Linky Friday: ‘Cause Ain’t No Such Things As Halfway Crooks Edition
As always, all pieces quoted in Linky Friday are the opinions of the writers, are for discussion purposes only, and are not an endorsement.
Long, thorough breakdown of the Joel Greenberg story, which the Rep. Matt Gaetz allegations and investigation stems from, including receipts:
Sources told Mediaite that it was Greenberg’s obsessive need to destroy Beute’s personal and political reputation that opened the door for all the troubles now swirling around him and his friends, leading to a still-growing number of dominoes falling, one by one, all the way to Gaetz’s doorstep…and perhaps soon others as well.
Greenberg, an independently wealthy man who was interested in cryptocurrency, decided to run for tax collector and allegedly use the resources of the office for that purpose, instead of using his own resources to launch a cryptocurrency business. He is accused of creating a viciously false smear campaign against a primary opponent, Beute, who he most certainly would have beaten if he had just stayed quiet until after the primary.
That alleged smear campaign, supported and promoted by Roger Stone acolyte Engels, attracted enough attention from local press and law enforcement authorities that a sprawling investigation began, warrants were issued, and Greenberg was arrested. Until Greenberg made his easily-traced attacks against Beute, federal and state law enforcement authorities had their suspicions about Greenberg, but do not appear to have had enough evidence to show probable cause to move forward investigating him or to issue the warrants that first gave them access to his computer activities.
Once the door was open, however, Greenberg’s poorly-concealed trail of financial improprieties — again, for allegedly stealing taxpayer funds to purchase items that he could have easily afforded to buy himself — gave investigators ample additional evidentiary paths to follow.
Among the duties of county tax collectors is issuing driver’s licenses, including collecting fees for licenses for new residents, who surrender their old IDs in order to get a Florida driver’s license for their new residential address.
When Greenberg was arrested at his home on June 23, 2020, federal agents found several stolen driver’s licenses in his work vehicle, two fake driver’s licenses in his wallet, and evidence related to creating additional fake licenses at his office. The fake IDs were allegedly created with the photos of Greenberg and some of the young women reported to have been involved in the sex trafficking escapades, but with the names and information from the people who had originally been issued the licenses.
In January 2020, months before Greenberg’s arrest, U.S. Secret Service agents got a tip from an employee of the Seminole County Tax Collector’s Lake Mary office about Greenberg allegedly making fake IDs, including a late night weekend trip to the office in April 2018.
Reportedly accompanying Greenberg on that nighttime escapade: his Congressional buddy, Gaetz.
[LF2] The Challenge of Big Tech Finance by Barry Eichengreen at Diplomatic Courier
The challenges for regulators are obvious. Where a single company channels payments for the majority of a country’s population, as does M-Pesa in Kenya, for example, its failure could crash the entire economy. Regulators must therefore pay close attention to operational risks. They must worry about the protection of customer data – not just financial data but also other personal data to which Big Tech companies are privy.
Moreover, the Big Tech firms, because of their ability to harvest and analyze data on consumer preferences, have an enhanced ability to target their customers’ behavioral biases. If those biases cause some borrowers to take on excessive risk, Big Tech will have little reason to care if it is merely providing technology and expertise to a partner bank. This moral hazard is why Chinese regulators now require the country’s Big Techs to use their own balance sheets to fund 30% of any loan extended via co-lending partnerships.
Governments also have laws and regulations to prevent providers of financial products from discriminating on the basis of race, gender, ethnicity, and religion. The challenge here is distinguishing between price discrimination based on group characteristics and price discrimination based on risk.
Traditionally, regulators require credit providers to list the variables that form the basis for lending decisions so that the regulators can determine whether the variables include prohibited group characteristics. And they require lenders to specify the weights attached to the variables so that they can establish whether lending decisions are uncorrelated with ethnic or racial characteristics once conditioned on those other measures. But as Big Tech companies’ artificial intelligence-based algorithms replace loan officers, the variables and weights will be changing continuously with the arrival of new data points. It’s not obvious that regulators can keep up.
