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

10 dollars an hour won't raise prices on anything. $10/hr doesn't even catch up to the inflation since the last time min. wage was changed.

don't fall for that b.s.

prices aren't determined by min. wage. they're determined by what the market could bare and what people are willing to pay for a product.

you think the price of gasoline goes up and down because what they pay the poor sap that works 12 hour graveyard shifts at shell stations.

reply to post by interupt42


Yes of course it's not good when prices increase and your wages stay the same. That's why they have to increase the minimum wage.

Yes it's artificial. That's what I've been trying to tell you the whole time. The WHOLE SYSTEM IS ARTIFICIAL. That's what the word Fiat means. Fake currency by force. It's artificial currency printed on worthless paper.

And you forget they're not "raising" the minimum wage. They're just adjusting for inflation and putting it BACK to where it was the last time they raised it.

You have to look PAST the numbers. That $10 bill isn't a $10 bill. It's just a piece of worthless paper. That $5 bill isn't a $5 bill. It's just a number that doesn't mean anything. It cost the same amount to print both pieces of paper. All that matters is how many goods you can buy with it.

Today, it costs $10 to buy the same stuff $7 used to buy the last time they raised minimum wage. So all they're doing is putting it back where it was before. Nobody is getting any kind of raise and nobody is going to be able to buy any more product than they could before. You just can't see past the numbers. Still stuck in the Matrix I guess.

10 bucks would actually take the minimum wage back up to a semi-livable wage, so there's no way that it will pass.

As for the economy, it won't have that much of an effect. People go on and on about how it'll hurt the lower class with job losses. Well, most places run a skeleton crew, anyway.

Originally posted by bowtomonkey
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.

Yes, you are correct. It's the basic wage/price spiral. It's such a simple basic concept people need to understand. And it is not going to help anything when the Fed is printing money like Niagara Falls, because the Fed printing money will cause so much inflation even 10 bucks an hour won't do anything for the average person.

Originally posted by ThirdEyeofHorus

Originally posted by bowtomonkey
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.

Yes, you are correct. It's the basic wage/price spiral. It's such a simple basic concept people need to understand. And it is not going to help anything when the Fed is printing money like Niagara Falls, because the Fed printing money will cause so much inflation even 10 bucks an hour won't do anything for the average person.

Yes it would. Moderate inflation is good. Only hyperinflation is bad. Part of the reason the economy is going to crap is because nobody can pay off their loans. When inflation goes up, your loan doesn't. If inflation spirals upwords do you have any idea how much easier that would make it for people to pay off their mortgages and student loans?

Do you have any idea how much better for the economy that would be? All these people strapped to loans and debt and ruined credit being able to pay all those off and go out and buy stuff again?

It would also basically eliminate the banking crisis. What crisis? According to their books all the loans say PAID instead of DEFAULT.

Yes guys and gals

You are all powerless victims.
If somebody gives you money, somebody else is going to take it away the next second.
Companys can increase prices whenever they want by whatever amount they want.

Of course, meanwhile in reality, higher minimum wage boosts demand, which of course is the single most important thing for a business.
Studies have also shown that a higher minimum wage actually lowers operating costs. How? Higher minimum wage means lower turnover, means less time spent looking for new employees and training them.

reply to post by tinfoilman


I hear what you're saying and I agree. To a point. You're looking at the big picture. Down here on the street level I don't see how having an extra 80 dollars in your paycheck would be a bad thing. When people have more money they spend more money. When you buy more things, more things have to be produced, made, planted and shipped. It's called supply and demand.

Small and big business owners need to realize this as well. They will need to have some sort of a financial cushion to get them over that initial hump of paying their workers more, but ultimately they'll be making more money because they're selling more to the people who are buying more.

You also have to remember that most of the things we buy here in the U.S. aren't made here anymore. This factors into the equation as well.

Originally posted by sligtlyskeptical
Lets put it this way. Labor on average is about 25% of the costs for the average American business. So if we raise the minimum wage by about 30%, prices will have to rise 7.5% in order to cover the increased cost and keep profits the same. So that 30% increase will still mean about a 22.5% increase in disposable income for those working minimum wage.

I don't agree with your math because you are using erroneous underlying assumptions. Clearly, not all labor costs to businesses are associated with minimum wage earners. Isn't it important to consider ONLY the cost for labor, that would be affected by an increase in minimum wage, in the equation here?

reply to post by tinfoilman


sorry but you are wrong, i remember the last min. wage increase, small buisnesses will immediatley raise their prices.

between goods and services going up and the additional taxes for the people with the new wage people will actually be making less then they make now.

maybe they'd do better to attach a line to the legislation that doles out the federal dollars (tax breaks, business loans, ect) that requires the businesses to provide details of their pay structure and finances....
as long as the pay structure isn's vastly imbalanced and their finances show that they ain't swimming in money, well, ya, they can have the fed dollars.... but if it's found that they have tons of cash, their upper management is making out like bandits and the taxpayers are getting stuck feeding their employees, well, nope, no money for you pay you taxes please!!

Originally posted by Praetorius
reply to post by LadyJae

 

Exactly. Most businesses/employers in the US are not part of the 1%, and that additional cost to them has to be made up somewhere...which ends up driving the cost of living up, causing layoffs and additional workloads if can't be offset by price increases, and a range of other issues.

People always like to eagerly attack even mere discussion of doing away with the minimum wage, but there are valid and extensive arguments on both sides that require much review and consideration. Sure, if you could just magically give everyone more money at no hidden cost, great - but that's not how the real world works.

