$10.10 Minimum Wage Would Actually Create New Jobs: Study

[bigarrow]

Quote from PiggyBank:

i get how it works, but you wouldn't just say "we'll take the loss" BEFORE even seeing what your comp does, would you? I would vote to shit can a ceo that said that (and meant it).

No of course not, the object is to make money. Besides fast food how many industries would 10.10 make a difference. And what about the argument that the higher wages for the working poor would help the economy, there is some validity to that.

 

[Ricter]

Quote from PiggyBank:

true but their costs are all still going up equally. those that will employ fewer people or raise prices, or whatever.. are trying to keep their margins in line. just stating 'we'll eat the cost' is lazy and stupid, from the companies perspective.

It's also lazy and stupid to say "prices will go up". Not necessarily, or necessarily by much. To quote, re profit margins, "the profit share of national income is at an all-time high while the compensation share is at a 50-year low". Of course, that's averaging.

 

[PiggyBank]

Quote from bigarrow:

No of course not, the object is to make money. 1)Besides fast food how many industries would 10.10 make a difference. 2) And what about the argument that the higher wages for the working poor would help the economy, there is some validity to that.

1) i dunno, but the point is this attitude that because it's a small increase and won't effect many business's is the problem. These little cost increases add up over time, and like gwb was stating in his post, they do end up pricing out the smaller players and raise the barrier to entry. this stifles competition and is bad for the economy.

2) all of my posts in this thread were about how it would (and has) hurt the economy. I don't see it as a valid argument at all.

 

[gwb-trading]

This is a good example of why putting in place a punitive tax aimed at one particular sector of the economy always back-fires. If you tax everything that is sold equally, but as soon as you put in place any type of 'luxury tax' the unintended consequences tend to pile on quickly.

For example, at some point someone proposed a 'luxury tax' on high-end expensive furniture that is sold to wealthy people. The reality is that this proposed tax would only serve to crush the sole remaining part of the furniture business that is still manufactured in the U.S. - leading to over 10,000 job losses in North Carolina and other states. Fortunately this tax proposal to 'stick it to the rich' never got anywhere.

Quote from tomdavis:

The minimum wage proposal is based on an economic model. But there's just one problem.

Economic models often fail because they're bound by assumptions that don't measure "unintended consequences."

Here's a classic example:

When a good idea isn't such a good idea

In the late 1980s the idea of a “luxury tax” on yachts had 80% support from the public. College professors all across America clamored for the tax, claiming their economic models showed it would raise tens of millions in tax revenues while making the rich pay their "fair share." A few brave souls dared to mention the problem of “unintended consequences,” but they were quickly shouted down.

Under sustained public pressure, Congress enacted the luxury tax in the fall of 1990. But what seemed like a good idea at the time quickly turned into an economic nightmare when people simply stopped buying boats.

The yachting industry tumbled into an irreversible decline. American boat sales fell by half. Over 35,000 middle-class boat-building workers, sales people, administrative staff and managers lost their jobs. Over 50,000 people who worked for companies that supplied yacht parts and raw materials also found themselves in the unemployment lines. Factories that had been filled with American workers manufacturing high-quality products were suddenly empty. In less than two years, the luxury tax on yachts destroyed tens of thousands of middle-class jobs.

Adding insult to injury, the luxury tax also resulted in a net loss to the US Treasury. In other words, the lost income taxes from the workers and boat businesses plus the cost of unemployment benefits paid by the government was tens of millions of dollars more than the amount of luxury tax collected.

In 1993 the luxury tax was repealed by Congress, but not before the damage had been done. Almost a hundred thousand jobs were lost and scores of boating businesses were bankrupt or irreparably damaged.

 

[PiggyBank]

Quote from Ricter:

It's also lazy and stupid to say "prices will go up". Not necessarily, or necessarily by much. To quote, re profit margins, "the profit share of national income is at an all-time high while the compensation share is at a 50-year low". Of course, that's averaging.

well if you think prices are going to stay the same and companies are going to hire more people at higher wages, then you think they are going to eat the cost themselves, and i know that's not going to happen.

And if you think they're going to make up for this with volume, because the min wage workers are going to spend more, then you are making the same argument that conservatives do for lower taxes. More disposable income = more spending, except in the latter case, it will be a much larger boost to the economy as the people effected are more numerous and have more income than min wage workers.

 

[Ricter]

Quote from PiggyBank:

well if you think prices are going to stay the same and companies are going to hire more people at higher wages, then you think they are going to eat the cost themselves, and i know that's not going to happen.

And if you think they're going to make up for this with volume, because the min wage workers are going to spend more, then you are making the same argument that conservatives do for lower taxes. More disposable income = more spending, except in the latter case, it will be a much larger boost to the economy as the people effected are more numerous and have more income than min wage workers.

Businesses will take the path of least resistance to preserve their profitability. Some will raise prices, if that works. Others will lower employment (though they'll have to increase productivity). And others will shave margins. US corporate profits have never been higher (for some), so that last option has never been easier (for some).

 

[Max E.]

Quote from PiggyBank:

I wonder what the BoD thinks about their ceo's plan to make them less money.. sounds like empty words or even just fabricated bs.

Ricter school of management

 

[bigarrow]

Quote from PiggyBank:

1) i dunno, but the point is this attitude that because it's a small increase and won't effect many business's is the problem. These little cost increases add up over time, and like gwb was stating in his post, they do end up pricing out the smaller players and raise the barrier to entry. this stifles competition and is bad for the economy.

2) all of my posts in this thread were about how it would (and has) hurt the economy. I don't see it as a valid argument at all.

The living standard of a countries people defines that country. Regardless if the wage is mandatory or not the lower the wages of the working poor the poorer and less successful that country is. Taking your argument to the extreme there should be no minimum wage and if an employer can get people to work for slave wages then that would be ok and good for our country. As for your statement that the minimum wage has hurt our economy I've seen no evidence of that and there is evidence to the contrary.

 

[Max E.]

Quote from bigarrow:

TRegardless if the wage is mandatory or not the lower the wages of the working poor the poorer and less successful that country is.

This might be one of the most foolish statements i have ever seen, hows china doing?

 

[bigarrow]

Max you worthless piece of shit, go fuck yourself.