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Originally Posted by Liquid Reigns
You haven't shown that they don't start at $1M, you've but claimed they don't. Besides you forgot to add in the Life Insurance and Retirement perks to make the $1M as is claimed. So you now change the argument to lower level execs, which make 6 digit salaries to justify your argument.
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So your contention is that hospital executive salaries start at $1MM, or is that just for CEOs? Either way, it's wrong. Using CA state hospital salaries (the ones you quoted for other workers)
Lofty pay for hospital CEOs: Area administrators make $500,000 and up » Ventura County Star :
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...he may have been underpaid, according to a statewide survey of 118 nonprofit hospitals. The report by the Payers & Providers healthcare business publication suggests the base salary for CEOs averaged $514,237.
Kick in bonuses, retirement money, reimbursement for education costs, expense accounts and the average total compensation hit $732,004.
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Plus, it's almost assured that the statewide average salary for a CEO is above that of a starting CEO, with no previous CEO experience.
And I've changed nothing from my original assertion. I said hospital "executives" were one type of employee that the corporation could hire. You then said that hospital executives start in the millions (or at least that's how your sentence reads), again, with no specification as to what type of executive. While I didn't specify which type of executive I was referring to, it should be self-evident that I didn't mean they could hire additional CEOs. Generally, businesses only operate with one Chief Executive. It's kind of why they give that person that title.
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Originally Posted by Liquid Reigns
Again you claim cheap labor benefits everybody without really showing that it does. The arriving labor does contribute to an expansion in overall, in this hypo, State GDP, as low wage workers increase the total amount of output the economy can generate. But the vast majority of this additional wealth goes to lower wage workers themselves, leaving only a small gain in business income. This small income gain to US employers (net of the wage losses to previous workers) results primarily from the modest scale of lower wage workers in the overall workforce.
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This is kind of ironic. You start off the paragraph accusing me of making unverified claims, and then proceed to do the same.
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Originally Posted by Liquid Reigns
Now look at it from the stand point of the State or for that matter to the Federal Government, lower payroll taxes are collected. For the employer, depending on the total employee's he has, may see, for 1 employee (using your $1.5 per hour savings), a savings of $3,120 per year. That number increases as the more employees at the lower rate the more the business savings appears to be (you are failing to add in the rising costs of doing business, fuel, insurance, piece-rate wages, etc). The Tax burden is now distributed over the populace. So it really doesn't "benefit" everyone as you claim.
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Yes, fewer payroll taxes are collected from that one worker. Good thing I hired lots of them. Plus, I got to hire all those middle executives and other workers to offset that loss to the state coffers. If I'm spending $X on payroll, it doesn't really matter if I'm paying that $X to 500 people or 5,000 people. (Technically, hiring more people is better for the local community due to the higher multiplier, but that's getting kind of far afield here)
Plus, by expanding my business I get to utilize additional savings due to economies of scale, and hire even more people, who will pay even more taxes. It's a virtuous win-win-win cycle!
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Originally Posted by Liquid Reigns
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Good thing my fake hospital doesn't care about the cost of tractors or shipping since it doesn't grow produce. It generally has fixed operational costs outside of labor. Yes, I agree that in fields where labor is a miniscule portion of total cost, savings to the consumer will be very small. But that's not applicable to all industries and businesses. In fact, it's not applicable to most in the US, which is predominantly a service economy.
As for your agriculture example, it's not really illustrative of anything other than showing how labor is a relatively small factor in the market price of some agricultural commodities. The cost of fuel doesn't diminish savings from reduced labor costs - the shipping cost would be the same, regardless of whether he's paying his field workers $25/hr or $1/day. And yes, I'll even grant that in industries like this the retail savings per single piece of produce (in that instance, lettuce) are very small. However, in the same way that my miniscule savings from hiring cheaper labor are aggregated into real savings, so too do the savings to consumers in aggregate. Assuming a head of lettuce weighs about 2.2 lbs, and going with the Food and Agriculture Office's estimate of 4.1MM tonnes produced in 2009, that's about 3.7 billion head of lettuce. If cheap labor is able to shave two cents off of each head, that's almost $750 million in savings to the US consumer. Again, that's real money. And aggregate that over all produce - and then through the supply chain that gets the produce to the purchaser, and you start to get to where it makes a difference for low-end consumers.
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