Passing the Cost to the Consumer from a Business Owner's Perspective

originally posted by: Greven
It's reality. If there is significant unemployment in an industry, the businesses in that industry have more bargaining power on wages than businesses in an industry that has little unemployment. This depresses workers' wages. When you're fighting to feed yourself and/or family, you're liable to make some concessions. You can say it's a cop, but that's how the world is - even from an economic standpoint.

And the converse is true. Take the energy industry in North Dakota.

If you do not want a minimum wage job then you need to increase your value.

Take note, women have a median hourly wage well below that of men - $13.44. This means that half of the women in the workforce earn $13.44 or lower. That's 23.5% of the workforce who earn (presumably) between minimum wage and 185% of minimum wage. That's pretty near minimum wage - anything less than double it.

I see. So your definition of 'pretty near' is anything up to double an amount. So if I said your personal debt went from $10,000 to $18,000 that is pretty near the original number. The median wage is no where near minimum wage, you are postulating a false dichotomy.

Only if businesses did make improvements. It seems they opted put the money in the bank for a rainy day. Perhaps small businesses wouldn't do that.

Money in the bank leads to more reserves for banks to lend, this also ends up back in the economy. Either way you slice it the money will find its way back to the markets.

Who, in government, is making such extravagant wages? Last I remember, government work paid less than private sector work, but tended to have better benefits.

You have certainly not remembered correctly:

According to the BLS, the average earnings for full-time federal government employees was $74,403 in 2009. This figure does not factor in employee benefits, which are an important part of a federal employee's compensation. source

What if the company you hire to make improvements also doesn't hire more staff or increase hours? Perhaps they just spread the work over a longer time period to get it in. Maybe they push the workers harder so that they can pocket more cash. Were any jobs created now?

What if? You can keep postulating one of situations but a poorly run business will go out of business.

What If:

People grew most of their food. Limited grocery store visits and restaurants. You would really be surprised how much food we eat and don't need. I am 63, gave birth to three children and weigh 130 lbs. I have never eat three meals a day in my life.

People made their own clothes. Simple homespun. Limited retail visits.

People made their own energy in their homes. Independence.

People bought homes that serve a purpose instead of "mine is bigger so better than yours".

With just those four changes in millions of lives, what would businesses do for customers?

The one I really like, is craftsmanship. Start your own business providing a need. My husband is disabled but his mechanical skills are still in demand. Now he teaches his son in laws mechanical skills.

originally posted by: AugustusMasonicus
And the converse is true. Take the energy industry in North Dakota.

If you do not want a minimum wage job then you need to increase your value.

I see. So your definition of 'pretty near' is anything up to double an amount. So if I said your personal debt went from $10,000 to $18,000 that is pretty near the original number. The median wage is no where near minimum wage, you are postulating a false dichotomy.

Money in the bank leads to more reserves for banks to lend, this also ends up back in the economy. Either way you slice it the money will find its way back to the markets.

You have certainly not remembered correctly:
source

What if? You can keep postulating one of situations but a poorly run business will go out of business.

That was implied, yes. Of course, that doesn't work so well when companies conspire to drive down wages.

It's not a false dichotomy at all. What alternatives am I having you choose between? Your analogy is missing some vital information; on a range between $10,000 and $30,000, $18,000 is not even the midpoint. Half of all women made between ~32% and ~60% of the average wage (minimum and median, assuming at least minimum wage). We don't have data that tells us how many workers made $7.30, $7.50, etc, to my knowledge. I'm piecing this together from estimates. I can't say where all the numbers fall within that range, and I'm not sure anyone else can either.

This Forbes article suggests that the minimum wage has very little effect below 45% of the average wage. So, there should be little effect on the economy (and few complaints by businesses) if the minimum wage was increased to $10.05, according to that article. Interestingly, this is rather near the midpoint between $7.25 and $13.44. In my opinion, given that the average wage is $22.33, $13.44 is fairly close to the minimum wage of $7.25. What do you think is near the minimum wage?

Only if banks are lending, which was a problem until recently.

I've had the hardest time tracking down where that BLS information is. The links elsewhere to the BLS (many of them link to that ehow site) no longer work. I'm not saying it's wrong, but just troublesome to find; the closest thing I can find is this article. I suppose I was thinking more of state and local government. It would make sense for federal government to average higher; they're akin to highly skilled private sector employees or management (in this case, of the nation rather than a business):

“Compensation cost levels in state and local government should not be directly compared with levels in private industry. Differences between these sectors stem from factors such as variation in work activities and occupational structures. Manufacturing and sales, for example, make up a large part of private industry work activities but are rare in state and local government. Management, professional, and administrative support occupations (including teachers) account for two-thirds of the state and local government workforce, compared with two-fifths of private industry."

