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#wage#https#free#where#pay#minimum#welfare#financial#government#author

Discussion (48 Comments)Read Original on HackerNews

bebe839494about 1 hour ago
Saying country like Norway has open economy without capital controls is just not true.

Try to leave that welfare paradise, you are still on hook as tax resident for extra three years after leaving!

alephnerdabout 2 hours ago
> Where redistribution runs vertically and broadly, the welfare state absorbs global finance shocks...

If this was true, then the Eurozone crisis would not have been as severe as it was in Portugal, Spain, Italy, Greece, and France - all countries with broad and large social assistance programs.

---

Also, the HN title is editorialized, the correct title is "Who the welfare state protects shapes a country’s financial openness"

mono442about 2 hours ago
The crisis was largely artificially engineered because Germans believed that Southern Europeans were "lazy" and needed to be made an example of.

The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.

ahartmetzabout 1 hour ago
Did anyone say lazy? I think the attitude was more like "irresponsible": Taking on debt with no hope of paying it off.
rayinerabout 1 hour ago
And are the Germans wrong?
gruezabout 2 hours ago
>The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.

Is that sustainable? Argentina's predicament is basically caused by a variant of this. The Peronists gave handouts to buy votes, funded by money printing (ie. "The ECB could have brought government bond yields down"), but that has consequences and turned Argentina into an economic basket case. Of course, you might argue the EU doesn't have this problem because it's stronger economically and other states can prop them up, but that begs the question, why should member countries like Germany fund Southern Europeans's fiscal profligacy?

kingleopoldabout 2 hours ago
sorry but whatever Ger/FRA doing right now is %100 not sustainable. Future growth potential is so bleak and so low chance, along with population crisis, aging natives too. They literally need miracle, like one that exist in stories
bodiekane43 minutes ago
That populist narrative was popular on social media, but the truth is the exact opposite.

Germany had relatively reasonable debt and government spending relative to taxes.

Italy had entirely dysfunctional spending and Greece was essentially a house of cards built on fraud. Without the Eurozone, Greece would have faced bankruptcy and/or hyperinflation, but instead they got bailed out by the rest of the EU.

Check out Michael Lewis's book Boomerang that covers the distinct problems Iceland, Ireland and Greece faced. The TL;DR on Greece is a country with massive social spending and tiny tax receipts, that took out massive and entirely unsustainable debt thanks to the other Euro countries and then inevitably was unable to pay it back.

Germany was the hero who saved the EU from complete implosion, but instead of being thanked they get misplaced anger for being the only responsible ones in the room.

3748949494about 2 hours ago
surely buying bonds will save you when you are running 8% yearly deficits to buy votes with welfare payments
mono442about 2 hours ago
There's no natural law saying that budgets have to be balanced. Most countries run constant deficits.
johnvanommenabout 1 hour ago
The author writes for Jacobin.

Of course it’s promoting Communism.

alistairSHabout 2 hours ago
That is the HN title?
nickffabout 2 hours ago
I believe that it was changed after the comment you have replied to was posted.
baggy_troughabout 2 hours ago
Where is the supposed austerity?
strictneinabout 1 hour ago
Austerity has become the boogeyman word for anytime a country doesn't increase spending as much as they originally planned or as much as some others think they should. An author who writes for Jacobin probably has a significantly different viewpoint on the term vs someone who works at a central bank.
ck2about 2 hours ago
in the US it protects the corporations so they don't have to pay a living wage

* https://www.washingtonpost.com/business/2026/07/22/amazon-gi...

amazingamazingabout 2 hours ago
Given that you cannot force someone to hire anyone at a given wage what is the solution?

At best all you can say is that if you decide to hire, it cannot be lower than some minimum, but often this results in no job at all.

WarmWashabout 1 hour ago
The actual problem in the US is housing costs, but most people are around social media knowledge level in this area, and just blame the first thing in front of them. Raising wages will do nothing to lower housing costs, which eat the largest chunk of everyone's pay.
marcuskane237 minutes ago
It's particularly sad that we just proved this with the massive Covid-era stimulus and yet didn't collectively learn the lesson.

We gave millions of people unemployment checks that were larger than their actual income had been, gave low and mid income workers stimulus checks, gave business owners forgivable debt for payroll and a year later we didn't have increased quality of life, we just had fast-food that cost twice as much, apartments that cost 50% more and billions of dollars spent on gambling, crypto and meme stock option trading.

ifwintercoabout 1 hour ago
This is what happened in the UK but not immediately, it’s only in the current government where the minimum wage (especially for young people) got hiked massively in the context of a weak overall economy that the effect on job creation became obvious.

Now it’s quite bad though, a whole generation of 16-20 year olds entering the job market and there’s just no jobs because you can hire a 30 year old for the same money

michael1999about 1 hour ago
Your "often" is not borne out by actual econometric studies. The actual rate of minimum wage that produces dead-weight loss is much higher than most minimum wages in the USA.

