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Old 02-21-2010, 04:10 PM
 
Location: Cloud Cuckoo Land
558 posts, read 483,659 times
Reputation: 213
Quote:
Originally Posted by newonecoming View Post
You said “If you increase the wages of X number of people, most of those people will buy more goods.” That means higher production. Higher production means more jobs and lower prices. (Making more stuff brings the prices down) Did you think what you said through? All the way through? To the end?


What we are having is dropping production dropping demand and dropping employment. This is a result of the effective minimum wage going down.
This will be my last post today because of time constraints.

I think you're incorrect. You have to consider time. Initially, yes, most likely if their paycheck was doubled, collectively they'd clear the shelves. But it wouldn't take long at all for the distributors, manufacturers, and retailers to realize what was happening. When they did realize what was happening they'd raise the prices to meet the new demand. The supply wouldn't increase. (I'm speaking of production overall. Obviously you could increase the supply (production) of some good, but only at the expense of producing fewer of some other good(s). That is, if everyone wanted corn all of a sudden and farmers started growing more corn to meet the new demand, you could expect the prices of other vegetables to increase since fewer of them would be grown.)

Innovation and/or additional labor are the only ways to increase aggregate production (overall).

As for your other question, no I didn't think it "all the way through." Nor have you. And if you think you have, I'm not sure you fully appreciate the scope of such a question.
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Old 02-21-2010, 05:44 PM
 
1,842 posts, read 883,616 times
Reputation: 169
http://en.wikipedia.org/wiki/Keynesian_cross When you raise the minimum wage it pushes the AD line on the Keynesian cross up. Even if THE SAME AMOUNT OF MONEY is spent on minimum wage labor. The reason is that the unemployed former minimum wage workers will be drawing unemployment. This means that the economy will expand.
Quote:
Originally Posted by GhostInTheShell View Post
But it wouldn't take long at all for the distributors, manufacturers, and retailers to realize what was happening. When they did realize what was happening they'd raise the prices to meet the new demand.
What you are describing is inflation. Yes you would have inflation. Some. We are currently having deflation driven by the collapsing real estate bubble. Doubling or more than that the minimum wage will tend to raise the wage structure across the board. This will mean that the housing prices will have less far to comedown to be where they need to be. But the wage inflation will be happening unevenly. The poor will have more wage inflation than the rest will so they will be ahead of the curve a bit. Even if the price of everything done by minimum wage labor goes up by 2X the minimum wage workers will be ahead.


Quote:
Originally Posted by GhostInTheShell View Post
Obviously you could increase the supply (production) of some good, but only at the expense of producing fewer of some other good(s).
You are thinking in terms of a fixed size of pie. Bumping minimum wage will make the pie bigger.



Quote:
Originally Posted by GhostInTheShell View Post
Innovation and/or additional labor are the only ways to increase aggregate production (overall).
10% unemployment? Outsourcing to China? There is plenty of un-utilized production capacity to support a higher minimum wage. The bottom wage bracket say from the 40% down has been flat or gone down after inflation from 2000 until now. The bottom has been hurt worst.



Quote:
Originally Posted by GhostInTheShell View Post
As for your other question, no I didn't think it "all the way through." Nor have you. And if you think you have, I'm not sure you fully appreciate the scope of such a question.
I've got Asperger's Asperger syndrome - Wikipedia, the free encyclopedia I've been thinking about this question in one variation or another for close to a year. Time spent about 2,000hrs on it. (and about 4~5hrs a day reading about it) No I haven't though it all the way through. But I'm getting there. I do appreciate the scope of such a question as I don't think anyone else can.



Have a good night.
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Old 02-21-2010, 05:59 PM
 
1,842 posts, read 883,616 times
Reputation: 169
I want inflation because in order to get it you have to have 100% employment or close to that with the exception of inflation caused by not enough gas (in siple terms)
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Old 02-22-2010, 09:46 AM
 
1,842 posts, read 883,616 times
Reputation: 169
bump
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Old 02-22-2010, 10:25 AM
 
Location: Long Island, New York
15,517 posts, read 5,312,679 times
Reputation: 3409
Quote:
Originally Posted by newonecoming View Post
bump
I see you are new

so here is a warning: you cannot 'bump', it against the TOS

http://www.city-data.com/forum/faq/9...rum-rules.html
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Old 02-22-2010, 11:49 AM
 
Location: Prepperland
7,834 posts, read 4,086,107 times
Reputation: 3240
Those solutions will do nothing to resolve the underlying problems.
Major culprits:
1. Inequitable trade.
2. Socialist overhead.
3. Bureaucratic overhead.
4. Usury.

