New minimum wage

[Ted S.]

Not sure what you are trying to say. Most studies show more job opportunities and increased growth. Minimum wage has been around for some time time. The removal of what would be pretty disastrous.

 

Minimum wage is a price floor that limits the demand for labor; it doesn't increase employment nor does it increase any growth, especially since it only affects about 5% of the working population. Also, most people associate the raising of minimum wage with higher prices of goods and services, which doesn't really happen; again, minimum wage is a price floor that limits the demand for labor. Businesses would simply either discontinue hiring and condense the division of labor.

 

The business cycle has upswings and downturns naturally; given no influence from government. There are plenty of other factors that have a much greater affect on economic growth than wages, and, as stated above, increasing the mandated price floor for 5% of the population can't possibly account for growth to the magnitude of investments, tax cuts, innovation, new markets, increased production as a result of previous investment, etc....

 

Generally speaking, when you look at a business cycle that is experiencing growth from year to year, there is naturally an increase in inflation(naturally based on "our" monetary system). Deflation is often occurs during market corrections (recessions). Inflation is also influenced by monetary policy, but that is besides my point.

 

When the economy is experiencing growth, inflation will occur naturally up until or just after the market correction (withholding artificial effects of monetary policy), and most increases in minimum wage happen to occur either during economic upswings to create the correlation that an increase in minimum wage increases the GDP, or otherwise nets positive economic growth. Just a correlation, and a weak one at that. I should put a chart together sometime, but that's a lot of data to digest.

[Jonnin]

Capitalism abhors a vacuum- Budistotle.
There are plenty of entrepreneurs and venture capital available to fill any void created by "big boys" trying to under pay for labor.
Sure, given your scenario a certain segment of the populous would suffer for a time, but it might actually cost taxpayers less to subsidize those employees during a transition period than it costs taxpayers to subsidize the employees AND the employer as we do now.
I say let the employers try what they will, and the market will reach equilibrium on its own without government interference a la T.A.R.P.

 

oh, I agree it will reach equilibrium, but I don't think the min wage earning types can afford to wait it out.    In the long run, yes, it would probably be good.  But at the very least, going forward, the easy way out is to never raise min wage again.  Eventually, the problem will correct itself... min wage will become too little to pay people via inflation, if you guys are right, and so letting it stagnate is a safe way to "do away with" it.  If you are wrong, it can't go backwards, and my scenario can't happen. 

[Ted S.]

The "free market" would victimize low skill and some technical workers if left unchecked by things like a minimum wage.  There were reasons for instituting it in the first place, and without a minimum wage, those reasons would come right back.

 

Another upside to a minimum wage hike is the money it would put back into what I call the "real economy"  by giving low income workers more purchasing power.  I think $15 an hour is too much unless it's phased in over a decade or something, but $10.10 now is reasonable.  Let's face it, if someone is making between minimum wage and $10.10 an hour, bring raised up to $10.10 isn't going to have them saving, or opening up a mutual fund.  That extra pay will be used to buy more items, and that's more money retailers can compete for.

 

When the market was free, it got people away from manual agricultural jobs that didn't innovate much. People shifted from hard agricultural jobs to manufacturing during the free market period because the jobs paid so well, and they didn't have to work themselves to death in the crop fields. Now the safety issues associated with the new industry are a whole 'nother discussion, but no one can deny the economies of scale that were created during the free market days. Many workers went from low paying agricultural jobs to low skilled manufacturing jobs that paid almost as well as highly skilled artisans in Europe. Products were made considerably more affordable, and thanks to that free market innovation and mechanization, one person could produce the labor of dozens without any extra effort.

[A.J. Holst]

Why is that so hard to understand?
It's common sense but as usual the left fails to see the logic.

Same goes for the decrease in hours so they can continue welfare,WTF!, I can't help but shake my head in disgust.

Because they don't care...it's all about getting more people on the guv'mint teat...

[zybysco]

When the market was free, it got people away from manual agricultural jobs that didn't innovate much. People shifted from hard agricultural jobs to manufacturing during the free market period because the jobs paid so well, and they didn't have to work themselves to death in the crop fields. Now the safety issues associated with the new industry are a whole 'nother discussion, but no one can deny the economies of scale that were created during the free market days. Many workers went from low paying agricultural jobs to low skilled manufacturing jobs that paid almost as well as highly skilled artisans in Europe. Products were made considerably more affordable, and thanks to that free market innovation and mechanization, one person could produce the labor of dozens without any extra effort.

