-1ChrisHallquist11y

Eh - Krugman is nice and concise, and popularizers like him are where I actually get my impressions of the empirical evidence of minimum wage laws. Also as far as I can tell he's right about Republican leaders.

5Dias11y

I think Krugman is sufficiently mind-killed on politics that it would be a mistake to get your impression of the literature from him, unless you also read the work of semi-professional Krugman watchers. In the latter case I withdraw the objection, but at that point it'd probably be easier to read the literature yourself.

-5ChrisHallquist11y

-4Eugine_Nier11y

And completely mind-killed about politics. (I'm giving him the benefit of the doubt there.) Also, notice his post crisis behavior. First he makes concrete predictions about what will happen with and without stimulus (things will be somewhat bad with stimulus and even worse without stimulus) meanwhile his opponents predict the stimulus will make things worse. Then the stimulus happens and things are even worse then his without stimulus prediction, his conclusion: "we didn't stimulate enough".

5ChrisHallquist11y

There is strong agreement among economists that the stumulus worked.

5Douglas_Knight11y

That is not at all relevant to Eugine's point, which is a conjunction between predictions ahead of time and beliefs after the fact. If he holds now that the stimulus worked, he must hold that has previous predictions were badly wrong. Does he admit that? Moreover, he must reduce his belief in the efficacy of stimulus, even if his assessment of the state of the economy shifts more. Is he explicit that he has stronger beliefs about the efficacy of stimulus than about the future of the economy? And these economists that today have strong agreement, what did they predict ahead of time? (I'm assuming that Eugine is correctly describing Krugman. But you didn't object to that.)

4ChrisHallquist11y

It's absolutely relevant. By Eugine's account, Krugman's opponents were predicting the stimulus would make things worse. Most economists now agree that Krugman's opponents were wrong and the stimulus helped. Beyond that, I'm a little unclear on what Eugine is saying: "Krugman said things would be worse without stimulus" is ambiguous between "Krugman said things would be worse without stimulus than with stimulus" and "Krugman said things would be worse without stimulus than they were at the time he was speaking." Link to what Krugman statement exactly Eugine has in mind would be helpful. In any case, this is at least semi-relevant.

-3Douglas_Knight11y

No, Eugine is perfectly clear. The only way to interpret his "things are even worse then his without stimulus prediction" is that Krugman made absolute predictions. The simplest hypothesis is that economists are impervious to evidence and are just backdating their predictions. Yes, inference can be complicated by mechanisms; that link is relevant, quite unlike your previous link.

[-]buybuydandavis11y100

In state after state, the largest group of Medicaid recipients is Walmart employees

This isn't corporate welfare to Walmart or it's employees, it's corporate welfare to our regulatory protected medical industries and guilds.

The vast majority of the supposed "welfare" spending for health care is paid in rent seeking and tribute to the regulatory state and the vested interests they entitle.

[-]gattsuru11y90

Part of Sanders' argument relies on the belief that there is a possible free lunch, here : they believe WalMart could raise wages significantly without causing the company to explode, either not harming people in ways that count to the progressive movement (decreased profit to corporations) or by arguments of comparison to CostCo, Trader Joe's, or other stores that have different structures. I'm pretty sure the math doesn't work out that way, and the realistic event chain is likely to be drastically different, but it's a very common belief. From that per... (read more)

6buybuydandavis11y

You just have to make an argument that would appeal to a conservative, which I think Paine's would. Amusingly enough, Bill O'Reilly basically bought Paine's argument with respect to the guaranteed payments from Alaska's oil fund, saying "It's our oil". Paine's argument was "It's our land." It's really not a great leap. Conservatives reject liberal arguments because they're not based in anything Conservatives recognize as justice. Your need for food does not justify your stealing my dinner. They may wish to give to charity to help the poor, but they reject having their money taken by force by the government to help the poor. It's the difference between giving a gift and being robbed.

-13[anonymous]11y

4Lumifer11y

That doesn't match my idea of what a free lunch is. I believe a better descriptive term would be the deep pockets theory.

-1Izeinwinter11y

It isnt even a question of deep pockets. Require walmart to pay each employee twice as much, and they will probably fire half of them, train the remainder better, and have customers bag their own groceries. Same total labor cost. This is generally considered better on the grounds that the people fired by walmart in this situation are not really worse of - any other employment they come by is as least as good because their current employment situation verily doth sucket hose - and the people still working there would then have actual jobs.

7Lumifer11y

I see no reason to believe this would happen. May I recommend a post on the subject? Oh really? Do you think Wal-Mart employees agree with you on that point? You're basically saying that there is no reason for anyone to work at Wal-Mart. This is... empirically wrong. What counts as one?

-5[anonymous]11y

1ChrisHallquist11y

Good points. The second link is excellent, may incorporate into a revised version of the post. But in addition to the points it makes, there's what seems to be a questionable moral assumption here: even if Walmart could pay employees more by taking a hit in profits, why should they bear that burden alone, as opposed to spreading the cost of improving those people's lives over the wealthy as a whole through taxes? That's where the anti-Walmart crowd seems to assume something like, "hiring someone creates a (fairly) strong moral obligation to look after their welfare, above and beyond things like not cheating them."

[-]Ben Pace11y80

Yes, politics, boo hiss.

Actually, grammar, boo hiss. Just check your post title again.

8hyporational11y

Did you defect by accident here?

5Ben Pace11y

I'm not sure... Data point: did it come across as me being helpful?

9hyporational11y

Reflexively it came across as you being a smartass, but I quickly concluded that you were trying to be helpful. I just think you left too much room for bad interpretation.

5ChrisHallquist11y

Thanks. (If anyone is confused, there was an extra word in my post title that I noticed and fixed before reading these comments.)

0[anonymous]11y

There's still a misspelling ("employess" for "employees").

[-]V_V11y70

Whatever your moral position is, government benefits to low-income workers are a subsidy to their employers.

If the government awarded benefits only to the unemployed, many low-income workers would find preferable to quit their jobs if their employers didn't increase their wage. Since employers need employees, employers would find preferable to increase their employees' wages enough that they don't need government benefits.
The net effect would be a redistribution of wealth from employers (especially those who use lots of low wage labour, like Walmart) to th... (read more)

3enoonsti11y

That's incorrect. Basic income is provided to everyone, even to those who choose not to work. Perhaps you were thinking of the Earned Income Tax Credit, which is provided only to low-income workers.

-1V_V11y

Therefore it allows employers to pay lower wages.

9enoonsti11y

...only if the workers don't mind lower wages (such as in a Silicon Valley startup). See, among many other benefits, basic income can serve as a permanent strike fund for those who are still employed. These employed strikers would not receive anything from your solution of "unemployed-only." Furthermore, your targeted solution can be demonized as "lazy-only" and cut by politicians. Look at stigmatized food stamps today. Such drastic cuts are very unlikely with a non-stigmatizing basic income provided to everyone.

7enoonsti11y

On a related note, GiveWell appears to be removing Against Malaria Foundation as their top charity, making GiveDirectly their new top charity. Donating to GiveDirectly may help legitimize the idea of an unconditional basic income. I don't think basic income is as important as mass cryonics, but I still defend it in my upcoming "cryonics and basic income for everyone" website. Here's hoping I finish the website someday.

-6V_V11y

1Luke_A_Somers11y

Even so, payments to those who aren't working can't reasonably be classified as 'redistribution of wealth from the taxpayers to Walmart' I'm not sure that the drop will be as much, though - if everyone has a basic income, some people who are now driven to work despite hardship would not be so driven and could finally quit. Those who do work will not need to compete with them for jobs. ALSO, those on basic income would be able to buy things they presently cannot, which would increase the demand for labor further.

0V_V11y

Right, in fact I was referring to payments to those who are working. A guaranteed basic income would not discriminate between the two, thus, in the proportion it was given to workers, it would be a subsidy to their employers. Unemployment benefits would be sufficient to obtain these effects without transferring wealth from the taxpayers to the employers.

1enoonsti11y

No. To illustrate, look at the starting point of the aforementioned subsidy to employers: the Earned Income Tax Credit. You can only make use of the EITC once you are employed, so all else being equal, the EITC contributes to the idea: "If you don't work, you starve." I may then feel pressured to work at McDonald's or Walmart. By contrast, Basic Income exists external to the market, serving as a base amount for everyone to live on. Since I don't have to worry about starving anymore, I now have more leverage in choosing if/where I want to work. Any amount I earn on top of the base amount is of my own volition for luxury items not needed for my survival. If I later want more money and my employer resists, I can use the basic income as a strike fund. Three things. First, you seem to be forgetting my earlier point regarding staying power. Even if you rally society today to support your targeted "unemployment benefits" (I put it in quotes because I know you mean it in a welfare context that is wider than merely unemployment compensation), your welfare solution is still at risk of being stigmatized in the future and then cut by politicians. Basic income for everyone avoids this risk, and will have much greater staying power. Second, you seem to be under the impression welfare is handed out like free candy. In reality, welfare can be a pain in the butt, whether it's the intrusive paperwork, stressful delays, or the threat of fines and probation. Basic income bypasses this mess. Third, you keep suggesting "taxpayers" and "corporations" are two separate things, even though corporations pay taxes too. Yes, corporations are quite adept at avoiding taxes, which is why tax reform also needs to be a part of this discussion.

-4V_V11y

My point is that you can do that with unemployment benefits without the side effect of subsidizing the employers. Any policy is potentially subject to being reversed in the future. I don't see why basic income would have more staying power than unemployment benefits. Seems like these costs could be reduced to the point of irrelevance. Not all taxpayers are corporations, and corporations have conflicting interests when they are in the role of taxpayers rather than the role of potential subsidy recipients: a corporation that employs mostly high pay labour (e.g. Google) has no interest to subsidy Walmart.

1enoonsti11y

No. You can't. One example I've stressed is that your unemployment benefits don't help employees who wish to go on strike. Union dues can be decreased via Basic Income because unions won't have to worry about strike funds anymore. Even if you're not officially unionized, you know your coworkers get paid a Basic Income each month, and they know that you know. This simplicity-induced transparency can help you persuade/guilt-trip your co-workers to go on strike with you over, say, safer workplaces or shorter hours. And going on strike is an easier sell than getting everyone to quit for "unemployed-only" welfare (which, as I've stressed, your coworkers may not even end up receiving), especially if your coworkers are getting paid quite handsomely. After all, we're not just talking about Walmart employees going on strike. Long story short: Basic Income subsidizes employee leverage. And as Aaron Swartz emphasized, it can even help encourage employees to become entrepreneurs. Your repeated argument that Basic Income is subsidizing Walmart reminds me of this psychicpebbles video :p Think of the aforementioned fight over food stamps today. Heck, many Americans don't even know it's called SNAP now, and SNAP advocates have to actively campaign to teach Americans what recipients receive. By contrast, Basic Income won't need active campaigning once adopted: everyone will be passively reminded each month via their monthly payments. Furthermore, the endowment effect (yes I see the criticism section at that link) makes it much less likely that everyone will support a politician's decision to cut their Basic Income monthly payments. But only if society cares to reduce the costs! Again, people don't even know the foods stamps program is now called SNAP. And they think recipients are all like Jason Greenslate. To be fair, there are practical bottlenecks in the implementation of a basic income, so I do support already-existing welfare programs. It's just that I also point out the we

-2V_V11y

Sure, but employees could threaten to quit their job. Anyway, how much money is currently locked as strike funds? So can unemployment benefits: If you business fails, you have a safety net. Sure, you would have to give yourself and your employees a wage while your business is still unproductive, but that could be dealt with subsidies specifically targeted at startups. Appeal to ridicule If the government started to give money to everybody who turns 18 and doesn't work I suppose that people would tend to notice. The same endowment effect applies to taxes which affect most of the population. When the government proposes tax raises there is always some opposition, but this doesn't prevent tax raises from occurring from time to time. Food stamps are considered something extremely low status which only the filthy poor and social parasites would ever accept. Most people don't care about the issue except as a social cost.

