GDP doesn’t measure tax revenue, just the total economic production.
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Blamemeta@lemm.ee 1 year ago
Isn’t a large chunk of that the taxes paid by the employer and again by the employee?
Not saying that we shouldn’t raise wages, we should absolutely raise them. Double them even. But this is kind of a bad metric.
Semi-Hemi-Demigod@kbin.social 1 year ago
OwenEverbinde@lemmy.myserv.one 1 year ago
But I do believe GDP includes government spending.
WalrusDragonOnABike@kbin.social 1 year ago
If you are earning just under ~$19/hr, then the employer is paying about ~$1.5/hr in taxes on that income, so not exactly a large chunk. The $19/hr is before the employee pays taxes. If you remove that, $19/hr is really more like $16/hr. 16/20.5 = ~80%, so the vast majority is going to the employee still.
This is only using federal taxes since state/local taxes vary, so that's an important limitation, but the sum of all state's taxes is about half of federal tax revenue and most likely comes primarily out of the employee's $19/hr rather than from the employer. Also non-monetary benefits are a thing, so if they, for example, cover health insurance cost or employer 401k matches, then the total compensation may be $1-3/hr more than the monetary pay. In total, that's a max of about $6/hour difference (more likely, about $2/hr-$4/hr) from the stated pay. Still short significantly short of just COLA adjustment from just 2008 being demanded even if you assumed payroll taxes didn't exist in 2008 and employees had no benefits then and high-end benefits now (not that you were arguing anything about that number; just wanted to give some context to the numbers and the demands).
Ultimately, I agree that its an unhelpful metric. The productivity of workers as a whole doesn't determine the value of specific workers and GDP can often count negative costs as a plus. Personally, I think the over-abundance of cars is a huge problem in our society, so if we based compensation on how much value is produced for society, most autoworkers might come out in the red. But if we wanted to use traditional economic measures of "value", then looking at the costs (excluding executive compensation) and revenue from car sales would be a more direct way to accomplish what they're trying to with that metric.
On the other hand, it provides some rough idea of how much we can afford. Only about half of the country is considered part of the workforce. Some of that is children who are being supported by that $19/hr the employee earns. But some are retired people who put in money over the prior 3 decades. Some goes to feeding children in poverty. Some are people with disabilities who need support. Some are people between jobs, but receiving unemployment insurance benefits (that they previously paid into). All of that has to come from the $73/hr. Some of that $73/hr goes to public programs that said workers can directly benefit from (things like roads, trails, parks, libraries, fire departments, medical research, funding the NLRB, etc). Without first subtracting all of those kinds of things from the $73/hr, you can't really use it to estimate what the average worker compensation should be.
marcos@lemmy.world 1 year ago
If you use the full revenue for the entire economy in one side, you should compare it to the full taxes paid for any kind of government on the other.
It’s much more likely to be above 30% of revenue than under 10%.
WalrusDragonOnABike@kbin.social 1 year ago
Fair point.
Total GDP: ~27tril
Total US Tax review: ~7.8trilSo, about 30% as you said. If you assume that the taxes need to be paid regardless and the the revenue made from those with much higher compensation is mostly just stolen wages, then its fair to say that the burden of those taxes would also need to be shifted to those workers if they take back all of those stolen wages. I don't think the assumption those taxes all need to be paid is necessarily true and most of it would naturally happen as workers rise into higher tax brackets and the SD becomes smaller compared to total compensation. This also still has the problem of assuming GDP is a fixed value.
US debt clock does include total worker compensation at 14.5 trillion, out of the total US GDP of 27 trillion. Not sure exactly what they are including in that. Not do they seem to have the number for previous years.
rockSlayer@lemmy.world 1 year ago
Unfortunately, all metrics will fall short of the point. This is because they come from a search for any justification that doesn’t outright say that profits are stolen wages