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One thing upping the minimum wage far enough to push the cost of labor higher across the whole economy twice as high on a per hr. basis is it will create un-leveraged income. Then low interestrates will get a consumer spending spree. Now where is the spending?
My fear is that the workforce that is cut and the alternative methods that can be used to replace the workforce (Such as totally automated fast food and retail checkouts), will significantly outweigh the spending done by those who still retain their jobs.
One positive thing that could happen as a result of raising the minimum wage: To harness the over-paid workers and re-distribute income more equally. If this would occur I could see the benefits more clearly.
My fear is that the workforce that is cut and the alternative methods that can be used to replace the workforce (Suchas totally automated fast food and retail checkouts), will significantly outweigh the spending done by those who still retain their jobs.
The size of increase I’m talking about is large enough that over ½ of hourlyworkers will directly get a raise. That large a % of people getting a raise will not result in outsourcing or replacement by automation. Some may but not that large a percent.
Quote:
Originally Posted by jaekn
One positive thing that could happen as a result of raising the minimum wage: To harness the over-paid workers and re-distribute income more equally. If this would occur I could see the benefits more clearly.
A bump the size I’m talking about would leave no choice but to raise prices. Cut ½ the workforce? Not going to happen. Upping prices to cover higher wages? Going to happen. Asking people to spend more?That could work. Or not. The net effect of a bump the size I’m talking about is to devalue the dollar. The top end compensation would tend to be sticky the bottom not so much. (By statute)
My God. I read this thread and its no wonder we are in shambles, with no hope of making things better.
1. We no longer operate in a free market. The government has taken our economy from hero to zero in 20 years. And you want them pass more legislation? No thanks.
2. The OP understanding of communism is poor at best. Communism doesnt value labor at all. They like to talk about how much they value it but thats about it. Communism values ideology. Capitolism values labor not money. Money is simply a convenient way for you to trade your production for other peoples production.
3. I wouldnt be tossing around Chinas GDP numbers as an example of what we need to do. You think we have juiced our markets too much through QE? China played the same game on a grander scale. Now the piper has come and that credit bubble is collapsing in China.
4. Min wage has done nothing but harm. Raising it will do more. Gaping holes in the logic you are using to justify your views. its not a game of percentages, its about actual dollar amounts.
The thought of "redistributing" money from skilled workers to unskilled labor makes me want to vomit. It takes a sick mind doing some tortured thinking to equate that with being good.
The government has takenour economy from hero to zero in 20 years.
What they did was to substitute a debt bubble for actual production. What I want to do is to turn it into inflation.
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Originally Posted by justanokie
And you want them pass more legislation? No thanks.
Actually I want very deep political reform but that is a subject for a different forum.
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Originally Posted by justanokie
2.The OP understanding of communism is poor at best. Communism doesnt value laborat all.
They pay lip service to it in their theoretical discussions of how economies work
Quote:
Originally Posted by justanokie
They like to talk about how much they value it but thats about it. Communism values ideology. Capitolism valueslabor not money.
That doesn’t mix with the current trend tooutsourcing.
Quote:
Originally Posted by justanokie
Money is simply a convenient way for you to trade your production for other peoples production.
Na it is away to get you into debt. And keep you there.
Quote:
Originally Posted by justanokie
3. I wouldnt be tossing around Chinas GDP numbers as an example of what we need to do. You think we have juiced our markets too much through QE? China played thesame game on a grander scale. Now the piper has come and that credit bubble iscollapsing in China.
World wide credit bubble. That is what we’ve had. China as much as everyone else. Just like the 1920’s and the 1930’s.
Quote:
Originally Posted by justanokie
4.Min wage has done nothing but harm. Raising it will do more. Gaping holes in the logic you are using to justify your views. its not a game of percentages,its about actual dollar amounts.
We are coming into the popping of a large debt bubble. The economic hangoverof inflation is far less painful than the economic hangover of a popping asset bubble. You can get wage inflation with the minimum wage law. With low demand for labor then there is downwards pressure on wages but the debt remains. Credit cards and student loans can’t be forgiven. Unless we clear out the bad debt we won’t grow.
Quote:
Originally Posted by justanokie
The thought of "redistributing" moneyfrom skilled workers to unskilled labor makes me want to vomit.
If you are worth more than minimum wage you will get it. But those skilled jobs are going away and we need the wages to replace them.
Quote:
Originally Posted by justanokie
It takes a sick mind doing some tortured thinking to equate that with being good.
Do you have a well thought out alternative to massive unemployment as the banksfail? Do you have a well thought out alternative to what I’ve said? I don’t have my ego invested in this I just want a return to good economic times! The future looks to be somewhere between muddling along as things are with our work force collecting SSI instead of working to catastrophic system failure.
Unless we do something about the debt as percent of GDP then we are in for a world of hurt long term. Be it slow stagnate decay or fast big unemployment.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by jaekn
My fear is that the workforce that is cut and the alternative methods that can be used to replace the workforce (Such as totally automated fast food and retail checkouts), will significantly outweigh the spending done by those who still retain their jobs.
One positive thing that could happen as a result of raising the minimum wage: To harness the over-paid workers and re-distribute income more equally. If this would occur I could see the benefits more clearly.
We do most of our food purchases at Costco, but when we do go to the supermarket, the longest lines are at the self-checks. I think people prefer to avoid the robotic "did you find everything" and other programmed chatter from the cashiers. The income will not re-distribute. In fact, companies in areas where higher minimums have been proposed are already doing the math to see how much more they will have to pay their people making higher salaries to maintain the gap, and how to pay for it.
Simon was dependent on Food Stamps and other welfare while working at low wages. Where is that money coming from? Who is doing Simon's work now at the Factory?
People working at Slave Wages do not necessarily rise to heights in their career. It will be interesting to know median salary of people who started at minimum wage and are now more then 30-35 years in age.
Put some extra taxes on those high-flying CEOs and put it toward the public works projects, which would also provided needed infrastructure that'd promote additional economic growth - a true win-win for everybody.
This would never work today. The Federal governement and employment law more generally is a much more byzantine bureaurcracy than it was in the 1930s. All those rules they've made over the last 70-80 years keeps a large number of bureaucrats in their jobs. They are not going to get rid of the bureaucrats or the byzantine laws/rules.
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Originally Posted by NorthStarDelight
If our government was truly daring, they could push the min wage up to about $15 an hour (same as Australia), and put the "left-out" workers back on the job at an even higher wage - the economy would boom big time.
It's already been proven a gazillion times in numerous posts that the minimum wage in Australia is not as good as it looks because:
--Employers get to pay people age 20 and under less than the $15 an hour wage and therefore, have every incentive to hire teens.
--The typical cost of living in Australia is significantly higher than the typical cost of living in the US.
why must it be a guarantee that prices will rise? What happened to price competition? Isnt that suppose to be an inherent essential of Free Market Capitalism: competition?
Industries that pay low wages typically have very low profit margins (3%-4%). That is why in low wage industries one or more of the following happen: 1. Prices go up. 2. Demand goes down because of higher prices (putting people out of work) 3. More automation/labor efficiency (putting people out of work). 4. Some firms that can't make a profit go out of business (putting people out of work).
My God. I read this thread and its no wonder we are in shambles, with no hope of making things better.
1. We no longer operate in a free market. The government has taken our economy from hero to zero in 20 years. And you want them pass more legislation? No thanks.
Actually, the process has taken longer than 20 years. Some say it goes back to the creation of the Federal Reserve in 1913. Some would say we've never had a true free market economy (i.e. slavery in the 19th century). In any case, I do agree that our economy has become increasingly less free as time has gone on.
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