1enoonsti11y

If threatening employers with the words "We'll quit" is all that's needed, then why do employees bother with strikes in the first place? Action gives power to words. As for your (rhetorical?) question, I'm not sure I follow. Non-unionized employees certainly don't have a strike fund. Hackers' hobbies and experimentation technically don't count as startups, even though they can lead to official companies in due time. Basic income can help support such experimentation. Furthermore, subsidies targeted specifically to startups can be opposed by established businesses as government meddling. When an average American interviews for a job, which of the two is more likely on his mind: the wage, or the tax implications of the new job? Tax reformers face the uphill battle of a public perplexed by the complexity of taxation, as well those who feel protected from tax increases via possible deductions and loopholes. By contrast, an income stream is an easier thing to grasp. If everyone is given this income stream, any attempts to cut this income stream won't be met with "some opposition." It will be met with widespread opposition. But your "lazy-only"... I mean, "unemployed-only" solution won't fly because it will be demonized in the manner that you demonize SNAP here: Whereas many SNAP recipients actually are employed, your "unemployed-only" solution actively discourages work. Therefore, your belief that the problems of targeted welfare "could be reduced to the point of irrelevance" seem, to put it mildly, a bit optimistic to me. Basic income does not actively discourage work. Instead, it gives people leverage to choose their work if they so desire. Yes, I agree it is, to put it mildly, optimistic to expect adoption of basic income in the near future. However, I'm in it for the long-run.... unless, of course, someone convinces me that basic income is a bad idea. You're currently not succeeding in this regard. Appeal to authority

-1V_V11y

Because they would be in serious troubles if they quit and don't have another form of income. So either these hackers are unemployed, therefore they would be getting unemployment benefits if they existed, or they are employed, hence they can fund themselves with their salary. Until they can find an investor, of course. Nope. Cash from unemployment benefit is indistinguishable from cash from another form of income, unlike food stamps which automatically signal you as "poor" any time you use them to buy something. Not any more than basic income does. Off topic. You are not helping to keep the level of this discussion high.

1enoonsti11y

Back from my Thanksgiving break. Delighted to see another turkey. So what you're saying is that your "unemployed-only" solution will make the words "We'll quit" into a more credible threat, and employers will meet their demands because employers are too stupid to call their bluff? You do recognize there are benefits to being employed other than the wage, right? Health care, networking, friends, knowledge, experience, etc? And, as I suggested before, what if the employees are paid well above your "unemployed-only" solution but wish to strike for shorter hours or a safer workplace? My great-grandfather was on the receiving end of a strike in 1940, and he lasted for two months without blinking an eye. If you tried your simple threat of "We'll quit and go live off the benefits" on him, it would have come across like this scene from Cable Guy. One of my contentions is that basic income has a much better chance of coming into existence than your solution, although I'll hedge this notion with Milton Friedman's Negative Income Tax discussed below. Nope. We're not talking about signalling "I'm poor" to the cashier at the supermarket. We're talking at the level of policy. You know, Washington D.C. and all that. By the way, maybe you should have looked at a SNAP card before going all scarlet letter on me. Look at this mountain of shame. And here's a film about the people who carry such cards. Maybe the film will help you stop calling them "filthy poor and social parasites." Even Tyler Cowen praises SNAP. Randomized control trials (here's one for example) indicate that basic income encourages work. RCTs often inspire hipster cynics to complain: "Oh, they continued working just because they knew the RCT would end. If you guaranteed them basic income for life, they would quit their jobs." Of course, such complaints are merely handwaving, unlike the empirical evidence just presented. Are there any RCTs for your idea? If no, why? As it turns out, the Negative Income Tax RCTs

-6V_V11y

2[anonymous]11y

That's an interesting point against Basic Income Guarantees. Thank you for making me consider it.

1witzvo11y

This isn't true, literally. Why do you think it's true figuratively? If you have in mind the counterfactual situation in which benefits to low-income workers were removed, well, I think the economic consequences of that are complicated -- much more complicated than a simple subsidy. None of this makes it a subsidy.

0Daniel_Burfoot11y

But the real problem is caused by the government giving more benefits to unemployed people than to employed people. It's hardly a serious ethical critique of Wal-Mart to say that its actions are harmful given the weird distortative incentive-misaligned modern economic world.

-1Manfred11y

And then this is is combined with a minimum wage, and things continue to get complicated.

-1Eugine_Nier11y

They would also hire fewer employees while doing so.

-1V_V11y

Why?

0Eugine_Nier11y

Basic supply and demand, if something costs more you buy less of it. Unless their demand for labor is completely inelastic which is rarely the case.

-3V_V11y

The demand for unskilled, low pay labour would be fairly inelastic if per-worker productivity was fixed, because these wages are set by a bargain between the employers and the workers where the employers have the majority of bargaining power. If per-worker productivity can significantly increased by investing in optimization and automation, then yes, demand for labour becomes more flexible, and increases in labour costs would create more unemployment. It seems to me that the gains in general efficiency of the economy would compensate for the extra costs of unemployment benefits to more people. After all, the government could always increase corporate taxes to gather the money it need to pay benefits. In principle it is possible to imagine an hypothetical (utopian? dystopian?) future where the vast majority of people are unemployed and live on unemployment benefits, while the few people who earn an income from a job or investment pay all the taxes. I haven't considered this scenario in enough detail to say that this scenario would be likely or desirable, but it does seem like an intuitively plausible high-automation scenario.

0Eugine_Nier11y

Why? Most labor markets aren't monosponies. Or if the workers are doing something that adds some value but isn't strictly necessary, e.g., Wall-Mart greeters. What gains in efficiency? After all automation and other capital investments cost money, and if it was a pure efficiency gain to invest in them, the company would already have done so. You seem to be confusing being capital intensive with being efficient. These are frequently not the same thing, for example, a company that works with metal when faced with higher labor costs might decide to simply throw out its scrap rather than reprocessing it, this is more capital intensive (the company needs to buy more raw metal) but not more efficient.

-1TheOtherDave11y

...or support government benefits directly to Walmart.

[-]CronoDAS11y60

In terms of actually existing politics, which do you think people in general would dislike least: subsidizing would-be freeloaders with taxpayer money, or using that same taxpayer money to hire people (or subsidize hiring people) to do largely unproductive jobs that the market wouldn't pay them a living wage to do? There seems to be a general feeling that it's wrong to let people (figuratively) starve, but also that it's bad to give people things they don't deserve.

If the answer is "I think people in general would rather make people work for their mon... (read more)

[-]Viliam_Bur11y170

Imagine that you are designing a Prisonner's Dilemma game. When all the numbers are ready, you have an additional option to increase the reward for defecting when the opponent cooperates. Would you do it?

If you expect that the player's future decisions are already fixed and your numbers will not change them, then increasing the reward adds more value to some players, while removing value from none. Thus it would be good to increase the reward.

But if you expect that people look at the payoff matrix and choose accordingly, increasing the reward for defecting will lead to less cooperation. By increasing the reward for defecting, you are reducing cooperation... and it's not obvious what will be the result.

Now let's add another complication. Let's assume that some players' voting mechanisms are broken, so they always vote to defect, and are unable to change that. It feels moral to punish those who defect voluntarily, but it feels immoral to punish those who merely randomly received a broken voting mechanism. -- I am speaking about people who are too stupid to do the kind of work that is important in a modern society. As opposed to people who could do the work, but are too lazy, if the s... (read more)

3TheOtherDave11y

I think I'm missing your point. It seems that one approach to this is for me to treat everyone well whether they work or not, and for me to provide additional incentives to people for doing the kind of work I want people to perform. This admittedly does not have the structure of a Prisoners Dilemma game, but I'm not sure why the PD structure is important. If I find that some people who are capable of doing that work consistently choose not to under my incentive structure, I can experiment with my incentive structure... different people are best motivated by different things, after all. If despite that I still find that some people who are capable of doing that work consistently choose not to... well, that means less of the work I want people to perform will get done than if they chose otherwise. Which might be a huge problem, if that work is much more valuable than the stuff they choose to do. I have a bunch of options at that point. E.g., I can figure out other ways to get that work done (e.g. automation). Or I can figure out ways to force people to do that work. Or I can rethink my initial conditions and stop treating everyone well whether they work or not... I can instead treat people well if they do the work I want done, and poorly otherwise, and count on that differential treatment to provide the missing incentive. But that last option is far from the only option, nor is it clear to me that it works better than the alternatives.

5Viliam_Bur11y

This seems to me almost what we have now. Yes, there is a problem about defining "treating well". However well you treat one group of people, if you treat everyone else better, the former will complain. These days in first-world countries the unemployed people are treated much better than an average working person was centuries ago. But that's irrelevant. We see that they are treated worse than other people are today, therefore they are not treated well. Even if you start treating poor people much better than they are treated now, even better than the average people are now, just wait 10, at most 20 years, and they will start comparing you to Hitler, if they see that someone else is treated even better. I agree that we should experiment more. Preferably many different experiments in smaller regions, so it is easier to stop things when they go horribly wrong. Seems to me a good first step would be giving more independence to regions; decentralizing the state power.

6TheOtherDave11y

Expanding on my "yup" above a little... it's certainly conceivable that we could adopt an approach to defining "treating well" that isn't entirely relative. For example, nation A could assert that A's unemployed people are being treated well if they have better conditions than the unemployed in nation B (by which standard the U.S. unemployed are generally treated well). Or that A's unemployed people are being treated well if their children don't demonstrate significantly higher levels of deficiency-based illnesses (due to malnutrition, exposure, etc.) than the children of their employed people. Or various other standards. The difficulty I'd expect to face when proposing such a standard isn't that the unemployed under it would be worse off than the employed and therefore I'm Hitler, it's that most people have already written their bottom line about whether (for example) the U.S. unemployed are generally treated well, and evaluate the standard based on whether it gives the right answer to that question.

2Viliam_Bur11y

Yes, we could. And then some people would get political karma for insisting that this isn't the true definition of treating well, and instead is just a part of conspiracy for oppressing people. I can imagine a situation where there are illnesses typically attributed to poverty (and some people get political karma for insisting on the poverty hypothesis), even if material poverty is not the cause. For example, you could give people tons of money to buy healthy food, and yet they could decide to spend it all on junk food and alcohol. You measure their childrens' health, and it becomes obvious the children are not fed properly. This article describes it better than I could. I agree that it would be great to have an absolute definition of "treating people well", which could be reached, first in one country, and then perhaps globally. But I predict that the closer we would get to it, the more people would insist that it's a wrong definition. I think that in a long term it's even worse: the bottom line depends on information the people get. In a totalitarian state, you just have to insist that everything is great, and imprison everyone who says otherwise, and after a few years people will believe that it really is great. But if you have freedom of speech, someone will always make political karma by insisting that people should have more (who wouldn't like that?), and that not having more is completely unbearable.

3Jiro11y

I am not convinced your article shows an example of "poverty" not being caused by real poverty. The examples in the article tend to include both poverty-related factors and non-poverty-related factors. For instance, certainly failing to press charges against an abusive, criminal, boyfriend is something that can be done by someone of any income level, but on the other hand, poor people are more likely to steal money (like this boyfriend did), more likely to be unable to treat mental illness that might result in violence, and more likely to be frustrated in ways that lead to violence. In this case the guy was a burglar and had no job (poverty leads to no money and people with no money and no job are more likely to burgle). Those aren't 100% due to poverty (clearly frustration at poverty is only a contributing factor to violence and the person won't be violent unless something else predisposes him to violence), but poverty affects them at the margins. Not to mention that even though each individual decision to stay with a boyfriend who has no job is technically not poverty-related, poverty cumulatively leads to a high rate of joblessness. Poor people are also less likely to be educated and therefore more likely to make poor life decisions. Even buying junk food is related to poverty because junk food has a lower time expenditure than other food and time has a greater relative cost to poor people than to rich people--poor people often work long hours that leave them exhausted, must spend a lot of personal time on child care, etc. Poor people also are less likely to have a supermarket with cheap non-junk food within easy commute distance. Again, none of this is 100% caused by poverty--this just raises the relative cost of non-junk food, it doesn't make it completely non-affordable--but it certainly has an effect.

3Viliam_Bur11y

Well, it's complicated. For poor people, some "smart" options are not really possible. On the other hand, I also see many relatively rich people making the stupid options voluntarily. Poverty can cause "stupid" (from our point of view) choices, and also stupid choices can cause poverty. I would like to see a society where no one is forced to make the "stupid" choice. (Organizations helping poor people to press charges against criminals, providing them food and refrigerators, etc.) But even in such society I expect many people making the stupid choices voluntarily. (And then complain about an unfair society. So if we could get halfway to such society, judging from people's reactions it would seem there was no improvement.)

