The Future of Poverty: the $15 Minimum Wage.

let's talk about the future of poverty
[Music] have you heard that phrase even once from joe biden bernie sanders donald trump or anyone else the future of poverty the poor you will have with you always it's an issue we think about less and less because we rely on minimum wage more and more right and it's not just that we rely on minimum wage pragmatically right we rely on it ideologically too right minimum wage represents a tremendously appealing ideal for our society minimum wage presents to us the ideal that you don't have to give a tip to the doorman who opens and closes the door for you when you exit your apartment because he's making enough he's making enough money to have a decent quality of life no matter how humble his job might be it's the ideal that you know amazon.com a huge company like this amazon they don't have to worry about the guys who work in their warehouse stealing from them because they know these guys are being paid enough whether it's ten dollars an hour or fifteen dollars an hour that they are earning a decent wage to have a decent quality of life that at the hospital they shouldn't have to fear the janitors the people who sweep the floor take out the garbage they shouldn't have to fear the janitors and the people who do the laundry stealing from the patients stealing medication from the doctors to sell on the black market because they are being paid enough many of the fundamental tensions in our society that you could read in novels from the 19th century not that long ago disappeared because of minimum wage but we also stopped thinking about the future of poverty right now i was raised with a very powerful misconception i don't know if you grew up this also i was raised with the pyramidal diagram of our society a triangle really not not so much a three-dimensional pyramid to be perfectly honest the idea that there's a small social class of the wealthy of the elite at the top of the pyramid and that their wealth comes from oppressing the people at the bottom and that the larger the number of those poor people at the bottom and the more oppressed they are and the less they're paid then the wealthier the people at the top will be that there's a reciprocal relationship between these things that the riches of the richest people among us really are a consequence of the poverty of the poor and that from the perspective of captains of industry the perspective of executives who own huge corporations and from the perspective of the elite in power in our government the more poor the better the less they're paid the better the more oppressed they are the better because who benefits the people at the top of that pyramid now this is false and it's false in a very simple arithmetic sense look at how much a lawyer or doctor or professor pays in taxes take the time get a pencil and paper if you don't believe me i've gotten lots of fan mail people don't believe me try to calculate how much someone pays in taxes in your country it's easy to google this stuff how much was some would someone pay an income tax there and a hundred thousand dollars a year two hundred thousand dollars a year three hundred thousand dollars a year you may have never thought about it those people pay a lot in taxes they really do now calculate how much a person will pay in taxes if they only earn twenty thousand dollars a year all right there's a really important arithmetic sum missing and that is the cost to the government in lifetime benefits the person who only earns twenty thousand dollars a year and wherever you're living they probably very little in taxes or maybe nothing at all that person still received an education provided by the taxpayer they probably receive more medical benefits provided by the taxpayer because a lot of rich people buy things for themselves that they could get for free from the government it's a little bit different in every every country but nevertheless the the total cost to the government is higher for for the poor especially the poor support and this person even if they're hail and hearty today they're healthy eventually they're going to retire eventually they're going to grow old and die and then they're going to cost the government even more so we do full life cycle analysis looking at the life of one poor person or a hundred poor people or a thousand or a million what you realize is the government is not getting rich by oppressing the poorest of the poor the parasitic relationship is between the government and the wealthy it's the wealthy who provide the government with money and the government really does redistribute that to the poorest of the poor sometimes just in terms of money food stamps money unemployment payouts the dole as the british sometimes just literally the government is taking money from the rich giving money to the poor but much more profoundly the government is spending millions and billions of dollars to provide services and benefits to the poor they otherwise could not enjoy whether that is running water or electricity or education or the ability to ride on a train or a bus all of these things are subsidized to an unbelievable extent every day that we take advantage of and take for granted and it's the poorest of the poor who benefit most and pay the least they may in taxes pay nothing at all when you do the math when you subtract the benefits from the taxes over a full life cycle the poor costs the government money they don't make the government money and then what's harder for people to accept is that for almost every business you can imagine that exists in the 21st century in a western democracy this is also true about the minimum wage people in a corporation in a gold mine in a law firm let's start with the law firm as the simplest example okay you think the law firm gets rich by paying the janitor as low wage as possible the owner of this law firm may be may have a black heart he may be a terrible person he may want to pay the janitorial service less than minimum wage and