Billionaire goes rogue, admits policy not schools destroyed middle class(inc.com)
inc.com
Billionaire goes rogue, admits policy not schools destroyed middle class
https://www.inc.com/geoffrey-james/billionaire-goes-rogue-admits-public-policy-not-public-schools-destroyed-middle-class.html
34 comments
> Billionaire says something people disagree with
"That's just the ramblings of a greedy, out-of-touch asshole who should be taxed down to 0 to atone for their sins."
> Billionaire says something people agree with
"Our idea is validated! Someone who is very rich and successful concurs!"
"That's just the ramblings of a greedy, out-of-touch asshole who should be taxed down to 0 to atone for their sins."
> Billionaire says something people agree with
"Our idea is validated! Someone who is very rich and successful concurs!"
Journalists wouldn't waste so much ink - just use 'claims' for one, and 'admits' for the other.
It's easier to trust someone who's speaking against their own interests.
Except he already has his billions and has sold his company. Thus his only 'speaking against his own interest' is estate tax which is easily avoidable with preparation.
Let me rephrase, then. It's harder to trust someone who's obviously speaking exclusively for his own interests.
>For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
Or that's an old wives tale, and the market will adjust and keep them employed (like tons of countries with minimum wage AND low unemployment), while most low-end job sector bosses will never willingly pay more than the minimum it can get away with.
The same way that if bosses could have child labor or slave labor or company scrip, tons of them would use it (as tons of them did use it, when the law allowed it).
Or that's an old wives tale, and the market will adjust and keep them employed (like tons of countries with minimum wage AND low unemployment), while most low-end job sector bosses will never willingly pay more than the minimum it can get away with.
The same way that if bosses could have child labor or slave labor or company scrip, tons of them would use it (as tons of them did use it, when the law allowed it).
Supply and demand (or, more technically, the slope of the demand curve) is an old wives tale? If you're going to make that claim, the burden of proof is on you to show why it doesn't apply in the employment market. Merely stating that it could be an old wives tale isn't very convincing.
>Supply and demand (or, more technically, the slope of the demand curve) is an old wives tale?
Yes. The market doesn't work based on some naive untouched "supply and demand" curve. Both supply and demand can be manipulated, and every weakness of the employee (who has the more need and the less information) can be and is exploited.
Yes. The market doesn't work based on some naive untouched "supply and demand" curve. Both supply and demand can be manipulated, and every weakness of the employee (who has the more need and the less information) can be and is exploited.
Even if everything you just said is true, that doesn't make higher prices increase demand for labor, nor even leave demand flat. The "old wives tale" that you need to actually refute is that rising prices cause decreasing demand, including for labor. So far, you haven't even attempted to refute it.
For one, you can have demand that justifies wage X in a "perfect market" but keep wages - X through political and social means (from cartels and monopsony, to exploiting illegal immigration)...
Second, the minimum wage can increase consumption (poor workers wage almost go all to the market, not to wealth accumulation and rent-seeking), and thus lift demand.
Third, demand is in many sectors inelastic. A employer need a certain amount of workers to function, period. If he doesn't have them, he can either overwork existing employees (if the law permits it, that's why overtime compensation and related laws are important), or squeeze his profit margins and rise to the minimum wage.
But he'll seldom if ever voluntarily squeeze his profit margins to minimum wage if he can get away with it (and thus use employees as a profit source). In an ideal (for the boss) world he would be able to even use slave labor (as many did in the past), blackmail employees (as many who employ illegal immigrants do), collide with other owners in an era to keep wages low, and so on.
Actually that's the same way huge increases in productivity are seldom/never passed on to employees, but are pocketed as extra profit margins, which is why productivity has skyrocketed in many sectors, but wages remain stagnant or even lower than 70s levels (when adjusted).
Fourth, minimum wage law equally affects all businesses in a sector (or across the market), and thus the extra costs will eventually just be a cost of doing business that will be passed along to the overall price. Other conditions being the same, countries that introduced minimum wage laws, even higher than the US, do just fine with their unemployment.
Fifth, certain markets (and especially ones were low wage earners work at, from fast food to strawberry picking), have a single or a few large employers in areas, that kill competition, and force workers to accept whatever's given (regardless of what demand would point to). That's a monopsony market, and certain low wage markets like fast food have been shown to be that (can depend on area).
And we haven't even touched into the improved (sometimes substantially) conditions of those getting a higher wage (because the got lower than the minimum before), which could result in increased productivity.
