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It has nothing to do with inflation, this is about throwing a bone to unions who donate massively in election years. Most union contracts have a clause that gives workers an immediate pay raise if the minimum wage is increased.
It has nothing to do with inflation, this is about throwing a bone to unions...
...contracts have a clause that gives workers an immediate pay raise if the minimum wage is increased.
All of which bubbles up to the "Prevailing Wage" (link)
Quote:
Originally Posted by awikiexcerpt
"Prevailing wages" were first established shortly after the Civil War in 1866 when the National Labor Union called on Congress to mandate an eight-hour workday.[4]
In 1869, President Grant issued a proclamation establishing the 8-hour day for government workers.
In 1891 Kansas was the first state to pass a "prevailing wage" for its own public works projects, and over the next thirty years was followed by seven other states
(New York 1894, Oklahoma 1909, Idaho 1911, Arizona 1912, New Jersey 1913, Massachusetts 1914, and Nebraska 1923) in establishing minimum labor standards for public works construction.
In the midst of the Great Depression, beginning in 1931 and prior to the end of World War II, twenty additional states passed their own prevailing wage laws.
In 1931 Congress passed the Davis–Bacon Act after 14 earlier attempts, the Federal Prevailing Wage law that remains in force, bar a few suspensions, to this day.
Doesn't help inflation but lowers income inequality. SO now the question is whether each state should set its own minimum or should the national government?
I personally support a significant rise in the Federal minimum wage.
Doesn't help inflation but lowers income inequality. SO now the question is whether each state should set its own minimum or should the national government?
I personally support a significant rise in the Federal minimum wage.
If minimum wages work so well why not a $100,000 minimum salary floor?
...now the question is whether each state should set its own minimum or should the national government?
Each state (and most large cities) have already done this because each area has different COL factors.
Such adjustments have also been going on for a century. The federal number is just an absolute bottom.
Quote:
I personally support a significant rise in the Federal minimum wage.
I support significant efforts to make the Labor Value numbers work again.
Most of that is rooted in the ever declining number of real jobs vs the ever increasing number of warm bodies available.
Doesn't help inflation but lowers income inequality.
Income inequality is usually a good thing.
It is usually the result of a small number of people adding tremendous value to society which in turn makes everyone better off.
Let's make this tangible for you. Let's take the case of Elisha Graves Otis. Elisha Otis was born in Vermont in 1811, and was a master mechanic, having invented many safety devices and labor saving devices used in bedstead factories in the Northeast US. One such invention was what he named the "Safety Hoist" - it had an ingenious safety device that prevented it from falling if its lifting rope or chain broke. Lives that might be lost were saved.
He went out on his own, setting up shop in Yonkers, NY and sold the world's first Safety Freight Elevator Machine on September 20, 1853. To demonstrate just how safe it was, the following spring he installed a Safety Freight Elevator in NYC, famously riding in it up high and ordering a helper to CUT THE LIFT ROPE. He went on to patent independently controlled steam engines to raise and lower the Safety Elevator, and many more improvements as well.
Elisha Otis became a very wealthy man. So in the parlance of Income Inequality, by inventing what we now think of as modern elevators, Elisha Otis ADDED TO income inequality. After all, he was making money hand over fist while the other millions of Americans were plodding along with their lives as usual (most Americans were directly involved in agriculture at that time).
But although the wealth gap between this man, inventor Elisha Otis, and his customers was higher than it was before the invention, the customers got a product they valued that made their lives both better and easier. In economic terms, the wealth of these customers increased slightly while Otis' wealth increased greatly.
Is that increase in wealth inequality a problem? When I’ve asked not particularly bright high school students this question, most all agree it is not a problem. Ditto for Freshman Econ students. Graduate level Econ students are smart enough that they don't need this example to comprehend the issue.
You can substitute any prominent inventor into the anecdote with the same results. You could recount the story of Robert McCulloch who in the 1940s invented a light one-man chain-saw. Or you could examine Robert Noyce who invented the Integrated Circuit and co-founded Intel Corporation. Or Steve Wozniak & his partner Steve Jobs. Or Jeff Bezos. Etc. And you can substitute in small businesses who similarly add value, and large corporations who do as well - even when their innovation is something as simple-yet-hard as logistics rather than new product creation.
In each case, by virtue of innovation, many inventors (and shareholders of companies) become wealthy - adding to income inequality and its cousin wealth inequality. In each case, customers were better off than they were before the invention.
