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Take the lowest number and that is your "pay". The expense of our society has no influence on what little a worker in China, or anywhere around the world, is willing to work for. They are competition for millions of Americans every day.
That is what the market will carry. But show me the law that prevents you from over paying your workers.
We can and should require the US owners of companies to insist that their workers get US minimum wage no matter where the work is performed. We can do this by taxing capital gains at 110% if they don't. Also dividends at the same rate.
In 2010, the US had the largest middle class in the world. Blame every law that's been passed since then for its demise.
LOL SINCE then? Globalization has been going on for like 30 years. When I was working in South Korea, a qualified bilingual engineer made 1/2 or 1/3 what the US counterpart made. It is probably similar or even less in many other countries.
So of course lowering wages is attractive to businesses, whose sole reason for being (ECON 101) is to make a profit. As they continue to hire workers who will take much less money for the same job...what does anyone EXPECT will happen to skilled workers in the US? Of course their wages will go down.
In some cases, I'm betting their working conditions will also worsen. That's IF they can find work. The rub is that for some reason bankers are now telling the government that the sky will fall if housing prices go down. As it is, workers in the US have to become debt slaves for THIRTY YEARS to even afford a house. That is not common even in so-called third world or developing countries. Who stands to lose if housing prices decrease?
You have it backwards. If you artificially increase pay you *reduce* demand for labor.
Though they may teach this in econ 101, they tell you it's untrue in 201.
There are too many factors to say that is empirically true. Mainly, that demand for labor is sticky on the low end, (can't reduce employees below 0, compliance & tax requirements, robots or process changes may still be more expensive than the increase in labor costs, materials costs may be higher than labor, not all goods have substitutes, etc) so there is no way to say that increases in pay decrease labor demand. Anybody who says it does is lying.
Also, since the US is a consumer-driven economy, many increases in labor are carried right back into the economy as worker spending on consumables. So though the company may make slightly less income on a per-product basis, the increased consumer spending may mean they sell more widgets, of course depending on the industry.
You can actually see the real effects of this in oil and mining currently -as the prices fall, the best thing to do would be to shut down the companies and leave the product in the ground until prices rise, but fixed management and land costs, regulations, and plain old greed keep companies running even as supply increases and price falls. Most are being run at small losses because small losses are better than big losses and better for owners than no income stream at all.
Last edited by TheOverdog; 03-31-2015 at 01:20 PM..
LOL SINCE then? Globalization has been going on for like 30 years. When I was working in South Korea, a qualified bilingual engineer made 1/2 or 1/3 what the US counterpart made. It is probably similar or even less in many other countries.
It's been going on since we figured out there are people's with other goods/services to offer. Today, globalization is driven by other factors such as cheap labor and outright currency manipulation. That's the difference as I see it.
Though they may teach this in econ 101, they tell you it's untrue in 201.
You need to look at it in context. He has been claiming that increasing the wages in poor countries (to US minimum wage) would increase demand. It's a pet idea he has. I can't seem to convince him that even if there was any way to make that happen, investment and development would cease and all those currently low paying jobs would disappear.
If you are talking about the US, then increasing the minimum wage should not reduce employment or have any adverse effects... unless you think redistributing income to the working poor is an adverse effect.
You need to look at it in context. He has been claiming that increasing the wages in poor countries (to US minimum wage) would increase demand. It's a pet idea he has. I can't seem to convince him that even if there was any way to make that happen, investment and development would cease and all those currently low paying jobs would disappear.
If you are talking about the US, then increasing the minimum wage should not reduce employment or have any adverse effects... unless you think redistributing income to the working poor is an adverse effect.
And I keep saying 2% employment at the current US minimum wage in an otherwise $1 a day labor pool would more than make up for an initial 50% unemployment rate at the prevailing wage. Any at US minimum wage and the economies would grow rapidly.
Out side investment may very well shut down. But domestic investment. Japan grew its own capital after WWII. The Asian countries that have followed Japan's model have done quite well for themselves.
I also think the US minimum wage should go up a lot.,
And I keep saying 2% employment at the current US minimum wage in an otherwise $1 a day labor pool would more than make up for an initial 50% unemployment rate at the prevailing wage. Any at US minimum wage and the economies would grow rapidly.
The unemployment rate would be 100% if you forced a huge wage increase by edict. I explained why in post #159, which I think you might have missed.
Why don't you two learn to use the direct message function already...
Oh come on, just join the party! It's no more of a detour than most of the threads on here...
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