In algorithmic processes, moreover, the source of bias can vary. The data used to train the algorithm may be biased. Alternatively, the training itself may be biased, with the AI algorithm “learning” to use the data in biased ways. Given the black-box nature of algorithmic processes, the location of the problem is rarely clear.
[LF3] It’s Time to Kick Armed Cops Off the Road by By Elie Mystal at The Nation
There is, of course, a way to stop this needless slaughter of Black people for the apparently capital crime of “driving while Black.” We need not live in a world where the police can “accidentally” kill Black people who committed moving violations. The solution is simple and obvious: Abolish armed traffic stops. Use unarmed officers and ubiquitous technology to enforce the traffic laws instead. More Black people will live.
This isn’t as radical as it might sound—or as dystopian. Yes, cameras, drones, facial recognition technology, and the other apparatus of the surveillance state are just as racist as the people who program them. But I can argue a ticket much more effectively than I can dodge a bullet.
In most localities, we already have unarmed law enforcement officers issuing citations for minor vehicular offenses. Parking cops issue tickets all the time, but most of them are armed only with that unforgiving ticket-writing thingy, instead of a gun. And despite the fact that I’ve seen people pull out a thesaurus to come up with the worst possible invectives to shout at these officers, when was the last time you heard about somebody killed by a parking inspector?
There’s no actual reason we should have armed police officers enforcing traffic laws. Government officials don’t need to carry a gun to write a ticket or issue a summons. The state need not send armed paramilitary units to rove the streets looking for people who miss a turn signal. The option of shooting somebody over an air freshener should never be on the table.
I’m not calling for traffic anarchy. Driving is a dangerous privilege. Road traffic accidents are the leading cause of death for people under 54 in the United States. They’re the leading cause of work-related death in almost every industry. I’m constantly aware that getting behind the wheel of a car is the most dangerous thing I do, and sitting in my car is the most dangerous thing my children do. I know I’m much more likely to be killed by a fellow civilian speeding through an intersection than by a cop violating my constitutional and human rights. Cars are so dangerous the Federalist Society probably wants to invent a constitutional right for aggrieved white boys to drive them without a permit.
But we have no evidence that siccing armed police officers on people suspected of moving violations makes our roads safer. Indeed, technology has advanced to the point where many traditional traffic enforcement duties are being handled by the surveillance state instead of the police state.
Like the business owners in Ohio, Ruiz and Rudzki say the generous government benefits are the primary impediments to hiring. “You can’t incentivize people not to work,” says Ruiz, a longtime Air Force veteran. “You need to have incentives to get people to work, not to stay home. You’ve got the hard workers who want to have a job, but the others need that motivation.”
“The government jumped in and helped in a crisis—it was the right thing to do at the right time,” says Rudzki. “But now, let’s admit there’s a problem and let’s fix it.”
One overriding concern: One part of the “fix” is five months away. That’s when the federal unemployment supplement expires. Several of the business owners we interviewed volunteered the exact date—September 6—without prompting and told us their hiring strategies are built on more labor availability then.
If these employers draw a direct connection between government support and their hiring challenges, the data are suggestive but not dispositive. N. Gregory Mankiw, professor of economics at Harvard University and chairman of the White House Council of Economic Advisers (CEA) under George W. Bush, says that while the conventional view of the current labor market suggests there is still a lot of slack, there are some counterindicators. The job openings rate (4.9) is higher than at any point in the last two decades, a data point “consistent with the stories you have been hearing and suggests a tight labor market.” The “quit rate” points in the same direction. “It is hard to say whether that apparent inconsistency (between employment, which is still well below the peak, and openings/quits) is due to policy, such as excessively generous UI,” says Mankiw. “That is a plausible hypothesis, but still unproven.”
Jason Furman, also a professor of economics at Harvard and the former chairman of the CEA under Barack Obama, says while labor shortages do not yet show up in the data, it’s likely that the government programs are slowing hiring. “The usual sign of an unusual degree of mismatch between workers and jobs is rising wages in the sectors with labor shortages that draw new workers in. So far we do not see those in the data (in fact wages have grown more slowly in the leisure and hospitality industry than in the economy as a whole), but we also do not have particularly good data for March and have no data for April so I would not rule out labor shortages,” Furman tells The Dispatch.
