I think in the model with better distribution of income, everyone wouldn’t be making double. The top would be making less. Though with some many people making (and spending) more, you could see inflation, but you could also see lots of savings.
You could look at inflation and standard of living in different economies with different inequality levels to see whether redistribution would inevitably lead to inflation/reduced standard of living.
Of course, while inflation is easy(ish) to measure, standard of living is harder to get a grasp on (stuff like PPP adjusted income does not compute taxes and social services, for example).
A quick search (might be wrong) seems to indicate there are high purchasing power countries with both pretty high (US) and pretty low (Scandinavian countries) inequality. Same for lower purchasing power countries.
Looking at traditional economic theory, while economists agree inflation influences inequality, it doesn’t seem many posit lowering inequality necessarily raises inflation. Inflation in general can be somewhat controlled by economic policies.
Now, would something like UBI raise prices of certain commodities long term? Maybe. Since we don’t really have a control case it’s hard to say and UBI would reshape a lot of things. But there are also ways to regulate prices on some fundamental stuff (housing, food, healthcare) and you can make the case that countries willing to implement such a scheme would also not be shy on those kind of regulations.
Also, as long as the inflation is lower than the increase of income at lower levels, it’s a net gain.
Redistribution is slightly inflationary as it tends to increase consumption spending and reduce capital spending.
Having said that I’d be more concerned about the effects of some of the more radical redistributive taxation strategies on capital allocation than any impact on consumer prices. I don’t think the additional inflation you would see is significant - if the same amount of goods are being produced, and are being allocated in a less unequal manner, I’m not sure why a slight price rise is an issue.
Price controls on housing and food are basically a recipe for shortages.
Price controls seems to imply a hard cap, and not the usual price regulations you have in several markets, which doesn’t not normally impose limits but regulates according to several factors (basically limiting selling at too much a profit).
For example, regulating prices in medicines (something most European countries do) does not seem to bring in any sort of shortages. Many European countries also regulate prices of public financed housing, agricultural product, electricity and energy (a LOT), and again you do not see shortages there. Cellphone use is also price regulated in the EU, and mobile adoption and profits from operators keep rising.
When the good you regulate is either imported or can be easily exported, then regulation can cause shortages. This might be the case for certain food products (and not others) but it’s definitely NOT the case for housing, which is immobile.
In the specific case of housing, lack of regulation leads to price increases in housing that makes them attractive investing targets, creating economic bubbles and actually causing shortages in housing (because housing is not used not brought into the rental/selling market, but kept as an investment product to be traded shortly). This actually happened in Spain with the housing bubbles. Increased prices (lack of regulation/control) led to lack of availability (and was not a cause of that lack of availability, since we do have a housing surplus).
Another shortage that can happen with housing is misuse (using housing as it was not intended). Catalonia is about to regulate housing rental prices precisely because if unregulated you see shortages for residents versus tourists. The alternative was to regulate touristic rental (which has been attempted, but was a harder task due to non-compliance).
Yes “but”.
During the time period in question the US economy has seen unprecedented productivity gains which both grow the amount of goods and services available, as well as make them cheaper to produce. What the report is indicating is that just about all of the returns from those additional goods and services being produced is only flowing to the 1%. Thus, just about everyone in the US has pocket computers more powerful than anything imagined at the time, for a fraction of the cost - but, the gains from expanding those goods and services are being monopolized through the political power and resulting tax/bailout policy to ensure that the money from those gains flows primarily to the 1%.
Didn’t Amazon increase the wages of all of its employees to $15/hr?
They made the starting pay for warehouse employees $15/hr - but took away stock compensation. Most employees seemed happy with it from articles I read at the time. They don’t plan to stay long enough for that stock to vest anyway.
So… They are in fact paying their employees well?
When was the last time you tried to budget on $30k/yr gross earnings?
$15/hr is an insulting joke.
It’s literally the amount that Bernie advocated for!
“The minimum wage should be $15 an hour!”
