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Are prices already going up to adjust for the new minimum wage?

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posted on Oct, 13 2014 @ 07:13 AM
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I am not an economic guru..most of it makes my head hurt when I try to wade through the mis-information and flat out lies..

But prices have been going up for about 7 years at least in Oklahoma.. I buy meat and eggs from a local meat market that typically lags behind the price increases you see in the chain stores.

A T-bone when I started this was running about 7 bucks a lbs... now its 12 bucks a lbs.

bacon went from 1.50 a lbs to nearly 4 a lbs.

eggs have doubles in that same time frame...

is this inflation... or everyone rushing to get the almighty dollar.. I have no clue, again the economy is something I am only aware of in the most basic minor sense... so my opinion on this and a couple bucks might get you a cup of coffee at the waffle house.

Keep in mind these markets buy from local growers/ranchers so its missing a lot of the price increase the chain stores that have to ship everything in to stock the shelves.
edit on 13-10-2014 by Irishhaf because: more lagging thoughts




posted on Oct, 13 2014 @ 07:14 AM
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a reply to: tridentblue

Modern economics depends on inflation to drive markets and relieve debt.
Who would buy a house if it wasn't going to appreciate?

You could argue the shallower inflation ride pre 1970's was healthier (but probably not to millennials).



posted on Oct, 13 2014 @ 08:12 AM
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I'm amazed and disheartened that no one has yet mentioned a government that runs such a large deficit as a contributor to the rise in prices. Since debt and dollars spend exactly the same every dollar the government borrows reduces the buying power of every dollar already in the system. There is zero chance of having stable prices while the government is running deficits of the size it does. The FED dual mandate is stable prices and low unemployment. The Fed is ok with 2% inflationand it sounds reasonable but that still robs a saver of more than half their dollars value over working life.



posted on Oct, 13 2014 @ 08:27 AM
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The fact that people are willing to be so easily led by the media is maddening to me. Every time I hear "We can't raise the wage! Inflation will happen! (insert wailing and gnashing of teeth)" I want to scream! The one thing that nobody talks about is the greed of the corporations and business owners. Same thing happened with Obamacare. It'll cause job loss. OMG! They're cutting hours! Its killing businesses!

No. You know what causes prices to go up when labor is paid more? The owners and their insatiable desire for year over year profits. McDonald's is case-in-point. They're leading the charge against any wage increase and bellyaching about how it will hurt workers because they'll "have to" cut hours or increase prices. No, they won't. They could easily suck up the increase as a cost of business in a changing world and take a hit to their profits. Instead, they'll just pass that right along to the consumer.

Papa John's was all over the news because they cut employee hours and even laid people off due to the implementation of Obamacare. "We had to! The costs to us forced our hands!" Poor, poor Papa Johns. What's that? You still had a YOY profit increase? Oh interesting. Amazing how that worked out for you...

Profits above people. That's been the mantra of business in the US for decades.

SMALL BUSINESSES would undoubtedly feel the pinch here. Heck - every business owner will feel the pinch - but nobody is forcing them to tack-on the increases to their products. If your business model was built upon unfair labor practices (and rest-assured, not paying a living wage is definitely an unfair and unethical business practice) and your business fails as a result of those actions being corrected, then your business was unsustainable from the outset and SHOULD fail. The business sector has gotten a free lunch from the American worker for decades and its time to correct it.

If the media actually reported on this angle instead of talking about how wage increases will hurt the economy, I think people would be rioting in the streets. Wage increases won't hurt the economy unless business owners elect to protect their profit margin versus thinking of what's actually the best thing for their fellow man.



posted on Oct, 13 2014 @ 09:45 AM
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a reply to: wanderingman

I agree here with you Wandering Man, inflation will happen for various reasons, and adjusting minimum wage wouldn't hurt the economy too badly if the businesses would just take the hit to their profits, but it seems that those profits drive growth by hiring more workers and building new stores. The owners who invest little back into their businesses will be forced out of the market by competitors after a while.

Inflation is a vicious circle that feeds upon itself and grows to spite efforts to keep it under control. It seems to me that the harder they try to control it, the more it grows and that instead we should have a truly free market system where the balancing factors of supply and demand dictates the price of products and services.