“All of that said, I think the $300 a week supplement for unemployment insurance, relaxed eligibility for unemployment insurance, and 100 percent federal subsidy for COBRA is going to hinder the labor market recovery at some point if it has not already,” he added. “More than half of workers will get more from being unemployed than they would be from being employed. Many of those workers will still choose to get jobs for the security it affords but definitely there is a heavy thumb on the scale of staying waiting until September to take a job. No one has ever studied this scale of benefits as a pandemic is ending. Congress should have tapered the benefits so they phased down to $100 a week over the summer (especially since the same unemployed workers are also getting checks so could maintain their consumption).”
For Dan Sinykin, who runs Monterey Mills, a textile producer with operations in Wisconsin and North Carolina, the influence of the government support was clear and direct. Although he raised his wages 30 percent overall during the worker shortage, he’s been unable to return his operations to fully staffed. And his labor flow has closely tracked with the federal government’s boost to benefits. “We definitely saw a resurgence when the second stimulus check was cut,” he says. “I think we lost 19 employees that week… We definitely saw more employees not return to work when [stimulus checks and unemployment supplements] were distributed.”
[LF5] Bill to enlarge the Supreme Court faces dim prospects in Congress By James Romoser at SCOTUSBlog
Expanding the size of the court – once a fringe idea – has become a rallying cry for many liberal Democrats who remain angry about how Republicans handled Supreme Court nominations in 2016 and 2020. Under Majority Leader Mitch McConnell, the Senate refused to give a confirmation hearing to Merrick Garland in the final year of the Obama presidency but, four years later, rushed to confirm Amy Coney Barrett weeks before the November election.
“We have a stilted, illegitimate, 6-3 conservative majority on the court,” Sen. Ed Markey of Massachusetts said at a press conference outside the Supreme Court to unveil the legislation. “Republicans stole two seats on the Supreme Court, and now it is up to us to repair the damage.”
But despite its support on the left, and despite the fact that Democrats now control both chambers, the bill has little chance of passage in the current political environment. President Joe Biden said as a candidate that he is “not a fan” of proposals to expand the court, and last week, he appointed a commission to study various types of court reform – a further indication that he has no interest in endorsing a sweeping plan to add seats in the short term. House Speaker Nancy Pelosi told reporters on Thursday that she does not intend to bring the court-expansion bill to the floor. And Sen. Dick Durbin, the Senate’s second-highest-ranking Democrat and the chair of the Senate Judiciary Committee, suggested that lawmakers should wait for Biden’s commission to issue a report, which is due within 180 days of its first meeting.
“I want to give the commission this time to do their due diligence and review the measures they recommend when it comes to important potential reforms of the court,” Durbin said through a spokesperson.
Republicans have condemned proposals to add seats to the court as politically motivated court-packing. The Judicial Crisis Network, a group that advocates for conservative judicial nominees, said Thursday it was launching a $1 million advertising campaign to oppose the bill.
Titled the Judiciary Act of 2021, the two-sentence bill would change the number of justices from nine to 13. In addition to Markey, the bill is sponsored by three House members: House Judiciary Committee Chair Jerrold Nadler of New York, Rep. Hank Johnson of Georgia, and Rep. Mondaire Jones of New York.
Congress has the power to determine the size of the Supreme Court, and it has changed the number of justices seven times in the nation’s history, from a low of five justices to as many as 10 justices at one point. But the size of the court has remained fixed at nine justices since the late 19th century.
Even the bill’s sponsors seemed to acknowledge its high political hurdles when speaking with reporters outside the court on Thursday. “I believe Speaker Pelosi and others will come along,” Nadler said. Markey added that, for the bill to have any chance of clearing the Senate, that body would first have to abolish the filibuster.
This story is absolutely, tragically bonkers…
Barney Harris was the basketball coach at Union Academy in Monroe where he was well-loved and respected, but Alamance County Sheriff Terry Johnson said there was another side to Harris that most people didn’t see — one that was involved in the dangerous and deadly drug world.