“We are going to raise our minimum wage to that level, even before the government mandates it.”
“YOU ARE A MONSTER!”
Yeah it’s not great but you can pay rent and aren’t starving to death. It’s the bare minimum, hence minimum wage. Good for Amazon. They can afford it.
I mean 30k is literally the median wage in the country. So a $15 minimum now moves everyone to the current median wage.
It isn’t great, and a lot of people would need to be two income families, but it moves a huge amount of people towards fiscal sustainability.
Now I am not a fan of a single national wage level, there needs to be CoL adjustments. Because paying someone in bumfuck Nebraska the same wage as someone in the Bay Area is not going to lead to good outcomes. Minimum wages should enable people to survive, and even $15 would have someone in SF living in their car.
They can afford a lot more than that. They’re run by the richest man on Earth. I still think it’s a good base start though.
Every day!
in euros anyway, and less than that.
It is irrelevant what the stock price of Amazon or how rich Bezo is how much Amazon can pay it workers what matter is how much profit the company makes.
Last year Amazon had revenue of $280 billion and they made operating profits of $14 billion. Meaning they made $.04 cents profit for every $1 in sales. They have 800,000 employees so if they gave them $5/hour (10K/year) that means their profits would drop $3 billion
Now let’s look Apple. Last year Appple had $275 billion in revenue,and a staggering $65 billion in operating income and $57 billion after taxes. Apple has only 137,000 so they could easily afford a $10K or even a $100K/raise for its employes.
Much of the reason for Apples profitability, besides their crazy high prices, is they employee 350,000 at Foxconn to make iPhone, iPad, and Macs. The average Foxconn employee make $390/month or less than $5,000. They work 6 days and 60 hours a week, some as young as 14, in pretty awful conditions. (Althought to be fair to Foxconn evidently pay and conditions are better at Foxconn than most Chinese factories.) Apple could raise their wages to $15/hour for less than $9 billions, or they could bring all those jobs home to the US pay normal manufacturing wages of $25 an hour and still be one of the most profitable companies in the planet.
Google, and Facebook are between Amazon and Apple in profitability so they can easily raise wages but they don’t employ an army of folks working in sweat shops.
In contrast, Walmart has a much harder time boosting wages. Walmart had $523 billion in revenue but only $20 billion profits making them even less profitable than Amazon. Giving their 2.2 million employees a $5/hour raise would completely eliminate all of their profit.
(sorry just saw I was responding to an old post)
Not only am I aware of how to do math and evaluate stock prices, consider revenue and profit, and market evaluations, and acknowledge what the wealth of a CEO of a specific means or does not mean, I am also well aware of what Amazon does, as well as other companies, do to keep their taxes low despite being the behemoth they are.
They’re not getting a pass from me when it comes to what they do for and against their employees as well as the communities they operate in. I can be both critical, reasonable and occasionally scathing against the same company.
Both Walmart and Amazon push low prices ideals and drive out competitors, some of whom paid better wages and provided better benefits. After doing that, they don’t get to turn around and talk about how they can’t dig themselves out of a hole they made.
If you aware that wealth of the CEO is irrelevant to employee pay why did you mention it?
My reason for show the profitable vs employee is to simply explain why it easy for some companies to boost wages and not others. Apple paid a slightly lower percentage of its income in taxes, than Amazon. The way both Amazon and Walmart keep their taxes low is by but not being super profitable, or Amazon case running up a decade of loses, funded by investors.
Both Amazon and Walmart compete on low prices, so does Costco. In fact competing on prices is one of the most common business strategies. It is also one that benefits consumers, especially low income consumers, Walmart, in particular, is good for low income people. I’ve not seen any evidence that local mom pop stores pay better than Amazon, and or even Walmart for that matter. Especially, in the last few years when unemployment rates, they only reason they got employees in the first place for new store was to offer competitive wages If they didn’t offer low prices they wouldn’t have become behemoths. Do you have something against low prices?