100% of society can't be brought out of poverty. Here's an example: If we motivated everyone to get a college education, we would have people flipping burgers who are college educated making min wage and living in poverty while struggling to put food on the table.
Why not? If you define poverty as being below the Xth percentile of wealth, then it is tautological that we cannot reach 100% non-poverty.
However, if you define poverty in absolute terms, then there is no fundamental reason why we cannot reach 100% non poverty. All that is necessary is for society to produce enough "stuff" that, when divided by the total population, is still greater than the poverty threshold.
In practice, the much harder problem is distributing that stuff such that everyone actually gets enough to put them beyond the poverty threshold. This is certainly a hard problem, but I don't see any reason to think that it is fundamentally unsolvable.
> Why not? If you define poverty as being below the Xth percentile of wealth, then it is tautological that we cannot reach 100% non-poverty.
This is indeed how it is defined in many wellfare states eg in Europe.
"People are considered at risk of monetary poverty when their equivalised disposable income (after social transfers) is below the at-risk-of-poverty threshold. This is set at 60 % of the national median equivalised disposable income after social transfers."
No. "60% of the national median" is not the same thing as fixing a percentile, and it is perfectly possible to not have poverty under that definition.
For example, in a country with ten people whose incomes are 7, 7, 8, 8, 10, 10, 12, 50, 47212 and 4000000000000000, there is no poverty after that definition (the median would be 10). As you can see, it doesn't even need to be a very egalitarian society!
"60% of the Median" can easily be a zero number of elements from the set.
In this case, median means "sorted by income, at which point have we divided the entire dataset in half". For a dataset with more than 2 elements (so 3 elements minimum), you can construct a dataset for which any below-100% of the median of the dataset is not represented in the dataset.
The easiest example would be using "99% of the median" and [9.999, 10, 11]. Median is 10, 99% of the median is 9.9, the smallest sample is 9.999.
60% of the median income basically means "the lowest 50% income bracket should not have more than 40% deviation". Or rather; the lowest possible income is bigger than 60% of the lowest earner of the top 50% of society.
There is also the issue that even if all of the money were split between everyone--some people would spend all of theirs and some would save theirs. Wealth is accumulated money, not income.
You're being too generous because you're only considering 1st worlders. 71% of the world's population lives on less than $10/day. If we're going to try to flatten out quality of life among everyone then impoverished Americans are going to take a lifestyle cut.
We're not going to have humans flipping burgers in a few years. A lot of these low-wage, low-skill jobs are finally on the brink of being automated. There will be new opportunities to replace them, as there always are. I'm pretty optimistic about the future of the economy - we have a huge number of skill-demanding fields that are growing, and many of them are facing real difficulty, which is exactly what creates demand.
How many people will be employed by the companies that replace all these low-wage low-skilled jobs? What will those formerly low-wage low-skilled laborers do after they are replaced? Buy a college education? Learn robotics?
As those jobs are automated, who will patronize those businesses? eg what fraction of McDonalds customers are high-income high-skill laborers vs lower-wage low-skill?
Human cognitive abilities follow a normal distribution. Some low-skilled laborers never had an opportunity to reach their potential, others lack the capacity to perform higher skill jobs... and some people are incapable of even "low-skill" labor.
Is automation maintaining or reducing the number of jobs for less capable people? Are we slowly raising the unemployable-threshold?
Those are good questions. Our challenge becomes ensuring that people are capable. How many of those displaced workers are less capable because of something intrinsic (some mental defect or insufficiency), and how many just need to be trained? I'm not sure if we'll ever reach a point where the "average" person is unemployable, but we can imagine a future where that is the case. But there's such little genetic variation within humanity that it seems likely that our education system could be made much more rigorous and suitable to ensure that everyone comes out of it at a very high level of capability.
But no matter how you slice it, pay is a function of supply and demand. Nothing more, nothing less. Burger flipping is low-wage because everyone is willing to do it, and people will undercut each other to secure that they get the job over someone else. The changing economy may make all jobs more difficult, but there will still be jobs that the masses gravitate to, and those jobs will remain low-wage as a result.
Debunked by economists who are the joke of the Nobel laureates. Even the Peace prize is more respectable. 100 years in human history? Nothing. The Roman Empire took half a millennium to decay.
