Prices rising so much that minimum wage workers are poorer than in decades(businessinsider.com)
businessinsider.com
Prices rising so much that minimum wage workers are poorer than in decades
https://www.businessinsider.com/reopening-inflation-minimum-wage-decade-lows-labor-market-pay-growth-2021-6
31 comments
Dutch inflation inclused cost of living (woonkosten) [0] as probably in most (all?) other countries. I read an explanation once. IIRC the actual cost of living did not increase so much. Prices of houses went up while interest rates went down. Rent went up (because inflation based), but by far not as much as prices of houses ;)
[0] https://www.cbs.nl/nl-nl/faq/specifiek/hoe-wordt-de-inflatie...
[0] https://www.cbs.nl/nl-nl/faq/specifiek/hoe-wordt-de-inflatie...
Just wondering, how about emigrating? or houseboats or more collective living? Are there not cheaper properties in the polders? Why doesn't the government do something to stop the rental empires?
Is 105K passed to your kid rich by any means?
Yes it is! Anyone starting off their adult life with the ability to buy a home of their own is an exception
100k?
Doesn’t even get you 20% in most places where rent is over 1k
Yes, when compared to 0k.
Yes? Absolutely?
88% of minimum wage workers are over the age of 20, with the average age being 35[1]. 36% are 40 and over.
According to this study[2], increases of 10% to the minimum wage are correlated with only a 0.36% increase of prices, and minimum wage increases may cause some prices to decrease, too.
[1] https://www.epi.org/publication/wage-workers-older-88-percen...
[2] https://www.upjohn.org/research-highlights/does-increasing-m...
According to this study[2], increases of 10% to the minimum wage are correlated with only a 0.36% increase of prices, and minimum wage increases may cause some prices to decrease, too.
[1] https://www.epi.org/publication/wage-workers-older-88-percen...
[2] https://www.upjohn.org/research-highlights/does-increasing-m...
Wow your statement and that website are incredibly deceptive.
You said “average of age minimum wage workers is 35” and your source says “average age of workers helped by an increase in minimum wage is 35”.
No wonder my bullshit detector was going off, and once again it was right.
You said “average of age minimum wage workers is 35” and your source says “average age of workers helped by an increase in minimum wage is 35”.
No wonder my bullshit detector was going off, and once again it was right.
This analysis is flawed because it uses year-over-year inflation changes. ....but one year ago, we were locking down so production and consumption halted.
A more accurate comparison against data two years ago shows that the change is not so dramatic.
A more accurate comparison against data two years ago shows that the change is not so dramatic.
It's almost like long stretches of low productivity relative to capital expended results in price increases.
Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars?
> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars?
Yes, but then you couldn't do nothing and use inflation to reduce it without political host.
Yes, but then you couldn't do nothing and use inflation to reduce it without political host.
> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars?
No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.
No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.
You would implement that by setting it to $X real and nominal at some base point, then using the CPI to readjust yearly or something. There's no problem knowing what minimum wage is or will be at any given time.
That is not really a problem as long as inflation or deflation is not crazy over a year or so. Just make the minimum wage X real dollars based on method such and such and the numbers from last year.
The problem with this is, who gets to say what a nominal dollar is? There are like ten different versions of inflation calculation. It wouldn't be hard to cherry pick the commodities that set inflation low. Or, if you are really devious, you could subsidize only those commodities that are in the index as a loss leader for stuff people actually need.
Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.
Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.
This could just be part of the law. In the end it is not that much different than the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. Having the law state the minimum wage in real dollars and specifying how convert the value would in the end just automate this process and adjust the minimum wage every year or so.
> the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers.
For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
The Federal Reserve decides what a nominal dollar is. It's the real dollars that are in question.
Unfortunately some solutions aimed (on the surface) of protecting workers make inflation worse. Tariffs to protect workers increase inflation. So does occupational licensing. And means based entitlements.
brrrr goes the money machinex
That’s it. We should raise the minimum wage to $25 hour. The businesses can just raise prices.
dominos upped their tip range from 15-30%
Prices are going up because wages are going up.
So you mean if even they paid $15/hr it sill wouldn’t be enough, because businesses will just raise prices?! What a shock!
First, the article doesn't describe any causality in either direction. It's simply stating that minimum wage workers are now even more poor now than they were last year; and, more importantly, got poorer faster than we expected them to. Second, a double-fistful of municipalities raising their minimum wage within the last year could hardly have caused significant motion to inflation at the national level.
You can't win like that, if you're a single earner (because you are single or because only one of two spouses is working) then you're basically going to be squeezed for many years because you can not save enough for a downpayment.
This sort of treadmill is extremely hard to get out of and one false step or bad illness and you're in real trouble.
Meanwhile, rich people get to hand 105K euros tax free to their kids to buy a house of their own, and investors buy condos to rent back out at exorbitant prices because that's the only relatively risk free way of putting their savings to work.
It's really tough.