Alexandria Ocasio Cortez Nonsense – The Majority Of Americans Don’t Get A Living Wage

Alexandria Ocasio Cortez has insisted that the majority of Americans don’t make a living wage. The vast majority even. Which is nonsense, as the vast majority of Americans are not keeling over from the diseases and starvations of absolute poverty nor destitution. By very definition, given the fact that Americans are living upon their wages, they are gaining a living wage.

But then that’s logic and the subject under discussion is demagogic politics.

The Washington Post has a go at this and they manage to miss the important point here.

We are going to break down her statement into parts. “I think it’s wrong that a vast majority of the country doesn’t make a living wage.” The question is whether a “vast majority” of American workers do not make a living wage, as Ocasio-Cortez claims. The answer is not easily found. The living wage is not really a measure of income but of living costs, before taxes, such as food, child care, housing, transportation and other basic necessities; it does not include meals in restaurants, entertainment or vacations. It is often misreported as an income figure, but it cannot be easily compared to income such as a minimum wage — even though it is. There are several versions of the Living Wage calculator, which all focus on the costs in a particular locality. There are wide variations, and so a nationwide average does not really capture that. The MIT Living Wage calculator, run by Amy Glasmeier, a professor of economic geography and regional planning, says the living wage in the United States was $16.07 per hour in 2017, before taxes, for a family of four (two working adults, two children). That means both adults together would need to make at least $32.14 before taxes to cover basic necessities. “We do not say that a majority of Americans don’t make enough income to cover basic costs,” Glasmeier said.

No, there’s a deeper point here. It’s Adam Smith’s linen shirt all over again. Not being able to afford a linen shirt does not make you poor. But if you live in a society where not being able to afford a linen shirt means you are regarded as poor then in that society, if you can’t afford a linen shirt, you are going to be regarded as poor.

That is, at least one useful definition of poverty is about the expectations of the society around you.

So, what’s the living wage? It’s a measure of what a certain number of liberal, even progressive, academics think would be a nice standard of living for all to have. Nothing wrong with that. Except, obviously enough, that living wage is now anchored in the expectations of the society about which it is set. The American living wage is very much higher than the Greek one, as an example, many multiples of the Bangladeshi one (we actually know what that one is, some $450 a month by one calculation).

And what is it that anchors that expectation? The average living standard of the people in that country. So, our living wage is set with some reference to the average wage. The observation that there are people below the living wage is just the acknowledgement that some people have below average incomes. Which, given what an average is, isn’t all that much of a surprise. You know, Lake Wobegon and all that?

Shrug. Quite why averages are a scandal is unknown but I guess it keeps us all talking about AOC for a little longer.

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Quentin VolethammondtimworstallsurreptitiousevilJonathan Harston Recent comment authors
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Jonathan Harston
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Jonathan Harston

I don’t have an iPhone. I suppose in today’s society that makes me poor.

surreptitiousevil
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surreptitiousevil

I think some people would consider it strange, rather than impoverished, if you didn’t have some sort of smartphone. I have stayed Apple because I took a course on Android security. But they are pricey and lack some of the interesting features other manufacturers have introduced to be competitive against the fanboi brand.

timworstall
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timworstall

The US does in fact have an anti-poverty program which supplies a mobile phone plus limited air time to those considered unable to afford such themselves. Don’t know if it includes smartphones yet or not….

Quentin Vole
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Quentin Vole

You can get a perfectly usable, new, contract free, ‘landfill’ Android phone for under £100, and second-hand iPhone models are on eBay for similar prices.

thammond
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thammond

The bigger problem is that she believes the billionaire has made the rest poor by becoming a billionaire. Perhaps 200 years ago, but to believe that now is to be utterly ignorant of where the billion has come from and why that person has it. And of course – most importantly perhaps – to be utterly ignorant of why, if you prevent people becoming billionaires, everyone else gets poorer, not richer.