Inequitable trade refers to the disparity in cost for hiring one's own self. If you're paid $15/hr, how much would you really have to pay to hire yourself.
In typical situations, it runs 3 to 4 times base pay.

Socialist overhead refers to the taxes on labor and production that not only hit the productive people, but also migrate to the retail price, depleting the buying power of the wages even more.

Bureaucratic overhead refers to the administrative costs associated with complying with government dictates.

Usury refers to the interest charges hidden in every transaction and tax.

Until those factors are remedied, the system will continue to slide into collapse.

Quote:
Originally Posted by h0tmess View Post
What do you think we need?
I have this theory based entirely off of nothing that if we increased the minimum wage to something that IS livable, that we may have less poverty. Less welfare cases. Etc.

I understand everyone's life is different. What one may think is a good wage, someone may think it's crap.

The min wage I believe in NJ is like $7.75. Let's say they slightly doubled it to $15. $15 an hour, IMO, is something that is livable. Especially in a dual income home. There would be no need for welfare, there would be enough for these people to pay their rent (or mortgage), pay their bills, and even have money left over to buy stuff. Buying stuff is a good thing. It stimulates the economy.

If more people have disposable money, then more people will be out there spending money. This way, the companies that DO pay the crappy min wage now..would eventually make up for now doubling the salaries of their workers.

I mean, it makes sense to me. But what about someone else?
Or is this a system to make people feel better about themselves compared to other people?
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Old 02-22-2010, 01:42 PM
 
Location: Bella Vista, Ark
48,391 posts, read 39,397,407 times
Reputation: 20310
Quote:
Originally Posted by h0tmess View Post
What do you think we need?
I have this theory based entirely off of nothing that if we increased the minimum wage to something that IS livable, that we may have less poverty. Less welfare cases. Etc.

I understand everyone's life is different. What one may think is a good wage, someone may think it's crap.

The min wage I believe in NJ is like $7.75. Let's say they slightly doubled it to $15. $15 an hour, IMO, is something that is livable. Especially in a dual income home. There would be no need for welfare, there would be enough for these people to pay their rent (or mortgage), pay their bills, and even have money left over to buy stuff. Buying stuff is a good thing. It stimulates the economy.

If more people have disposable money, then more people will be out there spending money. This way, the companies that DO pay the crappy min wage now..would eventually make up for now doubling the salaries of their workers.

I mean, it makes sense to me. But what about someone else?
Or is this a system to make people feel better about themselves compared to other people?
great just what we need to shoot everything up, groceries, housing, utilities, etc. Do you realize how many people work for min wage that are not trying to support a family? what about teens, college students, retiresss, moms that work part time for extra spending money or to suppliment the income?

Do you have a clue how much retailers would have to raise the cost of products to off set the salaries?

Sorry, you may think the idea is great, it is one of the worst I have ever heard.

that is my opinion..

Nita
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Old 02-22-2010, 01:49 PM
 
Location: Bella Vista, Ark
48,391 posts, read 39,397,407 times
Reputation: 20310
Quote:
Originally Posted by h0tmess View Post
Hmm.
First of all, you don't hire the neighbor kid to mow your lawn so minimum wage does not apply to this. Anything "under the table" does not apply.

What's wrong with wanting to have people earning a livable wage? $15 was a ballpark number, not like something I proposed. If more people made more money, there would be more money out there being spent! This is how an employer could make up for that.

No, why would anyone propose anything like dropping the price of a Mercedes? Lowering prices on anything has nothing to do with it at all.
so you pay the kid who does your lawn under the table, do you have any idea how many others would be paid "under the table"? Even if what you are proposing had some merit, the cost of everything would increase so inflation would eat up those increases.

Right now, my job (part time) is selling travel, mostly cruises: if the cruise company had to pay their workers like agents $15 or more an hour, the cost of cruising would increase and less people would be cruising...That is just one example. It would be this way with everything.

Nita
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Old 02-22-2010, 01:54 PM
 
Location: Everywhere and Nowhere
14,141 posts, read 15,470,363 times
Reputation: 6449
Artificially raising wages does not cause inflation. Unemployment yes, but not inflation. Inflation can only occur if the overall money supply increases relative to goods and services. What will occur instead is that employers will substitute machines for people or will just do without, producing greater unemployment.
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Old 02-22-2010, 09:11 PM
 
Location: Chicago, IL
9,000 posts, read 8,591,686 times
Reputation: 3452
ontd_political: AZ panel OKs lowering minimum wage for the under 22 set

Oh Arizona....
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