It'll go out of business unless it's too big to fail

originally posted by: MOMof3
People grew most of their food. Limited grocery store visits and restaurants.

I like an occasional steak or pork chop. Not to mention fish. I am not prepared to raise my own livestock or open a fishery on my .62 acre property.

People made their own clothes. Simple homespun. Limited retail visits.

Not possible. My company has a dress code and 'simple homespun' is not on it.

People made their own energy in their homes. Independence.

Maybe when the Mr. Fusion is available that would be viable. Until then what do you suggest?

People bought homes that serve a purpose instead of "mine is bigger so better than yours".

Why are you concerned about the size of other people's dwellings?

originally posted by: Greven
It's not a false dichotomy at all. What alternatives am I having you choose between? Your analogy is missing some vital information; on a range between $10,000 and $30,000, $18,000 is not even the midpoint.

But it is certainly closer to the midpoint then it is to the low point.


Half of all women made between ~32% and ~60% of the average wage (minimum and median, assuming at least minimum wage). We don't have data that tells us how many workers made $7.30, $7.50, etc, to my knowledge. I'm piecing this together from estimates. I can't say where all the numbers fall within that range, and I'm not sure anyone else can either.

What do you think is near the minimum wage?

Under ten dollar rates.

Only if banks are lending, which was a problem until recently.

Lending has eased significantly as the article reported. it would never have even been an issue if the government had not gotten involved with the banks in the first place.

I've had the hardest time tracking down where that BLS information is. The links elsewhere to the BLS (many of them link to that ehow site) no longer work. I'm not saying it's wrong, but just troublesome to find; the closest thing I can find is this article. I suppose I was thinking more of state and local government. It would make sense for federal government to average higher; they're akin to highly skilled private sector employees or management (in this case, of the nation rather than a business):

It is not that they are higher, it is that they are much higher. The number I gave was for straight salary, pensions and benefits were not factored in for that report. The average federal government employee makes much more than the average non-government employee and is the main reason why the counties surrounding the capital are the richest in the nation.

It'll go out of business unless it's too big to fail

I do not believe in corporate bailouts, nothing should be too big to fail.

a reply to: AugustusMasonicus

I am talking about downsizing to cut costs, like energy. You know, like companies do.

I can tell by your smart alec post, that thought scares you as a businessman.

originally posted by: MOMof3
I am talking about downsizing to cut costs, like energy. You know, like companies do.

You said 'make' their own energy, not cut down.

I can tell by your smart alec post, that thought scares you as a businessman.

Why would your idea that is not even possible scare me?

a reply to: AugustusMasonicus

Ok, produce energy, tap in, however I should have said it.

Cut back is the gist of my post. I am retired and had to learn to cut back to make it through the month. I wish that I had applied those skills when I was younger. Especially with all the recessions we go through.

originally posted by: MOMof3
Ok, produce energy, tap in, however I should have said it.

How does a homeowner 'tap in' to more energy?

a reply to: AugustusMasonicus

Well, from the sun. Solar panels.

originally posted by: MOMof3
Well, from the sun. Solar panels.

Return on investment from solar panels varies from 5-6 years on smaller installations to over 10 years on larger ones. Since the average homeowner is calculated to be in their home for approximately 12 years the return is just starting to manifest on the full house projects when they are preparing to move. This is also a heavily subsidized industry where the price of the installation and/or equipment is mitigated by government handouts.

Additionally, this is not a viable option for all homeowners, particularly in denser areas where southern exposures are not as readily available.

originally posted by: ArtemisE
a reply to: macman

It's been the function of every buisness before our present system. Almost all jobs had insurance and retirement. Only in the last 30 years have buisness stopped caring if there employees can make it.

Ohhh what???

The offering of insurance is a relatively new idea. Retirement was on the person, before pensions and such were offered.

You are maybe talking about something that is maybe 70 years old.

You should go and research when employment benefits came about, and when Health Insurance was tied into it.

originally posted by: Daughter2

You quote is EXACTLY why we need labor laws and taxation.

Yeah, because we can't have people making their own decisions and being responsible for themselves. We need to be ruled over by the Fed Govt.

originally posted by: Daughter2
First, in the long-term helping society does raise profits. Business that focus on the short-term are bad for the economy. A healthy work force with low poverty does help corporations. Short-term focus on $$ will destroy and business AND a SOCIETY.

