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

Originally posted by tinfoilman

Originally posted by AwakeinNM
reply to post by tinfoilman

 

Oh, sorry. I'm wrong and you're right. Let's leave it to the government to fix things and we can all sleep better at night.

We do sleep better at night. Minimum wage started at 25 cents in 1938. We're better off today than back then and our economy and investment has expanded by leaps and bounds since. All based on this very system of cheap credit.

Of course the same system may one day eventually leads to a massive crash where millions die, but the point isn't that I'm for the system. I'm actually against the system. I would much prefer a free market system where it is controlled by the market.

All I'm saying is that the system we have now isn't controlled by the market therefore the market can't fix it. We may need a new system when this one fails.

edit on 8-6-2012 by tinfoilman because: (no reason given)

uh yeh it might of been 25 cents in 1938 but a gallon of milk didn't cost 5 dollars then did it? i fail to see the point of raising it if it just evens out. then thats just more paper i gotta carry. it'd be cool to go into a store with a hand full of change and come out with all kind of groceries like our grandparents did lol

reply to post by tinfoilman


I said nothing about lay offs? What I said was you make the business pay more then the business will pass the cost to the consumer hence no gain.

Guess what, that waiter is a consumer so when he goes out to buy something he will have to pay more for the product than he would have had to pay for it before his new raise. So he gained no buying power even though he is making more money.

Furthermore, you would be LUCKY to maintain the SAME buying power after the minimum pay increase. In reality a business will take advantage of the situation as the consumers realize that prices are going to go up. So if the business cost of operations went up by a $1 because of the new wage they would most likely raise their prices by $1.25. Raising prices is never easy to do nor accepted by the public so they will take advantage and throw in a little more.

Well the gap between what I earn and min wage earners get, keeps getting larger and larger. So what does that tell you? They are being left behind. And things need to be readjusted. And hopefully their finances will resettle to their benefit.

Oh my, prices will go up. Yeah and if they paid folks in China more, prices would go up also. Anyone who doesn't support this is in favor of slave labor for their own financial gain.

Dup post.

Originally posted by biggmoneyme

Originally posted by tinfoilman

Originally posted by AwakeinNM
reply to post by tinfoilman

 

Oh, sorry. I'm wrong and you're right. Let's leave it to the government to fix things and we can all sleep better at night.

We do sleep better at night. Minimum wage started at 25 cents in 1938. We're better off today than back then and our economy and investment has expanded by leaps and bounds since. All based on this very system of cheap credit.

Of course the same system may one day eventually leads to a massive crash where millions die, but the point isn't that I'm for the system. I'm actually against the system. I would much prefer a free market system where it is controlled by the market.

All I'm saying is that the system we have now isn't controlled by the market therefore the market can't fix it. We may need a new system when this one fails.

edit on 8-6-2012 by tinfoilman because: (no reason given)

uh yeh it might of been 25 cents in 1938 but a gallon of milk didn't cost 5 dollars then did it? i fail to see the point of raising it if it just evens out. then thats just more paper i gotta carry. it'd be cool to go into a store with a hand full of change and come out with all kind of groceries like our grandparents did lol

Because our system is based off cheap loans and credit. All the economic expansion has happened because people were able to take out loans on houses, cars, boats, or even wars. The kind of thing that keeps people in business. Then the employees that makes the houses, cars, and boats cash their check and go to restaurants and grocery stores and and strip clubs and what not. Wait what?

Anyway, The inflation allows us to pay our loans back much easier than if there was no inflation. If I took out a loan for a house for $100,000 at 30 years. Well in 30 years that's not gonna be a lot of money. True there's interest on it, but that's still way better than if you had pay the full $100,000 back plus interest.

This is what makes our homes have value. For example my mother bought her house for a $15,000. That same house is worth $120,000 today. But she only had to pay the bank back $15,000 plus interest because of inflation. Not $120,000 plus interest. By the time she paid it back $15,000 was ezpz for a cost of a home.

This allows us to inflate out of our loans instead of actually paying the "real value" worth of the loan we took.

Originally posted by interupt42
reply to post by tinfoilman

 

I said nothing about lay offs? What I said was you make the business pay more then the business will pass the cost to the consumer hence no gain.

Guess what, that waiter is a consumer so when he goes out to buy something he will have to pay more for the product than he would have had to pay for it before his new raise. So he gained no buying power even though he is making more money.

