New bill pushing for $10 minimum wage; how will this affect economy?

Originally posted by vor78
Increasing wages are no different than any other cost component of a final product. It will put inflationary pressure on the end price of the good or service being offered, which in most cases is going to result in weaker demand and slower economic growth. Its not so much a question of whether it will have a negative impact or not, but rather how much of a negative impact it will have. That's a question that's difficult to answer.

That said, it would benefit me, and I have job security. If Obama can get it passed, I'll gladly say thank you...but there's no way in hell I'm going to vote for him.

No the prices are going up anyway because we have an inflationary fiat currency system designed for the sole purpose of making borrowing cheap. That way you can borrow money, and by the time you pay it back, the currency has inflated and in terms of real value, what you have to pay back is far cheaper than what you actually borrowed from the bank. It's what makes our entire financial system spin.

Our financial system literally cannot work, will fall apart, without inflation. It's part of the system, designed, and put there on PURPOSE. The prices are going up anyway. All raising the minimum wage does is adjust for inflation that's already happened. Typically minimum wage is adjusted AFTER the fact. To adjust for prices that have ALREADY been raised. Then after it's raise there is a slight market adjustment sometimes where some prices may rise or fall, but it makes the world go around. Cannot function without it. It's built into the system.

reply to post by neo96


Lest you forget,some of these companies are HIGHLY profitable and the only way they are is because they undercut the employees and in some cases, their customers!

They can afford to pay people more but they CHOOSE not to.

reply to post by oneness86


The price of goods is increasing anyway, due to the gas prices...the thing I'd worry about is that a lot of people would now jump to a different tax bracket, meaning that more taxes will be taken out of their check, so we wouldn't really see a difference in the amount of money people make if they are making minimum wage now.

reply to post by tinfoilman


Most new workers don't produce squat for the first few weeks. It actually costs money to train most workers in because you are taking a seasoned worker with higher pay away from optimal production to train a new guy in. I have been in business for thirty years and know how it works. A good worker deserves fifteen dollars per hour and even more if the local economy allows. I had prevailing wage jobs where I paid my worker over twenty four dollars an hour but the job was bid knowing the wage in advance. With workers comp at 12 percent of wages, liability at 5 percent, half of medicare and SS paid by employer and ten percent unemployment being paid by employers plus supplying tools to pay much more would make employees higher paid than small business workers.

What the people in the area can afford is a big part of what wages can be paid. People can do their own stuff around here if they have to if the costs are too high. Not all people are totally reliant on capitalism.

Originally posted by The Sword
reply to post by Praetorius

 

If you'll take off your rose-colored glasses for a minute, you'll see that there's absolutely no logic in going back to the bad 'ol days before the minimum wage.

You see, the typical responses in a thread like this are always pro-business. I suspect that they're more sycophantic in nature than meets the naked eye.

You need cattle to keep the other cattle in line with the rancher.

edit on 7-6-2012 by The Sword because: (no reason given)

Actually no, they're always anti-business. Raising the minimum wage is pro business because if you didn't raise it, then in poor areas you would get small pockets of deflation, especially in minority areas, causing the businesses in the area to default on their loans causing them all to shut the doors.

Raising the minimum rage isn't pro-business how most people think it is. It doesn't really help companies make more money than they did before. That all gets cancelled out. It does however help prevent things like Detroit where all the businesses will slip into deflation and go broke if people stop buying stuff.

Originally posted by rickymouse
reply to post by tinfoilman

 

Most new workers don't produce squat for the first few weeks. It actually costs money to train most workers in because you are taking a seasoned worker with higher pay away from optimal production to train a new guy in. I have been in business for thirty years and know how it works. A good worker deserves fifteen dollars per hour and even more if the local economy allows. I had prevailing wage jobs where I paid my worker over twenty four dollars an hour but the job was bid knowing the wage in advance. With workers comp at 12 percent of wages, liability at 5 percent, half of medicare and SS paid by employer and ten percent unemployment being paid by employers plus supplying tools to pay much more would make employees higher paid than small business workers.

What the people in the area can afford is a big part of what wages can be paid. People can do their own stuff around here if they have to if the costs are too high. Not all people are totally reliant on capitalism.

This has nothing to do with workers. Prices go up, you have to pay more. $10 isn't squat anymore. Congress has tricked you into thinking this is somehow your workers fault and you're trying to blame them but they had NOTHING TO DO WITH IT. The Federal Reserve is what causes prices to continually go up.

Originally posted by The Sword
reply to post by neo96

 

Lest you forget,some of these companies are HIGHLY profitable and the only way they are is because they undercut the employees and in some cases, their customers!

They can afford to pay people more but they CHOOSE not to.

Actualy no they can't because that hit's small business owners, and what people are forgetting which I already said a minmum wage increase is just not giving the person 10 bucks and hour.

The unemployment compensation has to increase, and what the employer is paying for that person's social security increases.