Channel 9 learned Harris and his brother-in-law, Steven Alexander Stewart, went to a mobile home park on Wyatt Road in Green Level, North Carolina in the early morning hours of April 8 to steal money and drugs from the Sinaloa Cartel’s stash house. Johnson said the Alamance County Sheriff’s Office was flooded with calls just after 12:50 a.m. in reference to reports of gunshots being heard at the mobile home park.
When they got there, deputies said they found Harris in a bedroom with several gunshot wounds. He was pronounced dead at the scene.
Investigators said 18-year-old Alonso Beltran Lara, who was a member of the cartel, was also found with gunshot wounds. Deputies said his feet were bound and his arms were tied behind his back. He was taken to a hospital where he later died.
Detectives said Harris and Stewart broke into a trailer and Lara showed up while they were inside. Deputies said the men questioned Lara about the stash and when he didn’t give them the answers they wanted, they shot him in the head. “And they were trying to find the money and drugs and apparently he didn’t give them the information to do that and he was technically close range, two bullets to the back of the head, he was executed,” Johnson said.
Johnson said after the pair killed Lara, other members of the cartel showed up and Harris was killed in the gun fight that followed.
According to Johnson, dozens of bullet casings were found at the scene. Some pierced through other trailers in the community, but no other injuries were reported. “The trailers that were shot up, it looked like an old Western shootout, that’s what it looked like,” Johnson said. The sheriff said Harris was wearing a bulletproof vest but that it was no match for the high-caliber firepower of the cartel’s guns. “Mr. Harris, he had a bulletproof vest on, but it did not work with the kind of ammunition that was used,” Johnson said. “He had gloves on, and he, they went there to do what was done except they did not think it was going to backfire on them.”
Detectives believe Harris and Stewart had been using electronic trackers to follow members of the cartel before the shootout. Johnson said Stewart, who is from Wadesboro, survived the shooting and was arrested on Sunday. He has been charged with first-degree burglary, first-degree murder and possession of a firearm by a felon. Steven Alexander Stewart Steven Alexander Stewart survived the shooting and was arrested. He has been charged with armed robbery and murder. Harris was hired by Union Academy Charter School in July 2017 as a high school Spanish teacher and served as the head coach for the varsity men’s basketball team and varsity men’s track team.
“It’s just hard to understand,” Johnson said. “The fact that someone like Mr. Harris, who apparently had a pretty good life as a teacher and a coach, wound up in this type of crime.” Johnson said he is concerned that the shootout could lead to a drug war with the cartel seeking revenge against Harris’ loved ones. “I’ll tell you right now, as sheriff, I’m still worried about some retaliation because Mexican cartels — they don’t forget. They’re going to pay someone back somewhere,” he said.
Deputies said they found about two pounds of cocaine in the trailer along with $7,000.
Juan Daniel Salinas Lara is wanted in reference to this crime and has active warrants for trafficking cocaine.
Retroactive
This Week At Ordinary Times:
The Hunger Games: I Volunteer As Conscript by Kristin Devine
It’s pretty unfair to say, “but The Hunger Games characters had their agency removed!” I mean, yeah, duh, that was kind of the point.
61-Year-Old Minnesota Man Arrested, Unharmed by Sam Wilkinson
Minnesota man arrested unharmed after assaulting store employee, attacking a police officer with his vehicle and a hammer, and fleeing.
Thursday Throughput: Neil deGrasse Tyson, Science, and Facts vs Truth by Michael Siegel
It’s fashionable to say, “believe the science”. But science is not a belief; it’s a series of facts and our interpretation of those facts
Noam Chomsky, Ron Paul, and American Hegemony by Russel Michaels
When conservatives mention that certain sectors of the American left despise America, Chomsky’s American hegemony BS is not far behind.
No Charges in Ashli Babbitt Shooting: Read It For Yourself
The US Attorney’s Office for DC has closed the investigation into the fatal shooting of Ashli Babbitt, one of the more infamous images from the January 6th Capitol Riot.
Unworthy Schemers, Demographics, and Nothing New Under The Sun by Andrew Donaldson
If you listen to them closely enough, the unworthy schemers always will tell you it is all about them. We should believe them when they do.