I've seen it first hand with a small business owner in my city. I am Canadian, born and raised in Saint John NB. I friend I work with owns a small Restaurant chain called Deluxe Fish and chips. It's fairly big on the east coast. The new 10$ minimum wage increase forced him to raise all prices by 5% across the board. He had no other options, his business does reasonably well, but without the price increase, he'd be struggling himself.

What's the solution though? No laws? Employers can pay their employee peanuts? I dunno anymore.

reply to post by macaronicaesar


is the problem with the wage, or is it more with his suppliers, ect? see that's the thing, the small business owners are kind of beholding to the bigger companies, they have to pay whatever price they set....they have to help pay for that big fat cat at the top also!

Originally posted by randomname
10 dollars an hour won't raise prices on anything. $10/hr doesn't even catch up to the inflation since the last time min. wage was changed.

don't fall for that b.s.

prices aren't determined by min. wage. they're determined by what the market could bare and what people are willing to pay for a product.

you think the price of gasoline goes up and down because what they pay the poor sap that works 12 hour graveyard shifts at shell stations.

Simply put, you are wrong. I've witnessed it myself, like I said, a very good friend of mine just went through this exact scenario and he raised prices of everything in his restaurant by 5% to make up the difference.

Originally posted by dawnstar
reply to post by macaronicaesar

 

is the problem with the wage, or is it more with his suppliers, ect? see that's the thing, the small business owners are kind of beholding to the bigger companies, they have to pay whatever price they set....they have to help pay for that big fat cat at the top also!

It's probably a combination of both. His suppliers were dealt the same wage increase, so they likely increased their prices to him as well.

Its funny how when resources get more expensive, it is passed on to the customers without a hush. But when works gets more expensive, OoO then it will destroy sooo many job. Like somebody who owns a buisness is going to do honest work if his buisness earns him just 250.000 after taxes and overhead instead of 300.000.

How will this affect the economy? It might drive up inflation somewhat and boost consumption a little. It will benefit the people who work for minimum wage and negatively affect the people who own a lot of money and assets or have debt outstanding they need to receive. Even with this increase it will not catch up to the inflation of the past 10 years.

Wages especially minium wage need to be corrected for inflation more quickly. Inflation ALREADY HAPPENED since minimum wage was increased the last time. People who do not make enough to safe have no reason to fear inflation, if it is driven by increased salaries that is as opposed by increased cost for resources.

Originally posted 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.

Idiots that don't own or run a small business don't seem understand how things work.

Most buisnesses arent as charitable as you and already employ only the bare minimum of hands they need to conduct buisness, so laying off people is not an option for them, or at least laying off a signifcant ammount of people. We shall see if they prefer to close shop over paying out a higher wage.

Originally posted by mytheroy
reply to post by Submarines

 

Actually you could do that, and not increase your prices...It's when greed is in your eyes would you up the prices on goods.

I want to open a business and I would take a cut out of my own money to make sure my employees had a job and were taken care of. It's called taking care of who takes care of you

Employees are the very backbone of any business no workers no business right? Unless your going to do it yourself but that's why you have workers so you don't have to.

Sadly its a race to the bottom, where you gotta be the first to be as cheap as possible legally. Else you will just be more expensive than everybody else. People like to bash Apple and the like, but what they do in China is not illegal. Sure they could take better care of their workers and enforce better conditions in the corporations that supply them and still turn a very very good profit, but then some other stock would be hot.

What needs to happen is that workers abroad obtain the same rights and legal protections as workers in Europe and America. Some people will have you believe that state intervention is zhe evil, but it is the only protection people who are basically easily replaced have. The ones who lose are those who make a ton of money instead of a $hitton of money. There were rich enterpreneurs before cheap work in Asia came online.

reply to post by oneness86


This will be a massive fail. You don't need to be rewarded for second class efforts.

First raising the minimum wage without tying it to the rate of inflation when it was first enacted was a mistake. It really should have been a no-brainer to do so. That is the first part of the wage problem and is the part that allowed for the second part. The second part of it is the captains of these enterprises paying themselves exponentially more and more while allowing the crew wages to stagnate. It does not do the economy any good whatsoever to put the most amount of money in the least amount of hands.

Originally posted by KeliOnyx
It does not do the economy any good whatsoever to put the most amount of money in the least amount of hands.

It does if you are in the buisness of selling gold plated diamond fitted cellphone cases.

Originally posted by tinfoilman
reply to post by interupt42

 

No that's why I hate it when people say raising minimum wage will cause businesses to lay people off. Like I've said earlier in this thread. That doesn't make any sense. Those jobs are going away anyway if the boss refuses to give the raise.

It doesn't make any sense because you can't employ logical thinking. The jobs won't go away if the boss doesn't give the raise - the PERSON will.. He can just find another person. The kind of jobs you're talking about can be filled with a trained chimp, but it's cheaper to get a high school kid.

reply to post by HauntWok


You have apparently never owned or operated a business before.

So lets hear about your winning business model. Where do I get this extra money from to actually pay this increase from? Should I just pass this on to the customers? Should I cut my own families income by 36,000/ yr?
Should I just spend less on the business itself? What about needed repairs to the store, the need for repair of old or replacement of equipment? What about the health insurance coverage, maybe I should drop that?

Why should I pay someone who can't count to 10 without using body parts $10.00 and hour?

Maybe you should think things thru BEFORE you insert your foot!