At what point did I say a company shouldn't help???
I have stated many times before that it is not the Govt business to FORCE this upon a company.
Nor is it to be EXPECTED.

Now, it still isn't the function of a business. The business is there to make a profit for the owner(s). Plain and simple.
It is the CHOICE of the owner(s) to adjust their goals to reflect these things.

originally posted by: Daughter2
Second, why do you think business isn't SUPPOSED to help society but instead focus ONLY on money? Whether it's a one person landscaping business or a international corporation? Do you really think that's going to create a good society?

Because it is the choice of the company to do so.
Unlike you, I don't think I have the authority to tell a company how they should function. Nor do I think that the Govt should be doing this, because YOU feel it is required.

originally posted by: Daughter2
Do you think killing your competition is ok too if it will increase your profits? Child labor ok in your book if your profit margin this month goes up a 1/2 %?

And what do those things have to do with this discussion? Other then attempting to pull heart strings?

Might as well thrust a baby in peoples faces and scream this is all for them.

a reply to: AugustusMasonicus

No, it is not a one answer for all. But where it can work, same as wind, it would be beneficial to homeowners. The farmers on the Palouse in my state are putting up wind turbines.

I believe the technology for making solar panels better and cheaper will happen eventually. I remember when the first cell phone came out and the technology improved over time.

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone. John Maynard Keynes

The very system you ascribe to is exposed by one who had a hand in creating it and the very practices you embrace.

The lesser of two evils is still evil.

originally posted by: MOMof3
No, it is not a one answer for all. But where it can work, same as wind, it would be beneficial to homeowners. The farmers on the Palouse in my state are putting up wind turbines.

At this point neither one of those are particularly viable options for me.

I believe the technology for making solar panels better and cheaper will happen eventually. I remember when the first cell phone came out and the technology improved over time.

Agreed, but I still would not be able to install them on my home.

originally posted by: MyHappyDogShiner
Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone. John Maynard Keynes

The very system you ascribe to is exposed by one who had a hand in creating it and the very practices you embrace.

The lesser of two evils is still evil.

Capitalism worked well enough, as long as the masses had something like a moral compass. Would the Americans of the 40s or 50s have bought something produced at Birkenau solely because it was cheaper? Probably not, probably they would have wished for such entrepreneurs to have their citizenship revoked.

Would Americans today have done so. Probably. Now Sweatshops in Asia and India are no Nazi Concentration camps, but if you compare them just by looking at pictures and videos of the 2, one could easily get confused.

Todays capitalism is the equivalent of a basketballgame where the team owners have rendered the referee ineffective and the outcome of the game depends as much on the skill in the field as the power each team owner can exert to referee in his favor.

a reply to: AugustusMasonicus

I can't recall ever hearing someone call for taxing small business tbh.

People question the system when ExxonMobil reports record profits, a massive increase in "local" supply, pays effectively zero tax and receives billions in subsidies from tax money while the rest of us endure a 30% rise in gas prices. The rest of us that have something on the order of 1/1000000th of the income/assets. If a family is worried about keeping the house or if they have the money for food this week their tolerance for someone's else's "right" to fleece them of the value they produce with their own hands is tenuous at best.

People are people too.

originally posted by: Fiberx
I can't recall ever hearing someone call for taxing small business tbh.

Not all business taxes are initiated at the Federal Level. There are plenty of State and Local taxes that impact small businesses daily. Regardless, raising them only on large businesses does not mitigate the fact that you will be paying the increase.

People question the system when ExxonMobil reports record profits, a massive increase in "local" supply, pays effectively zero tax and receives billions in subsidies from tax money while the rest of us endure a 30% rise in gas prices.

Firstly, I have repeatedly stated in this thread that no business should receive government money for anything, ever. ExxonMobil should not be receiving subsidies.

Secondly, if I recall correctly, ExxonMobil is also the largest taxpayer (by which I mean tax collector since we are footing the tax bill) on the planet. They paid $31 billion in 2012, which is the latest year I could find. A large portion of that is remitted overseas as corporate tax rates are lower and emerging nations will tempt companies with lower rates to set up operations in their nation.

Companies paying a lot of tax is not good for the consumer since we are paying those taxes.

a reply to: AugustusMasonicus

I still don't see the allure that people have to "taxing" one business over another.

Do people truly not see that the reason for $3.75 a gallon gas has so much to do with the oil company being taxed, the service station being taxed and then the consumer being taxed on top of those others taxes???