In each case, despite an increase in "income inequality," everyone is better off.
Even the not-particularly-bright high school students get it.
Here in Washington where it's going to be the highest in the USA at $16.28 make little difference. Fast food, retail, and other unskilled jobs are already paying $18-25/hour. It's the good-old supply and demand, no one will work for less than that. Employers just offer more pay and then pass it on to the consumers.
I'm paying the same to my retail employees in SC, where we don't have a state mandated minimum wage and just the Federal one. And no one pays the Federal minimum wage. If anyone chooses to work at that low wage they must really have problems.
So if inflation goes down will I reduce their wages, of course not. And I can't lower my prices and stay in business. So prices stay high, wages stay high, hours may have to get cut.
It is usually the result of a small number of people adding tremendous value to society which in turn makes everyone better off.
Let's make this tangible for you. Let's take the case of Elisha Graves Otis. Elisha Otis was born in Vermont in 1811, and was a master mechanic, having invented many safety devices and labor saving devices used in bedstead factories in the Northeast US. One such invention was what he named the "Safety Hoist" - it had an ingenious safety device that prevented it from falling if its lifting rope or chain broke. Lives that might be lost were saved.
He went out on his own, setting up shop in Yonkers, NY and sold the world's first Safety Freight Elevator Machine on September 20, 1853. To demonstrate just how safe it was, the following spring he installed a Safety Freight Elevator in NYC, famously riding in it up high and ordering a helper to CUT THE LIFT ROPE. He went on to patent independently controlled steam engines to raise and lower the Safety Elevator, and many more improvements as well.
Elisha Otis became a very wealthy man. So in the parlance of Income Inequality, by inventing what we now think of as modern elevators, Elisha Otis ADDED TO income inequality. After all, he was making money hand over fist while the other millions of Americans were plodding along with their lives as usual (most Americans were directly involved in agriculture at that time).
But although the wealth gap between this man, inventor Elisha Otis, and his customers was higher than it was before the invention, the customers got a product they valued that made their lives both better and easier. In economic terms, the wealth of these customers increased slightly while Otis' wealth increased greatly.
Is that increase in wealth inequality a problem? When I’ve asked not particularly bright high school students this question, most all agree it is not a problem. Ditto for Freshman Econ students. Graduate level Econ students are smart enough that they don't need this example to comprehend the issue.
You can substitute any prominent inventor into the anecdote with the same results. You could recount the story of Robert McCulloch who in the 1940s invented a light one-man chain-saw. Or you could examine Robert Noyce who invented the Integrated Circuit and co-founded Intel Corporation. Or Steve Wozniak & his partner Steve Jobs. Or Jeff Bezos. Etc. And you can substitute in small businesses who similarly add value, and large corporations who do as well - even when their innovation is something as simple-yet-hard as logistics rather than new product creation.
In each case, by virtue of innovation, many inventors (and shareholders of companies) become wealthy - adding to income inequality and its cousin wealth inequality. In each case, customers were better off than they were before the invention.
In each case, despite an increase in "income inequality," everyone is better off.
Even the not-particularly-bright high school students get it.
Do you?
So how is giving most money to a small amount of people who more than likely put it into a bank account better than giving it to more people who are more likely to spend it? Innovations are only helpful if people can actually afford to buy them because without that you have a bunch of products sitting collecting dust. Please tell me how a majority of wealth is better for the economy though.
So how is giving most money to a small amount of people who more than likely put it into a bank account better than giving it to more people who are more likely to spend it?
I don't think the word "giving" means what you seem to think it means. That is the root cause of your misunderstanding of how an economy works. I recommend you watch a few episodes of Shark Tank to see how entrepreneurs come up with an idea, build & sell a product, and build a company -- or fail while trying.
Quote:
Originally Posted by Storm Eagle
Innovations are only helpful if people can actually afford to buy them because without that you have a bunch of products sitting collecting dust.
In a first course in marketing, students learn about the 4 Ps and the 3 Cs, sometimes called "The Marketing Mix. Products, in order to be successful, have to have the right Product attributes, Price, Promotion, and Place (where to buy) - the variables under your control. The 3 Cs are Company, Customers & Competition - semi-fixed environmental factors in the marketplace around which you don't have that much control.
Quote:
Originally Posted by Storm Eagle
Please tell me how a majority of wealth is better for the economy though.
I think you may have mistyped the above sentence. Ask again more completely.
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