It is just not hey give them more cash because the employer now has to dole out even more to cover those benefits already being paid.

reply to post by tinfoilman


Technically, you're correct, there will always be inflationary pressure, and a bit of inflation is actually desirable. That said, too much can easily be harmful, and it doesn't take much before it becomes so, and that's the question at hand here. Would a minimum wage increase create an undesirable increase in the rate of inflation or perhaps on the unemployment rate of those making the minimum wage? I can't answer that question definitively, but it would seem to apply pressure in that direction.

Again, though, I'd be fine with it. I'll even be somewhat grateful to the ones who pass it, but I also realize that they're just trying to buy my vote. Not happening.

reply to post by tinfoilman

Well then if it goes up to ten bucks an hour I will only get experienced workers and won't train any new workers in the trade. They can go learn from a place where they have to pay for the education I teach them for free as I pay them. I have trained through my ventures quite a few people. Sometimes a mason I hired trained my workers. I have also been trained by many people and usually at a lot less wage than the one that trained me.

This is a real world out there, Being a small business owner you have to remain competative. Maybe you live in an alternate reality or work at a job where people are willing to pay your high wages.

reply to post by neo96


Oh I know, we'll pay them NOTHING and let them work like slaves.

You'd love that, wouldn't you?

Do you even own a small business?

Originally posted by vor78
reply to post by tinfoilman

 

Technically, you're correct, there will always be inflationary pressure, and a bit of inflation is actually desirable. That said, too much can easily be harmful, and it doesn't take much before it becomes so, and that's the question at hand here. Would a minimum wage increase create an undesirable increase in the rate of inflation or perhaps on the unemployment rate of those making the minimum wage? I can't answer that question definitively, but it would seem to apply pressure in that direction.

Again, though, I'd be fine with it. I'll even be somewhat grateful to the ones who pass it, but I also realize that they're just trying to buy my vote. Not happening.

Like I said in a previous post, that's why you raise minimum wage at a rate slightly less than the rate of inflation. You could probably even match it and be just fine. But as long as the minimum wage tracks slightly behind real inflation, you're not really raising it all. You're actually just keeping it where it is and it should work just fine.

It's like when people say, well if $10 an hour for minimum wage is good why not just raise it to $100? Because that would be OVER the rate of real inflation and nobody is suggesting that. That's why $10 would be good and $100 bad. One tracks slightly behind inflation where the other is over. And if you raise it over the inflation rate, than yeah, it will cause REAL inflation and then we would be in a world of hurt.

reply to post by The Sword
Rose-colored glasses don't matter much to me, honestly. As I said, this is an area needing further review and consideration on both sides.

Pro-business or pro-worker are two sides of the same coin, as far as I'm aware. If business doesn't do well, workers don't do well and find themselves unemployed or effectively working as wage whores. And despite the outcome (and my opinion that what you give is definitely not the best example), the rancher DOES feed take care of the cattle - at least for awhile.

Hopefully the cattle can find greener pastures to move onto in the meantime, I suppose. Thankfully, this is not a direct or truly fair analogy.

Admittedly, I'm not entirely sold here either way - but from what little bit I can see, the US was on a much better footing all the way around prior to minimum-wage laws. Granted, other factors come into play, but it seems to have been downhill since then.

Be well.

I did a lot of work for people who couldn't afford to get big loans. Lots tried to pay things as they went along. I even let some people put part of the job on payments so they wouldn't have to refinance. If you haven't noticed the costs of refinancing a loan have gone through the roof. If you need to take out eight thousand on a refinance at a lower rate you sometimes pay four grand in closing costs. That's highway robbery because their costs are based on the whole loan value. Maybe people are foolish and accept this new crooked way of life but I'll stay out of it.

Originally posted by rickymouse
reply to post by tinfoilman

 

Well then if it goes up to ten bucks an hour I will only get experienced workers and won't train any new workers in the trade. They can go learn from a place where they have to pay for the education I teach them for free as I pay them. I have trained through my ventures quite a few people. Sometimes a mason I hired trained my workers. I have also been trained by many people and usually at a lot less wage than the one that trained me.

This is a real world out there, Being a small business owner you have to remain competative. Maybe you live in an alternate reality or work at a job where people are willing to pay your high wages.

That's fine. Only hire trained workers. Like I said in a previous post. We won't really be losing any jobs. Those jobs are going away anyway. If you could hire workers for cheaper, as the prices rose, you'd start to benefit more while the workers would start to benefit less. Eventually those jobs would go away anyway.

Eventually prices will rise so high that even if you could hire a worker for $7 they wouldn't be able to live on it anyway. They'd starve to death on the street working for that. Like when I started working as a teenager it was less than $4.00.

Sure if they hadn't raised minimum wage I could have kept the job, but there's no way I could have paid my bills in TODAYS money on $4.00 so it wouldn't even matter. I would have still had to go get a job that paid more anyway. I couldn't have afforded to keep that job even if I had wanted to. But the raise in minimum wage actually allowed me to keep the job for a few more years until I got through college and actually allowed me to KEEP a job I would have otherwise had to quit.

