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Thread: Warren Buffett: $15 minimum wage will hurt the working class

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill View Post
    Whether or not most actually do, this is an idiotic argument.

    Oh wow, if you count people who received the Earned Income Tax Credit, most of them have Earned Income?!? You don't say!!!

    EITC generally isn't what is meant by "welfare". Folks are talking about TANF, SNAP, Medicaid, etc. EITC was added into those numbers specifically to get that result.
    EITC allows people to get their tax money back up to a certain amount.

    you have to make under a certain amount depending on your family size and how much in taxes that you paid.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill
    Quote Originally Posted by Gimmesometruth
    Absurd. Of course, less welfare will surely get those elderly and children out hustling for cash money.
    That's interesting. Change "elderly and children" to "able-bodied low-income", and you've just made a very conservative argument
    So this is getting interesting. Apparently the conservative assumption is that, if poor people lacked sufficient income, they would take steps to improve their situation through work, or self-improvement, whereas the leftist assumption is that, if poor people lack sufficient income, they will instead create political blocs to demand that others simply give it to them.
    Worth noting, Democrats: President Trump will have a Pen and a Phone. #Precedent.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by ludin View Post
    EITC allows people to get their tax money back up to a certain amount.

    you have to make under a certain amount depending on your family size and how much in taxes that you paid.
    I know what EITC is, I'm simply pointing out that generally when folks talk about welfare, that's not what they are talking about, and including it to show "what % of people on welfare work" is to deliberately skew the numbers.
    Worth noting, Democrats: President Trump will have a Pen and a Phone. #Precedent.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill View Post
    I know what EITC is, I'm simply pointing out that generally when folks talk about welfare, that's not what they are talking about, and including it to show "what % of people on welfare work" is to deliberately skew the numbers.
    it is a shame that there are people that want off welfare but the government won't allow them to get off of it.
    they slit their throat and make it impossible for them to be self sufficient. so these people end up cutting their wages or hours back so they can
    qualify again because the gap in support is so wide.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by Gimmesometruth View Post
    Let me get this, you asked for a mechanism on how the decline in income could cause employers to increase wages, you agree a grassroots mw movement can cause this, but that doesn't satisfy your forcing.
    That's correct. It does not provide a forcing function. It simply (in your model) adds additional impetus to one political pressure group among hundreds. It does not actually force Wal-Mart to calculate their employee's loss of take-home pay due to food stamps and increase each employee's salary by their relative reduction.

    Of course you did, I'll repost it:
    "The existence of serious welfare cliffs, for example, disincentivizes increasing ones' income."
    "Declining welfare cause less desire for income" is a completely indefensible position unless you are going claim everyone who experiences a decline in income becomes so depressed that they give up.
    Ah, I see where we miscommunicated there.

    A Welfare Cliff occurs when bringing home an additional dollar of income results in the loss of more than a dollar of benefits.

    A mother with two children on the Temporary Assistance for Needy Families program, for example, loses her benefits once she starts making more than $1,023 a month.. So, unless she can make enough of an immediate pay raise to cover the loss and then some, she has a strong incentive to keep her income at ~$1,000 a month.

    In Illinois a single mom has the most resources available to her family when she works full time at a wage of $8.25 to $12 an hour. Disturbingly, taking a pay increase to $18 an hour can leave her with about one-third fewer total resources (net income and government benefits). In order to make work “pay” again, she would need an hourly wage of $38 to mitigate the impact of lost benefits and higher taxes.

    Meaning that for that single Mom there is no incentive to move from $12 an hour to $18 an hour. Welfare Cliffs disincentivize increasing one's work-related income by reducing total income.

    The sarcasm went right by you, and forcing folks off welfare (especially children and the elderly) during a recession/recovery is not only insane, it is heartless.
    I would concur that it is certainly heartless.

    It is more of your soup kitchens cause depressions solutions.
    ?
    Worth noting, Democrats: President Trump will have a Pen and a Phone. #Precedent.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill View Post
    so your argument is that if we get rid of or decrease the social safety net, instead of forming political movements to reinstitute or increase the safety net, activists will form movements to demand increased MW laws, and that therefore the gap between the imaginary MW of a hypothetical future and today's MW is the subsidy?
    No, complete straw, I never said MW is a subsidy, an increase in MW is the replacement for the declining income. Again, your argument is based on this unreal idea that declines in income cause LESS desire for income.