1Nornagest11y

A while back, a friend of mine informed me that poorer Americans consume junk food because it's one of the few pleasures aside from alcohol that's easily and cheaply available to people of that socioeconomic stratum, and that what she referred to as "food politics" is therefore symptomatic of privilege. It sounded like rationalization to me at the time, and I still find the availability and time constraint arguments more convincing, but she'd have had more personal experience than I.

4fubarobfusco11y

Recommended reading: "Why I Make Terrible Decisions, or, poverty thoughts"

[-]gattsuru11y110

There seems to be some evidence that the article is at least describing a general case, and not the author's immediate experiences, or worse

6fubarobfusco11y

Huh. *updating*

4Viliam_Bur11y

Great article! In this specific case, replacing a state-subsidized work (if the author has one of those) with state-subsidized free time would be an obvious improvement. At least replacing one of these two jobs. I am a bit confused because my first idea of a poor person is a person who can't find a job, not a person who has two jobs (and therefore has no time to optimize their lives using the typical middle-class methods). I wonder how much should I update, and how much of this is a cultural difference. Or different kinds of poverty. Perhaps "having two jobs" is just a little bit higher economical level than "not having a job" (which explains why people keep doing it, instead of giving up). But maybe it's something completely different than I am not aware of. Reading the article again, I don't quite understand why a person with two jobs complaining about a lack of time is also attending a school. Okay, it would make sense if the school is necessary for getting a better job in the future. But even then this is probably not a situation of a typical poor person. EDIT: Everyone who was influenced by this article, please update! It is actually a hoax.

7gattsuru11y

At least in the United States, less than 4% of households report under 5,000 USD in taxable income, while between 14% and 20% of households are defined as under the poverty line (depending on source). The official BLS numbers put it at 10.4 million people who are 'working poor', aka working or looking-for-work for half the year and also under the poverty line (pdf warning), and a little over three quarters of households under the poverty line have at least one person who fits into the "working poor" category. This is further complicated by income disparities and cost of living varying heavily from state-to-state: one can live much more comfortably on 20k in the midwest than on 40k in California. A little over half of off-campus college students live under the poverty line, making up a significant part of total poverty . There's a perception that a degree (and usually a four-year-degree) is necessary for any desirable "real" (non-retail non-fast food) job. Worse, there's a perception that any degree is both necessary and sufficient for long-term "real" jobs. So you do get a lot of people trying to take classes and make ends meet at the same time, even if the system eventually shoves them out the door with a lot of student loans and a liberal arts degree that barely improves their options (or not even that: low-income folk who drop out get screwed even worse). It's probably not the average case, but it does make up a non-trivial portion of the total. ((On the other hand, many of the issues raised in the linked blog post show problems related to information access. "Sliding scale" payments usually mean nearly free for a low-income mother, in the odd case where she doesn't qualify for Medicaid. The documentation necessary to set up even a post-9/11 bank account is less than that necessary to get most forms of public assistance including WIC or TANF, while there are other complex reasons people in poverty avoid bank accounts. It's quite possible to cook basic staples

9graviton11y

another emerging issue is that degrees can have a negative utility these days. if your degree can't land you a "real" job, and employers who would otherwise take you now see you as 'overqualified', your options are more limited than if you never went to college in the first place.

4EHeller11y

I've spent a fair amount of time volunteering in fairly poor communities, and i my experience, many of the people living in those areas work multiple part-time jobs, some "official" some under-the-table. In the US at least, statistics bare this out- even 45% of homeless people have worked a job in the last week (much fewer have regular jobs, because of the nature of homelessness). 13% have regular jobs (are working poor). ~25% or so of people below the poverty line are working poor, and the fraction has been increasing. I imagine if you include under-the-table jobs, its much higher.

3Jiro11y

My idea of a poor person is not someone without a job, but someone without money. Not having a job is one contributing factor to being poor, not part of the definition.

5Viliam_Bur11y

If you want to help poor people, and the only information you have is that they literally are without money, the only conclusion you can get from this data is that if you give them some money, you will make them less poor... well, at least in the short term. Having information about how specifically these people are and remain poor shows opportunities for other interventions, some of which might be more effective. Thus I would like to know the most frequent "templates" for poverty. The linked article describes a person who studies and works at two jobs, and lives in an area far away from many useful or cheap things. This can give some specific ideas about helping them. For example giving them enough money to keep only one job; or providing them a free ride to the nearest city. Some of these ideas may be more effective than others; for example if there are more people in the same area with the same problem, you could drive them to the city together by bus, instead of each of them in a separate car. Or a big refrigerator shared among multiple families. Or an advice about how to solve unusual situations that happen once in a while and they have no time to research. Then there are people who are poor because they don't have a job, and don't even have the education necessary for the job. In that case, completely different specific ideas may be helpful; for example providing them the education or a simple work experience they could mention at a job interview. Or educating their children for free if they fail to understand something at school. Or perhaps teaching them how to do something useful for themselves and their neighbors, if free time is not a constraint. There are possible projects where they provide the work, and you pay for the materials and tools they need. Etc. I always imagined the latter to be a typical example, and didn't think much about the former. Now that I think about it, all the information I have on the former are from USA, while I have a lot of

2A1987dM11y

See also

5TheOtherDave11y

Yup. I'm all in favor of experimentation. And if we're already experimenting to the limits of our existing regional independence, such that increased independence will relax the rate-limiting constraint on experimentation (which I doubt we are, but is I suppose possible), then yes, increased regional independence would make sense as a next step. Though perhaps it's best to do so in a small region, so it's easier to stop things if it goes horribly wrong. Of course, if we believe for other reasons that decentralizing state power is a good idea, then we should endorse doing so for other reasons, but that's something of a nonsequitor.

0CronoDAS11y

/me shrugs Disability screening in the real world isn't perfect, but it works at least tolerably well. ("Tolerably", in this case, means that nobody appears to be making a political issue out of it not working.)

4Dias11y

It is an issue in the UK - the conservative government made a big issue about it, because it turned out that (off the top of my head) 75% of those on disability benefits were actually fit for either full or part-time work.

9CronoDAS11y

I stand corrected, then.

2TheAncientGeek11y

"Actually"? The UK government required disability benefit claimants to be re-assessed by ATOS, who rejected many claims. However that is a set of figures, not a reality: 38% of the rejected claimants were able to get their benefits re-instated on appeal, suggesting that ATOS had been given a mandate to drive figures down, rather than assess accurately.

2Eugine_Nier11y

Well the number of disabled people seems to increase whenever the economy goes down or disability benefits increase. Of course, think of the horrible optics of trying to make a political issue out of it.

[-]A1987dM11y160

I used to have rock-paper-scissor preferences for that kind of thing (if A = “John is paid to do nothing, i.e. basic income guarantee”, B = “John is paid to do something useless, e.g. digging ditches and filling them again”, and C = “John is not paid at all”, I preferred B to A to C to B). I realized that and forced myself to resolve this when reading this post and its comment thread.

9fubarobfusco11y

The traditional argument for B over A (that is, make-work over basic income) used to be that idleness is a vice and industriousness a virtue; that it is better to work than to sit on your ass. This seems like a lost purpose, though — the reason that work is usually better than idleness is that work accomplishes something useful. Work without purpose features prominently in depictions of hell, from the myth of Sisyphus to The Far Side. A fourth alternative, D, might be "John is paid to take classes and learn skills." John enrolls in art school and learns to make decorative pottery; or goes to math school and learns category theory; or goes to woodsman school and learns to build log cabins and tan squirrel hides; or goes to media-critic school and learns to write essays about reality television; or something else. Sure, there may not be a lot of demand for potters and squirrel leather, but that's okay since the robots provide pretty much everything there is demand for. However, I realize that in proposing D, I'm probably exposing my own bias for learning as a leisure activity ....

[-]jaime200011y140

The traditional argument for B over A (that is, make-work over basic income) used to be that idleness is a vice and industriousness a virtue; that it is better to work than to sit on your ass. This seems like a lost purpose, though — the reason that work is usually better than idleness is that work accomplishes something useful. Work without purpose features prominently in depictions of hell, from the myth of Sisyphus to The Far Side.

It's not that simple. There are people who just don't function without having to work for a living; give them lots of freedom and they simply use it to destroy themselves and others. Maybe they are consumed by superstimuli like World of Warcraft, or maybe they are the marginal case that is barely behaving in a civilized fashion because of the strong incentives associated with the work paradigm. You are probably thinking about the how the kinds of people who post on LessWrong would all have their lives improved with little to no downsides by such a scheme, but that's the typical mind fallacy at work.

[-]ialdabaoth11y150

give them lots of freedom and they simply use it to destroy themselves and others.

From that link:

Moreover, political authority in the countries in which I worked was arbitrary, capricious, and corrupt. In Tanzania, for example, you could tell the representative of the sole and omnipotent political party, the Party of the Revolution, by his girth alone. Tanzanians were thin, but party men were fat. The party representative in my village sent a man to prison because the man's wife refused to sleep with him. In Nigeria the police hired out their guns by night to the armed robbers.
Yet nothing I saw—neither the poverty nor the overt oppression—ever had the same devastating effect on the human personality as the undiscriminating welfare state. I never saw the loss of dignity, the self-centeredness, the spiritual and emotional vacuity, or the sheer ignorance of how to live, that I see daily in England. In a kind of pincer movement, therefore, I and the doctors from India and the Philippines have come to the same terrible conclusion: that the worst poverty is in England—and it is not material poverty but poverty of soul.

I don't understand how one can say "The party representati... (read more)

[-]A1987dM11y110

Yvain mentioned that here:

These are real costs, and they are certainly worth taking seriously; nevertheless, the crowds of emigrants trying to get from the Third World to the First, and the lack of any crowd in the opposite direction, suggest the benefits outweigh the costs.

6jaime200011y

This is not as implausible as you might think. In the spirit of Yvain's Versailles-building czar, imagine a king of lousy moral character who likes to go around randomly raping the wives of men. In fact, he does this every week, so in a single year there are 52 men who have had to suffer the indignity of having their wives so violated. Sounds horrible, right? Now, Wikipedia tells me that the rape rate in the U.S. is around 27 per 100,000 per year. The United States has a population of 320,000,000 or so, which works out to around 86,000 rapes per year. If the aforementioned king came to power in the United States and enacted policy changes which reduced the rape rate by even 1%, he would have paid for himself 16 times over. What does this tell us? That a society where vast swathes of the population suffer from social pathologies is probably going to be worse than one where a tiny fraction of elites occasionally indulge themselves in transgressions against the common man. I know that, in practice, the most powerful politicians and the richest of celebrities in the U.S. could probably make my life pretty damn miserable if they wanted to, maybe because I somehow pissed them off or because they have sadistic predilections they just randomly decided to satisfy at my expense, and yet, I am not nearly as afraid of them as I am of the members of the underclass I occasionally pass by on the street.

[-]ialdabaoth11y110

What does this tell us? That a society where vast swathes of the population suffer from social pathologies is probably going to be worse than one where a tiny fraction of elites occasionally indulge themselves in transgressions against the common man.

But that isn't a society in which "political authority ... was arbitrary, capricious, and corrupt", or where "you could tell the representative of the sole and omnipotent political party, the Party of the Revolution, by his girth alone", or where "the police hired out their guns by night to the armed robbers" - that is a society in which a vast majority of elites, not a tiny fraction, indulge themselves regularly in a wide range of transgressions against the common man. And that isn't merely a society in which one in a million people have to suffer their wife being raped; it's a society in which all but one in a million people have to suffer poverty and malnutrition, and arbitrary death due to poor conditions, poor safety regulation, and poor concern for welfare in general. I think that a slight risk of street crime from the underclasses pales in comparison to the kinds of organized depravations inflicted regularly on the populace in such places.

If we're still talking consequentially, that is.

[-]fubarobfusco11y140

And that isn't merely a society in which one in a million people have to suffer their wife being raped;

It's also a society in which an equivalent number have to suffer being raped.

I'm a little bit appalled to find a line of argument here that implies that only men are people!

9A1987dM11y

It jarred me too, but I don't like to point out factor-of-two mistakes in arguments relying on orders-of-magnitude differences because this. (Well, that may be problematic for different reasons too, but I was stunned speechless by the fact that a discussion mentioning rape had managed not to mindkill anybody thus far, and was afraid that calling that out could break the spell.)

1ialdabaoth11y

Scratch everything I just said, army1987 just summed up my position far more succinctly than I did. EDIT: Really?

