26 votes

What the rich don’t want to admit about the poor

18 comments

  1. [7]
    Icarus
    Link
    I think one point that is missed when having these discussions about price increases due to wage increases, is many of these large multi-billion dollar companies don't have to raise prices. For...
    • Exemplary

    I think one point that is missed when having these discussions about price increases due to wage increases, is many of these large multi-billion dollar companies don't have to raise prices.

    For example, Walmart posted a $138.836 billion profit last year. I think we could maybe make the argument that maybe it is not the price increases that are the problem but big businesses refusal to be a little less greedy? I'm thinking there should be a profit/wage ratio that cannot be exceeded or something for large companies like Wal-Mart where wages should be required to rise when certain profit/loss criteria are met.

    16 votes
    1. [3]
      rosco
      Link Parent
      It's addressed, be it subtly in the article: But to your point, we rarely, if ever talk about impacts on profits. It is unfortunate but understandable that the shoes everyone finds easiest to fit...

      It's addressed, be it subtly in the article:

      Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”

      But to your point, we rarely, if ever talk about impacts on profits. It is unfortunate but understandable that the shoes everyone finds easiest to fit into are the owner/share holder. "Why would I want to subsidize my workers salaries?" feels like a very common defense from someone who, surprise surprise, is weighing in hypothetically. I think that is part of the toxic nature of the American dream. We are always the boss, never the peon. Why would we have to imagine their perspective?

      11 votes
      1. [2]
        Cycloneblaze
        Link Parent
        I think it's crazy when most of the people running this hypothetical literally ARE the peon, and are in the position where the boss sacrificing some profit would benefit them directly. But for...

        I think that is part of the toxic nature of the American dream. We are always the boss, never the peon. Why would we have to imagine their perspective?

        I think it's crazy when most of the people running this hypothetical literally ARE the peon, and are in the position where the boss sacrificing some profit would benefit them directly. But for some reason they prefer to imagine themselves as the ones sacrificing, instead of recognising that they ARE the ones who would benefit? It's the "temporarily embarrassed millionaire" thing. I don't understand the psychology.

        4 votes
        1. vektor
          Link Parent
          Coping strategy for people who value material/financial success, but just fall behind their own ambitions? It's easier to suffer your own fundamental view of what constitutes success if you tell...

          I don't understand the psychology.

          Coping strategy for people who value material/financial success, but just fall behind their own ambitions? It's easier to suffer your own fundamental view of what constitutes success if you tell yourself you'll still get there.

          4 votes
    2. skybrian
      Link Parent
      You need to be careful when looking at profit margins because it depends on which number you look at on the income statement. Profits are revenue minus expenses, and the number you get depends on...

      You need to be careful when looking at profit margins because it depends on which number you look at on the income statement. Profits are revenue minus expenses, and the number you get depends on which expenses you include.

      Looking at Walmart’s financials on Yahoo for the last 12 months, revenue is $562 billion, gross profit margin is $141 billion or 25%, but operating income is $24 billion (4%) after deducting “operating expenses.” It would be interesting to find out which expenses that includes, but they spent the money on something.

      A 4% profit margin is more like what I’d expect from a successful operator of discount stores. We are not talking Apple-level profit margins here.

      8 votes
    3. [2]
      vektor
      (edited )
      Link Parent
      You know what makes me think here? I think a fundamental component of the way capitalism is heading towards lesser wages is that the average capital bound up in a job is rising. In the...

      You know what makes me think here? I think a fundamental component of the way capitalism is heading towards lesser wages is that the average capital bound up in a job is rising. In the waybackwhen, you had skilled craftsmen in rudimentarily equipped workshops. Consequently, most of the revenue goes to the craftsman, not the person bankrolling the workshop.

      Compare that to today, where it's not uncommon for a single employee being responsible for keeping 100k$ worth of machinery running. The capitalist who funded that wants to be paid, so profits need to be made. If the profit isn't enough to make the stock a 5-10% ROI investment, then the profit isn't enough, therefore we need to lower wages. Now, of course the walmart workforce doesn't operate machinery nearly that expensive. But the general pressure to keep wages low means that walmart doesn't need to offer more than they do to get workers - because e.g. skilled manufacturing jobs pay comparatively little (what with them having to fund the machinery), walmart can just follow suit.