President Biden Sets Date For Afghanistan Exit, For Real This Time, Supposedly by Andrew Donaldson
We’ve heard it through three different administrations, but President Biden says he means it: America is getting out of Afghanistan
CDC and FDA Against Johnson & Johnson Vaccine by Michael Siegel
Suspending the use of the Johnson & Johnson vaccine right now seems an over-reaction that is likely to get more people killed.
Stacey Abrams’s Big Lie Has Real Consequences by Eric CunninghamStacey Abrams doesn’t seem to realize that her words have consequences and her claims will be taken seriously outside the political sphere
Things Just Ain’t the Same: African Americans, Progress Made, and Work To Be Done by Dennis Sanders
Even though problems remain, and there is still work to be done, African Americans can’t forget the progress that has been made.
Respect My Authority!!! by Russel Michaels
Respect for (false) authority is a common logical fallacy that everyone who needs someone to trust them for something has to deal with.
Sunday Morning! “A Little Devil in America” by Hanif Abdurraqib by Rufus
Hanif Abdurraqib’s song of praise never elides Black pain or the reality of racism; but centers and is held aloft by Black miracles.
LF5: Expanding the court is a sugar rush. Stay away from the sugar, eat the responsible diet, implement term limits.Report
LF4: My experience is that business owners want to do everything to “incentivize” employees except pay them more money.Report
I can kinda see this, that they are seeing this as a temporary hiccup, so offering more money will bite them in 6 months when the supply of labor increases, especially since they’ll have to pay current employees more as well.
They should still just pay more, but I understand why they balk.Report
Business owners operate like this under normal circumstances though. Like the idea of having to offer more money to get workers is just heresy to them. I understand that they want more for themselves and to run the business but still.Report
Oh, I agree, and it’s not just small business owners, even major corporations would rather do anything other than offer more money to attract workers. And I think a lot of it has more to do with giving out raises than offering more. You get a cohort who come in at a higher wage because labor is tight, and it won’t be long before you have to raise wages across the board to avoid losing people, unless labor loosens up again real quick.Report
Exactly. One of our local popular oyster houses is now offering $12 as starting salary for non-tipped employees. Problem is they aren’t changing the base for tipped workers who are the people they need to hire. And then lamenting that can’t get enough people to work. Idiots.Report
Back when I was working for the state legislature, I was listening to an interim commission hearing on growing the number of jobs in the state. At some point during the testimony, the clearly exasperated chairwoman asked, “Is there anyone here waiting to give testimony whose starting wage for the new jobs they say they’ll bring if we give them help pay enough that the worker doesn’t qualify for one of food stamps or Medicaid? No? Then we’re done for the day.”
Not too many years after that voters passed an initiative that raised the state’s minimum wage to $12/hr for 2020, plus inflation (this year, $12.32). Low end retail jobs along the Front Range are typically starting around $15-16/hr, so it’s in practice a minimum wage for rural areas. Those areas claimed wages that high would put them out of business, but they seem to have figured out how to cope.Report
Why employees aren’t hustling back to restaurants.
https://www.eater.com/22417344/restaurant-labor-shortage-covid-19-unemployment-benefits-risksReport
[LF-1] – I’d note that any Democratic politician so described would already have been run out of DC on a rail.
[LF-3] – This is yet ANOTHER case where we collectively know how to alter these situations and refuse to use those data. This sort of resource shift is what one segment of the Defund the Police movement advocates for, but even that is seen in too many places as some deeply abhorrent Commie conspiracy. So more black men will die in traffic stops.Report
Taking a look at the 2019 Officer Death stats, I’m not seeing any justification for armed officers doing traffic duty.Report
The Brits sure don’t do it that way.Report
A brief history of the commodification of art:
https://www.youtube.com/watch?v=qjQPCnjM3BgReport
Via Balloon Juice, Kiglore Trout on Twitter breaks it down step by step how the rightwing tale of “workers loafing because of the social safety net” goes from one failed restauranter to national headline:
https://twitter.com/KT_So_It_Goes/status/1383099116486594565
Basically, the dude is a member of the local gentry who has connections in the media, and manages to gain a number of sympathetic ears, none of which bother to do even the most cursory check of him or his business.Report
Damn, something useful on Twitter.Report
What I find interesting in these sorts of “lazy loafers” stories (and they have a long lineage, dating back to at least the Victorian times and the birth of the modern industrial economy) is how people regard work.