3ialdabaoth11y

The problem with letting yourself be distracted by that kind of phrasing, is that you spend so much time crusading for Right Thinking that you never get to make your actual point. Clever debaters will notice this, and will start deliberately trolling you just to see how many times they can derail you. Also, declaring that only men are people is a statement of value, not a statement of fact. Oftentimes, when you find someone whose values you disagree with, it is more fruitful to take their value system as given and find discongruities WITHIN it, or discongruities between that value system and the behavior of the person espousing it, than it is to merely declare that you are appalled by that value system.

4TheOtherDave11y

Couple of things. First, it might well be that fubarobfusco does not believe that your value system actually embeds the idea that only men are people, and therefore your suggestion about what is more fruitful to do when such a value conflict arises might not seem apposite to them. They might have instead been (as they said) objecting to the implications of the line of argument itself. Second, do you mean to imply that fubarobfusco was actually allowing themselves to be derailed/distracted from something in this case? Or are you just expressing your concern that they might hypothetically be in some other, similar, case? (Or is this just an indirect way of suggesting that their comment was inappropriate for other reasons?)

5ialdabaoth11y

EDIT: army1987 just explained better. Feel free to TL;DR the rest of this post and most of my previous one. Hmm. English lacks distinction between specific and generic 'you'. :( I was trying to describe my own thought processes when I chose to continue the "suffer the indignity of having their wives raped" line, rather than challenge it in the typical gender-crusader fashion. (Also, I suspected that jaime2000 was stating that line hyperbolically in any case - Poe's Law is tricky that way.) While I agree with gender equality goals myself, displaying that I am appalled at someone else's disregard for gender equality has an opportunity cost that I didn't want to pay at the time, and wasn't likely to achieve the results that one normally hopes for when performing that display. Lesswrong doesn't seem to be the sort of place where shaming and rallying tactics work, nor do I want it to be. So I'll try to treat people's positions courteously as long as their positions don't seem actively disingenuous. When I saw fubarobfusco's post, I read it as a shaming/rallying tactic for 'my side', which I felt a minor social obligation to respond to. Rather than falling into line, I decided to explain my dissent.

8A1987dM11y

You can use “one” for the latter.

2TheOtherDave11y

Ah, I see. Thanks for the explanation.

1A1987dM11y

Me too, but I was too lazy to try to guesstimate whether I was right (e.g. by looking at jaime2000's contribution history) and so I didn't even mention that.

3EE43026F11y

That's assuming a leader's vices somehow correlate with enacting positive societal changes (when the contrary would seem more likely). Otherwise choosing instead one of the many, just as competent and not as corrupt potential leaders is still a superior choice.

1jaime200011y

The article was comparing societies where the population was horribly poor or subjected to tyrannical leaders but still had their drive, human dignity, and joie de vivre, with the nihilistic U.K. underclass who did not have such problems but who used their freedom to do little more than eat, sleep, fuck, fight, and dope, and deciding that the former was preferable. Obviously if you can have a functioning population without vicious leaders, that would be best, and the article made no claim that this was impossible or unlikely.

3Nornagest11y

It's true that one person committing personal crimes with impunity doesn't have much measurable effect on crime rates in a society of any size, but that's neither surprising nor particularly informative. No matter how shiny that person's hat.

1Moss_Piglet11y

You'd be surprised how quickly even normally very rational people go to the "but... Versailles! Droit du seigneur!" emotive argument when someone suggests that there can be socioeconomic benefits to a high level of inequality. The same scope insensitivity which makes people care more about a single sick puppy than millions of starving people makes it very difficult to see that the highly-visible opulence of the elite costs much less than the largely invisible 'welfare' superstructure which provides our underclass their bread and circuses. Not to mention that one produces value for society while the other annihilates it. If a rationalist knows anything it should be how easy it is to forget to multiply or use inappropriately anchoring null hypotheses, especially when ideological sacred cows are involved.

1[anonymous]11y

Ideological mind-projection. The writer who hates the English welfare state has somewhat different values from all the Third World people who want to protect their female family members from rape and eat meat once in a while. The writer therefore believes that rather than wanting to be English poor people - with food banks, benefits, and council houses - the Third World people are much better off the way they are.

-1Vaniver11y

I think this depends on how you read "I never saw the X." Consider something like "I never saw the death due to accident in England that I see in Tanzania." If you view this as the claim that no one ever dies in accidents in England, then obviously this is wrong. If you view this as the claim that death due to accident is qualitatively different in England and Tanzania, and worse in Tanzania, then it seems sensible.

7fubarobfusco11y

We're likely to end up in a society where human labor is unnecessary one way or another, simply because of the advance of automation and ultimately AI. We do not have the choice of preserving the "work paradigm" indefinitely — that is, unless we end up in a Bad Ending where the future of humanity is vastly warped or curtailed. So, if humans need work, we are doomed; because productive labor aims to extinguish itself. Moreover, the extinction of labor is already in progress. My question is: How shall the extinction of labor be distributed? I see no reason to declare that the people who currently own the robots should get to be the ones to move into a post-labor civilization, and everyone else can go to hell.

2A1987dM11y

Well, EY says (But the difference might be more about where you draw the line on the map between what you call “work” and what you call “play” than about where you think people in the territory should do in the future.) See here (and followup here).

2fubarobfusco11y

Very relevant ... and there's a few particularly amusing points in there, including in the comments. For instance — If a lifestyle without work reliably breaks people, then why aren't retirees/pensioners reliably broken?

1A1987dM11y

OTOH ISTR that lottery winner are pretty often broken. So I guess a lifestyle without work breaks certain people but not others, and whether it does depends not only on individual personality variance but also on circumstances, in some non-totally-obvious-a-priori way.

1TheAncientGeek11y

I award myself five points for guessing that quote was from Dalrymple.

2gattsuru11y

I lack the information necessary to evaluate what is likely, but barring very specific definitions of the word "unnecessary" I don't think it's obvious that it's impossible without massively curtailing the future of humanity. If the importance of the work paradigm exists and is fundamental to parts of human nature we like(1), there are a number of imaginable ways for those to be made necessary even if it could be made unnecessary. While some of these possible futures are dysutopian (Brave New World), not all of them need be. (1) I'm not sure this is the case. Some sort of act-or-unpleasant-things-happen seems necessary to get a good future, but this may or may not circumscribe the work paradigm.

3Dias11y

John sits resentfully in a class with a disinterested teacher, both fully aware they are wasting their time... You could solve this by making the free money conditional on passing exams, but that would be unfair on those who failed.

1fubarobfusco11y

Which just elucidates that the point of the exercise should be to provide humans with the abundant wealth generated by technological advancement — not to sort humans into deserving ones and undeserving ones, then send the undeserving ones to hell.

-2Moss_Piglet11y

I understand the desire to make sure people aren't suffering, but can't we think about the suffering of future generations as well? Paying for people to do nothing incentives doing nothing; fewer people will participate the more comfortable laying around gets compared to actual work. Worse, removing the natural selective pressures against low-IQ / high time-preference people means they will reproduce and leave the next generation with even more unproductive people for every productive person remaining to have to support. With IQ now negatively correlated with fertility, that's a recipe for genetic disaster and societal collapse. Buying the happiness of our generation's underclass at the expense of who knows how many of their descendants when the system finally collapses under it's own weight is the opposite of compassion; it's just pushing the suffering far enough into the future that you hope you can't see it anymore. If we really cared about making people comfortable, why shouldn't we look for a solution where we promote the traits which lead people to build their own happiness in the long run?

3A1987dM11y

I thought my other comment was way too terse, and was going to elaborate, but it looks like two people disagree. But anyway: my point is that there are ways to help people now which don't also help them reproduce; education would be the most obvious one. (“Removing the natural selective pressures against low-IQ / high time-preference people” is not what has lead to the observed negative correlation between IQ and fertility; it's not that stupid people have more children than they used to, it's that smart people have fewer.)

3A1987dM11y

Subsidize the hell out of IUDs, or something like that.

0jaime200011y

You mean paying people for implanting IUDs, and covering the costs involved? That could work, I suppose.

-1A1987dM11y

Yes, the subsidies may be so large that the cost to the end users becomes negative.

7satt11y

Upvoted for uncovering a psychologically plausible, real-life example of cyclic preferences.

2Viliam_Bur11y

I would be most happy to see the option "A+" = "John is paid to do nothing; and then John uses his free time to do something useful but unpaid for his community". Because there are so many things that need to be done. Once I saw an example on a TV: there was a village that had two big problems: a) many unemployed people, and b) no kindergarten. The local government solved this problem by paying a few local women to take care of the local children kindergarten-style at their (the women's) homes. And I was like: "OMG, that's the most logical solution; so obvious in hindsight! Why doesn't this kind of stuff happen more often?" (The women were first given some quick education about various activities they should do with the children, and they had a coordinator. So the solution had a support from outside; it just relied on the work of local people.) But to make this happen more often, there are some problems, both on the side of the local governments and on the side of the people. Every kind of work needs to be organized somehow, and organizing the work is also work, and rather difficult one; not everyone can do it well. There must be someone who does it well, and that person needs to be paid. On the other side, I can imagine that many people would try to cheat the system by pretending to do something useful for the community, but really optimizing for their own maximum convenience at the expense of everything else. I can imagine a local non-profit organization, literally paying people for doing useful stuff, or just paying them for doing nothing when nothing needs to be done. However, when there is a work to do for the community, and a person refuses to do it or is obviously cheating, that person would be removed from the list. I can also imagine this solution would have a lot of problems, getting the money being one of them but not the only one.

6[anonymous]11y

I would actually say it's definitely better, if you're stuck subsidizing someone's survival, to subsidize them as a "freeloader", aka: someone with actual leisure. If you're thinking that this is an incentive against the work-ethic, yes, it is. I believe our culture currently overemphasizes work-ethic, and this is all part of my sneaky evil plan to convince people to value work less.

0CronoDAS11y

That's one data point. What's your guess as to what people that aren't you think about this?

7[anonymous]11y

I wouldn't venture to guess at other people's thoughts. I'd rather just ask them.

4Ixiel11y

I strongly agree. Just to be another data point :)

-9Eugine_Nier11y

[-]Ben_LandauTaylor11y60

Well done. This is one of those things I'd never thought of, but is obviously correct now that you point it out.

Comments on how to expand / rewrite this post would be appreciated, as I feel like I could move it to Main with a little work.

I don't think this needs expansion. Brevity is a virtue, and this does a good job of explaining the core idea quickly and accessibly. If you run it through a spellcheck and spend fifteen minutes making the prose flow more smoothly, I'd consider it ready for Main.

-3ChrisHallquist11y

Thanks. I think I'll still try to expand slightly before moving to Main, to address a couple points made in the comments, but I'll try to keep it mostly brief.

[-]zslastman11y50

Good article. I think an important part of the idea behind the anti-Walmartism is the idea that Walmart is not only offering low paying jobs to people, but in doing so eliminating higher paying jobs that those people could otherwise take in the stores which a re driven out of business. They can do so because their business model is efficient, and people like their lower prices. But the anti-walmart crowd would argue that the low prices hide a negative externality for society at large, which reduces equity, and is a net utility loss.

[-]John_Maxwell11y40

It does seem possible that welfare changes workers' wage preferences and allows Walmart to attract laborers for less money though, doesn't it?

7ChrisHallquist11y

This seems implausible. If anything, I would expect taking away governent benefits to make people more desperate and more willing to work for low wages.

-3[anonymous]11y

That implies low-wage workers have the bargaining power to exercise preferences regarding their wages.

[-]Pentashagon11y20

I get the impression that the real problem with health care specifically is that we are keeping sicker people alive longer with more effective (and expensive) treatments, and this increased cost is not being reimbursed by valuable work done by those sick people. In simplistic economic terms it is not cost-effective to keep a certain class of people alive or healthy. Is that analysis evil? I think so; automation will almost certainly put 99% of unmodified humans into that class at some point in the future. The practical effect is perhaps what we are see... (read more)

3Douglas_Knight11y

Does that have anything to do with Walmart or health care for workers?

2Nornagest11y

That's a problem. The international statistics suggest it's not the problem -- health care expenditures don't correlate particularly well with longevity at the high end. Cultural tendencies towards proactive vs. reactive care might be responsible for part of this, but I'm unaware of any high-quality research on the issue. On the other hand, I haven't been following it closely.

0[anonymous]11y

Evil? It depends on your moral code. However, I would certainly note that allowing the economy to kill people should be considered strongly contradictory with normal LessWrongian social goals like abolish effective scarcity and make everyone immortal.