ETA: I also agree with Jefwane about our U.S. deficit. If a business for profit had losses like the government, they'd be belly up before the first business quarter was over.
edit on 13-10-2014 by MichiganSwampBuck because: Added comment


SM2

posted on Oct, 13 2014 @ 09:55 AM
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inflation does have a lot to do with the rising prices, but contrary to what some people in this thread are saying, a rise in minimum wage will make the price of goods increase, just as ObamaCare had an effect.

I will explain for those in denial and lack an understanding of the business end of the equation.

Most businesses (or at least successful ones) operate with a specific profit margin they need to hit in order for the business venture to be feasible to them. Let's use a leading national consumer goods company as an example, as most people are familiar with them.Proctor and Gamble, they have in the past few years either sold off or spun off several of their brands, like Folgers and some others, because the profit margin was below what they deemed necessary to keep in their portfolio, let's say it is 4% profit margin they want to see. Now, I know some folks here do not understand what profit margin is, so I will also explain this... Profit is the funds left over after cost of goods. The cost of the facility/facilities where it is manufactured, insurance, permit, fees and licenses, taxes, utilities, transportation of goods to the market, employee wages, benefits, taxes paid by the employer on the wages paid, reinvesting into the brand/product etc.

So, if a company wants to see a specific profit margin and the costs of goods increases from any of the inputs, then they are faced with a choice, close the business/division/brand, sell of the brand or increase prices. The past few years, businesses have been hit with multiple increases. Obamacare costs, which increase their taxes plus increased the payroll taxes that companies pay based on the wages of the employees, increase in benefits cost due to rising healthcare insurance costs. Rising gas prices which raises the cost of transportation of their goods to distributors, which also increases the cost of raw materials. The couple of years where credit was essentially unavailable due to the financial crisis, and now, the potential for a minimum wage increase, essentially doubling the minimum wage.

So, just how much can a business absorb before they have to take measure to remain profitable, after all, people go into business to make money. If you think raising the minimum wage is not the reason why your big mac will also double in price, then you are without a doubt, ignorant of basic economics and business principals.



posted on Oct, 13 2014 @ 10:01 AM
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a reply to: SM2



So, if a company wants to see a specific profit margin and the costs of goods increases from any of the inputs, then they are faced with a choice, close the business/division/brand, sell of the brand or increase prices.

Again, you're glossing over the most obvious thing: Re-examine the profit margin and decrease it to reflect the new cost of doing business. Nobody is mandating that they see YOY profits other than the shareholders and board members. THOSE are the people responsible for inflation.

If you make $.01c after the bills are paid (including your salary) - its still a profit. I'm all for making a buck when you can, but if you're doing it on the backs of your labor force and not paying a living wage - you deserve to fail.



posted on Oct, 13 2014 @ 10:38 AM
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I have no idea where I read this, it was years ago, anyway, what I read was 'every eight years, money devalues by fifty percent' I have kept my till chits for the last eight years, and my food bill has gone up 100%, my pension has not.



posted on Oct, 13 2014 @ 10:59 AM
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a reply to: pikestaff

Well at least your lucky enough to have one because everyone else is losing theirs.


SM2

posted on Oct, 13 2014 @ 11:02 AM
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originally posted by: wanderingman
a reply to: SM2



So, if a company wants to see a specific profit margin and the costs of goods increases from any of the inputs, then they are faced with a choice, close the business/division/brand, sell of the brand or increase prices.

Again, you're glossing over the most obvious thing: Re-examine the profit margin and decrease it to reflect the new cost of doing business. Nobody is mandating that they see YOY profits other than the shareholders and board members. THOSE are the people responsible for inflation.

If you make $.01c after the bills are paid (including your salary) - its still a profit. I'm all for making a buck when you can, but if you're doing it on the backs of your labor force and not paying a living wage - you deserve to fail.


