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Why should Fair Market Value apply to labor but not to housing? (Under zoning and housing regulations, property values and rents are inflated by government above FMV.)
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
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Quote:
Originally Posted by Dbones
You're definitely wrong. In order for things to remain equal for the employer, it would have to be a 1-1 ratio. So yes, 20% increase in total cost is what would be needed. In your figures they would be losing 16% of that 20% cost in labor if they only raised it 4%. I have no idea who taught you math, but you need a refresher.
No, because if labor is only 20% of your expense, the other 80% of your expenses aren't going to go up.
Here's an example. A pizza joint has a $2,000/day revenue goal, and allot $400/day for labor cost, which at $8/hr allows 50 labor hours said day, so 10 employees get 5 hours per day. Pizzas sell for $10 a piece, so 200 pizzas need to be sold to make that $2,000 goal. If the wage is raised to $9.60/hr (20% increase) those 50 labor hours are now $480, so to keep that $480 as 20% of the operating cost, the goal is raised to $2,400/day to swallow that extra $80. BUT, here is the caveat, if you only need to increase labor 20% operating budget only has to increase to $2,080/day, which is a 4% increase in total budget. Granted, this makes labor now account for 23% of the total budget, but this is okay, since the other 80% of the budget didn't go up. So this would mean to sell 200 pizzas for $2,080, that would be a 40 cent increase per pizza.
Please tell me when the labor cost goes up, what else would go up?
Let's try something
Let's make an imaginary product that currently sells for $100
Labor is 20% - so $20
Materials are $20
Overhead is $20
Utility is $20
And Profit is $20
What numbers are we using here, a 20% increase in labor?
So labor now costs ($20 * 1.2) $24
That would make the cost of the produce $24+$20+$20+$20 = $84.
Tack on the same $20 profit and the new sales price would be $104 - a 4% increase in the sales price.
*Ignores other factors such as, but not limited to: a decrease in demand for the product, increases in costs to suppliers
- Regarding your references to s/s recipients receiving consistent COLA increases to keep up with inflation; you couldn't be more wrong. . . especially for 2009, 2010, and 2015 which resulted in ZERO Cost of Living Allowance. In 2011 there was a 3.8% increase; for 2012-2014 it amounted to 1.5-1.7%; 2016 was 0.3% increase. You can view this information on the attached link reflecting the history of COLAs for s/s: https://www.ssa.gov/oact/cola/colaseries.html
Most of the low or zero increases were during Obama's administration. . . his BLM (Bureau of Labor Management) insisted there has been NO inflation for those years. . .they based that statement on the cost of gasoline. As far as rent/food/utility/medicine and other rising costs for all of those years, the BLM could care less.
And IF there is an increase in s/s, Medicare automatically increases the premium for Part B coverage and wipes out anything those on s/s would receive.
I like to mention that in 2015, average rent in Portland went up 15 percent while SS recipients got COLA for SS recipients was ZERO.
Please tell me when the labor cost goes up, what else would go up?
Your other costs wouldn't go up, because taxes weren't increased, the power company isn't going to charge more per kwh, the water company isn't charging more per gallon, because people in those fields make much more than minimum wage and wouldn't be affected by the increase. So you can make labor a 3% higher figure in the total budget to keep everything else the same.
It's funny that Lefties think businesses should just pay more for labor so employees can have a better lifestyle, but just love them some cheap crap from China where they pay those slaves wages not even an Ethiopian could live on. Why don't Lefties promote paying over twice the amount for a product so that businesses can pay better and they won't be supporting slave shops? The Left wants it both ways. Cheap payouts FOR THEM, but the burden of higher payouts for businesses. What they ALL seem to fail, at the 2nd grade level I might add, is that the prices for products would go up and now the buying power of those few dollars gained is gone and EVERYONE suffers instead of the unproductive only. That's the thing about their ideology (Socialism), it makes EVERYONE equally broke.
... maybe you need to read and find out just how much the right wingers promoted this outsourcing madness and how many executive were and are right winger who carted off American business.
You should learn to respect the word Social- Ism, because EVERY SOCIETY IS A FORM OF SOCIAL-ism....
Geez....
Honestly, thank goodness a great many in America are not as self-centered and self consumed. American people did not complain about paying the cost for goods.. It was greedy white male establishment, who was not satisfied with solid profit, they wanted "get rich now and quick profits" and started chasing slaves on other lands, and telling American they could not compete, when American had no problem with paying the cost of goods that was produced with their labor.. For that matter, the ENTIRE world was buying American goods and paying the cost, because they were durable goods and people could rely on them.
Right winger minded greed chaser are the ones who went and started putting plastic gears in thing that once had metal gears, they are the ones who started putting cheap foreign parts in things and trying to sell it under an American LABEL.. and as people bought because the label ONCE UPON A TIME MEANT SOMETHING, over time people realized, they were getting nothing but cheap low grade products with an American label and all it amount to was a shell with cheap foreign parts.
That's why people balked at paying for this stuff. Then the same Right Winger white male establishment, sent back to this country nothing but disposable goods, "forcing people to have the intent to repurchase every short cycle", all to feed his greed.. Now... we have no production of American Made Durable Goods, that the World is willing to pay for, because they are not going to import something they already made in their country, just because Americans stuck an American label on it and the foreigner knows they built everything that is within it, and they can buy the EXACT SAME in their land, which is made by them, even cheaper, and if they want good quality, they now can ONLY find that in their land, with a higher quality known brand from their own country.
In the expanse of American history right winger mindset white male greed has continually brought down and ultimately destroyed anything and everything that was built, and they will sell anything for money. That's why long term long established nations, they don't rush out every other day to sell their Marquee Items, not their Marquee Business and certainly not their Marquee Landmarks.
We just watched American fall so low, until now we have a Russian and Other Foreign Money gought administration running this country, ( further in the ground- all for GREED, Even now, every time the current President is on the world stage in foreign nations, every time!!! he whines about everything, condemn everything about America and then he talks, and start whining about money.
The greatest blessing that America has today, is within its people who were not born and groomed with the right winger ideology... Look at it: its the difference in ideology that brings down a nation and one that lifts it up... its the difference between what is a divisive mentality and ideology, and what is a unifying mentality and ideology.
Last edited by Chance and Change; 07-06-2017 at 01:07 PM..
Your other costs wouldn't go up, because taxes weren't increased, the power company isn't going to charge more per kwh, the water company isn't charging more per gallon, because people in those fields make much more than minimum wage and wouldn't be affected by the increase. So you can make labor a 3% higher figure in the total budget to keep everything else the same.
Quote:
Originally Posted by CBeisbol
Let's try something
Let's make an imaginary product that currently sells for $100
Labor is 20% - so $20
Materials are $20
Overhead is $20
Utility is $20
And Profit is $20
What numbers are we using here, a 20% increase in labor?
So labor now costs ($20 * 1.2) $24
That would make the cost of the produce $24+$20+$20+$20 = $84.
Tack on the same $20 profit and the new sales price would be $104 - a 4% increase in the sales price.
*Ignores other factors such as, but not limited to: a decrease in demand for the product, increases in costs to suppliers
Not correct in the minimum wage situation.
1. All costs will go up because everybody must follow the law, no?
2. Your profit in your example should not be $20. It needs to be at 20%. If you are making $20 while selling your product at $104, you aren't making the same profit margin.
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