[-]Viliam_Bur11y130

People are dying for economical reasons all the time.

In most cases, when a person dies, there was an option to save them. Killed by a disease? With enough money, best doctors and medicine could be bought to save them. If that is not realistic, with some money they could be at least cryopreserved and given some chance of living again. Killed by a murderer? With enough money, there could have been a policeman standing on that street to prevent the crime. Killed by a random falling object? With enough money, something could be there to prevent the object from falling on someone's head. Killed by an obesity caused by unhealthy life style? I am sure that with enough money, something could be done to prevent this, too.

Thus speaking about not allowing the economy to kill people is merely an applause light. People die for economical reasons today, and they will also die tomorrow. The only choice we have is to move more money to some area, by taking the money from another area, so we can save some people from dying by cause X at the expense of more people dying by cause Y; and we can hope that by doing some we have increased the total value (total quality-adjusted life years, or whatever is... (read more)

2Lumifer11y

That is not true because of one simple observation: eventually everyone dies. Millionaires and billionaires die, too, even with the best of doctors and security guards.

1DaFranker11y

If this comment was made with the implicit intent and understanding of money as an abstraction of the resources we have available, I don't see why it hasn't been upvoted through the stratosphere yet. It really, really hurts me when I see that the best options being offered by even the brightest minds and best visionaries in a given group all revolve around better redistribution of these million dollars, and not one of them asks "What if we could create a world where we don't have to take that million dollars from somewhere else?". Because I'm pretty sure that if someone cast Greater Wish and made everyone in a large rich country (e.g. USA) work together on this, it would happen.

[-]asr11y100

"What if we could create a world where we don't have to take that million dollars from somewhere else?". Because I'm pretty sure that if someone cast Greater Wish and made everyone in a large rich country (e.g. USA) work together on this, it would happen.

I have the opposite perception. For the near and medium term, resources are finite and that means we have to make allocation trade-offs. When we're talking about safety and health resources, those decisions are going to have consequences for who lives and who doesn't.

I can imagine a society without resource shortages. But I can't imagine building it even with universal agreement and cooperation. You don't get a technological singularity just by wanting it.

6DaFranker11y

Ah, I may have been overly abstract or generalized. I agree with your assessment of the situation. What I would like to see is novel approaches at making it so that resource shortages that can be eliminated are eliminated. Cliché example: We are mere years away, barring opposition from invested parties and given continued funding and enthusiasm, from a fully automated transport and logistics infrastructure. AKA self-driven cars & trucks. (please leave argumentation of those two premises for another discussion - a Greater Wish or the circumstances I discussed in the grandparent would make those premises true for the purposes of this discussion) Current wisdom is that these things should be left alone and "let the free market sort these things out" - which means, essentially, that we are to let shortages keep happening, because the margins of the free market will keep producing availability issues and shortages even on things where we can match supply to demand with positive net value after taking into account resources diverted from elsewhere (raw materials and human work time are the only relevant ones here once you trim the fat and all humans are fed, I believe). So to come back to the virtual example of the million dollars, what I'd like to see is less people asking "How do we decide who to heal, cure and provide treatment for?" and more people asking "How do we dramatically increase the abstract availability and supply of medical resources and is there some way to do this without draining human resources from other industries?" To craft a silly image, imagine an automated cold & flu treatment machine that looks like an ATM, is placed strategically to cover as many people as possible, does some basic automated symptom assessments to make sure it's cold & flu, and provides a printout and some dosage of medication. Once the setup is done, all that's left is raw materials and human work to maintain the system, the human work is of a non-expert kind so not curren

1TheAncientGeek11y

What if we already have created a world of much greater wealth in absolute terms, and it still isn't benefitting the poorest?

2DaFranker11y

Then we weren't looking for a solution to this problem statement, or we failed. The problem statement I wish were posed is: Currently, there is an attribution of (e.g.) medical resources, where wealthier people have priority and every application of medical resources prevents the application of important resources in some other place, medical or otherwise. Can we change this situation around so that the opportunity cost of any given life-changing attribution of (e.g.) medical resources will always be lower than the returns of this attribution (e.g. productivity of the healed person)? Naturally, this is intended to be a comprehensive "opportunity cost" calculation where "killing off all elders so that the overall medical opportunity cost of healing young persons becomes lower" is an appropriately taxed option. Still an option, perhaps a repugnant one, but at least one that is properly appraised. If there's currently no known good way to appraise this, then perhaps that might be a good first step?

-8TheAncientGeek11y

-2ChristianKl11y

What do you mean with "best doctor" in this case. Do you mean more than just a doctor who know which clinical trial says which drug is best for a particular condition? There no straightforward way to throw money at the problem of obesity to solve it. Gastric bypass surgery might work to reduce the weight but it has it's own disadvantages and I wouldn't call it buying health. I don't think that there are many cases where you can simply buy a life in a country with a health system like Germany for $1 000 000.

0NancyLebovitz11y

You're leaving out the possibility of needing to shuffle through a number of doctors to get a competent diagnosis. It's a fairly frequent problem in the US. I don't know how common it is in Germany. Typo: I think you mean disadvantages.

4ChristianKl11y

Do you have a source that describes how US millionaires go through 10 doctors to get a correct diagnosis? I think most of the time in Germany what stopping people from going to more doctors isn't financial but the fact that they trust a doctor. Fixed.

2NancyLebovitz11y

I don't have a source for how many non-millionaires in the US have to go through a number of doctors to get a correct diagnosis-- I just know a fair number of people (some online-only) who've done it. They probably have average or better incomes, though it would be worth checking. It isn't a cheap process, at least in terms of time, and I'm guessing that poor people are less likely to have the self-assurance to do it. Your assumption is that the difference in Germany is in the degree of trust in doctors rather than better diagnosis?

-1ChristianKl11y

I would guess that thing that separtes those people that you know online from the average person isn't only that the have more money but that the make decisions differently than the average person.

-1Eugine_Nier11y

Is that because Germany has more competent doctors, or because Germans trust their doctors even when they shouldn't?

-3TheAncientGeek11y

How does a non expert judge the competence of an expert?

-3Eugine_Nier11y

Well, seeing if the doctor's recommendations help the problem is one way.

1A1987dM11y

Like this? (I'd guess Germany would be somewhere between France and Sweden.)

-5Eugine_Nier11y

-3[anonymous]11y

No, that's not the problem. In real life, the choice is, "Do we spend one million dollars on a welfare state (or labor laws, whatever) that can keep people alive longer and with more dignity, in the hope of eventually abolishing human-scale scarcity, or do we allocate one million dollars to an institutional investor's mutual-fund portfolio?" You are making the extremely false assumption that our economy is already Pareto-optimal with respect to saving human lives. No serious economist actually believes that. In fact, they wouldn't even make the claim that the economy is designed to save human lives; it would be downright silly. They would point out two things: 1) If we use wealth-accumulation as an approximation of human value, the mutual-fund portfolio could, in some sense, be said to be more valuable than the human lives, in the sense that those human lives generate little value for other humans. Of course, socialists and anarchists can argue with capitalists over whether wealth-accumulation under a neoliberal capitalist economy is a good approximation of human value or not. (I side with the socialists in saying most definitely no.) 2) Real economies rarely or never actually hit Pareto-optimal equilibria, they merely oscillate around them, and in fact sometimes even rarely oscillate near them because the assumptions behind efficient-market theories are so far from real-world conditions. (There was once a paper published, IIRC, under the title *Markets are Efficient If and Only If P=NP".) Given these two facts, we should most probably not consider "The Economy shouldn't be allowed to kill people" as an applause light, but instead as an ethical charge to find the deadweight losses of human lives and remove them. We can argue about zero-sum tradeoffs when we're actually faced with one, but when instead faced with a case where a clear positive-sum move exists, we should take it.

5Viliam_Bur11y

Actually, I don't. And it's not even necessary for the argument. Even if we nationalized all the investment funds and hanged all the evil capitalists, someone would still die because there would not be enough money to cure them. (How could I possibly know? My country was like this. And the people here lived on average shorter than our evil neighbors. The medicine was completely free of charge, you just couldn't get it, because there was not enough made.) Back to the original topic, an analysis that concludes that some people will die either way, is simply a realistic analysis. Unless we have already solved the problem of Friendly Singularity. We can, and should, look for the ways to minimize this number. It's not going to be zero, anyway. Even if we had a world-wide government of incorruptible angels with mandatory cryonics right now.

0ChristianKl11y

That means that your country wasn't ruled well. On the other hand if you live in a country like Germany you do have access to all medicine that"s proven to work in clinical trials. When it comes to drugs the expensive part is research, marketing and other things that aren"t about the production costs of the actual drug.

-2[anonymous]11y

Yes, but that doesn't refute the case-by-case ummm... case, that we're looking at a deadweight loss of human life in this particular instance. If you don't hold that the economy is Pareto-optimal, then there are improvements we can feasibly make without suddenly causing shortages of medicine.

[-]NancyLebovitz11y20

I've seen the more general claim that companies which can't afford to pay a living wage shouldn't exist. This would include not just companies like Walmart, but also small new companies and businesses with relatively poor owners.

Many of those businesses provide useful services, and I've wondered whether there's a public good argument to be made for subsidizing them rather than eliminating them.

7buybuydandavis11y

Which is to advocate permanent unemployment for people who can't deliver value greater than a living wage. I think you'd tend toward perverse incentives immediately if you tried to subsidize only the below living wage jobs.

6[anonymous]11y

Which is exactly what we're currently doing, and exactly what the left-wingers are complaining about in this situation. Rather than the State spending its money on, for instance, useful jobs programs that can directly employ people for living wages in productive infrastructure work (would that totally eliminate unemployment? No. Is it an obvious first move? Yes.), tightening the labor market, stimulating demand, and helping to pay down private debts, the State instead spends its money subsidizing poverty-jobs. And as the Right always says, you get more of what you subsidize. In this case: sub-living wages.

1buybuydandavis11y

I'm glad that there are some left wingers now "demanding" a rollback in the perverse programs left wingers put in place in the first place. But as I've asked before, are there any particularly prominent liberals doing this in the US? I'm not aware of any. Prominent liberals anywhere else? In the US, I'm aware of prominent libertarians, and even republicans who have been advocating this for a long time.

5gjm11y

A basic-income scheme is part of the platform of the Green Party in the US. I don't know exactly what they want done with the rest of the welfare system, though.

0buybuydandavis11y

http://www.gp.org/greenpages/content/volume8/issue3/oped5.php My first google US hit. Promising. Not only basic income, but coupled with reducing corporate welfare. And the numbers don't seem crazy - $600-$800. I consider probably the majority of the arguments used appealing to libertarians. I didn't expect much common ground at all.

-2Lumifer11y

Not. This is pie-in-the-sky promises with no hard numbers or, actually, much of any economic analysis. Instead there's a lot of handwaving about cutting government spending and corporate welfare, introducing flat tax (!), etc.

-1buybuydandavis11y

It's one page on a web site. How much detail did you expect? They do refer to their party platform. Did you read that to look for details? They say: Certainly a footnote would have been useful here. Maybe there is one in their party platform. But you can eyeball government spending and do some basic math yourself. $800 isn't crazy talk, if you're actually replacing other health and welfare programs. I liked the basic principles they expressed - reduce government subsidies and tax carve outs. It surprised me to see the Greens come out in favor of that. I didn't have high expectations in the first place.

-1Jiro11y

It's hard to tell the difference between companies who really can't afford to pay a living wage and companies who can afford to pay a living wage but who would rather not have to. I suspect that much of the reason that people think companies that can't afford to pay a living wage shouldn't exist, is the fact that the latter category will, if given a chance, pretend to be the former, and the only way to prevent this is to ban them altogether.

0[anonymous]11y

I would have to contest that in this case, the absence of evidence is the evidence of absence. On general principle, lacking special cases with adorable old grandmothers and shiny MIT graduates, what is added to the public good by subsidizing businesses that are literally not efficient enough to keep their own employees alive? How can we claim such a business is adding net value to society? Note that I'm trying to distinguish between a subsidy and an investment. When a shiny MIT graduate needs money for his start-up, there could easily be a public good of investing in him, but in that case the public deserves shares of stock as compensation -- and will be able to realize gain from those shares as capital gains or dividends when the time comes. With Wal-Mart, the public doesn't even receive a capital stake in the business. It just pays for private actors to get rich on jobs that are, judging by their wage levels, far less efficient and productive than the ones people used to have.

