Wednesday, August 05, 2020

As the rest of the economy tries to catch up with healthcare and home prices

Generous unemployment benefits have given many Americans a taste of higher incomes. Going back to our low paid real jobs is less lucrative.

Maybe the minimum wage should go up to $15 per hour, or even more. Problem is, that doesn't come without consequences. Goods and services, that low wage workers provide, would go up in price. That's okay with me. Let gym memberships go up in price. I work at a YMCA. This could present problems, however.

Food prices would go up so food service workers can make more money. Executives and high paid professionals would have to see their wages go down; or at least their buying power go down. Their taxes would probably have to go up as things like government subsidized healthcare are part of this discussion.

As a society, we have become accustomed to low cost goods and services. It's kind of like being spoiled. Americans have become accustomed to low cost goods and services compared to rising home values stocks and professional salaries at least. Low cost compared to certain services, like medical specialists.

Food is probably too cheap. Gym memberships should maybe be more like $100 per month.

I got to thinking that for many services, like gym memberships, we are not competing with low wage workers in other countries. That argument is used against high wages for manufactured items that can just be imported for cheaper.

Most Americans don't work in manufacturing, anymore. We sell services to the American market. Services, like gym memberships, that are not easy to import.

Problem is, there still is competition. Competition from automation. When labor costs too much, business automates.

For gym memberships, there is competition from the great outdoors; especially during this wonderful weather we are now experiencing in Western Washington.

I do like the idea of a guaranteed minimum income. Just print more money and give it to people; especially lower income people. Eventually the dollar goes down in value so the assets of the rich are taxed anyway. The hidden tax of inflation. Home values, stocks and whatever can come down relative to things like food, for instance.

Some will say that higher wages creates more prosperity due to bolstering the consumer driven market. This may be true; especially when minimum wage laws apply across the board so folks can't just go down the street to another business that's undercutting someone's wage / price formula.

At the same time, these complex situations also vary from region to region. $15 may still not be enough to live in Seattle; land of million dollar fixeruppers, but this could have a totally different effect in a place like Pomeroy, Washington. Who's ever heard of Pomeroy? I have, I grew up in Pullman, not far from there.

Some of my thoughts related to reading this article from Salon. Why the idea of jobless benefits scares the conservative mind The pandemic has allowed us to conduct an experiment on how government assistance is good for the economy.