Jobs don't just grow out of thin air. That $7.25 job is self-evidently better for the worker than whatever other opportunities they had available, otherwise they wouldn't be doing it. Taking away that opportunity won't make their life any better, just means they end up on a worse job.
Well when we have lots of labor, and seemingly not enough jobs for people, even when they could be doing productive things that build their own wealth and others' wealth (like building homes), then that $7.25 wage being the "best" option is a failure of the system, because too few people I society have been empowered with the option of starting their own businesses, or having the access to the tools that would let them create wealth. Too much inequality, not enough people with money to spend, and not enough capital movement to allow people to create new jobs.
Capitalism is a fantastic means for directing economic forces as long as everybody has enough capital to do the voting, as it were. If only a few people hold all the capital, then only a few people make decisions and will often engage in capital strikes rather than risk the chance that their position may be threatened.
I agree that people lack opportunities and that's a failure of the system, but I think the problem isn't limited capital. I think the problem is the monopoly on land ownership. If there was land freely available, people would happily use it to generate wages, wealth, etc. Obviously land is a limited resource and we can't always just have more "freely available", but a land value tax could remove the monopoly and create new opportunity for development that's otherwise hindered.
I just read Progress and Poverty by Henry George and he makes this point very clearly. I highly recommend giving this book a read if you haven't yet.
Correct, they grow out of having a middle class with purchasing power, who can buy products and services, thus creating jobs for those who provide those things. But the middle class's effective purchasing has been going down for decades, while the wealth at the top has been increasing. So something needs to be done to balance these flows of capital - the current situation is not sustainable.
I agree that a UBI will probably be needed in the future, and that a wealth tax alone won't fund it - but it could be part of it. The way I see it a wealth tax is more like a 'catch all' tax - it's a fallback in case the other taxes and regulations that should be in place to counter-act income inequality fail. Those rules are much more important, but we might as well have the wealth tax too.
It is a fallacy and ignores the benefit to the economy that having a living wage level of pay for all citizenry vs the artificial corporate welfare support of having government entitlements (food stamps, medicaid, etc) making up the difference so that corporations can pay less. Lassez faire capitalism seems to be a common fallacy promulgated on HN a lot.