4Lumifer11y

I am unaware of any such businesses. Perhaps you want to dial down your rhetoric a little bit? It looks silly.

3[anonymous]11y

It's not rhetoric. If a company says they cannot pay a living wage without the subsidy, then that is what such a statement means.

7Moss_Piglet11y

What constitutes a "living wage" has literally nothing to do with how much money it takes to meet your survival needs; it is an amount of money which is supposed to support your family at a "normal standard of living" in your area. The actual cost to survive is naturally quite a bit lower than that, and can be calculated with things like the 'Food Energy Intake' or 'Cost of Basic Needs' methods of establishing poverty lines. Adding to this confusion is the fact that the Federal Poverty Line seems to be what most people use as their yardstick, despite it being an abstraction over the entire US with no allowance for regional cost-of-living differences and appears to be a relative measure of poverty based on mean income rather than an absolute measure based on the cost of survival needs. [Edit] Surprisingly, the Federal Poverty Line does actually seem to be an absolute measure, although I still can't find exactly what goods are supposed to go into calculating it and there is still no allowance for regional price differences.

2[anonymous]11y

Let's assume something truly basic: a living wage covers housing, food and health insurance. That is, a worker paid a living wage will not starve, will not die of treatable disease for financial reasons, and will not be removed from work via arrest for vagrancy (because they have a place to stay). Quibbling over definitions won't get us anywhere. Let's talk about the real issue, and if it means we have to taboo "living wage", so be it.

[-]Moss_Piglet11y100

I have no problem tabooing "living wage" in our discussion, but it is important to remember that the word has an actual definition in policy terms; if we talk about paying Walmart / Sam's Club employees a living wage that actually means one very specific thing in terms of how much money they are going to get, and it's not a particularly intuitive amount at that.

But that's a debate for the talking heads; if I understand you correctly, we just want to know if someone working at Walmart would starve without public assistance.

Let's assume for the moment that the Federal Poverty Line is the number we're trying to avoid here; above that you're still in a shitty position but you are not actually starving (technically you're probably not starving below it either, but I can't find good Cost of Basic Needs data for the first world). An average Walmart employee makes about $17,600 a year plus minimal benefits for 35 hours of work a week, which is piddling but also enough to support yourself and one other person by federal standards ($15,510 a year). With another 15 hours a week of work in a second job at the federal minimum wage (remember, most states have a higher minimum) a Walmar... (read more)

4Randy_M11y

Do you consider it unethical to pay less than it takes to pay less than it takes to live alone, but enough to hold down an appartment with a couple of roommates? Is every treatable disease, no matter the cost of treatment, included in that, or are insurance companies allowed to draw a line inconsderation of how common or expensive a treatment is? Is that insurance pool required to subsidize riskier but likely better off (ie, older) people? Is that food required to be convenient, tasty, and nutritious, or can the wage assume the employee does their own shopping and cooking with less costly food? What if one potential employee has a different idea of what it takes to live than others?

-1[anonymous]11y

Is Wal-Mart offering a couple of roommates? Let's say it's every disease a middle-class person could get treated. The point is to eliminate class distinctions in medical care, not to suddenly wave our arms and inaugurate Utopia. The food is required to be nutritious enough to never damage the health of the employee. Cooking time can be assumed to be traded off with working time, which can be taken to imply a 40-hour workweek as is legally considered full-time in most developed countries. Convenience and taste are left to taste, though I'm assuming at least some access to decadent upper-class luxuries (/sarcasm) such as iodized salt. I dunno, what if we stop trying to evade the point that Wal-Mart's wages are unlivable? I mean, come on, we're talking about a company that set up a charity collection for its own employees. That means even Wal-Mart acknowledges Wal-Mart pays poverty wages.

2Randy_M11y

I think I was just trying to get at the fact that living wage definition can reasonably differ, and that being so, isn't it up to the workers to evaluate for themselves, based on what they can tolerate or accomodate? You're going to have to go into more detail about that charity collection, because although I assume that Wal-Mart may very well pay below what one can comfortably live on alone long term, the fact that some or many of the employees inspire charitable giving doesn't prove that--a living wage, and one that can provide enough to live on in all foreseeable bits of bad luck are two different things, at least according to your definition. And if you work at Wal-Mart, you probably are a little worse at things like long term planning or impulse control. On a tangent, there's another large employer I often hear about underpaying their employees--universities and grad students--but it doesn't seem to raise the same ire. Maybe I'm not clear on the details and the difference is significant?

2[anonymous]11y

Would you like me to tell you about the misery of being a grad-student? I can speak from first-hand experience! But if I do, I'm yelled at for being more fortunate than the poor sods at Wal-Mart, you see. As to Wal-Mart and their charity incident...

4Randy_M11y

I read that article; it seems to support my possibly awkwardly worded argument above that having a charity drive for employees who have had unforeseen events and are currently in hardship does not prove--or is merely weak evidence that--the store pays a wage at which the average competant person would be able to expect to live with above minimal standards of living. For one reason, to be perhaps presumptious, workers at Wal-Mart probably have less long-term planning ability than workers at higher paid jobs--or at least draw from populations in which the skills are less common, etc--and therefore, even if paid enough to live and save, are less likely to have a "rainy day fund" and more likely to need a charity hand-out should they have a car problem, or health problem, etc. Note that it was charity provided by fellow employees, not the general public, so someone they pay clearly has more than the bare minimum.

1Viliam_Bur11y

All employers take attention: Never do anything useful for your employees, because it will create an impression that you are not paying them enough, which makes you an evil person! (Not meant seriously. But it makes me sad that when one has decided to hate some person, any good deeds of that hated person can be very easily explained away as an evidence that the person feels guilty or needs to fix their evil image.)

-1TheOtherDave11y

Colleges and football players are starting to raise the same kind of ire in some circles. These things are to some degree a question of fashion.

3Lumifer11y

It is rhetoric because "living wage" in the US is far beyond what's needed to keep people alive. People who don't get paid a "living wage" do not drop dead in the streets from malnutrition and exhaustion.

0[anonymous]11y

Can we drop the pointless definitional agreement and just find a study specifying what wage-level is necessary to keep people from dropping very preventably dead or being arrested for vagrancy?

3Lumifer11y

I am not particularly interested in a study. At one point in my life I was poor. Very very poor. I have quite a good idea of how much money do you need to survive in a US city. Hint: it's far below what is usually called "a living wage".

2NancyLebovitz11y

It may be that no one is efficient enough to supply ,low cost low quality goods and services to people who can't (typo corrected) afford better and pay a living wage at the same time. At that point, you can shut down the business and hope that services and goods of better quality will be supplied by the government (when?), technology will improve so that workers in those businesses will be more productive so that it's possible to pay them more, leave the unattractive business in place as it is, or subsidize the business. I'm not saying subsidizing the business is a great choice (keeping the system even relatively honest might be impossible), but I think it should be considered rather than just saying the business shouldn't exist.

2[anonymous]11y

If we condition our reasoning on the proposition that nobody can efficiently provide goods to poor people cheaply, then yes, I would at least claim the Proper Move (which is not necessarily easy from our status quo position) is to have certain things provided as a public service. On the second hand, if we're already talking about instituting such a thing as a Basic Income Guarantee, then it makes good sense to do so and then remove subsidies for "sub-living efficiency" businesses. After all, with a correctly configured Basic Income, possibly plus even a small income from real business (which will be easier to come by due to the demand/money-velocity boost), even those at the lower end of the income scale should have the purchasing power to start buying, at the very least, frugal goods instead of cheap goods.

[-]buybuydandavis11y20

Are companies with employess on government benefits are evil?

You should fix the title. It doesn't parse in my head, and has a spelling error.

How about?

Are companies with employees on government benefits evil?

1ChrisHallquist11y

Thanks. I caught the gramatical error on my own but somehow completely missed the spelling error. I am a terrible proofreader.

-4Kawoomba11y

If not for the two top comments solely dealing with trivial spelling errors, why, I suppose the OP's title would never have been properly understood.

6Peter Wildeford11y

It does show a lack of care for the quality of ones work.

[-]gjm11y120

In keeping with Muphry's law, your comment about how such mistakes show lack of care contains a similar mistake of its own ("ones" -> "one's").

4Peter Wildeford11y

I will not edit my post in order to memorialize the occasion.

1ChrisHallquist11y

It shows that I dashed it off quickly, while knowing damn well I really should have been doing homework at that moment, rationalizing that it was just discussion and I could improve it later.

[-]Ishaan11y10

I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.

I don't understand why you are worried that the anti-wal-mart meme would cause anyone, let alone a leftist, to oppose GBI ... a GBI reduces the incentive to work for low wages. If it's true that welfare is benefiting Wal-Mart and other low-paying companies, then the reason is that in the current system you lose your benefits if you don't get a job. This is just the natural consequence... (read more)

[-]Desrtopa11y00

I haven't scrolled through all the existing comments to see if someone else has already raised this point, but while, in general, I would agree that it's usually better for people to have poorly compensated employment that leaves them in need of some public support than to have no employment whatsoever and be even more heavily reliant on public support, I think this is not necessarily the most useful context in which to view institutions like Walmart.

In general, Walmart doesn't create jobs where, otherwise, no jobs would have existed. Instead, it usually ... (read more)

2drethelin11y

wait, in that case isn't Walmart mostly a subsidy to disadvantaged people? The vast majority of taxes are paid by the wealthy, but the vast majority of Walmart customers are the poor. This means that they get the benefit of cheaper products while paying little to none of the costs.

-1Desrtopa11y

Well, the majority of taxes aren't paid by the lower class, but I wouldn't say the majority of taxes are paid by the wealthy; for those who have enough money, there are sufficient tax loopholes for them to pay less taxes by proportion of their income (Warren Buffet has for some time now been paying a lower proportion of his income in tax than his secretary). So Walmart would mostly be subsidized by the middle and upper-middle classes. While Walmart's customer's certainly skew lower class, as to whether the "vast majority" are lower class, I couldn't say.

-4drethelin11y

The top 1 percent pay 36 percent of taxes while only being 19 percent of total income. The loophole thing, despite egregious examples like buffet, is wildly exaggerated.

3Desrtopa11y

Ialdabaoth already raised this point, but to put some numbers to it, while the the top 1 percent pays 36 of income taxes, people in that percentile make less than 40% of their income through salary and wages; most of the remainder comes from investments, which are not covered under the income tax and are taxed at a lower rate.

-13Eugine_Nier11y

1ialdabaoth11y

Be careful that the same definition of "income" is being used in both cases; I believe that the definition Warren Buffet was using included capital gains (which is specifically not taxed as 'income', which is what your first link counts). Capital gains are still taxed at 15%, so if the top 1% gain most of their 19% share through capital gains (or if the share is higher than 19% when capital gains are included), then it's likely they ARE paying less.

1drethelin11y

http://www.mercurynews.com/business/ci_24065108/wealth-gap-widens-richest-1-percent-earn-biggest according to this capital gains bumps it up to 22.5 percent.

1Desrtopa11y

Which is still well below the top income tax bracket of 39.6%. Given the income tax rates, capital gains tax rates, and the average proportion from both sources composing the income of the top 1%, the average rate of tax on people in that bracket, barring any use of additional tax limiting strategies, should be somewhat under 28%, the rate paid at the $87,851 - $183,250 income tax bracket. The very wealthy, whose income is more dominated by investment revenue, would tend towards a lower rate. If we categorize the wealthy by total wealth rather than yearly revenue though, then the top 1% pays a much lower proportion of their total wealth in tax. So while Walmart displacing jobs that leave employees in need of public assistance can be seen as a subsidy on the lower classes, it's not one where the wealthy are paying out either a majority or a disproportionate amount relative to their wealth.

[-]aquaticko11y00

Sorry to make my first post on LW a political one, but I've been hearing too much about this discussion everywhere to stay out of it, here. I'll try to keep it short.

ChrisHallquist: I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.

Quite honestly, I think this is a confused concern, or at least a misplaced one.

I'm a philosopher by education (again, my apologies), but an urban economist/macroeconomist by trade and hobby. I don't think I'm... (read more)

2A1987dM11y

Feel free to introduce yourself in the welcome thread and take the census/survey, if you haven't already. I was going to say “Sure, fewer regulations means more, cheaper restaurants and more jobs for cooks and waiters, but also more cases of food poisoning -- and if you wonder why in a free market I couldn't just decide to avoid the kinds of restauraunt likely to give me food poisoning even if they're cheaper, I invite you to read Section 4 in this FAQ”, but reading on I gues you'd actually agree.

