There are criticisms of the calculation of this (it's weighted for food, housing and transport costs are a much large component now than when the index was first created), but it would correspond to $5.84 for an individual, $11.93 for a family of four. In the latter case, I'd assume one parent is working less than full time.
By either measure, and with the requirement that subsistence cover both the worker's and their childrens' living costs, the present federal minimum wage is below subsistence.
How do you figure a few dollars per day for someone within the US?
Where I am located, many millions of people subsist on 100 rupees/day. Adjusting that for purchasing power yields about 6-8 USD.
Granted, I'm not living a place where 75% of the poor own a car, 45% of the poor own their own home, and 67% have at least 2 rooms per person [1]. I'm not in a place where even the middle or upper class have all those luxuries. Yet somehow, in spite of living below what you would call subsistence, there is no mass die-off over here.
In any case, I now understand that by "subsistence", you actually mean "subsistence plus an expanding basket of luxuries." (As I'm sure you know, the federal poverty line measures a fraction of average consumption which has gone up over time, not a fixed basket of goods.) And apparently, some of those luxuries include living in highly desirable areas like NY or SF, which even the federal government doesn't include.
When you use common terms in such non-standard ways, it helps the reader to clearly define what you mean.
In any case, your factual claim regarding "obtaining an input at less than the cost of production" is clearly wrong, as a simple look at other countries will prove that labor can be produced at far lower cost (adjusting for PPP) than the US minimum wage.
I'm aware that the standard of living, including what's considered poverty, is much lower outside the OECD / G7 / G20 nations. Simply put: for the most part that wouldn't constitute a sufficient standard of living to interact with the working world in the US without imposing significant handicaps of opportunity. The reality is that it's not only the ceiling that's higher in the US than in India, but the floor.
The cost of living -- food, shelter, clothing, services -- is simply higher in the US. You're arguing against US Federal standards for poverty, quite standard definitions, by the way, and which, contrary to your assertion, are not normalized for high-cost coastal cities (as I indicated: the costs would be higher there, and living at the poverty line would be distinctly challenging). Living expenses vary across the US pretty markedly. I'm not finding a direct link to lists, but city-data.com has some good lists of various demographics by city:
As for San Francisco: supposing you do happen to live there, the cheapest available housing will run around $200/week or $800/month per room. Few properties will let you have an unlimited number of tenants, so figure on 2-3 people per room maximum, the higher values only if you've got young children. Cost of living also tends to correspond to earning potential. And while housing might be slightly less expensive further out, you'll need transportation: BART will run $15 /day or so, for much of the US car ownership is all but necessary, carrying with it gasoline, registration, insurance, parking, and other costs.
I don't doubt you could establish a lower prevailing subsistence wage in India, but it's not directly comparable to what the same lower bound would be in the US.
Straw man #1: The cost of living -- food, shelter, clothing, services -- is simply higher in the US.
"...100 rupees/day. Adjusting that for purchasing power yields about 6-8 USD."
"...labor can be produced at far lower cost (adjusting for PPP)..."
Straw man #2: You're arguing against US Federal standards for poverty, quite standard definitions, by the way, and which, contrary to your assertion, are not normalized for high-cost coastal cities...
"some of those luxuries [which you seem to think are part of subsistence] include living in highly desirable areas like NY or SF, which even the federal government doesn't include."
Billions of people worldwide produce labor at a PPP ADJUSTED wage vastly lower than the US minimum wage. About 95% of India lives on less than the bottom 5% of the US, PPP ADJUSTED [1], yet still manages to be productive. So clearly your claims that people paying below the US minimum wage are obtaining an input at less than the cost of production is incorrect.
The definition of the federal poverty line is irrelevant. The cost of producing labor is far less than what US employers pay for it, and far less than what they would pay absent a minimum wage.
No, it's not. I've already addressed that the poverty level varies across different parts of the US. It's established by local costs and prevailing wages.
You clearly can't or won't grasp this, and you're presenting arguments irrelevant to this point. I'm not arguing that cheaper Indian labor cannot substitute for more expensive American labor, in some cases, though you may well want to study why it doesn't do so in all cases (hint: labor productivity per worker is much higher in the US, for various reasons, and by various metrics).
Your comparison of US vs. Indian costs of living is in fact a strawman. You might as well compare living expenses in Park Circus vs. Malabar Hill.