Furthermore, you would be LUCKY to maintain the SAME buying power after the minimum pay increase. In reality a business will take advantage of the situation as the consumers realize that prices are going to go up. So if the business cost of operations went up by a $1 because of the new wage they would most likely raise their prices by $1.25. Raising prices is never easy to do nor accepted by the public so they will take advantage and throw in a little more.

edit on 8-6-2012 by interupt42 because: (no reason given)

That's what I'm saying. The prices are SUPPOSED to rise. That's how the system was designed to work. On purpose! The prices are going to go up anyway. They don't raise minimum wage until AFTER the prices have already went up. Look at gas prices compared to what they were the last time they raised it? The inflation has ALREADY happened.

You're just adjusting for inflation. That's all.

The only thing that the increase of the minimum wage does is hurt the middle class.

If Joe is making $9.00 an hour at McCrap and his supervisor Bob makes $11:50 hour what happens.

1. Joe makes $10 Bucks and hour. Yea he got a raise!!!
2. Bob didn't get a raise. Well that sucks but he is an elitist supervisor.
3. Steve the proprietor of the McCrap realizes that he has to raise his prices in order to keep the same profit margin or doing business prior to giving Joe his $1.00 raise.

So what happens Now to Joe:
1. Joe got his raise and is happy, so he feels like splurging and decides to go online and buy two songs versus only one song this week. After all he is making some extra money with his new raise.

2. Wait a second, when Joe goes to buy his .99 song he realizes that it know cost him $1.99. Therefore, he only buys one song as he always had before but for a little more money..

What happens to Bob:
3. Bob has the same salary as before , so he goes and decides to buy his normal 2 songs a week for 1.98.

4. Wait a second, Bob realizes that the songs cost now 1.99 each versus .99. Therefore Bob only buys one song now versus the two he would have normally purchased for more money.

What happens to Steve:
1. Well Steve the smart business man took advantage of the opportunity to increase his prices. Although paying an extra $1 an hour to Joe only cost him an extra .25 per sandwich he capitalized on the opportunity and raised the price of the sandwich by.35 cents.


Bottom line
1. The minimum wagers get a raise only to be nullified by the increase of prices. Hence no buying power is gain for them if they are lucky.

2. Middle class workers don't get a raise but consumer products go up to make up for the wage increases. Hence middle class looses buying power.

3. The rich keep getting richer because they pass the buck to the consumer with a little extra in between.

Originally posted by interupt42
The only thing that the increase of the minimum wage does is hurt the middle class.

If Joe is making $9.00 an hour at McCrap and his supervisor Bob makes $11:50 hour what happens.

1. Joe makes $10 Bucks and hour. Yea he got a raise!!!
2. Bob didn't get a raise. Well that sucks but he is an elitist supervisor.
3. Steve the proprietor of the McCrap realizes that he has to raise his prices in order to keep the same profit margin or doing business prior to giving Joe his $1.00 raise.

So what happens Now to Joe:
1. Joe got his raise and is happy, so he feels like splurging and decides to go online and buy two songs versus only one song this week. After all he is making some extra money with his new raise.

2. Wait a second, when Joe goes to buy his .99 song he realizes that it know cost him $1.99. Therefore, he only buys one song as he always had before but for a little more money..

What happens to Bob:
3. Bob has the same salary as before , so he goes and decides to buy his normal 2 songs a week for 1.98.

4. Wait a second, Bob realizes that the songs cost now 1.99 each versus .99. Therefore Bob only buys one song now versus the two he would have normally purchased for more money.

What happens to Steve:
1. Well Steve the smart business man took advantage of the opportunity to increase his prices. Although paying an extra $1 an hour to Joe only cost him an extra .25 per sandwich he capitalized on the opportunity and raised the price of the sandwich by.35 cents.

edit on 8-6-2012 by interupt42 because: (no reason given)

We've had minimum wage since 1938. It's been going up ever since. According to your logic this means that every person has much less buying power than then they did in 1938. But that's not true. People today have FAR MORE buying power.

The truth is, as prices rise, Bob will eventually get a raise too. Today we have multiple computers, homes, cars, flat panel TVs, iPhones, food, (we're all fat). People have far more crap today than they ever had back in 1938 when minimum wage was only 25 cents. Even unemployed people have friggin iPhones. We got more junk falling out of our back ends than you can imagine.

You were lucky to even have ONE single black and white TV for the whole family and one car back then. You were rich.

Explain this? The evidence does not fit your logic.

Originally posted by tinfoilman

The evidence does not fit your logic

Because you don't want to see it or accepted. Its simple logic.
Which part of if is wrong?
1. Will joe get paid more?
2. Will bob continue to get paid the same?
3. Will cost of products go up at minimum to make up for the increase in pay?
4. Will business not take advantage of the situation if they can , in order to make a little extra?