-9Eugine_Nier11y

[-][anonymous]11y00

moral sense that Walmart employees should be primarily Walmart's moral responsibility, and not so much the moral responsibility of the general public.

Is that their true objection, really? I'm not from the US. and I've never seen this argument made to defend views against welfare. Then again, I don't follow politics much. I'd add to this that governments funding private companies, or at least some forms of it, distort competition. This is one of many arguments I see often. I'm not sure what it implies though.

I'm not sure about the title. Are governments that pay privately hired employees' salaries evil? Are privately hired employees who get partly payed by the government evil?

[This comment is no longer endorsed by its author]Reply

[-]DanielLC11y-10

This meme also worries me because I lean towards thinking that the minimum wage isn't a terrible policy but we'd be better off replacing it with guaranteed basic income (or an otherwise more lavish welfare state).

Funny. I think minimum wage is a terrible policy precisely because we'd be better off replacing it with guaranteed basic income. I think welfare is a terrible idea, for the same reason.

They all have the same intentions, but guaranteed basic income is the one the meshes the best with the invisible hand. Even if you have no idea if you should be helping the poor, minimum wage is the wrong way to help the poor, so clearly you shouldn't have minimum wage.

2drnickbone11y

It is of course possible to have both. Set a minimum income guarantee for everyone (so that even those who are not working, don't starve), allow the minimum income to be retained by those in work (so avoiding a high effective tax rate on low incomes), and add a minimum wage as well (so discouraging low-productivity work, and incentivizing training for higher productivity work). By the way, the major political value of describing Walmart as a "welfare queen" is that welfare recipients are stigmatised, and this line of rhetoric redirects the stigma (and tends to dilute it). It is unfair to Walmart, but perhaps no less fair than calling anyone a welfare queen.

1DanielLC11y

You can have both, but minimum wage is still a bad idea. You're better off just having a higher minimum income guarantee.

-3drnickbone11y

Why a bad idea, though? I guess you are disputing this point: Here's a simple model. Assume that full-time employees cannot live on less than $8 an hour (they starve, can't pay rent etc.) Also assume that an employer can offer untrained staff two sorts of job: Job 1 has very low productivity, total value of $6 per hour, but a pay-rate of $3 per hour. $3 a hour is too low to live on, but employees will accept it where that supplements a minimum guaranteed income. Job 2 has higher productivity, total value of $14 per hour, but staff must be trained to do it, and because they now have transferable skills, the employer must offer $10 an hour to retain them. The training costs average at $2 per hour over the typical duration of the employment. The employer offers staff Job 1 because that gives a higher profit ($3 per hour, rather than $2 per hour). Staff take it because $3 is better than nothing. But there is more economic value created if employers offer Job 2 instead. A minimum wage requires them to do that. You can argue the details, but that's the general principle. There is clearly a counter-argument that the minimum wage is a market intervention and can cause inefficiencies (it may result in some folks who just can't be trained losing their $3 per hour jobs). But the counter to that counter-argument is that the minimum income guarantee is already a market intervention which is encouraging employers to offer Job 1 (as it allows employees to accept it). So a corrective intervention is needed.

2Nornagest11y

That's an inefficiency, but it seems to me that a far more central one is embedded in the assumptions of your toy model: how many unskilled jobs ($3) funge against skilled or semi-skilled ones ($10). In practice, it seems to me that the kind of jobs an employer can offer are often narrowly constrained by business requirements. A factory owner, for example, might be able to retrain unskilled line workers (fitting Subwidget A to Subwidget B) to do semi-skilled work (operating a widget-fitting machine) for higher total productivity; that's consistent with your model's assumptions. But if you run, say, a hardware store, someone's got to stack shelves, mop the floors, and run the registers, all of which take roughly the same level of training, and there's only so many places you can squeeze out more per-body productivity by investing more. Anyone you have to fire because of minimum-wage laws there represents an economic loss: they aren't getting paid, and you aren't running as efficient a business as you could be.

2drnickbone11y

OK, a fair criticism of the "toy" model, which was simplified to make the point. There are always multiple choices of productivity and wage level, and big moves (more than doubling employee productivity, while simultaneously quadrupling the cost of labour) usually can't happen quickly. Back in the real world, I did a quick look at the economic evidence, and was surprised. The latest evidence base is that the minimum wage has surprisingly little effect on anything. It seems to have no discernible effect on employment levels - see here - but it has no clear net impact on training levels either - see here. One problem is that minimum wages tend to be varied only marginally, so it is hard to see a big effect. However, the UK provides a more dramatic experiment, where minimum wages were abolished in the 1990s, then re-introduced a few years later. Some UK assessment here on employment and on training. Again, not a big impact in either case, though training levels apparently did increase among groups affected by the minimum wage. This suggests the toy model is not totally daft.

1Nornagest11y

Interesting reading, although I'm always leery of relying on a single meta-analysis of a politically charged subject. For the sake of argument, though, let's take it as given that increasing the minimum wage has no or only a small effect on employment rates. Where's the money coming from, then, and what would we expect that to do to the economy? * First option: It's a free lunch; the money would otherwise go to line the pockets of (spherical, behatted, cigar-chomping) capitalists. This is implausible to me on priors, but we can put bounds on how far we can stretch it: most businesses run on margins of 15 to 20%. I'm having a slightly harder time finding figures on personnel costs, but Google informs me that 38% is a decent payroll target; factor in benefits and such and let's call it 50% for all personnel-related expenses. This suggests that minimum wage laws could increase average wages by 10 or 20% without cutting too much into business owners' cigar budgets, although we should really be thinking on the margins here. * Second option: It's being passed on to consumers in the form of higher prices. On average people are making more but also paying more; this means inflation. There are institutions trying to control inflation, though, so the costs probably end up being taken out in lower interest rates or in subtler ways. Note that higher costs of consumer goods work a lot like a mildly regressive tax; lower-income people buy more in consumer goods as a share of income. * Third option: The balance of labor changes. Jobs that can't economically be done at the lower wage points move to places that have less stringent laws, and trainable or higher-skilled jobs move in to fill the employment gaps. I don't think I'm economist enough to analyze this fully, but it looks like we'd expect wages for those higher-skilled jobs to go down in the affected jurisdiction as a consequence of supply-and-demand issues, probably after a time lag. In any case someone's still doing c

2drnickbone11y

My first reference above was more of a "meta-meta-analysis" since it surveys the results of several meta-analyses! At a high level, it is going to be quite difficult to argue that there really is a big impact on employment, but somehow all the analyses and meta-analyses have missed it. As I said, I found it surprising, but this is the full evidence base. This is the main question addressed by the Schmitt paper. To quote the exec summary. "The report reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases." One of the other hypotheses considered was a reduction in profits (which is what the toy model would suggest: the low-wage "Job 1" maximizes profits rather than productivity, and moving to "Job 2" increases productivity but lowers profits). However, Schmitt found not many studies and not much evidence of this, except in the UK following introduction of the minimum wage from nothing. Again, I found that very surprising: if anyone is losing out by paying the minimum wage, you would expect it to be the Walmarts of the world. But not so, apparently.

2Strange79y

Personally I would expect large corporations and the very rich to be capable of defending their position against any reasonably predictable shift in the economic environment, since they have resources and motivation to lay out more comprehensive contingency plans than anyone else. That extra productivity from "Job 2" doesn't just vanish into the aether. Higher minimum wage means the poorest people have more money, then they turn around and spend that money at Walmart. The ones who lose out from a higher minimum wage would be the middle managers, who are then less free to treat bottom-tier workers as interchangeable, disposable, safe targets for petty abuse. With higher wages, those workers will have more of the financial security that makes them willing to risk standing up for themselves, and specialized skills that make them more expensive to replace. That's what wage compression, reductions in turnover, and improvements in organizational efficiency look like from the trenches.

1Nornagest9y

The poorest people do not directly benefit from minimum wage, because they don't have jobs. Many participants in the informal economy are also very poor. One option I didn't think of in the ancestor is that people pushed into the informal sector may still be showing up as employed in the sources being referenced: people making a lower-than-minimum-wage living as e.g. junk collectors are sometimes counted as such depending on methodology. We could pick out this effect by asking for personal earnings as well as employment status: if higher minimum wages are coming out of corporate margins somewhere, we'd expect average earnings (at least in the lower segment of the workforce) to go up, but we wouldn't expect that if it's pushing people into the informal sector. A survey would probably have to be carefully designed to have the resolution to pick this up, though.

0James_Miller9y

Managers are more likely to abuse minimum wage workers the higher the minimum wage. At a higher minimum wage workers will value their jobs more and so will tolerate more abuse before quitting, and managers will value having the worker less because employing the worker is more costly.

2hairyfigment9y

There's some evidence this is false. Now, when I tried to google it, this is the only study I found (or at least the only one I could read for free), and I don't trust it all that much. But it is not immediately crazy to think that employers can get more effort out of employees at the lower-paid end by paying them less, eg due to loss aversion. We have yet to establish that minimum-wage labor meets my intuitive definition of a market, where people can freely make or refuse trades and you get more by paying more.

2elharo9y

The relative value of a job matters more than the absolute here. When a worker can walk across the street and get the same $15 an hour at McDonalds they do today at Burger King, then Burger King and McDonalds need to compete for employees based on work conditions. Managers get away with abuse only when the salary exceeds the prevailing wage for the skill set, or jobs are hard to find.

7Lumifer9y

Nope. When you force a price floor above the market clearing price (the price for labor, aka the minimum wage) you create a persistent glut of supply and a shortage of demand. Managers don't have to compete for workforce when there is a long line of people raring to get their $15/hour in front of both McDonalds and Burger King. Instead, managers spend a lot of time coming up with clever ways to to automate their business.

0gjm9y

If some prospective employees are better than others, then that long line of people will still contain better and worse candidates, and employers may compete to get the better ones.

0VoiceOfRa9y

Yes, and in this context better means "willing to put up with abuse by bosses".

0gjm9y

It presumably means some combination of that, speed, diligence, etc. I wouldn't expect abuse-tolerance to be a large fraction of what most bosses want, though no doubt some bosses are awful enough to prefer less profitable but more abusable employees.

0VoiceOfRa9y

Depends on the "abuse". Here it means practices that increase productivity at the expense of employee quality of life. For example, insisting that employees be willing to work odd hours on short notice.

0Lumifer9y

Employers always compete for better employees, but they are, generally speaking, satisficers. The marginal benefit from having a high-IQ, very conscientious, giving-his-100%-to-the-job employee flipping burgers is not very high.

0gjm9y

You're described a mechanism that will make managers more likely to abuse minimum-wage workers when the minimum wage is higher. But you haven't argued against Strange7's claimed mechanism that would make managers less likely to abuse minimum-wage workers when the minimum wage is higher. Do you think it's obvious that Strange7's proposed mechanism would be outweighed by yours, or that it's wrong altogether? Is there actual empirical research on the relationship (if any) between minimum wage and working conditions? (There's one bit of Strange7's comment that doesn't make any sense to me: "... and specialized skills that make them more expensive to replace". I don't see how increasing the minimum wage will have that effect. The rest seems reasonably plausible prima facie.)

3Lumifer9y

This one? It makes no sense. At first approximation a high minimum wage makes it more beneficial to have a (now high-paying) job, but it also makes it harder to get such a job. Given this, the workers will have more to lose and more difficulties in finding another job if fired. That makes them more willing to endure abuse so as not to lose the high-paying job. I don't have links handy, but I believe there were some interesting empirical case studies of the situations where a business paid much more than the prevailing wage (basically, a rich Western company set up shop in a very poor third-world country). As far as I remember, the basic results were that (a) the job becomes a valuable commodity to be bought and sold (essentially, the local power structures exert control over who can apply for the job); and (2) the workers are willing to do anything so as not to lose that job. Now, guaranteed employment at a "living wage" actually would make employees quite resistant to managers' abuse. However the obvious problems with that are obvious.

3gjm9y

Sure. But having had a higher-paying job means (or at least can mean and sometimes will) having more savings (or, more likely: some savings instead of none), which means that losing your job is a nuisance rather than a cataclysm likely to put you on the streets within a month. That seems like it might be quite a big deal in terms of employee attitude. (Yes, of course guaranteed employment would have a much stronger effect. So, less disastrously I think, would a reasonable-sized basic income.)