    So. No. There is no forcing function. Merely the potential for an indirect function in a world in which employers do not make cost/benefit assessments. Okedoke.
    I have shown 2 mechanisms that put pressure upon employers, either mandatory wage increases or the threat of employee loss. If the employer believes retraining costs/less productivity for a new (and more than likely long term unemployed) hire will be cost effective, so be it, but again, you keep ignoring that folks do react to less income by seeking more income.



    We have a wide pool of low-skill laborers. Supply and Demand are real things, that have real effects on prices. Price floors artificially reduce demand. None of these are economically controversial, it seems, until you put them together, at which point you challenge people's desire to have their cake and eat it too as the desert of a Free Lunch. But hey, if this is the best ya'll can come up with, then that's fine, because it means that our point stands. There is no actual subsidy to employers in the social safety net.
    You have slipped into pure rhetoric while holding to the idea that folks have less desire for income when income declines and ignoring that there is lots of evidence that employers were not rehiring the unemployed quickly, preferring the already employed. You ignore 2 mechanisms on employers to increase wages while you create absurd income claims.
    Quote Originally Posted by Drumpf
    "I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters."
    Quote Originally Posted by Moderate Right View Post
    When it comes down to it, all facts are cherry picked.
    Quote Originally Posted by Bodhisattva View Post
    He didn't say it didn't make sense. He said it is complete nonsense.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill View Post
    Quote Originally Posted by cpwill
    Quote Originally Posted by Gimmesometruth
    Absurd. Of course, less welfare will surely get those elderly and children out hustling for cash money.
    That's interesting. Change "elderly and children" to "able-bodied low-income", and you've just made a very conservative argument
    So this is getting interesting. Apparently the conservative assumption is that, if poor people lacked sufficient income, they would take steps to improve their situation through work, or self-improvement, whereas the leftist assumption is that, if poor people lack sufficient income, they will instead create political blocs to demand that others simply give it to them.
    Oh look. A Laboratory of Democracy:

    Last year Maine passed a measure that would require recipients of the Supplemental Nutrition Assistance Program, otherwise known as SNAP, to complete a certain number of work, volunteer, or job-training hours before being eligible for assistance...

    At the close of 2014 approximately 12,000 individuals were enrolled in the state assistance program. Keep in mind that these individuals are adults who aren’t disabled and who don’t have children at home and who are claiming the food-stamp benefits because of a lack of financial resources.

    After forcing these individuals to either work part-time for twenty hours each week, enroll in a vocational program, or volunteer for a minimum of twenty-four hours per month, the numbers showed a significant drop from 12,000 enrollees to just over 2,500...
    Huh.
    Worth noting, Democrats: President Trump will have a Pen and a Phone. #Precedent.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by cpwill View Post
    That's correct. It does not provide a forcing function. It simply (in your model) adds additional impetus to one political pressure group among hundreds. It does not actually force Wal-Mart to calculate their employee's loss of take-home pay due to food stamps and increase each employee's salary by their relative reduction.
    Your argument get narrower and narrower, you are moving the goalpost of forcing an employer. I provided 2 mechanisms that force increases in wages, if it does not cause an employer to weigh retraining cost for those lost employees, so be it.



    Ah, I see where we miscommunicated there.
    A Welfare Cliff occurs when bringing home an additional dollar of income results in the loss of more than a dollar of benefits.

    A mother with two children on the Temporary Assistance for Needy Families program, for example, loses her benefits once she starts making more than $1,023 a month.. So, unless she can make enough of an immediate pay raise to cover the loss and then some, she has a strong incentive to keep her income at ~$1,000 a month.

    In Illinois a single mom has the most resources available to her family when she works full time at a wage of $8.25 to $12 an hour. Disturbingly, taking a pay increase to $18 an hour can leave her with about one-third fewer total resources (net income and government benefits). In order to make work “pay” again, she would need an hourly wage of $38 to mitigate the impact of lost benefits and higher taxes.

