Raising Minimum Wage and Alternative Solutions

[Gibby]

I never do the line by line critique but I think it's probably necessary to explain this and then move on with my life. Apologies to the neutral reader.

So now I don't have morals

Well I never said that. Mainly because morals aren't facts; they're subjective as taste in music or the style of shoe you prefer to wear on your feet. According to my morals, being opposed to wage rises when data suggests that it is wise to do so and when there is a widening gap between rich and poor and the basics of every day life are becoming harder for low wage earners to afford, that is fairly immoral. What's a greater sin, 'more immoral' if you will, is operating on prejudice where facts contradict.

You do understand Marxists are left leaning in fact very far left leaning

Yes. I do. I don't see what this has to do with this conversation. The word 'Marxist' isn't something you can use like a power card to win a debate. Indeed, descriptive Marxism (describing the system of economics in play today) is largely to thank for the worldview of how we understand business and worker relations.

So raising minimum wage isn't redistribution of wealth Where do you think the extra money is coming from some magical money tree

Let me start by asking you a question: has there always been the same amount of money in the world, or has it in fact grown? Mull on that a second.

Here's where you're repeatedly not reading what I have written on page one of this thread. I'll try and break it down for you in really simple terms because I do worry sometimes that my posts are needlessly complex.

Henry Ford used to make cars. Cars were a luxury item back in those days and generally-speaking, those who laboured in his factories could not afford to buy the cars Ford was producing. Bad for the workers, sure. But also: bad for Ford. If he cannot sell cars to a wider range of people then how can he grow beyond the 3-4% of people who can afford his product. So Ford has an idea: raise wages for workers in his plant. He doubled wages for all (note: I am not suggesting we double wages for all).

This act overnight grew the potential owner market for his product. His company became a desirable place to purchase from for a wider market (cars were still a luxury, but one you could conceivably own on doubled wages). History shows us what happened to Henry Ford's wealth (summary: it went up) as well as how well his company did and what it did to American mobilarity in the early part of the 20th century.

Money in the economy is not like a household budget with incomings and outgoings. It is circular. My spending is your wages. Your spending is someone else's. If you look at it from a selfish standpoint that you're going to have to pay out an extra $30 a day to your shopgirl then I feel sorry that you're not willing to participate in a cultural seachange that stands to benefit you because things like data and evidence can be overlooked by waving your arms and screaming 'Marxism'. Was Henry Ford a Marxist? No, he was the archetypal American capitalist.

Obviously the "Rich Owner" with added costs will have less especially if GP takes a hit

I've already posted a very solid study on this. Please read at least the executive summary of it. It's not 'Marxism': it's economic research based on things that have happened.

I love the fact when some people like an idea to "Make things Fair" never offer their money

Well I would. It's called progressive taxation and it's a wonderful thing.

So your critique is if anyone doesn't believe in a higher minimum wage then they are just evil capitalist pigs

I don't like to throw insults around where I can avoid it. If someone doesn't believe in something despite overwhelming evidence to the contrary, I'd start to question their ability to judge, sure, and presume they were capitalist. I don't believe in the concept of 'evil', and pigs are quite nice.

First off I never disagree with a higher minimum wage
What I do disagree with is raising it as much as $3 more in one process
How about raising the wage in a 2-3 year window

The finer specifics of the bill I'm not familiar with I must admit.

Furthermore its window dressing by the far left politicians
Why haven't they brought up this amount before Oh yeah thats right because they figure to stir up their base because otherwise this Nov they are fixing to lose alot of seats in DC

Firstly, let me just say this: the USA does not have ANY far-left politicians in office with the exception of Kshama Sawant, a Seattle city council member. Secondly: you're surprised politicians might want to do something for their base? Well duhhh. That base is people, and whether it's a noble act done with ulterior motives, it still does good for people.

The minimum wage should be raised but its not an entitlement

I'd argue both but glad to see you're with it now.

Most wages are earned based off of prior success and skill set

This is patently untrue. Nurse vs Nascar driver? Who earns more? Whose skill is more vital and urgent?

