U.S. Presidential race - Democrat Discussion

[Kalyyn]

The thing that you're all conveniently ignoring is that many jobs aren't worth 7.25 an hour. Instead of getting a pay increase, the people working those jobs just get laid off. Now, a minimum wage set at the wage equilibrium would be perfect in that it would ensure that employees are paid what they are worth while not creating deadweight loss. However, this is not possible due to the fact that the equilibrium wage for each job will be different based upon the profit that job produces. So throwing out a hazard guess that's clearly far above the ideal wage for most manual labor only causes people to lose their jobs.

Here it is in visual form, if that helps.


---------- Post added 2012-06-11 at 12:01 AM ----------

While there is not a set minimum wage in Denmark as it is determined by collective bargaining - its around 18,85 $ an hour - what is it in the US? Was it 7,75 as kalyyn said or was it just an example?

It varies from state to state. It's 7.25 in Indiana.

[ishootblanks]

At best it creates a high standard of living

minimum wage does not improve anyone's standard of living.. it just raises the baseline in which people require to survive.. as it increases the most expensive factor in running a business.. labor costs

notice every time minimum wage goes up 10 cents.. the cost of bread goes up 15..

not to mention.. minimum wage is not intended to be a living wage.. it's intended to be the absolute minimum amount of money a business is allowed to pay a person..

[eriseis]

<snip>

Again, if your business is producing 7.XX per employee, then you have larger issues than wages. It's arguable to what degree wages play a factor in reducing the head count for a company. A smaller head count eliminates overhead costs and speeds business. Hell, a former employer made employees reduce as much head count as possible (future head count, the employer did not believe in lay offs) even when employees were producing at least half a million bucks on average for the sake of efficiency and productivity.

[Sunseeker]

minimum wage does not improve anyone's standard of living.. it just raises the baseline in which people require to survive.. as it increases the most expensive factor in running a business.. labor costs

notice every time minimum wage goes up 10 cents.. the cost of bread goes up 15..

Um, no? Minimum wage is 7.25 Federal for most labor groups. The price of bread is anywhere from .99c to $5(if you want your 5-grain organic stuff).

By your argument, since minimum wage increased from 5.15 only a few years ago, bread should be somewhere in the realm of $4 MINIMUM(assuming bread cost at least a dollar to start with).

Minimum wage isn't intended to increase anyone's standard of living, it's intended to make you simply capable of living on a single income with a full-time work week. Paying employees so little that they can't afford your products is pointless, if they can't afford your goods, you don't sell anything and everyone's broke..

[eriseis]

minimum wage does not improve anyone's standard of living.. it just raises the baseline in which people require to survive.. as it increases the most expensive factor in running a business.. labor costs

notice every time minimum wage goes up 10 cents.. the cost of bread goes up 15..

not to mention.. minimum wage is not intended to be a living wage.. it's intended to be the absolute minimum amount of money a business is allowed to pay a person..

Livable wage in Boston is like 13 bucks an hour, anyone working for the city has to make that much (city organizations will pay at least that and contractors for the city have to pay at least that). The salary didn't raise the cost of living, the salary rose due to cost of living.

With inflation into account, after a few number of years I can't keep paying people 5 bucks an hour unless I want them all on welfare.

---------- Post added 2012-06-10 at 08:11 PM ----------

It's intended to make you simply capable of living on a single income with a full-time work week. Paying employees so little that they can't afford your products is pointless, if they can't afford your goods, you don't sell anything and everyone's broke..

Or you make them so poor that you are their only option for food, like Wal Mart.

[Kalyyn]

Again, if your business is producing 7.XX per employee, then you have larger issues than wages. It's arguable to what degree wages play a factor in reducing the head count for a company. A smaller head count eliminates overhead costs and speeds business. Hell, a former employer made employees reduce as much head count as possible (future head count, the employer did not believe in lay offs) even when employees were producing at least half a million bucks on average for the sake of efficiency and productivity.

The point isn't how much profit each employee generates. The $6.50 figure was purely hypothetical. The point is that at a certain threshold, it becomes cheaper to hire a foreigner and ship my chairs back to America than to just build them in America. That's when people start losing jobs.

[eriseis]

The point isn't how much profit each employee generates. The $6.50 figure was purely hypothetical. The point is that at a certain threshold, it becomes cheaper to hire a foreigner and ship my chairs back to America than to just build them in America. That's when people start losing jobs.

There will always be people who can make it for cheaper. A Mexican minimum wage worker makes in a day what a minimum wage worker in America earns in an hour, if Mexico raises wages there's always, I dunno, Guatemala to Zimbabwe.

I wonder if wages was as prominent of a factor of factories being created elsewhere or whether it was the extraordinary fluidity certain environments in some countries offer (due to their rather shitty standard of living).

[Catta]

The point isn't how much profit each employee generates. The $6.50 figure was purely hypothetical. The point is that at a certain threshold, it becomes cheaper to hire a foreigner and ship my chairs back to America than to just build them in America. That's when people start losing jobs.

America can never compete with India or China or Malaysia so its not worth the bother - move on to things THEY cant do as well

[ishootblanks]

Livable wage in Boston is like 13 bucks an hour, anyone working for the city has to make that much (city organizations will pay at least that and contractors for the city have to pay at least that). The salary didn't raise the cost of living, the salary rose due to cost of living.

With inflation into account, after a few number of years I can't keep paying people 5 bucks an hour unless I want them all on welfare.

---------- Post added 2012-06-10 at 08:11 PM ----------



Or you make them so poor that you are their only option for food, like Wal Mart.

so what you're saying is that the local market sets the minimum wage thereby rendering the federal minimum wage irrelevant?!!

on the same note.. making the $7.25 federal minimum wage in a place like Valdosta GA is actually a livable wage.. $13/hr is about as good as it gets

[eriseis]

(1) so what you're saying is that the local market sets the minimum wage thereby rendering the federal minimum wage irrelevant?!!