Economists are not clear cut as you seem to believe: "The profession as a whole is divided on the topic: When the University of Chicago Booth School of Business asked a panel of prominent economists in 2013 whether increasing the minimum wage to $9 would “make it noticeably harder for low-skilled workers to find employment,” the responses were split down the middle." [1]
[1] https://www.theatlantic.com/business/archive/2017/01/economi...
-- which also mentions:
Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level. When economists try to tackle this question, they come up with all sorts of results. In 1994, David Card and Alan Krueger evaluated an increase in New Jersey’s minimum wage by comparing fast-food restaurants on both sides of the New Jersey-Pennsylvania border. They concluded, “Contrary to the central prediction of the textbook model ... we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”
Card and Krueger’s findings have been vigorously contested across dozens of empirical studies. Today, people on both sides of the debate can cite papers supporting their position, and reviews of the academic research disagree on what conclusions to draw. David Neumark and William Wascher, economists who have long argued against the minimum wage, reviewed more than one hundred empirical papers in 2006. Although the studies had a wide range of results, they concluded that the “preponderance of the evidence” indicated that a higher minimum wage does increase unemployment. On the other hand, two recent meta-studies (which pool together the results of multiple analyses) have found that increasing the minimum wage does not have a significant impact on employment. In the past several years, a new round of sophisticated analyses comparing changes in employment levels between neighboring counties also found “strong earnings effects and no employment effects of minimum wage increases.”
Second, the minimum wage can increase consumption (poor workers wage almost go all to the market, not to wealth accumulation and rent-seeking), and thus lift demand.
Third, demand is in many sectors inelastic. A employer need a certain amount of workers to function, period. If he doesn't have them, he can either overwork existing employees (if the law permits it, that's why overtime compensation and related laws are important), or squeeze his profit margins and rise to the minimum wage.
But he'll seldom if ever voluntarily squeeze his profit margins to minimum wage if he can get away with it (and thus use employees as a profit source). In an ideal (for the boss) world he would be able to even use slave labor (as many did in the past), blackmail employees (as many who employ illegal immigrants do), collide with other owners in an era to keep wages low, and so on.
Actually that's the same way huge increases in productivity are seldom/never passed on to employees, but are pocketed as extra profit margins, which is why productivity has skyrocketed in many sectors, but wages remain stagnant or even lower than 70s levels (when adjusted).
Fourth, minimum wage law equally affects all businesses in a sector (or across the market), and thus the extra costs will eventually just be a cost of doing business that will be passed along to the overall price. Other conditions being the same, countries that introduced minimum wage laws, even higher than the US, do just fine with their unemployment.
Fifth, certain markets (and especially ones were low wage earners work at, from fast food to strawberry picking), have a single or a few large employers in areas, that kill competition, and force workers to accept whatever's given (regardless of what demand would point to). That's a monopsony market, and certain low wage markets like fast food have been shown to be that (can depend on area).
And we haven't even touched into the improved (sometimes substantially) conditions of those getting a higher wage (because the got lower than the minimum before), which could result in increased productivity.
Economists are not clear cut as you seem to believe: "The profession as a whole is divided on the topic: When the University of Chicago Booth School of Business asked a panel of prominent economists in 2013 whether increasing the minimum wage to $9 would “make it noticeably harder for low-skilled workers to find employment,” the responses were split down the middle." [1]
[1] https://www.theatlantic.com/business/archive/2017/01/economi...
-- which also mentions:
Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level. When economists try to tackle this question, they come up with all sorts of results. In 1994, David Card and Alan Krueger evaluated an increase in New Jersey’s minimum wage by comparing fast-food restaurants on both sides of the New Jersey-Pennsylvania border. They concluded, “Contrary to the central prediction of the textbook model ... we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”
Card and Krueger’s findings have been vigorously contested across dozens of empirical studies. Today, people on both sides of the debate can cite papers supporting their position, and reviews of the academic research disagree on what conclusions to draw. David Neumark and William Wascher, economists who have long argued against the minimum wage, reviewed more than one hundred empirical papers in 2006. Although the studies had a wide range of results, they concluded that the “preponderance of the evidence” indicated that a higher minimum wage does increase unemployment. On the other hand, two recent meta-studies (which pool together the results of multiple analyses) have found that increasing the minimum wage does not have a significant impact on employment. In the past several years, a new round of sophisticated analyses comparing changes in employment levels between neighboring counties also found “strong earnings effects and no employment effects of minimum wage increases.”
One: True, and a problem, but doesn't change the sign of the slope of the demand curve.
Third: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fourth: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fifth: True, but doesn't change the sign of the slope of the demand curve.