The Malthusian argument is a thermodynamic argument. If we grow without bound (either by number or per capita consumption) we will run out of resources like any other biological system.
The only thing that allows us to escape this is human's unique ability to transcend our biological nature - i.e. breed responsibly (Gd I hate that) and consume less.
Mainstream economics is enamored with boundless growth, therefore, we're on a crash course.
Right, because food today is more expensive than food yesterday, since we are growing so much outside our means, we are clearly consuming all the natural resources and devouring each other for that last piece of corn.
Human behavior is not thermodynamics. To the very least, the day were all the resources in the universe have been consumed by its living beings is so far away that it is absolutely irrelevant and inapplicable to our society.
Sorry, what's the point of the universe? We're bound to Earth by any rational understanding of physics and physiology.
"Right, because food today is more expensive than food yesterday" Love the sarcasm, not the shallow argument (I appreciate that food is, seemingly, cheaper than yesterday).
Human behavior is not thermodynamics. Agriculture is. Food is cheaper today because:
1) N2 fixation thanks to Dr. Haber
2) Large scale potash mining and shipping.
3) Unsustainable use of other necessary agricultural inputs
Point 1) is fairly stable in the medium term (i.e. my daughter's potential children's life span ~ next 100 years to 400 years) because energy is cheap and effectively getting cheaper. Population won't grow too fast as to run out of energy, if it did we're really f.ed, and global energy use has stabilized and might decline.
Point 2), however, is a nasty one. Run out of potash, then you run out of K and therefore food production above carrying capacity. You can turn to (say) oceans to mine K, but that's expensive.
I appreciate the econ argument that "you can't run out of resources because the price goes up until you don't want to use them" but that ultimately trash. You won't go hungry, because you might afford a doubling in price of your groceries. It's the Ethiopian kids whose lives balance everything out.
Point 3) Acquirers are running out so, for example, California's agricultural production is in peril.
See... thermo!
Are there alternatives that are more "sustainable"? Sure. But they all come with (an unknown to me) maximum carrying capacity.
As to human behavior not being modeled by thermo... that's irrelevant. People will shift preferences to eat lower quality, higher yield crops due to prices changes and all.
Of course those prices changes are (partly) due to... thermodynamics!
We could still give everyone guaranteed basic income for example and solve the problem that way. Not everyone needs to work to ensure as a society that everyone has a warm roof over their head and decently healthy food. It's just a matter of will.
That is not an example of anything - "We can't eliminate poverty! If we gave everyone a college education, some people would still be in poverty". There is no cause and effect.
Maybe the main crux is the definition of wealth. Flipping burgers and being college educated would be fine if one could still live a life that's measurably a fulfilling life.
The work they do is of low value because almost anybody can do it. Morally they may not deserve to be poor, but nobody is going to pay them a lot of money to perform that work.
That's not true. Burger flippers aren't low paid because it is easy, thry are low paid because the supply of people willing to do the work is too high. If other, better opportunities become available for a large number of those employees, wages will go up.
Look at Walmart, they aren't raising wages out of the goodness of their hearts, they need to raise wages to keep good employees. (and probably a little PR and politics too)
Minimum wage only really encourages businesses to hire fewer people and train those fewer people to do more and be more productive, if not to raise prices. There are many small bookstores and mom-and-pop stores that are going to be closed when the minimum wage is raised because they literally can’t raise prices any more or hire fewer people.
That’s why in some other countries, instead of a minimum wage, which is the government forcing businesses to pay a certain wage, the government itself makes up the difference between the actual wage and a desired wage. So if the government decides that everyone should earn at least $15/h but the market price for flipping burgers is only $10/h, the government itself will provide the additional $5/h. This effectively raises the standard of living without pressuring businesses and also without the adverse effects like pushing up prices or creating more unemployment.
To some degree there will be cases like that, but that is not really what happens on a macro level though. In aggregate, there tends to be no statistical correlation between the minimum wage level and employment levels. Companies try to be efficient, so they try not to have any more or less people than they need (based mostly on demand). The desire to pay as few people to do as much work as possible always exists. Higher minimum wages may put some extra emphasis on this, but it's likely that the extra demand from consumers having more income balances this out.