I'm not sure I understand the point you're trying to make. I don't share Chris' politics, but the point he is making is straightforward: it is not in fact invalid to compare living expenses between SF and India. The poorest 5% of Americans do in fact enjoy a standard of living that vastly exceeds that of the average Asian. But Asia does in fact remain very productive.
If I'm looking for ordinary gainful employment, or plan on raising a family, there are minimum standards which are imposed, whether through social expectation, law, regulatory requirements (e.g., immunizations for children attending schools, water, power, and/or septic connections for residences, etc.). Not meeting those requirements will put handicaps on your ability to find and/or keep gainful employment independent of your qualifications otherwise.
Arguably a similar state exists within India, but prejudices are far more baked in to the system and are generally acceptable (I turned up numerous articles discussing discrimination by caste, religious affiliation, sex, etc., while doing some associated research for this thread, they make for ... interesting reading).
I'm not addressing the morality of the differences in living standards between the US and India, or even between Park Circus vs. Malabar Hill (both of which are within India, and, arguably, represent a larger divide than that between the median incomes of the US and India (roughly: $42,693 and $1,219/$3,608 nominal/PPP). That's a separate issue and independent of this discussion.
The question at hand is: what is the minimum wage necessary to provide for a sustainable supply of labor, meeting present standards, within the US. And the answer to that question is, of necessity, relative to prevailing conditions, including expectations, within the US.
If I require the labor I hire to maintain certain standards of cleanliness (running water), communcation (electricity & phone), availability (possibly use of a car), then the cost of production of that labor is going to be higher than if I don't require these things. It's quite possible (though I've no idea whether it's in fact the case) that these things are more expected and/or more expensive (relative to other things included in PPP) here.
Comments
Can you then define the "real cost" of labor? Surely it's not subsistence, since that's only a few dollars/day.
I've just referenced the Federal poverty rate elsewhere: $11,670 for an individual, $23,850 for a family of four.
http://familiesusa.org/product/federal-poverty-guidelines (the numbers cited previously are apparently pre-2014 and are slightly lower).
There are criticisms of the calculation of this (it's weighted for food, housing and transport costs are a much large component now than when the index was first created), but it would correspond to $5.84 for an individual, $11.93 for a family of four. In the latter case, I'd assume one parent is working less than full time.
By either measure, and with the requirement that subsistence cover both the worker's and their childrens' living costs, the present federal minimum wage is below subsistence.
How do you figure a few dollars per day for someone within the US?
Where I am located, many millions of people subsist on 100 rupees/day. Adjusting that for purchasing power yields about 6-8 USD.
Granted, I'm not living a place where 75% of the poor own a car, 45% of the poor own their own home, and 67% have at least 2 rooms per person [1]. I'm not in a place where even the middle or upper class have all those luxuries. Yet somehow, in spite of living below what you would call subsistence, there is no mass die-off over here.
In any case, I now understand that by "subsistence", you actually mean "subsistence plus an expanding basket of luxuries." (As I'm sure you know, the federal poverty line measures a fraction of average consumption which has gone up over time, not a fixed basket of goods.) And apparently, some of those luxuries include living in highly desirable areas like NY or SF, which even the federal government doesn't include.
When you use common terms in such non-standard ways, it helps the reader to clearly define what you mean.
In any case, your factual claim regarding "obtaining an input at less than the cost of production" is clearly wrong, as a simple look at other countries will prove that labor can be produced at far lower cost (adjusting for PPP) than the US minimum wage.
[1] http://www.census.gov/prod/2008pubs/h150-07.pdf
I'm aware that the standard of living, including what's considered poverty, is much lower outside the OECD / G7 / G20 nations. Simply put: for the most part that wouldn't constitute a sufficient standard of living to interact with the working world in the US without imposing significant handicaps of opportunity. The reality is that it's not only the ceiling that's higher in the US than in India, but the floor.
The cost of living -- food, shelter, clothing, services -- is simply higher in the US. You're arguing against US Federal standards for poverty, quite standard definitions, by the way, and which, contrary to your assertion, are not normalized for high-cost coastal cities (as I indicated: the costs would be higher there, and living at the poverty line would be distinctly challenging). Living expenses vary across the US pretty markedly. I'm not finding a direct link to lists, but city-data.com has some good lists of various demographics by city:
http://www.city-data.com/toplists.html
http://www.city-data.com/
As for San Francisco: supposing you do happen to live there, the cheapest available housing will run around $200/week or $800/month per room. Few properties will let you have an unlimited number of tenants, so figure on 2-3 people per room maximum, the higher values only if you've got young children. Cost of living also tends to correspond to earning potential. And while housing might be slightly less expensive further out, you'll need transportation: BART will run $15 /day or so, for much of the US car ownership is all but necessary, carrying with it gasoline, registration, insurance, parking, and other costs.