that's bad and i'm morally opposed to that i don't i don't believe in economic efficiency it'll cost it's more economically efficient for him yes if he can if he can pay the uh the janitor as little as possible but the janitor is not producing the value the product the output of this corporation this law firm in this case right the janitor is kind of a drag on productivity they need him they need someone to take out the garbage and sweep the floor you don't want the lawyers wasting their time they need someone to wash the windows let's say things like this that are quite time consuming and people can't just put down their legal briefs and start washing them or at least maybe they could but that's not the way this particular law firm is organized it's not organized not such egalitarian principles i know a lot of schools in japan that are organized that way where the schools say no the teachers are the janitors the teachers watch the windows everyone takes terms you can do it you you can try but in any case this law firm they may want to pay the janitor as little as possible the productivity the profitability of the law firm entirely concerns people who are paid much much more than minimum wage and they work together their productivity comes out of a cluster the job they do couldn't be done by just one person sitting alone at a desk and it's so profitable it's so productive running this law firm that they can afford to pay their janitor ten dollars an hour and they can afford to increase his wage to fifteen dollars an hour with no significant impact on the law firm even if they have ten janitors maybe they've janitors and a bunch of other people that's fine it is a drag on productivity but that's what's good for society as a whole that's what government wants is to have this higher minimum wage why we don't want the janitor having to drive his car two hours a day because he can't afford to live in the same neighborhood where he works or he can't he can't afford to live within i don't know a couple kilometers of where he works he has to travel a huge disney i remember there was a restaurant in cambodia where they were paying a man i think he was mostly doing the gardening but he was he was paid at the lowest level for this this restaurant so i don't know gardening and janitorial work or what have you and i was just in the room when the owner of the restaurant who was italian was talking to his main member of cambodian staff who translated back and forth for him and he was shocked and horrified to find that this guy was coming and sleeping in the garden every night and the woman explained look you pay this guy a wage you pay him a salary to mow the lawn and beautiful flowers all around this restaurant they really a very memorable restaurant many ways you pay this guy to you know set up the orchids and mow the lawn and keep this place looking beautiful right he comes from a small village you know he can't afford to live in downtown phnom penh you can't afford to live in the big city you can't afford to live anywhere where you can get back and forth you know to work every day okay um there were really terrible social conflicts that emerge from paying people less than a living wage it makes everyone's life miserable it makes all society miserable all society is on the edge of revolution and violence all the time just because people aren't being paid enough by firms that can't afford to pay them all right the gold mine mining remains in our mind's eye an image of terrible oppression we imagine that the way gold mining works is by having one captain of industry one owner of the mind exploiting some enormous number of workers at the lowest wage possible right get it as close to slavery as possible that's what makes a gold mine profitable nonsense it's not true all right today in the year 2020 you look at a gold mine the people pay minimum wage they will be janitors they might be people like security guards right the profitability and the productivity of the mine entirely rests with people who are more highly skilled harder to replace right with special technical skills at a higher level of the mining form there are people who are testing the walls of the mine shaft for structural integrity there are safety engineers there are geologists there are scientists of every kind but even if you look at the guys who do the drilling the guys who operate the the drilling machine in a mine you are going to find they are paid much much more than minimum wage and the gold mine they can't afford to pay the janitors the lowest paid staff they've got they can't afford to pay them 10 an hour and they can't afford to pay them 15 an hour and it's good for a whole society if the government forces them to pay these people ten dollars an hour fifteen dollars an hour but the reality is the owner of the gold mine is not getting rich by oppressing those people or by pushing them down to the lowest salary possible the reality is the profitability of the gold mining firm not so different from that law firm it's being produced by a cluster of highly paid people not necessarily at the top in the middle and the top of the corporation but far above the minimum wage right and those people they couldn't be productive in that way working alone right one safety engineer working alone does not a gold mine make one geologist is not worth that much oh but you got all those people organized and working together now you're making billions of dollars now you have a gold mine figuratively and literally right and out of that surplus out of that amazing productivity and profitability they can afford to carry along those minimum wage people they can afford to provide the minimum wage people in their in their company with a good quality of life with health care with benefits with the ability to live somewhere nearby and not have to sleep in the garden in front of the gold mine not to have to be a hobo not to be pushed down into poverty this way from the government's perspective in terms of designing a society in the