What are you talking about and when? The early 1900s when factory jobs were horrible and unsafe? It is hard to have a discussion with you when you use broad and undefined language. Are you a lawyer?
-neener

[BigK]

If the dollar was still tied to a tangible good, then I would agree with most of you. However, it isn't. Most studies show that keeping minimum wage level with inflation increases economic growth. I think everyone agrees corporations are greedy.

 

I'm not splitting hairs, but corporations are inanimate objects, incapable of greed or generosity. The people that run them are no more greedy than any of us. Think that's crazy talk? Ask your average consumer what they wish the price for a good/service was. Bet they say $0.00 or some other price too ridiculously low to cover costs every time. The consumers would consume all they could at these prices with no consideration for the health of the economy, because they are ignorant of the consequences. That's greed too, like it or not.

 

At least the people who run the corporations are knowledgeable enough to temper their greed with sustainability. They don't charge $1B for a car, because the market won't support the price. The only way an economic system can support itself is when EVERY party involved acts in their own best interest. Sometimes that self-interest includes the health of the market, which only the supply side of our supply and demand economy ever thinks of.

[Ted S.]

What are you talking about and when? The early 1900s when factory jobs were horrible and unsafe? It is hard to have a discussion with you when you use broad and undefined language. Are you a lawyer?
-neener

 

The only period of time the economy in this country was considered Capitalist, or having the greatest degree of freedom in the markets, was the during the nineteenth century with a little lag time before and after, and slavery being a huge exception to that.

 

Yeah, of course the factory jobs were "horrible and unsafe" compared to today's standards. Occupational science has come a very long way over 200 years. These industries were still relatively new and it was generally accepted at that time that pay was viewed as compensatory  for the inherent dangers of the job. People often knew the dangers of the work they were getting into and acceptance of the job at a set wage was considered by the courts as acceptance of the risks that go with those jobs. Mining was just as, if not more dangerous than most manufacturing jobs, and those working the mines were compensated for assuming the increased risks. Hell, back then if someone didn't like there job, they could just go get another high paying job.

 

It may be hard for people to understand this from a modern perspective, but life in general was a much more dangerous undertaking back in that time, regardless of occupation. During this period of time employers were limited on the amount of labor they could acquire because the options to potential laborers was vast: land was stupid cheap; especially in the West, the employment market was competitive because many entrepreneurs were substituting skilled labor for mechanization with low skilled inputs, etc. Employers had to find ways to attract labor period. They had to compete for labor.

Edited July 26, 2015 by Ted S.

[A.J. Holst]

I'm not splitting hairs, but corporations are inanimate objects, incapable of greed or generosity. The people that run them are no more greedy than any of us. Think that's crazy talk? Ask your average consumer what they wish the price for a good/service was. Bet they say $0.00 or some other price too ridiculously low to cover costs every time. The consumers would consume all they could at these prices with no consideration for the health of the economy, because they are ignorant of the consequences. That's greed too, like it or not.

 

At least the people who run the corporations are knowledgeable enough to temper their greed with sustainability. They don't charge $1B for a car, because the market won't support the price. The only way an economic system can support itself is when EVERY party involved acts in their own best interest. Sometimes that self-interest includes the health of the market, which only the supply side of our supply and demand economy ever thinks of.

 

If you have a 401K or IRA invested in the market, I'll bet you want the corps your fund invests in to be as profitable as possible...greed?

 

Shareholders want the corp be as profitable as possible...greed?

 

Executives are rewarded for increasing / maintain profit profits margins or they have no job...is their motivation greed?

 

Reminds me of the outrage against Exxon-Mobil for earning zillions in gross profit, more profit than any other corp in the history of the world...net was about an 8% margin...that's $.08 on every $1.00 earned...guv'mint makes more on a gallon of gas in tax than the producer or retailer.

 

Greed is interesting when it's someone else's money

[BigK]

If you have a 401K or IRA invested in the market, I'll bet you want the corps your fund invests in to be as profitable as possible...greed?

 

Shareholders want the corp be as profitable as possible...greed?

 

Executives are rewarded for increasing / maintain profit profits margins or they have no job...is their motivation greed?

