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I'm curious how many of these raise-the-minimum-wage cheerleaders have ever actually run a business. I'm particularly curious how many have run a retail business.
Raising the minimum wage hurts small business, especially retail. You all can chatter away about the academics of it all day long, but in the real world, this is common knowledge.
One business does not the economy make. Show me the stats.
Explain this to me. Why has no one been fired at my company because of a raise in our wages? Why have prices to our customers gone down while our wages have gone up? This real world example flies in the face of everything you exploitatation cheerleaders are saying.
Removing the minimum wage would result in exploitation of desperate people. Profits would increase, and we all know who benefits from trickle-down economics: The Chinese.
Try running you model with some realistic numbers. Say, 10% of people are affected by the minimum wage increase, but 100% of the people are affected by any subsequent price increase. Now what happens?
Lets say oranges in Florida cost $1.00 each. Of that $1.00, 10 cents pays for the labor to pick them in the fields. The pickers in the fields are paid a minimum wage of $6.55 per hour with a daily output of 500 oranges. Now lets assume that the minimum wage is raised to $7.55 per hour. With the laborers still picking 500 oranges per day, the new overhead for picking an orange is 12 cents each. So, the new price of an orange at the store will be $1.02 taking into account the additional overhead of ONLY the picker. Lets assume that the person that washes the oranges, boxes the oranges, loads the oranges on a truck, fills the truck with fuel, the person who unload the oranges, the person that stocks them on the store shelves, and lastly the cashier and bagger all have their wages increase; what is the price now. So now, this picker goes to the store to buy an orange for his lunch.... with a cost now well over the $1.50 mark, that raise of an extra dollar an hour isn't helping so much anymore not to mention all of the other necessities required to sustain his life which have all went up in price.
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Originally Posted by saganista
LOL. We have one of the highest nominal corporate tax rates among developed economies, and thanks to myriad tax breaks and credits, one of the lowest effective corporate tax rates.
"Because of the federal deductibility of state and local taxes, the effective "tax cost" of the average state rate is 35 percent less than 6.6 percent, or 4.3 percent. This rate is then added to the 35 percent federal rate to give an overall rate of 39.3 percent. In the appendix table, each state's rate is reduced by 35 percent before being added to the federal rate." The Tax Foundation - U.S. States Lead the World in High Corporate Taxes
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Originally Posted by saganista
Free markets are amoral. They just seek equilibrium. They don't care where that is or what it looks like. Failure to regulate markets is like like shooting yourself in the foot. And both knees, an elbow, and a shoulder...
So basically, people are driving this type of interference with free trade under the guise of "what it looks like", i.e. "how it makes me feel". Equilibrium is fair. Its been working for 200 years and has produced one of the most successful nations the world has ever seen.
Going further, I never said that I didn't see the benefits of regulation, but they all don't fall under the same cover. Regulation by taxation and regulation by attempting to influence the overall market is wrong. Regulation to ensure that my orange picker washes his hands is good. Regulation providing that equal rights to all employees should be given is good. Regulation to encourage racism through programs like affimative action is bad.
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Originally Posted by saganista
Get a grip. Markets are a tool, just like a chainsaw. If you're not careful, you can do some real damage with either one of them.
Conversely, being too careful to include guards on the dangerous parts of the chainsaw can impede its ability to do its job and ultimately render the tool useless.
Explain this to me. Why has no one been fired at my company because of a raise in our wages? Why have prices to our customers gone down while our wages have gone up?
Uhh...
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Originally Posted by nvxplorer
One business does not the economy make.
Damn, that was easy.
Answer this for me, nv:
Have you ever owned or managed a small retail store?
If the economy operated "logically," you'd be correct, but economics is a social science. What we've observed - so much so that it's called a law - is that when prices rise, sales fall, so your little "logical" experiment isn't necessarily true. Indeed, if an operator has his ducks in a row, he's already operating at peak efficiency, so raising prices will not affect profit one bit. In fact, depending on his particular case, raising prices could decrease profit.
This has never been shown true regarding the minimum wage.
Same thing. Price is a reflection of supply and demand, not the corporate tax rate.
At a price of y, x number of widgets can be sold. Very basic. Raise y and x goes down. Profit goes nowhere. Any tax increase or wage increase comes out of profit. Simple.
A perfect example would be my company. About 90% of us got a raise last January, but because of pressure from competitors, price to our customers went down.
So you are saying that the cost of overhead including wages and taxes has absolutely no impact on price? Only supply and demand can impact price?
No matter how you slice it, putting the additional burden on corporations is going to lead to a consequence. Can you think of a single positive one caused by infringing on their profit margin?
I find it very amusing that those who are barking the loudest about minimum wage are the same people who bark about Wal*Mart and "the corporations", yet those large companies are the only ones that can truly afford to absorb the added cost of a minimum wage increase.
By supporting regular increases in the minimum wage, they're promoting the destruction of small businesses and increasing unemployment.
Are they for the little guy, or are they trying to eliminate all of Wal*Mart's competition? I wish they'd make up their minds...
So you are saying that the cost of overhead including wages and taxes has absolutely no impact on price? Only supply and demand can impact price?
In general, yes, but there are a plethora of market forces that effect every other market force. That's why simplistic assertions such as that in the OP are so off the mark.
Taxes are not overhead. Taxes are paid on profit.
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No matter how you slice it, putting the additional burden on corporations is going to lead to a consequence. Can you think of a single positive one caused by infringing on their profit margin?
Yes, taxes are a burden - on everyone who pays them. Singling out corporations is a fallacy (but the Chamber of Commerce loves it when it can dupe people into taking the side of business).
Taxing me leads to a consequence, as well. Now I have less money to give to Corporation X. Why don't we raise the corporate tax? Then we can eliminate my tax, and I can afford to give more money to Corporation X. Therefore, raising the corporate tax is good for me, good for business, good for the economy.
You see, jcarlilesiu? Any economic argument can be turned around. The moment you see the economy in black-and-white terms is the moment you lose sight of what actually happens.
It boils down to this. Who knows better how to spend his money? The consumer or the corporation? If you favor the corporation, then the consumer will have less buying power. If you favor the consumer, then the corporation will have less after-tax profit. It's a merry-go-round, not a straight line, as some would have us believe.
Very good, but I'm not the one making these claims about price and unemployment. I know many people who received raises this year at other companies. No one was laid off there, either.
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Answer this for me, nv:
Have you ever owned or managed a small retail store?
No. Point? I'm perfectly capable of understanding the economies of retail stores.
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