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No they will pass on the higher costs to the end user of the labor.
Who is the end user of the labor? Do you mean that the company sourcing products from overseas will just charge higher prices?
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No. My proposal is to just tax capital gains on stock at 110% if they use labor at less than us minimum wage world wide. Buy stuff made at less than US minimum wage employ anyone at less than US minimum wage or use contract labor at US minimum wage.
Who will determine compliance and non-compliance? Will you require compliance for the entire chain of production? Do you realize that a company that produces a product uses parts and materials from a vast array of sources? Even if the final assembly plant pays high wages, you could easily have >90% of the labor going into the product paying a much lower rate.
And again, you appear to be oblivious to the fact that companies will source nothing whatsoever from these poor countries if they are forced to pay US wages.
It is apples to oranges comparing economies of even the 1970's to today.
The use of credit has largely masked declining wage levels in the USA and until the recent credit/financial sector "collapse" allowed many to continue living a "middle class" lifestyle. This even when their household income clearly indicated otherwise.
My parents in the 1970's detested credit and my Old Man kept Mother Dear on a tight lead when it came to charge account use. Since both sets of grandparents went through the Great Depression my parents like many in their generation had the avoidance of debt drummed into their heads almost since childhood. The only debt most had back then was their mortgage which they tried to get rid of soon as possible.
Like governments household experience a cost to servicing their debt loads. You have two choices when revenues (income) decline; you can pay your debts (credit card, mortgage, etc....) on time and thus preserve your credit score/rating. Or, pay rent, get food on the table and other more immediate problems and deal with the other stuff later.
Problem is the United States economy is *very* sensitive now to consumer spending. Meanwhile banks and credit card companies are keeping careful tabs on who and how much rope they are giving out.
In particular the US housing market is still suffering because many still cannot obtain mortgages. Home buying supports a vast part of the US economy and less spending in that sector has effect that spread.
Huh? There are tons of boomers who will be working well past traditional retirement age because *gasp* their social security check just won't cut it. The recession effectively robbed many of them of their highest income earning years. Even if they kept their jobs, it's likely that the recession negatively impacted their incomes, and possibly their retirement plan.
Huh? There are tons of boomers who will be working well past traditional retirement age because *gasp* their social security check just won't cut it.
And you think young people will have it better? Open your eyes. They can't even get a job! If they do many of them are near minimum wage even with a college degree. Do you think they will have bigger SS checks and better benefits? The benefits aren't going up, only the payments.
The wages and benefits have been in general decline since the late 70s, so the older you are the more time you've had in the workforce when the economy was "good".
And you think young people will have it better? Open your eyes. They can't even get a job! If they do many of them are near minimum wage even with a college degree. Do you think they will have bigger SS checks and better benefits? The benefits aren't going up, only the payments.
The wages and benefits have been in general decline since the late 70s, so the older you are the more time you've had in the workforce when the economy was "good".
Back home in Tennessee, a lot of Boomers lost their manufacturing jobs, but they were able to at least find SOMETHING. Most of the Millenials have had to simply move north to find jobs.
Well, we know that the middle class has suffered since around the mid-70s when income inequality started to rise up. We also know that from the 1930s to the mid 70s it was the opposite- the middle class thrived beyond measure in the US. So we can compare what characteristics in the earlier phase helped the middle class vs. what characteristics hindered it afterwards. What do we need to implement to return the middle class to prosperity.
Let's keep that separate from the obvious improvements in living standards by the technological advances. Of course everyone, including the middle class, is better off today than say in the 1970s because of technological advances. However how much MORE better would it be for almost all of us if we had the same income distribution as then.
As you mention, FDR basically created the American middle class with the new deal policies. They have become such a part of our system that most folks don't even recognize them...and people who use many or all of them will dump on FDR. That's pretty funny....things like:
30 years mortgages
Social Security and eventually medicare
Fair wages and benefits
Non-discrimination in work
and much more...were enshrined in law and created the great Middle Class - and, in addition, millions entered the upper classes as their Middle Class status allowed them to work harder and prosper even more (those with more gumption, better ideas, etc.).
The exact causes of why is stopped are debatable - some could be construed as positive and some as negative. It all depends on your outlook. Here are some to ponder:
1. The costs of the Vietnam War were never paid - they ended up resulting in hard times and the....
2. Nixon Shock - look it up. It's when the US Dollar was decoupled from Gold and was largely because of our debts, etc.
3. Oil Embargo's - were part and parcel of the Nixon shock years....we were living high on the hog but not understanding that it was not sustainable - cheap energy was not really cheap.
4. Corporate greed - the first real buyouts and mergers started in the 70's....leveraged buy-outs, etc.
5. Reaganomics - by the 80's tens of thousands of factories were shutting down and work was going to Mexico and Asia - the Reagan Administration actually favored this because it was in the hands of bankers and the corporate elite. Unions were busted and everyone cheered as the American worker made less in $$ and benefits....
6. The Revolution(s) and countercultures - a certain % of the population, of which I was a part, did not aspire to "more more more" but decided that living outside of the rat race was preferable. Many followed the beat of a different drummer and went into the arts, farming, etc. instead of just climbing the corporate ladder for more money.
Unlike many I don't think there are people sitting around plotting for the middle class to fall into misery. I know many wealthy people and they have much better things to do than try to hold others down.
More likely it's a complex problem related to LACK OF government action (on trade, jobs, etc.)...somehow this disease has taken hold in the USA which says Government only does bad things (Reagan loved to push this idea and many do it today....)....
BUT, without decent trade policies and job/manufacturing policies, we cannot help things much. Letting the chips fall where they will results in some bad endings.
Unlike many I don't think there are people sitting around plotting for the middle class to fall into misery. I know many wealthy people and they have much better things to do than try to hold others down.
Unintended consequences. I can make more money if I cut my labor costs. Going down to $1 a day cuts it quite far. If we all do this then we all make less money. Cutting labor cost to increase profit. That looks like trying to keep the middle down. What it looks like is an untended consequence of cutting labor costs. You can praise the demise of unions but that will make us a poor country.
As long as everyone has to keep to the same minimum the more everyone pays their workers the batter off we all are.
Who is the end user of the labor? Do you mean that the company sourcing products from overseas will just charge higher prices?
I am the end user of China's workers labor in their export industries. Or a small fraction of it. I expect to pay higher prices in the event that this goes through.
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Originally Posted by rruff
Who will determine compliance and non-compliance?
Compliance, a small level of compliance initially would get a big boost to the world's economy. (That is what I want) Non compliance well certifying your supply chain would guaranty compliance and lift the tax.
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Originally Posted by rruff
Will you require compliance for the entire chain of production?
yes
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Originally Posted by rruff
Do you realize that a company that produces a product uses parts and materials from a vast array of sources?
yes
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Originally Posted by rruff
Even if the final assembly plant pays high wages, you could easily have >90% of the labor going into the product paying a much lower rate.
Yes, US minimum wage would drive up the cost of a lot of what we buy.
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Originally Posted by rruff
And again, you appear to be oblivious to the fact that companies will source nothing whatsoever from these poor countries if they are forced to pay US wages.
Am I? The small time operators would not be bound by the capital gains requirement and that would leave the poor countries free to do business with them. Also any work done in those poor counties at US minimum wage would have a huge impact on the money in circulation in the countries. Less than 2% at US minimum wage would double a previously $1 a day workforces income. You could have an initial 50% unemployment rate after the change and still be ahead long term. Getting those poorer countries exposed to higher wages and higher productivity that goes along with it will cause rapid growth in their economies.
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