Economists especially of the free market variety tell us that labor is a commodity to bought and sold on the open market, and its price and supply ought to follow the laws of economics.
But is it really?
For example, an argument could be made, has been made, that some sort of UBI would benefit the economy overall by giving people the freedom to pursue more speculative ventures like education or entrepreneurship.
But what’s odd is that resistance to this idea of paying people money whether they work or not meets fierce resistance, even from those who would benefit the most from it.
Because as the story above shows us, people generally don’t think of work in detached objective terms, they think of it in moral terms, that work itself is a moral good and people ought to do it regardless of the economics of the situation.
This view holds a collectivist view of the economy, that everyone has a duty and responsibility to work.
Which is why even though I support the idea of a UBI, I have really strong doubts as to whether it could be a political reality.Report
Be that as it may, we can actually see this phenomenon reflected in the stats. The red line is the unemployment rate (U3), and the blue line is the job openings rate. As you can see, the job opening rate is at the highest level since the BLS started measuring it in 2000. But what’s really extraordinary is that it’s at 4.9% with an unemployment rate of 6.2%. The last time the unemployment rate was that high was in April 2014, when the job openings rate was only 3.2%. And in July 2003, when unemployment was at 6.2%, the job openings rate was only 2.2%.Report
I don’t think anyone is doubting the reality of the trend, only that it has a simple fix.
Offer higher wages.Report
Was the point of Chip’s comment and the linked Twitter thread not that this is fake news based on the lies of one particular individual? That’s the message I thought I was supposed to take away.
Anyway, “just raise wages” isn’t always a viable solution. You can only raise prices so far before you start losing customers. Now, under normal circumstances I’d say that if you can’t hire the workers you need at the wage you need to pay to make enough profit to justify keeping the doors open, you should probably shut down. But when you’re hiring mainly unskilled workers, it can be tough to compete with the $400, $500 or more government is paying people each week to do literally nothing. How many people are going to work 30 hours per week for $20/hour when they can get $500 for nothing? After payroll taxes, you’re only netting a dollar or two per hour!
The government doesn’t just have its thumb on the scale; it’s going full Chauvin on the scale.Report
Telling employers to “just raise wages” in a situation like this is like telling an athlete complaining about competitors using steroids to “just train harder.”Report
Here’s where I get confused. Seems to me that higher wages for unskilled laborers increases the amount of disposable income those folks can spend thereby increasing the overall GCP (gross community product 😉 which leads to more equitable wealth distributions and higher standards of living.
Now, of course *mandating* that increase will (let’s agree) put some employer with low profit margins out of business. But in the long term, shouldn’t the lost jobs/capital due to the wage boost be recaptured by new jobs/capital investment trying to capture some of that increased GCP?
One other thing: to your specific point about high unemployment benefits working against employers’ ability to recapture those workers even at a higher wage, doesn’t this suggest that high UI payouts will have an indirect effect of increasing wages over the long term anyway?Report
The ol’ pay your burger flippers enough that they themselves can buy burgers from you too theory, eh?Report
Ha! My robot burger flippers don’t want to buy my burgers!Report
The machines are still a few generations away from getting a taste for meat.Report
Burger flipping isn’t the only place they can reduce the number of staff. McDonald’s here was experimenting with ordering kiosks and centralized handling drive-through orders. The latter seemed to do okay. Particularly outside of the rush hours, one person could handle two or three franchises. The former was, IMO, designed to fail. It took an insane number of button presses to tell them, “Quarter pounder meal, medium, no cheese, Diet Coke.”