If "Rich Pigs" just wanted to keep their money they would low ball everyone

They have done for years, my friend.

 

[scomvp316]

Many countries in the last 100 years have tried the trickled up affect and hasn't garnered enough for their economy for massive positive growth
The Marxist comment referring to it be left leaning was in response to you in O Reilly who leans to the right
The trickle up affect has worked for some companies and it has failed for alot
In business their is a saying of direct contact marketing which Henry Ford did
I am sure if his balance sheet was ever available it would show that the trickle up affect hurt his GP % seeing more operational costs always affects that part of the balance sheet
I guess we will soon see if the trickle up affect will work in the US
Business is alot lot politics it all depends what philosophy you believe
The minimum wage was written in one of Karl Marx's books and was called Fair Compensation and even Marx in this book said it was a version of redistribution of wealth
Anytime you have trickle up affect it will always be considered redistribution of wealth
I always respect people's opinion even if I don't agree

Me personally trickle up affect doesn't work in my business
I pay my employees a very good amount compared to the market
I do that only because I feel that its the right thing to do
If I make a profit of only $1 I am satisfied
I am not into it for greed but for the passion
The one area that trickle up affect does work in is the credit market
People that make more money will be able to honestly afford payments on their mortgage and the auto industry
Other aspects of the economy throughout history has had little to zero change
You can take a look at any public company's balance sheet when wage costs increase see the GP % compared to six months before the operational wage increase
Of course thats just my opinion

 

[TWJC: The Beginning]

Many countries in the last 100 years have tried the trickled up affect and hasn't garnered enough for their economy for massive positive growth
The Marxist comment referring to it be left leaning was in response to you in O Reilly who leans to the right
The trickle up affect has worked for some companies and it has failed for alot
In business their is a saying of direct contact marketing which Henry Ford did
I am sure if his balance sheet was ever available it would show that the trickle up affect hurt his GP % seeing more operational costs always affects that part of the balance sheet
I guess we will soon see if the trickle up affect will work in the US
Business is alot lot politics it all depends what philosophy you believe
The minimum wage was written in one of Karl Marx's books and was called Fair Compensation and even Marx in this book said it was a version of redistribution of wealth
Anytime you have trickle up affect it will always be considered redistribution of wealth
I always respect people's opinion even if I don't agree

Me personally trickle up affect doesn't work in my business
I pay my employees a very good amount compared to the market
I do that only because I feel that its the right thing to do
If I make a profit of only $1 I am satisfied
I am not into it for greed but for the passion
The one area that trickle up affect does work in is the credit market
People that make more money will be able to honestly afford payments on their mortgage and the auto industry
Other aspects of the economy throughout history has had little to zero change
You can take a look at any public company's balance sheet when wage costs increase see the GP % compared to six months before the operational wage increase
Of course thats just my opinion

Trickle down has no evidence (0) of ever working.

Raising the minimum wage is NOT redistribution of wealth. A CEO who decides to pay himself more when his WORKERS produce more is redistribution of wealth. Ever since Reagan really popularized this bullshit, worker share of revenue has gone down despite worker productivity going up.

It's not "trickle up" it's called aggregate demand. When your consumers have more money to buy product, you make more money. The cost of laborers isn't enough that increasing their pay hurts you.

It's not a matter of opinion. Trickle down factually does not work. When wealth is more equally distributed, the economy does better. It's been validated all through history. No one is saying socialism. We are saying pay people a livable wage.

You also have to consider that people making less have to use government assistance (or steal/sell drugs) which puts the rest of society at a deeper loss. I don't want to subsidize labor. You might say "well why force businesses to pay more". My answer isn't a moral one, it's an economic one. Simply look at our economy before and after businesses were held accountable. You'll notice a sharp increase in the economy when unions and regulations (like minimum wage, 40 hour work week, etc) came into play.



I'm just going to bullet point some of your other things.