In any market, there is wide range of possible clearing prices with cost of production as a floor, and marginal value as a ceiling. Which price the market settles on is often a function of bargaining power as much as productivity. Minimum wage regulation is a heavy-handed way to change that bargaining relationship.

amazingamazing44 minutes ago
Hmm? Outsourcing is the clear counter example. Or do you think it is a coincidence that no outsourced job is more expensive than hiring Americans.
ben_wabout 2 hours ago
While true when minimum is set too high, the level it is set to generally takes this into account so that "too high" is not reached over the entire jobs market.
autoexecabout 2 hours ago
> At best all you can say is that if you decide to hire, it cannot be lower than some minimum

That's pretty reasonable. Nobody should be working 40 hours a week at a job and not make enough to support themselves. Any company who can't afford to pay their employees at least that much is a failure who deserves to be out of business.

SubmarineClubabout 1 hour ago
> Nobody should be working 40 hours a week at a job and not make enough to support themselves.

So it’s better that they don’t get hired at all and live entirely off support of the (forced) largesse of the tax payer?

As one of those tax payers I’d much rather they work and earn at least something.

johnvanommenabout 1 hour ago
> Given that you cannot force someone to hire anyone at a given wage what is the solution?

The author writes for Jacobin, which promotes a failed ideology where you CAN force people to “hire anyone at a given wage.”

It’s an advertisement for a failed ideology.

3748949494about 2 hours ago
Is that why wages in the US are double those in europe or more
autoexecabout 2 hours ago
It's because the most massive costs an American has like healthcare, child care, and higher education are free or vastly less expensive in Europe. Americans spend all their time at work for a very impressive number on their paystub while they're still one accident or illness away from homelessness or bankruptcy. Europeans get higher quality of life/happiness scores and spend far less time slaving away for their boss. Just because the number on your paycheck is bigger, it doesn't mean you're winning.
strictneinabout 1 hour ago
> higher education are free

Many of the states[0] have started offering free or low cost tuition for their public community colleges and trade schools, and low cost tuition for their colleges and universities. For example, Minnesota offers tuition at a state college starting at $6k a year[0] and free tuition at community colleges if you're earning under $80k[1]. Those prices are before financial aid, grants, scholarships, etc which are widely available from multiple sources.

[0] https://www.sofi.com/learn/content/states-with-free-tuition/

[1] https://www.minnstate.edu/admissions/affordability.html

[2] https://www.nhcc.edu/free-college-tuition-nhcc

As for the rest of your comment, you have a very distorted of what life in the US is like. Also, nothing you list is "free" in Europe, there's just a lot of rather regressive taxes that are collected to pay for it all. The US federal tax structure is actually rather progressive, but that also means there's less money for the feds to pay for all of those "free" things.

cwbuildsabout 2 hours ago
Not sure we do have better quality of life in Europe. We may have in the 2000s, but we're in decline relative to the US. Even if you take things like healthcare into account:

US average disposable income is $51,000, while it's $32,000 in the UK (with higher rents in the UK than the US).

fhdkweigabout 1 hour ago
Not at Walmart. They want their employees to get on government assistance to justify paying them less.

https://factually.co/fact-checks/business/walmart-workers-go...

https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...

AlotOfReadingabout 2 hours ago
The median salary in the US is $43k for the latest year I see data (2023). Median salary in the Netherlands and Germany was €44-48k or ~$50-55k.

We might make half as much (rather less for me actually) because of our specific industry, but that's not generally true.

strictneinabout 1 hour ago
Not sure where you're getting that $43k number. The most up to date number is $65,052[0].

"Median weekly earnings of the nation's 120.9 million full-time wage and salary workers were $1,251 in the second quarter of 2026"

https://www.bls.gov/news.release/pdf/wkyeng.pdf

ambicapterabout 2 hours ago
What does that matter when cost of living is commensurately expensive?
irishcoffeeabout 2 hours ago
It seems a little bit cherry-picked that you selected an article about people on food stamps and federal aid during a global pandemic, which saw absolutely massive amounts of people lose their jobs.

Doesn’t feel objective.

johnvanommenabout 2 hours ago
> “The pattern invites us to read welfare as macroprudential policy, part of the toolkit that keeps financial openness politically survivable. Where redistribution runs vertically and broadly, the welfare state itself absorbs the shocks of global finance. Where it runs horizontally, protecting established insiders while the rest carry the risk, governments buy stability at the financial border instead. Capital controls work as a cheap, imperfect substitute for redistribution. They calm an exposed society without asking anyone at the top to pay.”

Their analysis will yield false conclusions because they’re completely ignoring a number of variables.

For instance, the USSR had capital controls for financial and political reasons. The article assumes that politics plays no role, only finance.

Wall Street influences US financial policy, but so does politics.

The laziness of this research is shocking, so I looked up the author. He’s an author for the Communist blog “Jacobin.”

Why is this on Hacker News?

This paper is flimsy propaganda.

https://jacobin.com/author/martino-comelli