What's your source for this? If there's no statistical correlation between the minimum wage and the unemployment rate (and I thought I had read otherwise) then I suspect the statistics aren't telling the whole story.
Your explanation of what's going on at the micro level contradicts my experience as a business owner who's been signing paychecks for many years. All businesses have inefficiencies, and in general the larger the check, the more scrutiny the expense will receive. Internally this manifests as having higher expectations for a higher paid employee, and prioritizing automation, offshoring, or other business decisions when labor costs get too high. Externally, when we expand our relationship with a client, we fully expect that it will receive more scrutiny from various stakeholders at the company simply because the check getting written to us is bigger, even if we deliver proportionately more value.
The government in the US already subsidizes businesses that can’t or won’t pay a living wage - with food stamps and such for their workers. Perhaps having government make up the difference in pay, as you say they do in other countries, would be better.
Depends on one's definition of "livable wage." Minimum wage and "decent standard of living" are often conflated but minimum wage was not imposed and has never been intended to provide that. It's always been a wage that was at or slightly above the federal poverty line.
The lowest minimum wage I remember hearing about as a kid was $1.50/hr. I thought that sounded like a lot of money at the time, but I probably was not even 10 years old.
That would have been in the first half of the 1970's when the federal poverty line was around $2,500. So working full time, you'd make $3,000 or about 120% of the poverty level.
Today, the federal minimum wage is $7.25 an hour and the poverty level (2016) is $12,200. So still, a full-time minimum wage worker earns nearly 120% of the poverty level.
You could call it corporate welfare. Or you could consider the 3 to 4% profit margins these companies have and assume that they might not sustain that number of employees at a higher wage.
This comment implies that these companies going out of business would be a bad thing. In the short term, definitely.
But jobs are just means to an end for most people. Why can't government aim to simply provide those ends?
The obvious counterargument is that the free market is more efficient. But the US government has shown itself to be very capable in providing some services to the entire country. The military has done a great job keep the country safe. There just doesn't seem to be the willpower to create the navy/army/airforce of food, shelter, healthcare and education.
I guess the issue is that it's hard to get elected if you promise to make things better 20 years from now.
Hilarious that you use the word "efficient" and then in the next sentence make the claim that the US military has done a great job at keeping the country safe. Yes, they do a good job. But the US military is one of the most bloated, over-funded organizations in human history.
I'd like to stretch some ideas for the sake of exploration. Curious to hear what you think:
I think you could interpret the US military's success despite "waste" to mean that a federal government can get away with a lot of inefficiency and still beat the "free market."
History already showed us what private military is like. I believe it's essentially feudalism and warlords. I.e. true poverty for 90% of the population. A powerful federal millitary that follows the laws of democratically elected officials gives people in the US historically unprecedented safety.
It's not clear to me why the federal government couldn't build a military-like organizations for addressing food, shelter, health care, and education.
The fundamental issue seems to be that the free market is the best means for deciding resource allocation towards those other goals. So why not simply implement UBI pegged to prices in LCOL areas?
It's not really success despite waste. It's one of the principal factor's bankrupting the nation. Apply that to other major issues as you listed and we are bankrupt even faster.
Because when you raise minimum wage, that means employers of the minimum wage earners need to push up their prices so that they're still making the same profits. (Actually, the same is not good enough, the profits need to exceed the previous years). The price of everything ends up inflating and minimum wage earners end up getting less for their money, despite having "more of it".
That would only be true if the goods minimum wage workers produce are being bought only by minimum wage workers. In reality the price also goes up for incomes above minimum wage so in a sense raising the minimum wage is a transfer of money from higher earners to lower earners.
In reality what happens, is those jobs go away (jobs like retail) and they are replaced with slightly higher paying jobs (like Amazon warehouse worker) except at a rate of about 1 new job for every 10 previous jobs.
Anytime you artificially set price floors and ceilings you have unintended consequences. Why put the burden on private businesses?
There is a better answer - keep the minimum wage where it is until it becomes meaningless because of inflation and increase the Earned Income Tax Credit and make it easier for employers to pass it on to workers each month. They already take out taxes, it shouldn't be hard to do the opposite.
The EITC has historically been supported by both Republican and Democratic presidents.
