Income Inequality Depresses Support for Higher Minimum Wages [pdf]

Original Article ↗ Hacker News Discussion ↗

Minimum wage, offshoring, and tariffs

  • One view: a uniform $15 federal minimum would accelerate offshoring; wage-based tariffs are proposed to “level” international labor costs.
  • Critics note this implies extremely high tariffs (orders of magnitude higher than current debates) and would distort prices for goods like coffee/bananas.
  • Supporters of global efficiency argue production should occur where it’s cheapest; opponents say this often just means exploiting lower-wage, weak-labor-law countries.

Living on minimum wage

  • Some argue $15/hour is survivable only with roommates or parental support and doesn’t allow homeownership; they point to homelessness among people without family safety nets.
  • Others stress the paper doesn’t actually advocate a federal minimum and suggest many minimum-wage jobs are not easily offshorable (e.g., California experience, though that is disputed with claims of job loss, price hikes, and automation).

Empirical effects vs Econ 101

  • Several commenters cite meta-analyses (without details) claiming little to no correlation between minimum wage hikes and prices/employment, and similarly for rent control.
  • They criticize “Econ 101” reasoning that treats labor as a free market, arguing the labor market is structured and power-laden, so simplistic supply–demand stories are misleading.

Income vs wealth inequality and “what matters”

  • One camp: the key metric should be living standards of the poorest (access to health care, housing, education); if these are secured, relative gaps matter less.
  • Others argue huge wealth disparities still matter because:
    • They convert into outsized political influence (campaign finance, lobbying, media ownership, capital flight threats).
    • They drive stress, indebtedness, and distorted markets (housing as investment, leverage advantages for the wealthy).
  • Distinction is made between income, liquid wealth, and overall wealth; many insist wealth inequality, not just income, is the core problem.

Fairness, merit, and the origins of inequality

  • Some argue inequality is natural (Pareto-like), driven by varying abilities, amplified in a global/knowledge economy.
  • Pushback: studies (not cited) supposedly show wealth is predicted more by birth and marriage than “ability”; essential work (teaching, nursing, care, cleaning, logistics) is underpaid relative to its social value.
  • There is debate over whether “value of work” should be equated with market wage; critics reject this, pointing to working poor who can’t meet basic needs despite full-time work.
  • Discussion branches into whether we should accept life as unfair or actively design systems to reduce arbitrary unfairness (inheritance, luck, structural barriers).

Political power, democracy, and oligarchy

  • Many argue extreme concentration of wealth erodes democracy, edging systems toward oligarchy even when basic needs are partly met.
  • Mechanisms cited: campaign money, regulatory capture, media framing, and the ability of the rich to “change the rules of the game.”
  • Some counter that unequal influence is inevitable; the goal should be aligning elites’ interests with the broader public rather than seeking strict equality.

Is inequality “necessary” for efficiency?

  • One stance: inequality is “absolutely necessary” to allocate resources efficiently and maximize overall wealth, with the US’s high median disposable income cited as evidence.
  • Critics respond that capitalism also channels resources into dubious uses (e.g., luxury yachts, stunt projects) and relies heavily on marketing and inherited advantages, not pure efficiency.
  • It’s unclear from the thread whether high national median income justifies current levels of internal inequality.

Dependence on low-paid labor and care work

  • Some see the US moving toward a model where middle-class lifestyles are propped up by extremely low-paid workers (like domestic staff in India).
  • Explanation offered: as more (especially women) enter higher-paid work and housing/childcare costs rise, tasks once done as unpaid household labor become low-wage jobs, which inherently requires income inequality to be “worth” outsourcing.
  • Childcare is labeled “low productivity” in the economic sense (limited scope for efficiency gains), making it structurally expensive and hard to automate, despite being socially vital.

Housing, standards of living, and cross-country comparisons

  • Japan and parts of Europe are mentioned as examples (especially pre-2020s) where cheap, small, flexible housing plus affordable food allowed minimum-wage workers to live independently.
  • Commenters argue US zoning rules, minimum size/parking requirements, and “housing-as-investment” politics prevent a similar outcome, making housing the key bottleneck for the poor.

Media, narratives, and public support

  • One long comment argues falling real incomes (contested by another commenter citing rising median wages) alongside booming corporate profits show “who benefits.”
  • Mainstream media, owned by wealthy individuals and dependent on corporate ads, is accused of ignoring working-class perspectives and thereby muting support for living wages.
  • Another commenter claims the US is already an oligarchy, with media helping persuade people to vote against their own economic interests.
  • There is no consensus in the thread on the underlying data (e.g., real wage trends), but strong agreement that narrative framing and information channels shape public support for higher minimum wages and redistribution.