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The only thing you can do is take a smaller margin. Gotta wonder why you weren't doing that before if it was such a good idea.
How naive! You see points and lines instead of planes and volumes. Probably the result of having never run stuff. Businesses most often involve complex webs of ever-changing demands and factor costs. You have to play different chords in order to make actual music. Strumming the same stupid strings over and over again is a good way to get booed off the stage.
Don't those people with better skills already have jobs?
If they do, they are not minimum wage jobs. For all intents and purposes, low-wage labor is a commodity. Like bushels of corn, there is very little difference between one low-wage job and another, or between one low-wage worker and another. This makes them very easy to exploit which is why there are regulations establishing a minimum wage to begin with. Marketable skills on the other hand are something that differentiate one worker from another. Skilled labor is not a commodity, and the relative scarcity of the skills involved tends to drive wages up, even against the massive resistance that employers will put up.
How naive! You see points and lines instead of planes and volumes. Probably the result of having never run stuff.
Good lord! Cut the hand waving BS! I own a small business. This is simple arithmetic.
If you and all your competitors experience a 10% cost increase due to a rise in the MW, and demand remains unchanged even with a 10% price increase, then there is no reason for anything else to occur than a 10% price increase. Else you are just making stuff up.
This makes them very easy to exploit which is why there are regulations establishing a minimum wage to begin with. Marketable skills on the other hand are something that differentiate one worker from another.
That's pretty sensible, but workers are differentiated regardless of their skill level. If you have a difficult and highly specialized skill that is in low demand then you won't be paid for it. Similarly low skill workers can receive good wages if there is a shortage. This happened in many places recently that boomed due to fracking. It's supply and demand regardless.
What the MW does is establish the baseline or floor wage. Because capitalism naturally drives the floor wage to subsistence or below. That's undesirable both socially and economically. Aggregate production and productivity and wealth are higher if economic gains are more evenly shared.
People think raising minimum wage will increase their standard of living, they argue that Europe has high wages and they're somehow doing great. This may work out in the short term, but the prices of other things will continue to raise as well. Think when you go to the store- chicken may be 7 or 10 dollars one week, then it goes up for any variety of reasons. But your wages are still the same, so you demand higher wages. Even if your wages did increase, down the road your cost of living would continue to increase, putting you right back where you started.
So it's not that you want the minimum wage to go up, you really want the cost of living to go down.
What do you think?
That is exactly how I see it. Riding minimum wage hikes is ephemeral, always chasing a rising target.
A hike merely catches you up (if that) to the purchasing power you HAD the last time it was raised.
Who are the people clamoring for a boost? Other than union organizers (who stand to benefit from contract-driven wage and dues increases), it's adults trying to actually live on that wage.
This demographic has a VERY LOW homeownership rate. What THEY need is help with the elephant in their budgets, which usually is rent.
So I think government can help these people most by reducing housing regulation in order to make housing more affordable to these workers.
That is exactly how I see it. Riding minimum wage hikes is ephemeral, always chasing a rising target.
A hike merely catches you up (if that) to the purchasing power you HAD the last time it was raised.
Who are the people clamoring for a boost? Other than union organizers (who stand to benefit from contract-driven wage and dues increases), it's adults trying to actually live on that wage.
This demographic has a VERY LOW homeownership rate. What THEY need is help with the elephant in their budgets, which usually is rent.
So I think government can help these people most by reducing housing regulation in order to make housing more affordable to these workers.
Which is why it should be indexed to inflation.
I'm usually pretty pro-government in a lot of things, but housing is one sector where I don't see government being of much help. It can do something on the wage side by raising the wage floor. On housing however, what can it do? Rent controls don't do much good. Rising rents are a pretty straight-up supply/demand issue.
At best, government can facilitate growth by lowering taxes and regulations on developers while funding transportation infrastructure to/from the areas where new developments occur.
Perhaps it could subsidize lower income housing somehow. In my area we've got plenty of developers building new units all over the place.... but they build them at a price point that's only attainable for people solidly in the middle class already. Also lots of expensive luxury units.
When you make only minimum wage of course you want a higher wage. Only those people who make much higher wages see no need to give anyone making so little more money!
If you and all your competitors experience a 10% cost increase due to a rise in the MW, and demand remains unchanged even with a 10% price increase, then there is no reason for anything else to occur than a 10% price increase. Else you are just making stuff up.
Call your accountant. Any change in price will cause demand to be altered according to its price-elasticity. This is basic economics for ANY firm. What I am "making up" is real world factors that you seem for some reason to be utterly unaware of. The business environment is dynamic -- a complex web of factor and other variables with ever-changing values. Sword-fighting with that is the name of the game. But for all of it, you don't go changing your prices any more often than you have to.
That's pretty sensible, but workers are differentiated regardless of their skill level.
Low wage labor is a commodity by definition. Like bushels of corn.
Quote:
Originally Posted by rruff
What the MW does is establish the baseline or floor wage. Because capitalism naturally drives the floor wage to subsistence or below.
Because without unions or some such, the labor market has huge power concentrations on one side. and tiny little nothings on the other. Such a tilted playing field will always produce sub-optimal outcomes.
That is exactly how I see it. Riding minimum wage hikes is ephemeral, always chasing a rising target. A hike merely catches you up (if that) to the purchasing power you HAD the last time it was raised.
You argue here only for indexing the minimum wage. That would be very sensible. Without indexing, the minimum wage -- at whatever level -- loses purchasing power every year until it is raised again. This is basically a tax on workers and a subsidy to their employers.
Quote:
Originally Posted by freemkt
So I think government can help these people most by reducing housing regulation in order to make housing more affordable to these workers.
LOL! Without regulations requiring it, builders simply do not give affordable housing a second thought. They build whatever maximizes their profits instead.
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