1James_Miller9y

Lumifer is right, and I think you are effectively confusing a law that gives you the right to work at the minimum wage with actual minimum wage laws which are instead laws forbidding you from working for less than the minimum wage.

0gjm9y

I promise that I am not confusing those things, though of course it is possible that I am confused in other ways. The question I think is on the table, which hasn't obviously-to-me been resolved, is this: Suppose we substantially increase the minimum wage and wait a few years. All sorts of things may change as a result. Some people will have more money. Some people will not have jobs any more. Etc. Now, look at those people who do still have minimum-wage jobs. Are those people more or less subject to abuse by their bosses? Maybe more, because doing the same work for higher pay means they need their jobs more and their bosses are more able to fire them. Maybe less, because they may now have more savings because they've been being paid better. Maybe more, because actually they won't have any more savings but they'll stand to lose more by getting fired. Maybe less, because being better paid will bolster their confidence and make them more inclined to stand up for themselves. Etc. I agree (for the avoidance of doubt) with the mechanism Lumifer describes. That will definitely tend to produce more abuse. But it looks to me as if there are others that go the other way. If you have compelling evidence that they aren't real, or that they are outweighed by the one Lumifer describes, would you care to sketch it or point to it, rather than just saying "Lumifer is right" (with which I already agreed if it means "Lumifer's mechanism works the way he says", and which surely needs further support if it means "... and it outweighs all other factors") ?

0advael9y

That's not exactly true. You can volunteer for far less than the minimum wage (Some would say infinitely less) if you want to. What you can't do is employ someone for some non-zero amount of money that's lower than the minimum wage.

0James_Miller9y

The Obama administration is making it difficult for businesses to use non-paid interns to do the kind of work that paid employees do.

1Lumifer9y

I don't know. You're talking about the propensity to save and -- at the minimum-wage levels of income -- it's not obvious to me that it's correlated with income. We can throw images back and forth ("Now she has money left after buying food and she'll put into a savings account!" vs. "Now she'll just buy a bigger TV and fancier clothes ending with the same credit card debt!"), but I suspect that economics papers with relevant data exist. I also suspect that the results will show high variance and dependence on the prevailing culture (e.g. compare average savings rates in the US and China).

0gjm9y

And ability. The higher your income, the more of it is somewhat discretionary and the easier it is to save more. I agree that there is almost certainly real research on this, but evidently neither of us has read it yet :-).

0Lumifer9y

If you can formulate that claim sufficiently precisely to be falsifiable, it shouldn't be hard to test it.

0drnickbone11y

Someone downvoted your reply, Nornagest, which I really can't understand: I upvoted it myself. The parent is now at -2; one more down and it will disappear from view, and we will get a heavy tax for continuing. What is happening here? Are we just not allowed to have discussions on this forum about the possible economic gains and costs of minimum wage or minimum income policy?

5Nornagest11y

Someone's probably downvoting everything in the thread, most likely on grounds of being too political for the forum. My other comments here have taken the same hit. Obviously I don't agree with that policy as it's applied locally, but I can't really blame them either. This exchange has been relatively sane, but the discussion under other comments has had points of low quality, and I'm not totally convinced that we're better off with the thread as a whole.

1advael11y

My knee-jerk assumption is that Job 1 would actually not be accepted by almost any employees. This is based on the guess that without the threat of having no money, people generally would not agree to give up their time for low wages, since the worst case of being unemployed and receiving no supplemental income does not involve harsh deterrents like starving or being homeless. Getting someone to do any job at all under that system will probably require either a pretty significant expected quality of life increase per hour worked (which is to say, way better than $3 per hour) or some intrinsic motivation to do the job other than money (e.g. they enjoy it, think it's morally good to do, etc.) It's more likely that a well-implemented basic income would simply eliminate a lot of the (legal) labor supply for low-wage jobs. I both see this as a feature and see no need for a minimum wage under this system.

-5drnickbone11y

[-]Viliam_Bur11y-10

Instead of complaining, could this system be hacked to help the poor people? If you created a company for hiring currently unemployed unskilled people and providing them as good working conditions as possible, could you get the same subsidies Walmart does? Then those people would prefer working for you.

I imagine something similar to Mondragón Corporación Cooperativa, but focused on low-income people.

[-]Lumifer11y110

No need to hack anything, anyone who wants to can step in and create such a company.

I predict rapid learning about reasons why these people are unskilled and unemployed :-/

3Viliam_Bur11y

Not sure if it's my idea that is wrong, or just my way of presenting it. So here is a longer version: We observe that some people are employed by a company that effectively pays them less than most people consider an acceptable wage. Some say it's less than living wage, but that's probably an exaggeration. Let's just say that the wage is considered so low that this fact offends many people, and for the purpose of this comment let's just call it "unacceptable" without providing an exact definition of what precisely that means. (The basic intuition is that we object against a specific amount of money being paid to a person living in a specific location, regardless of which specific company would pay the money, if the work is equivalent.) Some people conclude that the company is "evil". Which I would translate as a moral obligation to stop doing such things, and either pay the employees an acceptable wage, or fire them. Other people conclude that the company is doing morally okay, because some people simply don't create enough value that would translate to an acceptable wage without a state subsidy. There doesn't seem to be an easy way to make both of these people agree on one specific answer; not merely about whether Walmart should but even about whether it could pay those people acceptable wages. Instead of just expressing my allegiance to one of these tribes, I propose solving the problem experimentally. If it is possible to employ the same people and give them higher wages than Walmart does, then do it. Actually, Walmart succeeds to do it while creating profit and big salaries for its management -- so if you would run the company without the explicit goal of creating a profit and big salaries for the management, you could use that extra money to improve the situation of your employees compared with the employees of Walmart. If you succeed to execute this project well, it could lead to Walmart going out of market, which (if you consider Walmart evil) would be a

2Nornagest11y

Confusingly, "living wage" in US parlance doesn't mean "the minimum you can live on", but rather the minimum needed to meet some set of quality-of-life criteria for the region after factoring in dependents. Exact definitions differ, but it usually hashes out to quite a bit higher than subsistence wages: when California was debating one a while back, I believe the number being tossed around was $13/hour in late-1990s dollars. I don't know exactly what Walmart pays its employees but it probably doesn't qualify.

0Lumifer11y

That's a rather interesting criterion. By the way of comparison, let me point out that not baptizing your children also offends many people (because from their point of view you have just pushed your child into the pits of hell). Or, for another example, polyamory offends many people, too. So? Um, and who's going to do it? And how would that work-- you'll set up a company which functions much like Wal-Mart? That will be pretty expensive and I am not sure you can do this -- arguably Wal-Mart competitors have tried and failed. If you want to just employ these people doing whatever, well, there is the whole market economy out there which offers choices of employment. If someone is willing to pay these people more (in money and benefits) they would switch jobs, wouldn't they? Yes, of course there are frictions but at Wal-Mart scale the effect should be pretty obvious.

-3johnlawrenceaspden11y

Your idea sounds great in its short and long forms, and I think Lumifer's agreeing with you and telling you his prediction about how it will go, so you can falsify it.

-3Vivificient11y

I'm not sure if I understand what you're suggesting. As I understand it, the argument isn't that Walmart is literally getting subsidies. It's just that Walmart employees are getting welfare, so Walmart doesn't have to pay to support them, reducing Walmart's costs hypothetically compared to an equivalent company which paid their workers a better wage. So if you created a company which provided as good of working conditions as possible, your employees wouldn't need welfare, so you wouldn't be benefiting from the "subsidies". Also, your costs would go up, so you'd be more likely to go out of business than Walmart.

-3Viliam_Bur11y

I am suggesting to give people exactly the same money that Walmart is giving them (so the company benefits from the subsidies). But treat them well, and actually make them spend an hour or more each working day getting better education (during working hours), or something similar that will improve their lives in long term. Such an option would be a strict improvement against Walmart. Those who have better options available are simply not our target group. We are trying to improve the lives of those who currently work cheaply for Walmart.

4Lumifer11y

Where would this money come from?

3Dias11y

No it wouldn't. Unless you can manage a supply chain with the skill Walmart does, it would fail to provide the key service Walmart does; being a low-cost, wide variety retailer. Even if you could do everything else Walmart did (unlikely), your labour costs would be >10% higher, and your prices accordingly higher. As such, your sales would be lower, and your customers less well off. It might be a kaldor-hicks improvement. But it would not be a strict improvement.

[-]Sanji11y-20

I have noticed a contrarian position on the whole minimum wage thing. One that advocates buying from sweatshops, because they say "at least those people working in the sweatshops aren't homeless".

Possible solution to the whole minimum wage thing: model the thing as a math problem where you minimize the cost to taxpayers? Like, if (current minimum wage current number of jobs) - (hypothetical minimum wage resulting number of jobs) < 0, then the taxpayers would want to switch to the hypothetical minimum wage.

And to keep experimentation in that ... (read more)

0gjm9y

You can of course do that, or any number of other things where you pick a metric and optimize it. The question is: how well does that metric capture what we actually want? For me, at least, optimizing (min wage * #jobs) doesn't seem like it matches my values terribly well, though it's probably better than maximizing either factor on its own. That's an interesting idea (though it feels rather horrible), but I'm not sure how it's supposed to work. * If they are meant to be the only safety net for people who can't find work at minimum wage or above: why would we expect it to be sufficient? Some people may be unable to cope with working conditions in the sweatshops; some people may simply not be able to do the work; and if the amount of sweatshop work is limited as you propose, there's no reason why there should be enough for all the people unable to find minimum-wage-or-better work. * If there is meant to be some further safety net: why then would anyone work in the sweatshops? The usual answer would be something like "because people like to work; it gives them more sense of dignity and purpose", and indeed people do mostly like to work rather than depend on government benefits. But now we're talking about working conditions and pay that are almost illegally bad, so much so that the government doesn't allow more than a very limited number of people to be stuck with them; I would expect a lot of people to prefer depending on government handouts to that, and I don't think I'd blame them. * So maybe they'd be some kind of coercion? You don't get your government benefits if you refuse a sweatshop job, or something. But now (1) this is not reasonable for people who, e.g., are physically incapable of doing that work, and (2) since sweatshop places are scarce, it means that some benefit claimants will (arbitrarily?) be required to work in the sweatshops and some won't, which will surely cause resentment. I suppose you could require everyone in receipt of benefits to wo

0Strange79y

Bizarrely enough there are many people who have jobs, yet cannot afford housing. Something about rising real estate prices.

[-]Sophronius11y-30

Chris, I agree with your observation that people don't think very consequentialist here. However, there is also something to be said for a solid application of common sense.

Yes, the obvious economic argument is that Walmart is under no obligation to hire employees, and any employee is free to leave whenever, so they should be allowed to treat them any way they want. The underlying assumptions here are that the (job) market is efficient so that no single company can influence it, people can get new jobs instantly, people can rationally decide whether to swi... (read more)

-3Sophronius11y

If possible, I would like to hear the reason for the downvoting of the above post. Specifically, whether the reason is: 1) It discusses politics (in response to an article about politics?) 2) The reasoning is fallacious 3) It was written by me 4) People don't like silly examples 5) It sounds vaguely leftish 6) The point I made is so obvious that it's redundant 7) people prefer to have their politics debates one-sided

4votesplainer11y

8) It's too long, says very little and doesn't have a summary preceding it. 9) Almost all of your writing is either political or meta, which suggests you don't belong here and will only add noise. 10) You've clearly failed to learn from previous criticism.

-5Sophronius11y

3Nornagest11y

The single most important reason for my downvote was the invocation of "common sense", which I tend to read as "don't bother doing any analysis, just fall back on your learned heuristics"; I'm fairly sure this is a correct reading in context. Now, that's good advice in time-constrained or highly complex situations, but this is neither. To make matters worse, it's a politically polarized topic, which implies that the salient heuristics are very likely going to be split along ideological lines: half the people you're talking to are using their common sense, which just happens to say something different from yours. That in turn implies either that you aren't aware of this dynamic or that you're using rallying tactics, and I don't want to see either one on this site. I also feel it's too long for its content. Additionally, it's in a political thread, arguing for a politicized stance, and both lower my threshold for downvoting.

2johnlawrenceaspden11y

I've no idea who you are and I've just downvoted you because your post is a tedious wall-of-text.

-2knb11y

LWers are mostly socialists. If you're getting downvoted here while saying "leftish" things, what you're saying probably has some actual problems.

[+][anonymous]11y-70

[+]buybuydandavis11y-150

[+]Lumifer11y-230

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