      The tendency for the average work equipment to get more and more expensive has been documented for a while now. I think it might be driving wages down.

      Edit: Just realized another effect this would have: It drives up the price of entry for other companies, thus creating less competition on that side of the job market. Additionally, the increased productivity reduces the amount of jobs available. From that profit margin, the employer can afford a lot of bargaining power if the need arises (e.g. due to a competitor popping up), thus making it even harder for other companies.

      4 votes
      1. hungariantoast
        (edited )
        Link Parent
        On the bright side, as work equipment gets more and more expensive the protest value of workers willing to destroy or seize that equipment increases, so long as other conditions (that honestly...

        On the bright side, as work equipment gets more and more expensive the protest value of workers willing to destroy or seize that equipment increases, so long as other conditions (that honestly don't exist yet in the United States) exist. Modern Luddites.

        3 votes
  2. [5]
    Grzmot
    (edited )
    Link
    The linked Federalist article made me laugh so hard I made a meme about it: https://u.cubeupload.com/monarch/Screenshot2021062410.png I have nothing else to say really, the article does a good job...

    The linked Federalist article made me laugh so hard I made a meme about it: https://u.cubeupload.com/monarch/Screenshot2021062410.png

    I have nothing else to say really, the article does a good job of explaining the problems with that logic.

    Edit:

    Last week I saw a short article about a local bakery chain in Vienna having to close a few of their stores because they couldn't find workers. The owner was very confused, as he was offering 1,5k € before tax (the national minimum wage for a 40h full time job), seemingly not realizing that you cannot really live on that wage and additionally to that, bakers don't really have the nicest working hours.

    After taxes, this leaves you with ~1,3k clean cash that lands in your bank account every month. The average price to rent a square meter in Vienna is 13,33€ per month. Finding an apartment under 50 square meters is pretty fucking hard, it doesn't go smaller than that unless you rent a room only, so you can at expect to rent ~650€/month. That's half your monthly wage gone on not being homeless.

    Some people just have no connection to making that little money. They built their business 30 years ago and since wages didn't increase but their profits did, they could comfortably ignore the plight of the common folk. But now their house of cards is collapsing, cause they didn't think long-term.

    23 votes
    1. [2]
      NaraVara
      Link Parent
      That's surprising. Baking is pretty skilled labor and I wouldn't think anyone would even expect to be able to hire experienced bakers at just minimum wage. What did he think would happen?

      That's surprising. Baking is pretty skilled labor and I wouldn't think anyone would even expect to be able to hire experienced bakers at just minimum wage. What did he think would happen?

      9 votes
      1. Grzmot
        Link Parent
        Bakers make shit money. After your apprenticeship, you can expect around 1,6k before taxes, and the average baker income per month in Austria is ~2,3k, topping out at a maximum of 3k if you are a...

        Bakers make shit money. After your apprenticeship, you can expect around 1,6k before taxes, and the average baker income per month in Austria is ~2,3k, topping out at a maximum of 3k if you are a in a managing position. It's not a field to get rich in.

        As for what he think would happen, I don't know. Boomers doing boomer things I guess.

        9 votes
    2. hungariantoast
      Link Parent
      Did Chipotle really need to raise their prices to raise their wages, or could they maybe have cut executive pay instead and, you know, not have given their CEO a 137% raise?

      Did Chipotle really need to raise their prices to raise their wages, or could they maybe have cut executive pay instead and, you know, not have given their CEO a 137% raise?

      5 votes
    3. Autoxidation
      Link Parent
      Your meme is perfect and made me laugh out loud! Thanks. :)

      Your meme is perfect and made me laugh out loud! Thanks. :)

      2 votes
  3. [5]
    spctrvl
    Link
    My reaction was actually, "Holy shit that's cheap." Compared to the benefits of abolishing especially intergenerational extreme poverty, that's nothing. Poverty is a huge drag on society and the...