1. "Where do you think the money comes from" (when saying min wage is redistributin)

The money does NOT come from the owner. The money comes from the consumer. Who's transaction was helped by the worker. Consumers are job creators. I have a business degree as well from a school that is rated top 15% in the country. Not presitigious, but the best public school in my state. I also have a minor in economics.

2. Some will increase price to cover the cost.

Again, do you REALLY think all you need to do if you want to increase revenue is increase cost? In that case, I just gave myself a $1,000,000 raise, so guess what, now I'm selling hugs for $1,000,000 to cover that expense. Doesn't mean anything. If people won't pay the new price, my revenue isn't increasing. Raising price because of increased wages is stupid. You still have to hit a price point that people would pay. If they are willing to pay more, they are willing to pay more regardless of how much you pay your employees and you weren't efficient to begin with.

3. Many countries in the last 100 years have tried trickle up...

Name one. The united states used "trickle up" (demand driven) economics in the 50s and it worked pretty damn well. It wasn't until Reagonomics that our middle class was squeezed and now we have a lot of people working 40 hours a week and still needing government assistance.



I think the issue is you're very black and white about it. You also have the supply side perspective of the owner being the money generator. The owner writes the checks but the owner isn't the reason the money is there. The reason the money is there is consumers.

If company A, B, C, and D are all in the same city, and they all employ a bunch of people. If they all pay their workers like shit, all their revenue will go down, eventually cutting themselves into going out of business.

Your workers are consumers. Aggregate demand. If nobody is getting paid a livable wage, then no one is spending. The greedy owners who think they are the reason the profit is there (they're not) are hoarding the money, less money gets spent. It's called the marginal propensity to spend/consume. This means less money in the economy.

I do agree that it should be gradual. At least for small businesses. Fuck Wal Mart, they can handle it. I'd also penalize companies that don't pay their workers well with higher taxes because their workers are more likely to be on welfare or need to steal/sell drugs to eat. Maslov's Hierarchy of Needs.

 

[scomvp316]

Trickle down worked in the US for a short period in the 80's and then it led to a recession in the early 90's
Yes I agree as a whole workers are the consumer Thats one of the first things we learned at Wharton
Trickle up was in Germany in the 70's-80's that helped them finally rebound post WWII It worked to a certain degree but then high taxation followed suit and crushed it
I have always been a believer of adopting certain aspects of both trickle up and down
When employees make little it doesn't guarantee certain businesses going under
Wal-Mart started and still preys on the low worker seeing they buy items at a much reduced price and sell for less compared to the market but get high return
When you talk about unions the huge power grab at in some unions get a 90% share of the pie and thats one of many reasons jobs went overseas I do believe any company takes their jobs overseas should have a high % of tariffs on their products
Personally if people want to close the gap between rich and poor the 10.10 number isn't significant enough I think to close the gap the base wage would have to be around 15-17
People should take a look at one stat: manufacturing workforce % compared to collegiate participation % This number started to get high in the 80's and quite the coincidence when the manufacturing number dropped the collegiate participation number rose quite heavily Thats the real problem of rich vs poor is that alot of people just don't want those jobs regardless of pay Union powergrab has hurt alot of companies that are affiliated with unions with a very high % going towards unions wages and pensions have seen slow GDP growth within that company and because of the money going towards unions has drastically affected price point Recently the predicted GDP was 1.2 and in that same predicted time frame it only rose .1 Thats a horrible number for just one month There are many variables involved with rich vs poor gap and wages are part of it but not the main focus

 

[TWJC: The Beginning]