The truth is, as prices rise, Bob will eventually get a raise too.

If Bob will eventually get a raise why wouldn't Joe?

We've had minimum wage since 1938. It's been going up ever since. According to your logic this means that every person has much less buying power than then they did in 1938. But that's not true. People today have FAR MORE buying power.

Today we have multiple computers, homes, cars, flat panel TVs, iPhones, food, (we're all fat). People have far more crap today than they ever had back in 1938 when minimum wage was only 25 cents. Even unemployed people have friggin iPhones. We got more junk falling out of our back ends than you can imagine.

That reason is because people back then where more frugal , didn't second mortgage their home for a big screen tv, luxury cars,boats, or phones,etc. The other big reason is because they didn't easily qualify for credit and didn't have 20 max out credit cards.

Todays wages didn't contribute to any of those items it was mostly done on credit. As a matter of fact the economy has stopped because peoples credit has diminished. Without credit they can't afford those items let alone live on their salaries.

So no your buying power hasn't gone up based on what you said, but your credit has and it has gotten much easier to get than before. Some say that is the cause of our economic crash. People overspending and banks over lending to unqualified buyers.

Originally posted by interupt42

Originally posted by tinfoilman
Todays wages didn't contribute to any of those items it was mostly done on credit. As a matter of fact the economy has stopped because peoples credit has diminished. Without credit they can't afford those items let alone live on their salaries.

That's what I've been trying to tell you the whole time. It's about cheap credit. That's how the whole system was designed to work and it's what got us this far. The reason the economy took a crap is because inflation stopped. Home prices stopped going up. They started going down and becoming worth less. Deflation happened. People couldn't pay their loans. That means they couldn't get new loans and that's bad because our entire system is based on credit.

They moved a whole bunch of jobs over seas which caused wages and prices to DROP and it destroyed our middle class. Deflation. Like I said it's deflation that kills the economy. Prices going down kills the economy.

However, if wages go up and prices go up, the loans people have out now will become far easier to pay off because what they're paying back would be far less of a percentage of the final equation than what it was when they borrowed the money out. Once they have those loans paid off, they take out new loans and the buying starts again. Prices go up, wages go up. Inflation!

Inflation=growth and growth is what we want. We don't want to spiral to the bottom with prices always going down. That causes us not to be able to pay the loans. You have to grow out of the loan with inflation.

Why cant the CEO's' CFO's and the other Big wigs take a hit to their enormous paychecks and still be able to raise the minimum wage so that the little guy has more buying power?

That would not require any re-work to our current economic model, it would simply mean the rich are not as rich as they where last year (most of these big wigs could do with a million less in their portfolios, it wouldn't kill them". I mean really most of these guys have more money than they know what to do with.

reply to post by interupt42


Going by what you are saying, it is not the min wage that is the problem, but greedy businesses. The very ones that are utilizing slave labor to make more money and also give you cheap prices to entice you to buy buy buy... So lets starve the poor folks to save the middle class a dime and help them buy cheap fancy trinkets. Still sounds like slave labor to me.

Originally posted by mileysubet
Why cant the CEO's' CFO's and the other Big wigs take a hit to their enormous paychecks and still be able to raise the minimum wage so that the little guy has more buying power?

That would not require any re-work to our current economic model, it would simply mean the rich are not as rich as they where last year (most of these big wigs could do with a million less in their portfolios, it wouldn't kill them". I mean really most of these guys have more money than they know what to do with.

You must be for collectivism and centralization of power. You must be for a complete totalitarian world where government tells businesses what salaries they can pay. Yah why don't you just walk up to the next CEO you see and give him your suggestion and see what he says. Otherwise you are asking for the govt to decide these things, and then it wouldn't be free market or freedom would it?
I'm pretty sure you hadn't thought it all out that way, but I just thought I would give you some food for thought.

It will make things more expensive. The shops will become more expensive. I know because that's the way it has been here for 20 years. No cheap labour = higher prices = even more higher prices as people who suck a bit more money out, will. Those that can't will go bust.

A lot of Australians buy their goods from America because everything there is so cheap. It's not your mark-ups, it's our overheads. What's more they dodge paying any taxes.

I would say, be prepared for high prices like here, but our market is so small it has to be expensive for retailers etc. Your market is 10 x bigger and safer.

Originally posted by tinfoilman

Originally posted by interupt42

Originally posted by tinfoilman
Todays wages didn't contribute to any of those items it was mostly done on credit. As a matter of fact the economy has stopped because peoples credit has diminished. Without credit they can't afford those items let alone live on their salaries.

