Alternative to government welfare

What percent of the population is "working poor"?

 

Not Amused, various USA government agencies from federal down to local agencies consider various percentages above the federal poverty level as for their agencies’ purposes, eligible for their particular programs. Their programs may be limited to only what those programs consider, (if not actually expressing) as their participants ”working poor”, or their programs’ “caps” may be extended to also include some portion of what’s often referred to as “lower middle income earners.

When I write of lower income earning employees I take the broader view of including all fulltime employee incomes s purchasing powers that are significantly affected by the federal minimum wage, (FMW) rate.

[The FMW rate’s purchasing power to some extent affects ALL USA employee compensation but it doesn’t affect them all equally.

Excluding jobs for which there’s a shortage of potential or actual qualified labor, the affect upon a job’s pay scale is generally proportional and inversely related to the purchasing power of the difference between the minimum and the job’s rate; (i.e. lesser earners are more affected).
Considering that relationship, I would suppose that pay rates of those not earning more than the median rate are perceivably affected and the lower quarter of our entire full time employees’ pay rates are significantly affected by the purchasing power of the FMW rate].

A major proportion of our lowest earning quarter of full time employees are what I would consider as our “working poor”. That’s in excess of 12% of USA’s full time employees.

Refer to: http://www.politicalforum.com/economics-trade/270559-consequences-repealing-minimum-wage-rates.html

Respectfully, Supposn

 

A more pertinent question would be "why does it exist in a mature economy?". Such an economy should be characterised by high productivity and upskilling. The abundance of low wage labour in the US shows a structural flaw in its economy

 

And as a result I requested the logical argument to support that position and reiterated my argument regarding the incentives faced by those in this position.

The question is: Why would a person (not burdened by societal pressures) work if they can receive a similar income and maximize their leisure time?

For the peanut gallery: This isn't to say that I think these people would sit idle, they may very well engage in productive activities, but I can't understand the incentives that would lead this type of person to rejoin the traditional workforce.

Assuming these can be quantified, my boss can't know how much I like my job vs. my co-workers or even relative to workers in other jobs and that these non-pecuniary benefits are static amongst those in these jobs. They aren't, so the notion that wages ought to fall because some folks in these professions actually enjoy working is unrealistic, well unless we're assuming some level of omniscients.

That wages would tend to remain elevated for jobs that are in high demand despite the satisfaction that workers in these fields garner is central to the issue when you state that wages ought to fall as a result of benefits outside of direct compensation. You can't make a ceteris paribus argument here particular in light of the professions I chose in my example since the demand for both is and will likely continue to increase.

I can't speak to heterodox exclusively, but the bit of literature I'm aware of regarding work disincentives relies on the availability of opportunities and that results are consistent across all regions. Which circles the wagons right back to where I started.

 

You could be right, but another contention might be the way in which poverty is measured. It'd be hard to state that even the worst amongst us have it as bad someone doing just "ok" did in not-so-distant history. I'm certainly concerned with the aggregation in the financial sector but I'm skeptical about whether it's a flaw in the system or an issue of how much access those in the financial sector have to influence legislation.

 

My comment was based on the standard leisure-consumption trade-off approach to labour supply. That describes how work disincentives are a particular concern when corner solutions are created in the income constraint. The use of more generous benefits, by reducing effective marginal rates of tax, eliminates these issues.

You disputed that approach. You were asked to therefore attack it. However, all you've come out with is comment over the nature of the indifference curve.

There are two goods here, leisure and consumption. The point with more generous welfare is that, as benefits aren't taken away as aggressively, there is an available utility gain from giving up leisure.

You were presented mind you with an alternative approach that focused on scarring effects. This was used to try and understand the empirical evidence where welfare dependence effects aren't found.

They don't have to be quantified. There would be a consequence on the labour supply curve and therefore an impact on wages.

You're being silly. Of course I can make a ceteris paribus argument. Its the basis of the economic approach after all.

Sounds like you don't have anything. You can't refer to any heterodox schools and the orthodox approach rejects the simple disincentive conclusion.

 

One would expect it is education / training level, as better education is associated with much lower unemployment rate.

A more pertinent question would be why recent graduates in the US have a 53% unemployment rate, compared to a 20% in UK, or Germany with 11.6%.

The US economy is characterized by high productivity, but only to design and manufacturing sectors due to automation.

At one extreme, activities like software and entertainment have a high fixed cost, and a very low per unit cost (the size of the market has no impact on fixed costs). At the other, service sector jobs can do little to improve productivity (how much can you speed up a haircut?). Product manufacturing lies somewhere in between, automation reduces cost, but the "fixed" costs associated with automation increase with market size.

Uneducated / untrained labor has little value in the marketplace.

What type "economy" eliminate low wage labor?

 

Always the anti-Americanism with you people! Always the blame game.

Start by shifting away from neo-liberalism. It is not of any surprise that it is the UK and the US that standard out somewhat as countries with high 'low wage' labour demand

 

Anti-American? I have no idea what you are referring to.

What would you shift toward?

 

You seem to be going for the standard supply-side explanation for the US low skill abundance. That attacks the ability of Americans and therefore anti-American is appropriate lingo.

Me? I'm a socialist, you're asking the wrong person. However, a shift to liberal democracy (with labour markets characterised by stronger collective bargaining and the use of living wage policies) would help