You are wrong. Inflation is caused by an increase in money supply, which leads to the currency being of less value. So, if you pump billions upon billions of dollars into the economy that should not be there, such as monetizing the debt, quantitative easing and the "too big to fail" trillion dollar bailouts, what did you sincerely expect to happen? We didnt have that money, we printed that money out of thin air, it's called fiat currency. Every single one of those dollars lessened the value of each dollar in your private accounts and wallet. Add in the feds' activity in keeping the interest rates artificially low thru even more money pumping and you get what we have now.

None of this has anything to with shareholders and board members wanting a profit margin they feel they can live with. This train of thought is called Kenyesian Economics, and we get into demand-pull, cost-push and wage push theories. Demad-pull inflation are..an increase in money supply, see my previous comments.Government expenditure, now, only continuous spending from non plan revenue increases inflation from the demand side, such as spending more than revenues allow, like borrowing millions of dollars a day as we have been doing for years. Then y ou print more currency notes and have what you call deficit financing (current government officials call it quantitative easing so people do not get enraged).

Then you have cost push theory, which has two major causes, wage increases and the increase in prices for other inputs, like raw materials, transportation, taxes and energy.There is also the wage push variant of the cost push which basically breaks down as, for example, a large industry, lets say the utility industry, has powerful unions, which ask for significantly higher wages, if labor productivity fails to increase proportionally , then prices will surely rise so that the companies can continue to survive with the new increased costs.

then you have the inflationary spiral (wage price spiral) which is exactly what raising the minimum wage is, it is what I just described above, a never ending cumulative cycle in which the wage increases, productivity doesnt, the price increases, and the wages increases so on and so forth.

Every single monetary and credit policy has the potential (and usually does) cause inflation.

now, explain to me how some shareholders and board members of a single company can cause inflation "on the backs of workers" simply because they want to maintain the profit margin they need to maintain in order to stay profitable.


SM2

posted on Oct, 13 2014 @ 11:47 AM
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originally posted by: wanderingman
a reply to: SM2



So, if a company wants to see a specific profit margin and the costs of goods increases from any of the inputs, then they are faced with a choice, close the business/division/brand, sell of the brand or increase prices.

Again, you're glossing over the most obvious thing: Re-examine the profit margin and decrease it to reflect the new cost of doing business. Nobody is mandating that they see YOY profits other than the shareholders and board members. THOSE are the people responsible for inflation.

If you make $.01c after the bills are paid (including your salary) - its still a profit. I'm all for making a buck when you can, but if you're doing it on the backs of your labor force and not paying a living wage - you deserve to fail.



Now let me tell you why your 1 cent profit, is just plain not going to work and an idealistic infantile argument....

Let us say you own a company making a product that is regulated by the FDA. Now, all products manufactured or sold in the US are regulated by someone. Even imported items are regulated and have to be approved by the appropriate agency. Now, in this scenario, your supply chain people just placed an order with the manufacturer of the packaging materials for your product. You just got a call from legal, some moron just crushed it up and put it in their eye and are suing you pain and suffering. So you pay the legal fees, go to court and win, but you still have all those legal bills. Now the FDA says that you need to put a warning label on your product warning people to not crush and apply to the eyes (think mcdonalds coffee and the caution contents are hot label) So your supply chain guy calls the company that makes the packaging for you, and you are told that you will have to purchase new plates for the printer (pretty much a standard thing) which will cost roughly $35000. Once they have the plates for the printer, it will be a 3 week lead time, plus transit time. So you are now at 4 weeks roughly before you have the new packaging. So you call the company that makes the plates and they inform you 1 week plus transit. After all these are huge pieces of equipment, not something you carry around, they weigh a ton (literally in some cases) big steel drums that are engraved for the printing. So now, 5-6 weeks before you have the packaging in house.

Now, you have an FDA audit you pass, but it still cost you some cash, as you had to shut down certain machinery to allow for the inspection. You are now informed that you are now allowed to ship anymore product until the new label is on the packaging. This causes even more issues. You have contracts with retailers that you need to fulfill, in the time you can not ship to market, you loose shelf space to a competitor. Finally, the plates have arrived at the printer, they make your usual order size, with additional fee because they had to put you in out of sync. So you just paid for the packaging twice (plus the additional fee for a rush, new plates, plus an additional charge because more print on the label, plus extra units to make good on your pre existing orders) You are now out hundreds of thousands, if not millions of dollars.