When prices rise workers will eventually have to leave and look for another job ANYWAY regardless if they raise minimum wage or not. The only difference will be that this way you'll have to lay them off so they get unemployment instead of them quitting.

Just yet another classic example of something looking good on paper that does not work in the real world. Some time I think some members of our government are from another dimension because they seem to not have a clue as to what is going on in this one. If this passes it will be taking one step forward while taking two steps back.

reply to post by The Sword


When we finished up a job I would have my workers putts around doing stuff that didn't really need to be done so they would get a full paycheck. If I were to raise there wages up they would get less hours because I would not create work for them. Once you lose the "Provider of living" feeling for your employees than they are just workers who are expendable and not worth trying to go out of your way to get them work.. Believe it or not, many employers care about their workers.

reply to post by tinfoilman


So then that new trainable guy won't get a chance to be making 16 bucks an hour in a year, only the people already making that wage need apply. Ten years down the road and all the tricks of the trade will be lost. No new workers. I don't have to hire anybody if I don't want to. I'm sure there are thousands of employers like me. I've been on both sides of the street on this subject.

You are lumping all employers into one big lump. I am saying training a person is expensive to do. Maybe people can apprentice for nothing to get training for the job then.

reply to post by Submarines

It is going to cause me to lay off employees. I can't keep raising prices to compete, so customer service will suffer.

That's the attitude of most business owners. No loyalty to the people making their money.

Several years ago, I worked for a guy who had a different business model. He decided he was going to treat his employees fairly and give them a decent wage. He was awesome to work for. You had to work hard, but going to work was great. You really enjoyed working for this guy.

The effect was that his profit margin went through the roof because his employees were so happy they in turn worked harder to ensure the customers were happy. The customers then in turn returned more frequently because of the great service, and the business became extremely profitable.

What ended up happening was he retired and sold his business because he made enough money that he no longer had to rely on that business in order to make his money. It was sad really, cause if he still owned the place, I would still be working there.

But we don't see that nowadays. What we see is employers like the poster above who subscribe to a business model that employees should be shat on at every opportunity, and that they are nothing more than disposable liabilities that should be shed if they are deemed too expensive.

Oh no, let's not improve our products or services, let's just lay off more employees, that's a winning business model. Seriously? You do know that laying off employees is actually detrimental to the economy and therefore your own bottom line right?

See, now if you hired two new employees, and every other small business owner hired two new employees, there would be a massive amount of money flowing into the economy, and those people earning paychecks would buy goods and services (possibly from you), and those businesses would then gain from that boost in the economy and be able to afford those new employees. The economy would improve because more money would exchange hands.

Of course, you know that they won't increase the minimum wage to 10 bucks an hour. The conservatives wouldn't allow it in the first place. They all think like you do, thinking that employees are a liability instead of a business's most important asset.

Remember, without your employees, YOU don't make money.

Originally posted by rickymouse
reply to post by tinfoilman

 

So then that new trainable guy won't get a chance to be making 16 bucks an hour in a year, only the people already making that wage need apply. Ten years down the road and all the tricks of the trade will be lost. No new workers. I don't have to hire anybody if I don't want to. I'm sure there are thousands of employers like me.

Sorry, but that's just the result of doing business with the Federal Reserve. But I'm sure another company will pick them up and train them. Perhaps a company with new technology that allows them to do things quicker, easier, and cheaper.

See, that's a big part of what makes this all work. New technology. Take a hint and check out the worker productivity numbers, they're through the roof. A worker today can push out twice or more product with technology that a worker of 30 years ago could. That allows business to stay in business as they have to pay out more wages. But it doesn't work forever. Everyone knows this fiat inflationary type currency system eventually crashes. It's just the inevitable result. You can't have infinite growth. But I'm not the one that invented the system.

But that's the thing, it's not the workers fault. It's just basic math. Anyone can see that as prices rise, workers will have to make more money to make up the difference. There is NO OTHER WAY unless we come up with a new system. Anyone that denies that can't add 2+2.

Like I said, it doesn't matter if you lay them off, or they have to take a better paying job. Eventually $7 will not be enough and they'll have to get another job anyway. It's just part of the system we're in, but not the one that I designed.

reply to post by rickymouse


I'm also quite interested in your theory of economics where because you can't hire untrained workers for 7 dollars an hour you'll just hire a whole bunch of trained ones for $16? That's like throwing the baby out with the bath water.

According to my math hiring 2 untrained workers at $10 an hour is still cheaper than hiring a 2 trained workers at $16 an hour. It might not be as cheap as 2 untrained workers at $7 an hour, but it's still cheaper than $16.

Also, once inflation kicks in again those $16 an hour workers are probably gonna start looking around and then they'll want $20 anyway.