For hobby purposes I’ve been looking at a couple of pieces of software that the creators are billing as “speech to intent.” Limited vocabulary, aimed at pulling out keywords very accurately and ignoring the rest. And let’s face it, for the wages you pay one person to work the cash register for a day, mostly doing speech-to-intent processing and pushing buttons, you can put a super computer in the kiosk.Report
The other thing about remote-operator drive-thru orders is that your restaurant staff no longer has to speak English, which means that McDonald’s can respond to minimum-wage laws by just paying illegal immigrants cash under the table.Report
How is that true if it’s a condition that affects everyone. I can see your point if one business, was impacted, but if it’s impacting every business looking for workers at that level, then I fail to see who is on steroids?Report
So you’re saying that the government is establishing a minimum floor on wages, and thereby forcing all businesses to offer more than that?
Sounds like a win-win to me.Report
There is a difference between a $15/hr minimum wage paid in return for (presumably constructive) labor, and $600/week long-term unemployment (or a UBI at that level) given in return for no labor. I’m sure there’s an equilibrium state, but I always worry about transitions.Report
Raising wages doesn’t have the impact on costs for restaurants most people think it does.
Standard is that 1/3 of costs should be food, 1/3 wages, 1/3 overhead. Then you add your profit margin.
So, let’s assume a $10 burger and fry meal. $3 wages, $3 food, $3 overhead, and you make $1. Across the board raise of 25% from $12 to $15/hour. So, now wages are $3.75. Damn. There goes 3/4 of your profit. That’ll torpedo you.
But… can you charge $10.75 for that burger? How much business will you lose as a result? Likely, not much. And you gave everyone a 25% raise. Yowza.Report
Especially if all your competitors were also forced to give their employees the very same pay raise.
I get what the market fundamentalists are saying, that it isn’t possible to just arbitrarily command the economy to produce higher wages without some sort of side effects or negative consequences.
But it is equally true that economies are like ecosystems, they are marvelously adaptable and durable.Report
I’m not weighing in on any specific policy but the notion that small increases in wages will make costs skyrocket is just misplaced.
It has an impact, no doubt. Anyone saying it won’t isn’t being honest. But so too is anyone saying that the impact is enormous.Report
Right, I understand that the price increases are not one-to-one, but it is important to note that wages are also embedded in your non-payroll expenses. Your ground-beef supplier has workers to pay, which means that the price you pay for ground beef will go up as well.
So if payroll is 30% of your expenses, your costs won’t go up 10% for a 10% increase in wages, but they’ll probably go up more than 3%. Maybe 5%.
Also, as I pointed out above, even $20/hour probably isn’t competitive with $500/week unemployment, unless people are so desperate for extra money that they’re willing to work for $1-2 per hour. ($20 x 30 hours – 0.0765% payroll taxes = $554, so a net of $54/30 = $1.80/hour).We’re probably looking at $25/hour or more to be reasonably competitive with a bit of light unemployment fraud. Of course, in some states unemployment might be as low as $400 or so ($300 federal + $100 state), so there’s a little give there.Report
“let’s assume a $10 burger and fry meal”
me: (looks at McDonald’s ad campaign touting their $3 burger and fry meal) How about let’s don’t assume that?Report
First off, ISWYDT, nicely done.
Second, unless there is evidence the unemployment benefit is the federal governments attempt at backdoor minimum wage (rather than a short term experiment in UBI), I’m not sure how there are any thumbs, much less knees on the scale. The term implies an intent to muck things up, rather than simply providing a stop gap for the (ideally temporary) loss of jobs. Since government can not know exactly when the crisis will abate enough to eliminate the need for the extended benefits, they have to kinda pick a term that will hopefully fill the gap.
Businesses complaining that they can’t get people to come back to work because the benefit exceeds the wage they are willing to pay is not a thumb on the scale, it’s them complaining that they don’t want to have to pay more and thus raise prices. Even though every economist out there is expecting some degree of inflation after the restrictions are relaxed and folks start going out and spending money again, so businesses will probably raise prices anyway.
As for the Twitter thread, here we have a guy who is not some small business owner barely hanging on to their livelihood, casting himself in that role because he just don’t wanna pay more money to attract employees. I have very little sympathy for people who what to put on a pity party for themselves because the realities of economics are a b*tch.
He can either offer more, or struggle through until the benefits expire.Report