I don't doubt you could establish a lower prevailing subsistence wage in India, but it's not directly comparable to what the same lower bound would be in the US.
Straw man #1: The cost of living -- food, shelter, clothing, services -- is simply higher in the US.
"...100 rupees/day. Adjusting that for purchasing power yields about 6-8 USD."
"...labor can be produced at far lower cost (adjusting for PPP)..."
Straw man #2: You're arguing against US Federal standards for poverty, quite standard definitions, by the way, and which, contrary to your assertion, are not normalized for high-cost coastal cities...
"some of those luxuries [which you seem to think are part of subsistence] include living in highly desirable areas like NY or SF, which even the federal government doesn't include."
Billions of people worldwide produce labor at a PPP ADJUSTED wage vastly lower than the US minimum wage. About 95% of India lives on less than the bottom 5% of the US, PPP ADJUSTED [1], yet still manages to be productive. So clearly your claims that people paying below the US minimum wage are obtaining an input at less than the cost of production is incorrect.
The definition of the federal poverty line is irrelevant. The cost of producing labor is far less than what US employers pay for it, and far less than what they would pay absent a minimum wage.
[1] http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t... (Just in case you missed it: these numbers are adjusted for ppp.)
Straw man #1
No, it's not. I've already addressed that the poverty level varies across different parts of the US. It's established by local costs and prevailing wages.
You clearly can't or won't grasp this, and you're presenting arguments irrelevant to this point. I'm not arguing that cheaper Indian labor cannot substitute for more expensive American labor, in some cases, though you may well want to study why it doesn't do so in all cases (hint: labor productivity per worker is much higher in the US, for various reasons, and by various metrics).
Your comparison of US vs. Indian costs of living is in fact a strawman. You might as well compare living expenses in Park Circus vs. Malabar Hill.
I'm done here.
I'm not sure I understand the point you're trying to make. I don't share Chris' politics, but the point he is making is straightforward: it is not in fact invalid to compare living expenses between SF and India. The poorest 5% of Americans do in fact enjoy a standard of living that vastly exceeds that of the average Asian. But Asia does in fact remain very productive.
Living in conditions which are acceptable for a given cost in India would be prejudicial to hiring consideration in the US.
The question isn't "absolute standard of living", but "what is a necessary income to provide for a supply of labor".
Why is lack of running water, electricity, use of a car, and a private bedroom acceptable in India and unacceptable here?
Again: I don't like where that line of reasoning takes us either, but I obviously find the logic harder to dismiss than you do. Why is that?
I didn't say "acceptable", I said "prejudicial".
If I'm looking for ordinary gainful employment, or plan on raising a family, there are minimum standards which are imposed, whether through social expectation, law, regulatory requirements (e.g., immunizations for children attending schools, water, power, and/or septic connections for residences, etc.). Not meeting those requirements will put handicaps on your ability to find and/or keep gainful employment independent of your qualifications otherwise.
Arguably a similar state exists within India, but prejudices are far more baked in to the system and are generally acceptable (I turned up numerous articles discussing discrimination by caste, religious affiliation, sex, etc., while doing some associated research for this thread, they make for ... interesting reading).
I'm not addressing the morality of the differences in living standards between the US and India, or even between Park Circus vs. Malabar Hill (both of which are within India, and, arguably, represent a larger divide than that between the median incomes of the US and India (roughly: $42,693 and $1,219/$3,608 nominal/PPP). That's a separate issue and independent of this discussion.
The question at hand is: what is the minimum wage necessary to provide for a sustainable supply of labor, meeting present standards, within the US. And the answer to that question is, of necessity, relative to prevailing conditions, including expectations, within the US.
If I require the labor I hire to maintain certain standards of cleanliness (running water), communcation (electricity & phone), availability (possibly use of a car), then the cost of production of that labor is going to be higher than if I don't require these things. It's quite possible (though I've no idea whether it's in fact the case) that these things are more expected and/or more expensive (relative to other things included in PPP) here.
You get it. tptacek and yummyfajitas not so much.
PPP is not COLA.