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I think we should pay everyone $80 an hour. In my area with $80 an hour the average family can live a middle class lifestyle. They can own a home, drive a modest newer car, maybe have an occasional vacation, go out to eat. Yup I am thinking that everyone in my part of the nation should be paid $80 an hour.
What do you all think?
And folks who get $600/month from SS will simply live in cardboard boxes?
Contrarian Econ, can you explain what is and how do we determine the “top as a fraction” and the “monetary base”? How can we calculate what would be USA’s GDP if we had full employment?
Respectfully, Supposn
Take the top 50 or so total compensation packages average them and set the minimum wage as a fraction of that or higher.
The Fed has assets on its books that balance the money in circulation. If those assets do a 4X then the minimum wage should do a 4X as well. Or more.
Take US GDP. It is off a bit from where it should be if everyone had a job and was working. Do some math, take a guess. It shouldn't be that hard. Why I want to use full employment GDP is to not chase contracting GDP with contracting employment. Debt stays the same GDP goes down debt remains the same debt to GDP goes up temporarily. Adjusting GDP for full employment means that you don't chase recessions making them worse.
Was there consumer demand for an iPhone before the iPhone was invented? Where was the consumer demand for high-speed internet or cable television prior to their creation? Demand is always driven by production. Entrepreneurs introduce a good or service to the marketplace and if consumers like it, they buy it. "Build it and they will come".
Ok...so what good is demand if there aren't anything on the shelves? Besides where do consumers get the money to buy stuff? Does it fall from the heavens? Does the tooth fairy slip spending money under your pillow while you're asleep? In the real world, most people have to earn their money working at a job or doing some other productive activity. The production has to come first.
One of the major problems with our economy is that there are too many people working at jobs that should've never been created. We have a $700+ billion dollar trade deficit and instead of building factories, we're building Super Wal Marts and overpriced McMansions. Instead of growing and employing people in the manufacturing sector we would rather feed our addiction for Chinese imports with our worthless dollar. You know our economy is in bad shape when the government is the country's largest employer.
As far as your claim that America prospered because of good wages and access to credit...I don't fully agree, especially the credit part. Ironically a lot of the good wages that your speak of came from manufacturing. We were extremely productive, we were savers, cost of living was low, and the government stayed out of the way. Now the Fed is creating near double-digit inflation, prices have skyrocketed, the average American household has $16,000 in credit card debt, and now 6+ million manufacturing jobs are now performed by the Chinese. At the end of the day the less productive we are, the more it hurts the economy, especially consumers.
The reason iPhones are popular is because people buy them on credit, because all those manufacturing jobs are gone. Eventually the market will catch up to the trade deficit and iPhone sales will drop, at least in the US. I guess then Apple can sell them to the Chinese. And we'll get nothing!
And folks who get $600/month from SS will simply live in cardboard boxes?
Is that what they are getting now? If it is then they are living in cardboard boxes now.
My point to the $80 an hour remark is that it is insane to have a minumum wage. We need to get rid of the minumum wage and allow people to get paid what they are worth. Note to everyone: Not everyone is worth the current minumum wage. You are only worth in pay 1/3 of what you bring back to your employer and that is on a minumum scale. You should be bringing back more of a return than what you are getting paid.
If you want $80 an hour you better figure out how to make $240 an hour for your employer. For those that can make $400 an hour for their employer they should easily make $80 an hour.
In other regions you can do fine on that level of income.
I don't know anyone that can live on $600 a month here. My parents are retired and living in Surprise Arizona and they could never live on $600 a month and they don't have a house payment and it is a lot cheaper out there than it is where I live. I doubt with $600 a month that they would ever be able to take trips to the coast, or back to Chicago to visit my moms family. $600 a month would never be living but getting by maybe, if you are lucky. Between water, trash, electric, gas, cable, Internet, Phone, and Cell Phone bill that can eat most of $600 right there. Sure you may not need cable or a phone but try living without water, electric, heat, AC in many areas.
Lets say that you don't own a home, meaning paid off home. To rent a room here in my area would be $700 a month easy. Then again my area is one of the most exspensive in the nation. On average a base 1 bedroom apartment will cost you almost $1,400 a month. A nice place can set you back $2,000 a month. Which is funny because my home that was built in 1962 could rent for $2,500 easy. (Why pay $2,000 for a 1 bedroom when you can get a 4 bedroom home for $2,500 and rent out the other 3 rooms.)
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