That leaves your second point as the only one that actually addresses the question. But even that only gives a plausibility argument that it might slope the way we would wish, rather than the way most people expect. Your last two paragraphs also merely indicate that the question is open.
But the thing that triggered this discussion was this statement by tyree731:
> For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
To which you replied:
> Or that's an old wives tale, and the market will adjust and keep them employed...
Which seems to indicate that your position is something other than "it's incredibly debatable" - that the demand curve for employment will raise employment if the minimum wage is raised, and that it's an old wives tale that raising minimum wage will cut employment. But in the parent post to this, all you've shown is tyree731's point, that it's highly debatable.
Third: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fourth: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fifth: True, but doesn't change the sign of the slope of the demand curve.
That leaves your second point as the only one that actually addresses the question. But even that only gives a plausibility argument that it might slope the way we would wish, rather than the way most people expect. Your last two paragraphs also merely indicate that the question is open.
But the thing that triggered this discussion was this statement by tyree731:
> For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
To which you replied:
> Or that's an old wives tale, and the market will adjust and keep them employed...
Which seems to indicate that your position is something other than "it's incredibly debatable" - that the demand curve for employment will raise employment if the minimum wage is raised, and that it's an old wives tale that raising minimum wage will cut employment. But in the parent post to this, all you've shown is tyree731's point, that it's highly debatable.
>Which seems to indicate that your position is something other than "it's incredibly debatable"
Actually the 50-50 split mentioned among economists are the very definition of "incredibly debatable".
Actually the 50-50 split mentioned among economists are the very definition of "incredibly debatable".
I also agree that it's incredibly debatable. Though, please note that there was a Bloomberg piece earlier this year [0] that claimed that 'higher minimum wages haven't increased unemployment', based on a research paper [1].
Of course, one paper isn't enough; I'm willing to learn if there's contradictory evidence out there, too.
[0]: https://www.bloomberg.com/opinion/articles/2019-01-24/u-s-ec...
[1]: https://www.nber.org/papers/w25434
Of course, one paper isn't enough; I'm willing to learn if there's contradictory evidence out there, too.
[0]: https://www.bloomberg.com/opinion/articles/2019-01-24/u-s-ec...
[1]: https://www.nber.org/papers/w25434
https://slatestarcodex.com/2014/12/12/beware-the-man-of-one-...
Doubly applicable in this case, as it talks about the perils of a single study _and_ discusses this in the context of minimum wage research.
Doubly applicable in this case, as it talks about the perils of a single study _and_ discusses this in the context of minimum wage research.
I wouldn't downvote it because I believe it might frame a good discussion or debate.
Specifically, while I agree with three of the four solution points, I actually strongly disagree with the first.
The true way of achieving the spiritual ideal of the first point is to instead INCREASE CONSUMER BUYING POWER by making the 'staples' of living cost less. There are many and potentially controversial ways of making that happen. My own favorite is for "the government" to establish a baseline which private industry is free to compete against. (If they're so much better, they should be able to win; which would be a win for consumers.)
Specifically, while I agree with three of the four solution points, I actually strongly disagree with the first.
1. Increase the minimum wage.
2. Pay workers for overtime labor.
3. Restore labor's bargaining power.
4. Increase taxes on the rich and their estates.
The true way of achieving the spiritual ideal of the first point is to instead INCREASE CONSUMER BUYING POWER by making the 'staples' of living cost less. There are many and potentially controversial ways of making that happen. My own favorite is for "the government" to establish a baseline which private industry is free to compete against. (If they're so much better, they should be able to win; which would be a win for consumers.)
It's a weird piece. It presents as something more akin to the interlinking blog sites that just link to other blog articles (but at least some of these links are to reputable organizations), but that style doesn't do much to actually impart information to the reader. Laying some basis of what to expect in what is being linked to helps quite a bit, but this article is too lazy to do so.
Combined with overreaching assertions, the whole article just makes me feel like they're trying to manipulate me in a ham-handed way. And I'm someone receptive to this argument! I can imagine anyone that already hold beliefs otherwise immediately ignoring it.
Combined with overreaching assertions, the whole article just makes me feel like they're trying to manipulate me in a ham-handed way. And I'm someone receptive to this argument! I can imagine anyone that already hold beliefs otherwise immediately ignoring it.
I don't really think it's that debatable because the issue of minimum wage is a smokescreen. It hides the fact that the minimum wage simply isn't livable for a large amount of the population.
If you raise the minimum wage and it results in unemployment, then that's a clear indication that the only reason the jobs existed was to exploit workers that couldn't meaningfully survive off that wage. Which means we need some sort of other societal solution to solve the problem of jobs being rendered redundant.
