But why aren't they paying a living wage in the first place, a wage that they were paying in the past if not for inflation?
And wouldn't the cost of the subsidy mainly be spread across the upper end of the middle class and not the employers, making it be a net benefit for the employers?
Walmart for instance already has a huge emphasis on setting their employees up with welfare and using that to pay them a below living wage, why would expanding that system convince employers to pay more?
> But why aren't they paying a living wage in the first place, a wage that they were paying in the past if not for inflation?
Because the market rate for labor doesn't always work out to equal a "living wage". Markets are remarkably good at bringing down the price of goods & services, but that necessarily means that they also bring down the price of labor, which is an input. While this is good for most people, it's obviously less good for those workers that are engaged in low leverage work where net-productivity hasn't changed. As a society, we should help those workers via welfare.
> we'd see the consumer price index dropping. That's not what's happened.
Not for all goods & services. The consumer price index has been falling for most goods & services with the notable exception of healthcare, housing, education, and (to a lesser degree) food.
The only way to prove that “market forces do not reduce prices” is if all goods & services are provisioned through purely market forces, and the CPI still increases. But not all goods & services are provisioned through purely market forces.
The price of food in particular is largely dictated by the price of low wage labor, and minimum wage laws bring that up, despite productivity improvements elsewhere in the supply chain. In other words, the consumer price index for food could drop if the cost of labor wasn't constrained.
> Most of the structures of UBI I've seen seem like a massive redistribution scheme to the wealthy.
Only true for landlords, but that's because the supply of housing is artificially constrained by zoning regulations. If we fix that, then this becomes less true.
Yes, some sub indices have gone up, others have gone down. That doesn't change the fact that _overall_ the CPI has gone up over time. Wages have been having an inverse relationship with prices overall. This is not a case of "prices are cheaper so the wages are less too".
> The only way to prove that “market forces do not reduce prices”
I'm not sure why you're putting in quotes something I didn't say.
> Only true for landlords, but that's because the supply of housing is artificially constrained by zoning regulations. If we fix that, then this becomes less true.
No it's true for all employers that would have had to pay a living wage and now don't because the middle class will subsidize their labor costs.
> Yes, some sub indices have gone up, others have gone down. That doesn't change the fact that _overall_ the CPI has gone up over time. Wages have been having an inverse relationship with prices overall. This is not a case of "prices are cheaper so the wages are less too".
First of all, wages have not universally been in an inverse relationship with price. For example, the median wage has gone up, in real terms, no matter which inflation index you use -> https://twitter.com/Noahpinion/status/1307793622369103872
Second of all, the minimum wage has absolutely increased in most of the US, via state and local minimum wage laws -> https://news.ycombinator.com/item?id=24733559. This is reflected in the urban price of food (CPI-U), which is comparatively more sensitive to labor prices, as an input. In other words the argument isn't "prices are cheaper so the wages are less too", it's "wages are higher, so are the prices". While you may be correct that the minimum wage increases are not always sufficient to outpace overall CPI, they more than outpace CPI for food (less labor), which is why the CPI for food has moderately increased once you include labor.
The goods & services for which CPI has dramatically increased have very little to do with low-wage labor (for now), and the root causes are more sector-specific (zoning, guaranteed loans, lack of price transparency, lack of supply etc)
> I'm not sure why you're putting in quotes something I didn't say.
I apologize, I was paraphrasing. That said, that was essentially your assertion: that if markets do actually bring down prices, then the CPI should have fallen. But that presupposes that all goods & services are delivered purely through unfettered markets, which is not the case.
> No it's true for all employers that would have had to pay a living wage and now don't because the middle class will subsidize their labor costs.
No matter what, the employer never pays that living wage. It's either passed on to the consumer in the form of price increases, or it's paid for by society through subsidy.
I've found it helpful to visualize what this looks like with a concrete example:
Imagine a pizza maker's market value is (say) $5/hour. They are able to produce (for simplicity's sake) 5 pizza's per hour, or $1/pizza. Including other operating costs + 3-5% profit margin (that's the average for most restaurants), let's say that the pizza sells for $5. Thus the pizza maker can expect to earn $40/day, on the market. Suppose, due to rising rents and healthcare costs, the "livable minimum wage" should be $15/hour, or $120/day. There are 2 ways to guarantee this:
A) The government deposits an extra $80 to the worker, allowing them to make $120 that day. They can buy a pizza for $5, which is about 4% of their daily wage.
B) The government mandates a minimum wage of $15/hour, which means that the labor portion of the pizza cost goes up from $1 to $3 per pizza (at the same rate of 5 pizzas per hour). The pizza now sells for $7 so that the shop doesn't go out of business. The worker makes $120/day, and can buy a pizza for $7, which is about 6% of their daily wage.
Notice that in (B), the worker is actually worse off, even though they have the same amount of money in their pocket. The worker has to pay a higher percentage of their pay to afford to eat, but this $2 extra means absolutely nothing to a millionaire, it's pennies to a rich person. In scenario (A), the worker is better off, and the welfare system that sustains it can be funded through progressive taxes, which targets rich people.
> First of all, wages have not universally been in an inverse relationship with price....
First off, don't cite unsourced one-off tweets if you want to be taken seriously.
Secondly, yes, wages have gone up... since WWII. This entire discussion has been about the stagnation of median wages since the late 70s.
> But that presupposes that all goods & services are delivered purely through unfettered markets, which is not the case.
In no case are we talking about unfettered markets, so that has no bearing here. We're talking about the regulatory env of today contrasted with a UBI which is far from unfettered markets.
> No matter what, the employer never pays that living wage....
Continuing to follow that logic nobody pays for anything. "Employers don't really pay for labor" is an incredibly hot take I wasn't expecting to defend against today. If a business transitions from unprofitable to profitable by slashing wages, and sticks that profit in the bank, where did that money come from?
And wouldn't the cost of the subsidy mainly be spread across the upper end of the middle class and not the employers, making it be a net benefit for the employers?
Walmart for instance already has a huge emphasis on setting their employees up with welfare and using that to pay them a below living wage, why would expanding that system convince employers to pay more?