(2) on the same note.. making the $7.25 federal minimum wage in a place like Valdosta GA is actually a livable wage.. $13/hr is about as good as it gets

I don't know what you're trying to get at with (1).

(2) Grats, not everyone lives in Valdosta, GA. Must be a shitty place if 13 bucks is the max you can earn.

[mistuhbull]

While there is not a set minimum wage in Denmark as it is determined by collective bargaining - its around 18,85 $ an hour - what is it in the US? Was it 7,75 as kalyyn said or was it just an example?

Federal Minimum Wage is $7.25. Each state and city is free to set its own wage above that mark. California is $8, city of San Francisco is almost $10

Way less than yours in denmark, but we also pay less in taxes, so I can't be assed to figure the equivalency

[Sunseeker]

Or you make them so poor that you are their only option for food, like Wal Mart.

I make slightly more than minimum wage currently, my fiance does as well. Our incomes combined we still end up shopping at Wal-Mart.

The problem with the "no minimum wage" argument is that products have a price floor. Without putting a floor on wages, the simple fact that the supply of labor almost always outstrips the demand for it inevitably leads to people making less money than the product cost floor. Once that happens, everyone goes belly up because nobody can buy anything.

Wages need to at least slightly above the price floors to make the system work.

[Stanton Biston]

1) Yes, the bottom 50% of income earners pay little in federal income tax. There are state and local taxes, and there are people who earn income in the upper 50% too. If you reduce their taxes, it creates demand,

State and local taxes which are far too varied to discuss in aggregate. And reducing the tax burden of the upper 50% of wage earners (which is less than 50% of the population) doesn't create proportional demand.

and it diverts money from the government.

Only in your fabricated fantasy world of faulty axioms is this a relevant point.

2) The value of the stock reflects future profits.

ROFL. I actually had to take a moment to contain my hysterical laughter at the naivety of this statement. Stock prices are influenced by a million things that have nothing to do with actual potential for future profits.

Do they not teach that in Finland?

Lower profits mean the risk of investing in new projects or new business is higher. This diverts investment from that particular nations business sector into bonds or overseas investments. In other words, lower corporate tax spurs investment in new business and expansion of existing business. People are more willing to risk their money for these purposes.

Not that you actually addressed the issue I brought up. You should read what I wrote and try again. Maybe consult someone who understands English better in case you were confused because you didn't even come close to anything relevant to what I wrote- You just said something you've said before as if a scripted response...?

3)Ventures that previously weren't profitable enough to off-set the risk, become viable with lower corporate taxes.

Corporate taxes are on profits of corporations, not on the returns of ventures. (Most venture activity is actually taxed at the gains rate) The ability for a company to turn a profit is independent of the volume of profit or it's tax rate. Aside from the ridiculously low minimum tax rate, the tax rate could be 100% or 0% and it wouldn't impact whether or not the corporation turned a profit because US corporate taxes are on actual profits. So viability isn't impacted.

They create competition that drives down prices, they create jobs and they create demand.

Competition doesn't automatically drive down prices and your assumption is that there are unfunded activities that could be added to a market to drive down prices. Also, if prices are driven down, then someone else's profits are reduced and they probably lay off people, lowering demand again. Net zero change, or potentially negative change if a company with 10 people puts a company of 100 people out of work with a product that's only 10% cheaper.

4) Yes it does. Just like increasing the corporate tax means some will leave, but not all - lowering them means some will return/new will start, but not all. So you're wrong.

That makes no sense at all. General Electric isn't going to start paying 15% tax instead of 30% tax if they're currently paying 0%. I don't think you have a clue, really, about tax codes or how things work outside of your bad theories.

I think one of the big misconceptions about corporate tax is that people believe it doesn't hurt business because it's applied only on profits. People somehow believe that simply being profitable is enough to exist as a corporation in perpetuity, but that just isn't true. Investments need to meet certain return expectations based on their risk, otherwise people will want to move their money and assets elsewhere.

And I think you have no idea how venture capital actually works. Well, I know you don't from how you present the information. You continue to present the state of business in the US as being predicated on venture, and continue to misrepresent how venture operates.

And really, your manners are still as shit as ever.

Sorry Ms. Post, your completely derisive tone in your initial response indicated to me that you had discarded all regard for decorum. In the future, perhaps you should consider your actions and how they are seen if you desire different outcomes.

[Badpaladin]

so what you're saying is that the local market sets the minimum wage thereby rendering the federal minimum wage irrelevant?!!

Not what he's saying. However, it is a fun concept - you don't seriously think employers are going to be gracious enough to pay their workers enough to actually live properly, do you? There's no incentive.

[Wells]

Minimum wage is mathematically illogical, though. At worst it causes rampant unemployment, and at best it creates deadweight loss. Nothing good comes out of it.

The level of unemployment it causes is hardly "rampant". And it creates a price floor for labor rather than treating it like just another commodity.

[Kalyyn]

The level of unemployment it causes is hardly "rampant". And it creates a price floor for labor rather than treating it like just another commodity.

But labor is a commodity. What else could it be?

[eriseis]

But labor is a commodity. What else could it be?

Phuck! We have to change all Human Resources departments to Human Commodities.

I'm no expert in economics, but I feel you're taking quite a linguistic liberty with the word.

[Wells]

But labor is a commodity. What else could it be?

Maybe people?

[Kalyyn]

Maybe people?

It's people acting as a resource. I don't see what you're getting at?

[eriseis]

It's people acting as a resource. I don't see what you're getting at?

That you've jumped metaphor, hyperbole and semantic shift and have landed in gaga-land while dehumanizing everyone in the labor force?