    The proposal, developed by Naomi Zewde, Kyle Strickland, Kelly Capatosto, Ari Glogower and Darrick Hamilton for the New School’s Institute on Race and Political Economy, would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.

    “With poverty, to address it, you just eliminate it,” Hamilton told me. “You give people enough resources so they’re not poor.” Simple, but not cheap. The team estimates that its proposal would cost $876 billion annually.

    My reaction was actually, "Holy shit that's cheap." Compared to the benefits of abolishing especially intergenerational extreme poverty, that's nothing. Poverty is a huge drag on society and the economy, undercutting the consumer spending that's its lifeblood, weakening labor power, supporting parasite industries like payday loan places, and interfering with efficient allocation of labor by curtailing investment opportunities among the impoverished.

    Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”

    This is short-sighted. Don't get me wrong, I'm all in favor of crushing the bourgeoisie, but somehow we're only told thinks like, "The economy is not zero sum", or "Smaller piece of a bigger pie", when it's the oligarchs making out like bandits. But in the long run, they also stand to gain from the abolition of poverty, even if it decreases their power over the workers, simply because an economy without the drag of poverty is a healthier and faster growing one with greater consumer demand and more niches to fill, and they're in a position to fill them.

    13 votes
    1. [2]
      rosco
      Link Parent
      I had the same thought. We could eliminate poverty with 1/5th of the federal budget? Let's get on that. If you compound the direct savings on programs like unemployment, medicare, or welfare with...

      I had the same thought. We could eliminate poverty with 1/5th of the federal budget? Let's get on that. If you compound the direct savings on programs like unemployment, medicare, or welfare with the indirect savings on social programs, negative health outcomes, bankruptcy, or defaults and the increased consumer spending, forget the progressive agenda, this should be a staunch fiscal conservative's wet dream. It's ludicrous that those arguing for fiscal responsibility always seem to be arguing for fiscal consolidation.

      On the "smaller piece of the pie" note, I think we will see losses from these changes but where we will see them is misplaced. I agree with you that in the long run the vaaaaaast majority of folks stands to gain from workers benefits. But that top decimal percentage (.1%) will lose their proportional wealth, and they are the ones with the means to sow fear that anyone with a 401k that has ridden in an Uber is set to have their life turned upside down. The über rich would have less proportionally and as such wouldn't be able to prey off of the desperation and misery of the lower classes. That is the loss I think about when we talk about "a smaller slice of the pie". I say let them eat slivers.

      7 votes
      1. spctrvl
        Link Parent
        Yes, but the top .1% would benefit more from the societal advancement and stability of a society that has abolished poverty than they would from adding another zero to their already ludicrous...

        Yes, but the top .1% would benefit more from the societal advancement and stability of a society that has abolished poverty than they would from adding another zero to their already ludicrous wealth. It's just that as a class they're typically so monomaniacal that they don't understand that.

        6 votes
    2. [2]
      skybrian
      Link Parent
      A negative income tax and universal basic income are essentially equivalent, or could be made so with a bit of tweaking of progressive tax rates. The difference is that with UBI everyone gets the...

      A negative income tax and universal basic income are essentially equivalent, or could be made so with a bit of tweaking of progressive tax rates.

      The difference is that with UBI everyone gets the same amount, but most people pay it back again with higher taxes. So it’s easier to determine who is eligible and send the checks, but it also looks a lot more expensive.

      If you eliminate the payments being sent out that will just come back again as higher taxes, you get a negative income tax.

      5 votes
      1. spctrvl
        Link Parent
        I do actually prefer a UBI, but I assumed that even accounting for recapturing the excess with taxes, it would cost significantly more than that. Certainly I didn't think the net expense would be...

        I do actually prefer a UBI, but I assumed that even accounting for recapturing the excess with taxes, it would cost significantly more than that. Certainly I didn't think the net expense would be sub-trillion.

        4 votes
  4. NoblePath
    Link
    Side note: setting an fixed amount in legislation is a bad idea. It should be tied to median tax bill or something.

    Side note: setting an fixed amount in legislation is a bad idea. It should be tied to median tax bill or something.

    5 votes