 

Reminds me of the outrage against Exxon-Mobil for earning zillions in gross profit, more profit than any other corp in the history of the world...net was about an 8% margin...that's $.08 on every $1.00 earned...guv'mint makes more on a gallon of gas in tax than the producer or retailer.

 

Greed is interesting when it's someone else's money

 

I agree with everything you said...all these things are a form of greed and every one of them play a pivotal role in keeping our economy solvent all the way from lining the pockets of investors to supporting our bloated government. All of the above are necessary forms of greed too, because:

1. if investors make no profits, they don't buy stocks or start businesses
2. if corporations get no investors, they can't grow or hire new employees
3. if employees don't have jobs they can't feed themselves or their families
4. if they can't feed themselves they turn to the gov't or crime
5. if the gov't is the only answer, they'll just take everything we have, just like the criminals

[Ted S.]

Greed is such a negative, overused, and (often)incorrect word. Self-interest is a more accurate term when used correctly in context. It is in a corporation's self-interest to maximize shareholders value. It is greedy to do so at the cost of moral faculties. It is self-interest for CEOs and COOs to fulfill their contract and achieve pre-agreed metrics that are rewarded with bonuses. It is greedy to achieve such results immorally, unethically, or otherwise fraudulently. Greed is more in line with selfishness, and I believe there isn't enough care given to distinguish greed and selfishness from self-interest. For some odd reason, possible a conspiratorial brainwashing scheme or maybe the decline in critical thinking, the terms greed and selfishness have become interchangeable with self-interest, and even synonymous.

Edited July 26, 2015 by Ted S.

[BigK]

Greed is such a negative, overused, and (often)incorrect word. Self-interest is a more accurate term when used correctly in context. It is in a corporation's self-interest to maximize shareholders value. It is greedy to do so at the cost of moral faculties. It is self-interest for CEOs and COOs to fulfill their contract and achieve pre-agreed metrics that are rewarded with bonuses. It is greedy to achieve such results immorally, unethically, or otherwise fraudulently. Greed is more in line with selfishness, and I believe there isn't enough care given to distinguish greed and selfishness from self-interest. For some odd reason, possible a conspiratorial brainwashing scheme or maybe the decline in critical thinking, the terms greed and selfishness have become interchangeable with self-interest, and even synonymous.

 

I agree that self-interest is a better term than greed. Whether you call it greed or self-interest, smart CEOs and shareholders won't cut open the goose that lays a golden egg, like the poor do by wanting success to be penalized through our tax code or by legislation. To me that's just as greedy (in the bad way that you described) as what the crooked executives at Enron did.

Edited July 26, 2015 by BigK

[kieefer]

Saw a help wanted sign in front of McDonalds today, 8.00 per hour.

I feel that is pretty good for flipping burgers.
My guess is that your average manufacturing wage will be between $10 and $25. Per hour depending on the product.

So, if I'm in a factory where the risk of injury to myself is much higher than it would be a MickeyD's and I'm making $10. bucks, id jump at a chance to make $15 at a burger joint, well maybe not. Or reduce my risks and work for $8.00......?

Point being, for a factory, be it a small company paying $10. it will be tuff to pay $15 to keep an employee and still remain in business.
As a result this small business could fold or be bought out by a large Corp..

So the libs say they hate big business but want to raise the wage where everything becomes more expensive, less competitive and kills small businesses.
Surprise, surprise.

I believe some, and I'm sure there's some in the Guv that would rather we let them take all profits and dole them out according to the your needs as they see fit.

Anyway we will see how Seattle handles their recent wage hike.



. Edited July 27, 2015 by kieefer

[btq96r]

I get the argument that investments help with the economy, but right now I think we have too much of the money going to the investment/financial sector, and not enough making its way down to the workers.

 

Everyday people need purchasing power, and I'd rather raise the minimum wage than raise or expand welfare.  We all know the latter will happen if the income inequality problem isn't addressed, right?  At least by raising the minimum wage, we can reward those who actually go out and work while reinforcing the value of a job.  Salaries are also still a tax deduction up to $115k I think, so businesses wouldn't get hit as hard as some like to argue.

 

I would also tie the minimum wage raise with an amendment saying welfare rates won't raise with it for somewhere around five years.  That can serve as an incentive to get people to take jobs, not just pull minimum wage (or higher) living from the dole.   A hike in the cap on salary deduction amounts isn't out of the question, but I'd cap it at a proportion to the raise of the minimum wage.