government's interest to the government's advantage what they would want is an inverse pyramid they would want a larger number of wealthy taxpayers and the fewest number possible of people subsisting on minimum wage or living in poverty below minimum wage now there's another sort of difficult to pin down implicit assumption that the way our society operates reflects what is in the government's best interest as opposed to what's in the people's best interests or the interests of the poorest or the poor who may be quite powerless in your political system where you're living or maybe moderately powerless depending where you live the united states has a border with a country called mexico all right and as the minimum wage in the united states goes up and up and up the temptation for any company for any venture is to relocate their manufacturing south of the border to mexico or they can pay all the employees dramatically less part of my reason for being this video now in the last months of the year 2020 is that the prospect of a dramatic increase in minimum wage in the united states is on the docket once again perhaps uh ignored amongst the election promises of joe biden is that he will now raise the minimum wage united states to 15 per hour 15 u.s dollars per hour in the year 2020 is quite a lot of money the view of minimum wage as something fundamentally parasitic and not exclusive to the right-wing fringe the view of the government forcing employers to pay more and the assumptions about whose interest is that in and what is the benefit these will again be called in question one of the disadvantages of the united states increasing its minimum wage is simply that america is adjacent to mexico the computer i'm recording this on right now was manufactured in china the camera was manufactured in china i believe this lamp was manufactured in china i wonder how many of these books were published maybe you know pulp and paper industry is one of the last things we still do uh here in canada uh almost everything i own is either made in china mexico bangladesh we've all lived through this we've all seen this happen right the disparity between the minimum wage in one country and another has profound warping effects on the whole economy and when i read bernie sanders what i see is that he has no clear vision for the future of poverty his only idea of the future is to go back to the past it's just to promise that he's going to revive the car manufacturing industry in detroit that america it's it's really it's like donald trump's slogan make america great again like oh yeah in that post-world war two period in the 1950s and 1960s america had all this manufacturing power rule we we can do it again can we can we you can have a law firm that carries even a huge number of janitors you can have a highly productive firm like amazon paying a 15 an hour minimum wage no question every hospital can afford not just to pay its doctors and nurses you know a good wage but they can pay the cleaning staff and the security guards and the people people who do the laundry they all matter too out of the profitability of the elite aspects of the company you can lift up you can carry the the poor and provide them with a with a good quality of life even though they can be replaced even though from a strictly economic perspective in terms of efficiency you could pay someone else way less to do the laundry you could take the dirty laundry from the hospital beds and send it to mexico and have someone there clean it and send it back and you'd probably save money and the whole hospital would be more profitable it's true you can outsource everything i was hearing the other day about newspapers that were outsourcing the writing of articles to the philippines so the newspaper articles are being written by journalists in the philippines to be published in america this is the problem this is the this is the riddle of our times bernie sanders is looking at this and saying the future of poverty is the past and that just can't be right not every industry is going to operate like a gold mine not every industry is going to operate like a law firm okay mass manufacturing when you get into industries where there are more and more people at the bottom of that pyramid people sitting at tables taking pieces of cloth and stitching them together to make t-shirts right well that's your whole that's your whole company there are just a couple of executives at the top then a huge number of minimum wage laborers manufacturing t-shirts what's the future of that in the united states america and what is the future for the whole world when we embrace this kind of broken pyramid system where one part of the pyramid that's inverted it's an upside down pyramid is here in the united states and canada and then the other part of the pyramid all the all the mass employment mass manufacturing industries those are in china and mexico okay this is a rare video in which i'm not here to give you all the answers that should be a separate video not that i don't know the answers that'd be a separate video i'm really here trying to emphasize something that was a misconception in my own youth because i was raised with this propaganda i was raised with this uh misconception quite intentionally it was inculcated into me the notion that our whole society is shaped like a pyramid because the government itself grows rich from the oppression of the poor that there's nothing the executive over at the gold mine wants more than to have huge numbers of employees being paid the absolute lowest wage possible and that that rather than the actual goldmining is where his his fortune comes from um who's really thinking about the future of poverty about having a society where the rich and poor can live together and work together i'll tell you something in the year 2020 it's not bernie sanders and it's not donald trump the most dangerous element of the minimum wage is maybe that it works too well that it lets us just not think about these most fundamental questions [Music]