Trickle down worked in the US for a short period in the 80's and then it led to a recession in the early 90's
Yes I agree as a whole workers are the consumer Thats one of the first things we learned at Wharton
Trickle up was in Germany in the 70's-80's that helped them finally rebound post WWII It worked to a certain degree but then high taxation followed suit and crushed it
I have always been a believer of adopting certain aspects of both trickle up and down
When employees make little it doesn't guarantee certain businesses going under
Wal-Mart started and still preys on the low worker seeing they buy items at a much reduced price and sell for less compared to the market but get high return
When you talk about unions the huge power grab at in some unions get a 90% share of the pie and thats one of many reasons jobs went overseas I do believe any company takes their jobs overseas should have a high % of tariffs on their products
Personally if people want to close the gap between rich and poor the 10.10 number isn't significant enough I think to close the gap the base wage would have to be around 15-17
People should take a look at one stat: manufacturing workforce % compared to collegiate participation % This number started to get high in the 80's and quite the coincidence when the manufacturing number dropped the collegiate participation number rose quite heavily Thats the real problem of rich vs poor is that alot of people just don't want those jobs regardless of pay Union powergrab has hurt alot of companies that are affiliated with unions with a very high % going towards unions wages and pensions have seen slow GDP growth within that company and because of the money going towards unions has drastically affected price point Recently the predicted GDP was 1.2 and in that same predicted time frame it only rose .1 Thats a horrible number for just one month There are many variables involved with rich vs poor gap and wages are part of it but not the main focus

It did not work in the 80s. The tax cuts actually caused a horrible recession. The economy didn't turn around until Reagan started spending like crazy. The middle class died and jobs were shipped.

Union powergrab is why I didn't work at age 5. Sometimes there is overreach but I appreciate unions.

Wal Mart is a different animal completely. If Henry Ford paid his employees well so they could afford his cars, Wal Mart does the opposite. If Wal Mart paid their employees decent wages, they would shop at better stores.

I agree about the manufacturing/college. The way colleges are ran in this country is a racket. Senator Elizabeth Warren is one of my heroes because of some of her proposed legislation with education and interest rates on student loans. Lucky me, I have two useful degrees and had a job before I graduated. Personally, it shouldn't cost money. You should test into it. I don't know how many spoiled suburban brats I know who have no business in college. Their parents pay, they get a 2.0 and squeeze by. We are a service economy at this point. I don't think it's that people want to get paid an extraordinary amount, it's that nobody should work for the 50 cents/hour foreign labor will work for.

We don't push technical skills in this country a lot. We need a more diversified post high school path. We also need better education in general.

Just so we're on the same page, define "trickle up" and "trickle down". I use the classic definitions of supply side economics and Keynsian Economics. In a nutshell, I believe supply side fails because you give those with power even more power and it runs wild. In a perfect world, if you don't pay me enough, I go to the next job and the next until I find a job that I like. I don't have enough bargaining power to do that though and the business has exponentially more. I starve if I don't get hired, they find someone who will work if they don't hire me. That's why you need smart regulations to balance it (Keynsian). Of course, you have to be careful with Keynsian because if you do it wrong, you cause inflation.

 

[scomvp316]

I am not a union guy not because I may have less money from a NP perspective but just how they have reacted over the last 20 years I admit I lean to the right a bit but on certain issues I slightly lean to the left
From my POV trickle down has usually been about tax cuts not just income but payroll and corporate taxes as well The general idea of that is you hope with the extra cash the top 10% will invest most of the extra cash and he/she business will rebound quickly especially if you can by extra supplies that can drop down prices which will then hopefully bring in more customers

Trickle up and this is my POV is to try and cut the gap between rich and poor which starts with wages and higher taxes for the top tier to have social programs to bring the poor out of poverty especially for sponsored programs for job training that can lead to college and then that should open the door for even higher wages for that individual

Between the two the trickle up has a longer term of success
I believe the two can exist if implemented the right way
I am not a fan of lower interest rates from the Feds
It dillutes the market and long term growth bubble will burst Reason why we had a recession Not a fan of putting people in homes that can't afford them Thats both the left and right problem they created One reason the economy is slow is because the credit market isn't even close to getting back to stable condition Thats why they keep printing money and when that stops you will see how the economy really is I like Interest rates between 2.3-3.4 Thats a sign when government is out of the way and the economy is flourishing on its own from the middle The middle class has always been the key when thats being over run either from the top or bottom only economic chaos will happen from either direction

 

[TWJC: The Beginning]