[Ted S.]

I get the argument that investments help with the economy, but right now I think we have too much of the money going to the investment/financial sector, and not enough making its way down to the workers.

 

Everyday people need purchasing power, and I'd rather raise the minimum wage than raise or expand welfare.  We all know the latter will happen if the income inequality problem isn't addressed, right?  At least by raising the minimum wage, we can reward those who actually go out and work while reinforcing the value of a job.  Salaries are also still a tax deduction up to $115k I think, so businesses wouldn't get hit as hard as some like to argue.

I would also tie the minimum wage raise with an amendment saying welfare rates won't raise with it for somewhere around five years.  That can serve as an incentive to get people to take jobs, not just pull minimum wage (or higher) living from the dole.   A hike in the cap on salary deduction amounts isn't out of the question, but I'd cap it at a proportion to the raise of the minimum wage.

 

Well, there really isn't a pleasant solution to fixing anything.  Not one anyone is willing to accept anyways. The "system" is crap. The monetary policy is crap. The business environment is crap. The governments economic policy is crap.

 

Raising minimum wage isn't a solution so much as it's a mandate. We can speculate on its effects all day. Plain and simple when you raise the price for a good or service, the demand decreases unless that good or service is relatively inelastic. Labor is largely elastic. There are more people wanting jobs even at the given price floor than the current demand for labor in most places in this country. Raise the price floor of labor and you further decrease the demand for not just labor at the previous price floor, but there's also the potential of decreasing demand for all labor valued between that previous price floor and the new price floor.

 

The purchasing power of the remaining employees who still have a job (assuming some get laid off, which is conjecture at this point) may increase some for them, but productivity for those positions will fall because businesses will either stop hiring, slow hiring, or lay people off and consolidate the current division of labor.

 

The speculation that prices will rise for the goods and services are logical, but usually don't happen immediately, and if they do it may not necessarily attributed to the raise of wages, but possible related supply shortages, lower production, inflation, speculation, etc. Too many other variables exist at most times to just blame minimum wage hikes.

 

Purchasing power isn't dependent on the value of wages, but rather the value of tender. Easy way to increase purchasing power is for America overall to become competitive in the world market again (and end the fed :tinfoil:). Businesses outsource jobs like manufacturing and IT to other countries for several reasons, but they all boil down to the lack of the ability for America to adapt, innovate and compete in the midst of the growing global economy.

Edited July 27, 2015 by Ted S.

[Jonnin]

So the libs say they hate big business but want to raise the wage where everything becomes more expensive, less competitive and kills small businesses.
Surprise, surprise.

I believe some, and I'm sure there's some in the Guv that would rather we let them take all profits and dole them out according to the your needs as they see fit.

Anyway we will see how Seattle handles their recent wage hike.



.

 

its a boost their voters, punish the "enemy" attack all rolled up in communism (wage equality).  Whats not to love?   Boost their voters --- give them a wage increase that does nothing but makes em happy.  All those poor people that vote D ... they get a wage increase, but that causes every business that hires people to increase the price of all goods and services, so the result for the poor is a wash (as desired, they remain poor and dependent on government) but they feel better about it (and have short term monetary gains -- loans due, for example, are now reduced by inflation).   Punish the middle class, who vote R (inflation hurts retirement accounts and savings, the few middle income that are actually able to do this these days)  and their wages do not go up, but cost of living does,  its a severe attack on the middle class (as desired, goal is to knock them into poverty and hook them on handouts...).   And wage equality/communism speak for themselves .. that is the primary GOAL of liberalism.

Edited July 27, 2015 by Jonnin

[No_0ne]

It can go both ways; the intention of my post was for perspective. Back then money was backed by something physical, now it's backed by magical promises and pretty nothings. Precious metals are a terrible investment in general based on their volatility. In the long term they are a great store of value, especially when fiat tender goes bunk.

Sent from my SAMSUNG-SGH-I547 using Tapatalk

 

If metals were a great store of value, great granddad's ounce of silver would still be worth the 2 or 3 days labor.  You keep the silver, I'll take all that worthless fiat currency you can spare ...

[Ted S.]

If metals were a great store of value, great granddad's ounce of silver would still be worth the 2 or 3 days labor.  You keep the silver, I'll take all that worthless fiat currency you can spare ...

 

When the dollar goes bunk, I'll gladly unload any I have left on you. ;)