    Meaning that for that single Mom there is no incentive to move from $12 an hour to $18 an hour. Welfare Cliffs disincentivize increasing one's work-related income by reducing total income.
    That is assuming large numbers would be effected...and that no changes to TANF/SNAP would be made.

    I would concur that it is certainly heartless. ?
    Sure you do.
    Quote Originally Posted by Drumpf
    "I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters."
    Quote Originally Posted by Moderate Right View Post
    When it comes down to it, all facts are cherry picked.
    Quote Originally Posted by Bodhisattva View Post
    He didn't say it didn't make sense. He said it is complete nonsense.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by Gimmesometruth View Post
    No, complete straw, I never said MW is a subsidy, an increase in MW is the replacement for the declining income. Again, your argument is based on this unreal idea that declines in income cause LESS desire for income.
    No, it's just a failure of reading comprehension. Observe:

    Quote Originally Posted by cp
    so your argument is that if we get rid of or decrease the social safety net, instead of forming political movements to reinstitute or increase the safety net, activists will form movements to demand increased MW laws, and that therefore the gap between the imaginary MW of a hypothetical future and today's MW is the subsidy?
    I was asking if your argument was that the gap was the subsidy, as that is what you seem to be saying. Not the MW itself.

    Quote Originally Posted by gimme
    I have shown 2 mechanisms that put pressure upon employers, either mandatory wage increases or the threat of employee loss.
    Neither of these is an actual forcing function. One depends upon a possible hypothetical in which increased "pressure" results in a political decision, and the other merely requires having to hire new low-skill workers.

    If the employer believes retraining costs/less productivity for a new (and more than likely long term unemployed) hire will be cost effective, so be it
    McDonalds already has an annual turnover rate of 150%. It seems that low-skill workers are also more likely to quit when they have worked enough to qualify for benefits again, or when school starts up, etc. So those costs are already baked in the cake.

    but again, you keep ignoring that folks do react to less income by seeking more income.
    I concur with that. I simply think that your mechanism is highly unstable, and your idea that it of necessity creates a forcing function on employers is implausible. Sure, people will seek more income. That doesn't mean that a low-skill job or worker will suddenly magically increase it's value-added.

    You have slipped into pure rhetoric while holding to the idea that folks have less desire for income when income declines and ignoring that there is lots of evidence that employers were not rehiring the unemployed quickly, preferring the already employed.
    Quite the contrary - never have I suggested otherwise. However, that does not mean that the unemployed are unemployable, except where artificial price-floors have made them so.

    You ignore 2 mechanisms on employers to increase wages while you create absurd income claims.
    You have one mechanism which is very hypothetical and dependent on a series of indirect means.
    Worth noting, Democrats: President Trump will have a Pen and a Phone. #Precedent.

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    Re: Warren Buffett Don't raise the minimum wage

    Quote Originally Posted by Gimmesometruth View Post
    Your argument get narrower and narrower, you are moving the goalpost of forcing an employer.
    I am maintaining the goalpost that I set out in the beginning - that of a forcing function on the employer to raise wages commensurate with the loss of public aid experienced by his or her workers. Thus far you've come back with "well, in such a scenario politics might mandate the increase in the MW" hypothetical, forgetting that A) in that parallel universe apparently going through such a libertarian moment, that is unlikely and B) employers have alternatives to human labor when that labor becomes prohibitively expensive. Demand for low-skill labor is not perfectly inelastic.

    I provided 2 mechanisms that force increases in wages, if it does not cause an employer to weigh retraining cost for those lost employees, so be it.
    The employer is likely already retraining employees, and your other mechanism was that perhaps a political pressure group would arise.

    Warren Buffet is correct. If you actually want to help Low-Income workers, expanding the EITC is a better policy to actually put money in their pocket.

    That is assuming large numbers would be effected...and that no changes to TANF/SNAP would be made.
    ... I do not understand this reply. I am saying that welfare cliffs exist and have negative impact on people's desire to earn income, not making any proposals. Though I would agree that large changes to TANF/SNAP should be made, and that this would effect many millions of Americans.

    Sure you do.
    I do. I'm in favor of a social safety net, simply a simpler, better designed one with fewer destructive incentive structures.

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