I am not a union guy not because I may have less money from a NP perspective but just how they have reacted over the last 20 years I admit I lean to the right a bit but on certain issues I slightly lean to the left
From my POV trickle down has usually been about tax cuts not just income but payroll and corporate taxes as well The general idea of that is you hope with the extra cash the top 10% will invest most of the extra cash and he/she business will rebound quickly especially if you can by extra supplies that can drop down prices which will then hopefully bring in more customers

Trickle up and this is my POV is to try and cut the gap between rich and poor which starts with wages and higher taxes for the top tier to have social programs to bring the poor out of poverty especially for sponsored programs for job training that can lead to college and then that should open the door for even higher wages for that individual

Between the two the trickle up has a longer term of success
I believe the two can exist if implemented the right way
I am not a fan of lower interest rates from the Feds
It dillutes the market and long term growth bubble will burst Reason why we had a recession Not a fan of putting people in homes that can't afford them Thats both the left and right problem they created One reason the economy is slow is because the credit market isn't even close to getting back to stable condition Thats why they keep printing money and when that stops you will see how the economy really is I like Interest rates between 2.3-3.4 Thats a sign when government is out of the way and the economy is flourishing on its own from the middle The middle class has always been the key when thats being over run either from the top or bottom only economic chaos will happen from either direction

Let me ask you this about trickle down. You say "with the extra money, hopefully the owner reinvests it in the company" (paraphrased). However, does that even matter?

Let's say you have a city. That city has a cumulative desire/money for Mexican Restaurants of $5M. There are 5 Mexican restaurants in town, each generating roughly $1M each. You cut taxes on business owners, so they have more money. One of them decides to open up a second Mexican restaurant on the opposite side of town.

One of two things will happen. 1) His new restaurant fails because there isn't enough demand for it. 2) One of the other restaurants fail because there isn't enough demand for it.

There lies the problem with trickle down. You can't sell product without demand. Either your new venture goes out of business, or someone else's does. I realize the theory is that if each owner invests in a new restaurant (or whatever they own), that there are that many new workers and thus, more demand. That doesn't happen though. People are greedy so the money is usually pocketed.

What you're talking about with the coexisting is Keynsian Economics. Regulating in a way that doesn't give the rich people too much power, but also doesn't strangle creativity and new ideas. Personally, I feel like education is the most key. A populace skilled in a variety of ways will have jobs. You need tax revenue to do that, and rich people/corporations are currently skipping out on their share.

 

[jacdnwarrior]

There has to be some intervention on the minimum wage. Go to countries where businesses/industries are left to control the wages of their employees without any intervention and you see incredible abuse, for years if not decades. There must be some standards put in place, because if there isn't any, many business owners will abide many will find ways to abuse it. Depending on the importance of the industry as an employer that can have a huge damaging affect on the people of that city, states, if not countries.

I have very little sympathy for the bigger companies. You started a company offering a product you created that people want or need. However, your company functions because of the efforts of a workforce that gets behind and dedicates its efforts to help you succeed. Without that workforce, you would not succeed. Some of the most well known large companies could pay more than the current minimum wage while not suffering any kind of effect whatsoever. Governments have given many companies (banks, car manufacturers, etc) financial breaks and aid (paid for by the tax payer) only to see them not pass that good fortune to their workers but put it into their own accounts offshore, while shipping those jobs to nations with much lower minimum wages than Canada/USA.

If there is an age limit imposed, companies will probably accept it and hire people irregardless of age and not have any negativity around it, others will only have people under 25 working for them and then once they turn 25 kick them out the curb. Perhaps there could be quotas put in place in hiring based on age due help reduce costs.

Income equality is a serious problem, and it has to be tackled somehow. Finding the way to help people climb higher on the economic ladder is the key. Getting people college or university education is helpful, but education in many places is about the money in your wallet some get quality many get substandard, post secondary tuition costs puts that out of reach for many , school loans and the rates are a nightmare to deal with. These issues make the gap between haves and have nots even greater.

Raising the minimum age is a small thing but it could help in a number of ways.