Ultimate the intent of working for a living is that you work _for_ a living. If that doesn't work out, then the system is broken.
If you raise the minimum wage and it results in unemployment, then that's a clear indication that the only reason the jobs existed was to exploit workers that couldn't meaningfully survive off that wage. Which means we need some sort of other societal solution to solve the problem of jobs being rendered redundant.
Ultimate the intent of working for a living is that you work _for_ a living. If that doesn't work out, then the system is broken.
[deleted]
The US has too much education. About half of college graduates are doing jobs that don't require a college education. Worse, many of them borrowed to go to college.
This. Not every job or career needs a college education. A lot of college tracks, such as a lot of liberal arts, while useful in the general sense have few corresponding career paths with a resumable ROI for all the debt that those paths lead to.
And, what is worse is that in general there is no, or very limited, concept of on job training. Everyone wants experts who can become productive on day one.
And, what is worse is that in general there is no, or very limited, concept of on job training. Everyone wants experts who can become productive on day one.
The amount of time you hear "I dont use anything I learnt in college, its all about experience on the job!" definitely screams "we need to encourage apprenticeship-type learning over college".
Yes, exactly, that's what I had kinda meant that a lot of jobs require more apprenticeship type training, than a formal college.
Apprenticeships might also lead to career mobility. Try a job/training, if you don't like it, try something else. In a 4-year college you end up making a commitment where sunk-cost fallacy kinda prevents you from just moving on to something else if things don't work out.
Apprenticeships might also lead to career mobility. Try a job/training, if you don't like it, try something else. In a 4-year college you end up making a commitment where sunk-cost fallacy kinda prevents you from just moving on to something else if things don't work out.
Yup. College is often an apprenticeship too (just super expensive) anyway, with how common co-op programs are (which are basically just apprenticeships)
I wonder if the US economy could change to accommodate all that education. If it could change the proportion of low-education (and typically low wealth creating) jobs and simply have more people working at higher-levels, creating more wealth. Why are there so many low-productivity, low-wealth-creating jobs that don't require higher levels of education (be that college or other), and what can we do about it?
Does this really follow? If automation continues to eliminate low skill jobs, is cutting down on academic education a solution? But maybe it automation cuts down white collar jobs just as much. Anyway,making the populace less erudite feels like the wrong way to go. Unless institutional education is obsolete.
Strawmen go rogue, admit billionaires aren't a secret club with homogeneous viewpoints.
Obviously, poor performing public schools don't do anyone any favors. They are filled with apathy from the teachers to the students. Other than that, regardless of what the parents are making, a strong education is a huge contributing factor for upward mobility.
> People who see education as a cure-all have largely ignored the metric most predictive of a child's educational success: household income.
This is patently untrue and can be seen directly in several poor immigrant populations that have come to the US in the last several decades. Cultures that put an emphasis on education have had the highest social mobility. The only reason household income is 'predictive' is because success typically begets success. But in higher income areas parents are simply more involved - maybe because they can afford to be or because they put an emphasis on education or they know the benefits of an education. This can work just as well for poor students, it's just more difficult.
> People who see education as a cure-all have largely ignored the metric most predictive of a child's educational success: household income.
This is patently untrue and can be seen directly in several poor immigrant populations that have come to the US in the last several decades. Cultures that put an emphasis on education have had the highest social mobility. The only reason household income is 'predictive' is because success typically begets success. But in higher income areas parents are simply more involved - maybe because they can afford to be or because they put an emphasis on education or they know the benefits of an education. This can work just as well for poor students, it's just more difficult.
He has been doing this schtick for years: https://hn.algolia.com/?query=hanauer&sort=byDate&dateRange=...
The actual piece is imho more interesting and less opiniated: https://www.theatlantic.com/magazine/archive/2019/07/educati...
I think the venture capitalist conveniently forget that a way to maintain or increase household income......
Is to not let millions of job leave the country in the first place. And preferably not to countries that abuses human rights.
Is to not let millions of job leave the country in the first place. And preferably not to countries that abuses human rights.
Economists would argue the jobs go to where they are more efficiently done. The trouble is, "efficient" means pushing negative externalities onto someone else e.g. pollution, lax labor laws, forced labor. All of them condoned and sometimes actively encourage by the ruling regime. Then again, being forced to work in a sweatshop and having a minimum amount of food is better than not working and starving.
You get my point...
You get my point...
It’s the elephant in the room
[deleted]
I'm not sure what this person is admitting other than than their own opinion. For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
This just reads like a progressive opinion piece, which is fine, except it postures itself as the truth revealed. I'd downvote it if I could.