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Not reading the OP post but going off the thread title...
It's not faulty logic.
When the minimum wage goes up, wages across the board go up, raising the median wage. Logically, when the opposite happens the opposite response is quite possible.
If you want to raise wages for everyone, raise the minimum wage and the rest will follow. We use monetary and fiscal policies, some economists are proposing a new wage policy be implemented. The economy needs more demand.
OK, let’s look at this logically. First when the employer is forced to pay higher wages to the lowest tier of their workforce, what does that do to the bottom line? It reduces overall profit.
Now does that increase or decrease the ability of the employer to raise wages in higher wage tiers?
In order to restore the same level of profit, the employer must either raise prices, or increase productivity.
Now, raising prices makes his product less affordable and reduces a purchase which is undesirable. Increasing productivity is a catch phrase for getting more work out of each worker making it possible to do business with fewer employees. This allows the employer to lay off workers resulting in higher unemployment.
The workforce is governed by the same laws of supply and demand as every other business entity.
The way to raise wages across the board is to increase the demand and lower the supply of workers.
Simply increasing minimum wage does not accomplish this. In fact it does the opposite.
Minumum wage should be based on what a person produces for the company. On a minumum an employee needs to produce 3X what they are paid in order to be considered an asset to the organization.
Interesting factoid. By contrast, in a socialist economy, an employee only needs to produce 1X what he is paid in order to be considered an asset to the organization. Maybe 1.1X, in order to generate some margin for expansion and betterment.
Let x = the number of workers and y = the total output. Every worker produces y/x, and every worker consumes y/x, since every worker is paid y/x. Who gets the productivity difference in your 3y/x model, where the workers are not paid enough to consume any more than y/3?
Interesting factoid. By contrast, in a socialist economy, an employee only needs to produce 1X what he is paid in order to be considered an asset to the organization. Maybe 1.1X, in order to generate some margin for expansion and betterment.
Let x = the number of workers and y = the total output. Every worker produces y/x, and every worker consumes y/x, since every worker is paid y/x. Who gets the productivity difference in your 3y/x model, where the workers are not paid enough to consume any more than y/3?
OK, now explain where the money comes from to build the facility, to purchase equipment, to pay lawsuits and regulatory fines and all the other expenses that go under the heading of overhead.
Then kindly explain where the incentive to work comes from in a socialist society, and why no pure socialist society has ever proven viable, because the only incentive socialism provides is the incentive to do nothing.
OK, let’s look at this logically. First when the employer is forced to pay higher wages to the lowest tier of their workforce, what does that do to the bottom line? It reduces overall profit.
Now does that increase or decrease the ability of the employer to raise wages in higher wage tiers?
In order to restore the same level of profit, the employer must either raise prices, or increase productivity.
Now, raising prices makes his product less affordable and reduces a purchase which is undesirable. Increasing productivity is a catch phrase for getting more work out of each worker making it possible to do business with fewer employees. This allows the employer to lay off workers resulting in higher unemployment.
The workforce is governed by the same laws of supply and demand as every other business entity.
The way to raise wages across the board is to increase the demand and lower the supply of workers.
Simply increasing minimum wage does not accomplish this. In fact it does the opposite.
Google some charts comparing the correlation with a rise in the federal minimum wage and the effect on all wage levels.
Google some charts comparing the correlation with a rise in the federal minimum wage and the effect on all wage levels.
And tell me, what exactly do you deduce from charts that would show a correlation between increases in minimum wage and all wages?
In order for this data to have any meaning, it must be looked at within the context of the overall inflation picture.
If the minimum wage is raised 5% and results in an overall increase of 6% in inflation, what have workers gained? Nothing.
In addition if the raising of the minimum wage results in the automation of some minimum wage jobs, then it has, as often happens with over simplified solutions had an opposite than intended effect.
The idea that raising the minimum wage is somehow a panacea that cures all the ills of the economy is completely ignorant of the reality of the situation.
If raising the minimum wage cured the ills of the economy, we would now have a thriving economy because the minimum wage has been raised 500% since I entered the workforce.
Instead we have a downward spiral in the economy with the pressure on wages losing a constant battle with inflation.
Raising the minimum wage does not create jobs, it does not build factories, it does not provide incentive to invest. It only creates inflation.
The one and only thing that will restore prosperity to America is the elimination of globalization and so called free trade agreements which export American jobs and exploit American markets.
Interesting factoid. By contrast, in a socialist economy, an employee only needs to produce 1X what he is paid in order to be considered an asset to the organization. Maybe 1.1X, in order to generate some margin for expansion and betterment.
Let x = the number of workers and y = the total output. Every worker produces y/x, and every worker consumes y/x, since every worker is paid y/x. Who gets the productivity difference in your 3y/x model, where the workers are not paid enough to consume any more than y/3?
Your income is only a partial part of the cost of keeping you on the payroll. You do know that employees are part of the cost of running a business. Lets look at SSI. You pay half of the amount and your employer pays the other half. Then again you don't see that amount, but it is still a cost to your employer. Not sure if you have insurance or other benefits. My employer pays a benefit to employees and covers 80% of the cost of healthcare. I don't see that on my pay stubbs and if your employer does the same you wouldn't see it either. So many other things that we as employees don't see that our employers pay for.
Lets look at another aspect of running a business. As asset that is purchased for a company needs to provide a return on the investment. I wouldn't expect a tool to return just the cost of that tool. I would want it to pay for itself over and over again. I want minimal problems and plenty of action. An employee is the same. Employers expect a return on that investment and as a minumum I would want 3X the investment.
When minium wage goes up its all realtive. Then medican want a raise and more liely to get it .It all increases cost and prices go up.One only has to look at 118K as poverty line on income( no other source). Not that long ago that would have made you sold middle class. The market actually compensates and decides what a particluar jobs is worth in reality.Even the worth of particular work varies overtime.
We should do like Hong Kong and Germany either reduce or eliminate the federal minimum wage,but give the poor and working poor free or subsidized housing,healthcare, and food. If everyone has adequate food housing and healthcare
The minimum wage becomes a mute point.
When minium wage goes up its all realtive. Then medican want a raise and more liely to get it .It all increases cost and prices go up.One only has to look at 118K as poverty line on income( no other source). Not that long ago that would have made you sold middle class. The market actually compensates and decides what a particluar jobs is worth in reality.Even the worth of particular work varies overtime.
Tex Dav, we disagree upon everything in your prior response.
The federal minimum wage, (FMW) is less a contributor and more a victim of the U.S. dollar’s inflation. The FMW inversely and proportionally affects ALL USA wages and salaries; wage rates of lesser paying job proportionally benefit more, and higher paying job rates proportionally benefit less due to the FMW; but USA’s median wage an all other wages and salary schedules benefit due to the FMW.
I believe we will eventually adjust the FMW in the same or a similar manner as we now update Social Security retirement benefits. Those benefits are annually cost of living adjusted and they retain parity with the USD’s purchasing power.
I believe we will eventually adjust the FMW in the same or a similar manner as we now update Social Security retirement benefits. Those benefits are annually cost of living adjusted and they retain parity with the USD’s purchasing power.
Our failure to do so sooner rather than later is economically and socially detrimental to our nation.
Then who would do the work?
Getting on disability or SS is a past time in the usa.
I'm not for subsidizing drug dealers and the lazy.
Quote:
Originally Posted by ptug101
We should do like Hong Kong and Germany either reduce or eliminate the federal minimum wage,but give the poor and working poor free or subsidized housing,healthcare, and food. If everyone has adequate food housing and healthcare
The minimum wage becomes a mute point.
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