That's what I've been trying to tell you the whole time. It's about cheap credit. That's how the whole system was designed to work and it's what got us this far. The reason the economy took a crap is because inflation stopped. Home prices stopped going up. They started going down and becoming worth less. Deflation happened. People couldn't pay their loans. That means they couldn't get new loans and that's bad because our entire system is based on credit.

They moved a whole bunch of jobs over seas which caused wages and prices to DROP and it destroyed our middle class. Deflation. Like I said it's deflation that kills the economy. Prices going down kills the economy.

However, if wages go up and prices go up, the loans people have out now will become far easier to pay off because what they're paying back would be far less of a percentage of the final equation than what it was when they borrowed the money out. Once they have those loans paid off, they take out new loans and the buying starts again. Prices go up, wages go up. Inflation!

Inflation=growth and growth is what we want. We don't want to spiral to the bottom with prices always going down. That causes us not to be able to pay the loans. You have to grow out of the loan with inflation.

edit on 8-6-2012 by tinfoilman because: (no reason given)

I'm calling it a night but Re read my post above. Forcing an increase on the minimum wage will do nothing but hurt the middle class and most likely even the poor. The reason the economy took a crap was because gov't involvement with the lobbyist and their manipulation of the market and people over extending themselves.

Inflation is not good when your wages stay the same or get worse. The minimum wage increase is artificial because your buying power stay the same or worse as I shown above. Then you have consumer products going up (inflation , what Steve did) which means you can now afford less.

reply to post by ThirdEyeofHorus


It's not a free market now. The gov prints and borrows money into infinity and sets the interest rates and bailouts banks that should have collapsed and uses our tax money to move our jobs overseas while they give them tax BREAKS for moving overseas. In a free market system we wouldn't even have income tax and didn't used to.

It's a gov controlled system created by the gov. A system we didn't used to have. So, sometimes the gov has to make an adjustment. If we had a free market, the free market would adjust. But we don't currently have an entirely free market system. So, the solutions can't always be entirely free market based.

Originally posted by Praetorius

Originally posted by oghamxx
For starters the CEO's will up their pay another $7,000 an hour. Got to maintain 'parity'!

Yes, yes, the wicked CEOs.

Why does everyone want to actual like all employers are CEOs with megabucks instead of realizing that most employers - in the US at least - are in SMALL BUSINESS, with a good many already struggling to make ends meet?

I don't think that's quite right. I was employed at a small company with 20 employees and one location; was making $12.00/hr which was good pay but I knew something was wrong when my bosses were driving around in Ferrari's and lived in million dollar mansions (high price for a home in my area) and I'm not exaggerating in the least. That and their monthly vacations to the Florida keys (business write off I'm sure just because they had ONE customer in the keys that they visited.) Similar deal with my wife who worked at a company with 10 employees but who's owner drove around in a $200,000 Porsche.

It's this that I realized that life of 9 to 5 wasn't for me so I started my own business through sweat, blood and exhaustion and now I'm the one driving around in a Porsche (actually I have a Mustang Cobra, not a Porsche hehe.)

There's nothing wrong with being a corporate slave, because if no one was and every one was trying to be a CEO or run their own business then there wouldn't be any companies out there at all (every company needs employees.) I just knew after doing it for 10 years, the life wasn't for me.

But don't go acting like small business owners are suffering at all. Maybe the truly small, small businesses like the coffee shop down the street or the plumber with an apprentice, but if a company has at least 5 employees I guarantee the company is raking in at least a million dollars a year or something is very wrong.

reply to post by tinfoilman


I agree with you on that.

Originally posted by tinfoilman
reply to post by ThirdEyeofHorus

 

It's not a free market now. The gov prints and borrows money into infinity and sets the interest rates and bailouts banks that should have collapsed and uses our tax money to move our jobs overseas while they give them tax BREAKS for moving overseas. In a free market system we wouldn't even have income tax and didn't used to.

It's a gov controlled system created by the gov. A system we didn't used to have. So, sometimes the gov has to make an adjustment. If we had a free market, the free market would adjust. But we don't currently have an entirely free market system. So, the solutions can't always be entirely free market based.

I am aware that we are not operating on strict laissez-faire, but what people are suggesting are ideas based on socialism and communism and centralization of power. It clouds things when we are running on partial socialism, but still have many free market capitalist mechanisms.
I would like to see this all turned around but the current trend has been to add more and more socialist entitlements and mechanisms. When people see the failure of the system, they are told by the socialists and social engineers that it's all the fault of capitalism and free market enterprise.

It will mean that $10 will be worth $7.25 as it approaches infinity.

In short, a bubble.