So, how did that .01 cent make this happen? What would have happened if you had operated with a .01 cent profit and no residual cash on hand for expansion, emergency etc? You have had the choice of shutting down, or borrowing the money, which would have raised the price of goods as well, because you would have had to recoup the money borrowed, paid the interest and still maintains your profit.


This is a real world scenario, i have seen it happen in a similar fashion on numerous accounts in real time, in the real world.



posted on Oct, 13 2014 @ 01:21 PM
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originally posted by: Cauliflower
a reply to: tridentblue

Modern economics depends on inflation to drive markets and relieve debt.
Who would buy a house if it wasn't going to appreciate?

You could argue the shallower inflation ride pre 1970's was healthier (but probably not to millennials).



That's the thing, what does it even mean to have my house appreciate. Nominally? Is it a win if I buy my house for $100,000 and sell it for $200,000 when the price of everything else has doubled as well? The whole thing is an illusion, and the main use of the illusion has been to lower everyone's wages, without them noticing. You give them a payraise now and then, always keeping it less than inflation, and they basically thank you for their raises while they're check buys less and less each year, so they are effectively getting paid less and less.

Using inflation to eradicate debt is BS too. So I give you some pieces of paper that represent the ability to buy 10 gallons of milk, or 2 hours of my labor. Your labor is worth the same, but you wait to pay me back until the amount you owe is only worth one hour of your labor, or 5 gallons of milk. Its dishonest.

I understand the idea of money being created as debt. The idea is to make the monetary supply equivalent to the available wealth, to avoid deflation, where economic growth makes money saving the best option. It is designed to keep the money moving.

But the amount of inflation shows that's not what's happening, more money is being produced than the wealth its supposed to correspond to. The system has got to change.



posted on Oct, 13 2014 @ 02:13 PM
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a reply to: onequestion

Inflation is about to render out of the economy anyone making under 15 dollars an hour. You will not be able to afford food and housing and will have to seek the help of the government or aid organizations.


I have been saying this simple statement for over 1 year now. It is slowly happening and nothing can be done to stop it. TPTB printed 3x the money supply to save the economy and in doing so ruined it. When this money finally makes it way out of the economy it is called inflation. This is only going to get worse until we enter hyper inflation and than this house of cards will all fall down.



I can prove what I am saying in a simple way. Everybody reading this track your grocery bill and see the simple truth in black and white.



posted on Oct, 13 2014 @ 05:45 PM
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originally posted by: wanderingman
a reply to: SM2



So, if a company wants to see a specific profit margin and the costs of goods increases from any of the inputs, then they are faced with a choice, close the business/division/brand, sell of the brand or increase prices.

Again, you're glossing over the most obvious thing: Re-examine the profit margin and decrease it to reflect the new cost of doing business. Nobody is mandating that they see YOY profits other than the shareholders and board members. THOSE are the people responsible for inflation.

If you make $.01c after the bills are paid (including your salary) - its still a profit. I'm all for making a buck when you can, but if you're doing it on the backs of your labor force and not paying a living wage - you deserve to fail.


From a business perspective, profit is not as simple as "what's left over after you've paid your bills". It's the minimum amount that you need to make to have an incentive to stay in the game.

You start up a business for your own benefit, not for the benefit of anyone else. If you're starting it up for the benefit of someone else, that's called a charity.

There are lots of people in this thread who are happy to redefine what it means to run a business, without ever putting in the blood, sweat, and tears that come with running a business. If you had put your own time and money on the line, you'd be laughing as hard as I am at the thought of a $0.1c profit being acceptable.



posted on Oct, 14 2014 @ 06:30 PM
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Doesn't this cycle also include things like downsizing, layoffs, early retirements, wholesale firings, reduction in or elimination of benefits, less than living wages, increasing work load, no bonus or pay increase, outsourcing to third world facilities, cheaper materials, planned obsolescence, employing illegals, in addition to an increase in product and service pricing?



There are a lot of aspects to consider.



posted on Oct, 14 2014 @ 10:18 PM
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a reply to: onequestion

Things are getting pricey here to even Subway sandwiches.


Three dollars each now they were two dollars each before.




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