Instead of raising minimum wage, we should lower it! Here's why...

Millions of Americans don’t make enough to survive. I’m one of them. I’ve gone through a couple of job changes and business changes over the past couple of years after losing my business of 15 years back in 2010. It was my fault. I made a major investment in an attempt to take my business into a different direction, one I knew little about. The end result…after my whole life of believing I was in total control, reality set in, but that’s a whole other story that I’m not going to tell here. The point of this thread is to talk about the growing divide between the rich and the poor!

The minimum wage is clearly not enough for anyone to survive on, especially if you have a family to care for. It’s a very sad state that our country is in and the state continues to worsen. Only a select few who work extra hard or catch a lucky break will ever successfully make the jump into the “other side.”

Should we raise the minimum wage as the Democratic Party suggests? No. I believe we should lower it. You’re laughing right now because how crazy this sounds, but let me explain.

I’ve always been very conservative in my view points. I’ve always been a capitalist. I always held true to the idea that those who work hard and hold on to the dream will succeed. But, that view is fading fast because I’ve learned now that IMO the system is set up so that those of us on this side of the tracks…stay on this side of the tracks!
Why bother to raise the wages that we make because the cost of just about every thing will rise anyways. It’s true. Down below I will show some numbers about the rising cost of living since 1980. As our incomes rise, the costs rise even more.

In 2006, there were approximately 116,011,000 households in the United States. 1.93% of all households had annual incomes exceeding $250,000. 12.3% fell below the federal poverty threshold and the bottom 20% earned less than $19,178. The aggregate income distribution is highly concentrated towards the top, with the top 6.37% earning roughly one third of all income, and those with upper-middle incomes controlling a large, though declining, share of the total earned income.

And since 2006, the gap continues to widen. When they show us today that things are improving, don’t believe it. It’s only improving for the 6.37% who earn one third of all income. When you hear about the stock market rising, it’s because those at the top are increasing their wealth and leaving the rest of us further behind. The Fed prints $35 billion every year that they continue to pump into the market so that the economy doesn’t collapse. But what is happening? This money isn’t circulating in the general economy where the average folk are shopping, eating out and paying their bills. No…it’s circulating at the top making those filthy rich get richer. All the while, those every day Americans continue to suffer…losing their homes, their vehicles, unable to pay simple household bills, etc. Homelessness in this country is rising and it’s not because people are lazy…it’s because there aren’t enough jobs there that folks can actually make enough money to take care of their families.

Once again, I ask, why bother to raise our income wages only to have the cost of living increase even more, only benefiting the elite as they make more profits. I say instead of raising the minimum wage, let’s knock it back a few decades. Let’s go backwards and give the elitist corporate owners no choice but to lower their prices. If we simply can’t afford to buy products, the price has to fall. It’s called supply and demand. Currently, we have no choice but to buy, buy, buy. We need to live so we need food, common household products, vehicles, gasoline, clothes on our backs, etc. As long as they know this, they will keep the prices just high enough that what ever money we make, we have to spend in order to live!

The cycle won’t end and the gap will continue to widen until one of two things happen…we become slaves or we rebel!

Here are some numbers

1980 / 1990 / 2000 / NOW / Increase
Minimum wage $3.10 / $3.80 / $5.15 / $7.25 / 234%
Real value $5.90 / $4.56 / $4.69 / $4.87 / -121%
New car $7,210 / $16,000 / $24,750 / $31,252 / 433%
Monthly Rent $243 / $447 / $602 / $800 / 329%
Stamp 15 cents / 25 cents / 33 cents / 45 cents / 300%
Gallon of gas $1.25 / $1.16 / $1.26 / $3.25 / 260%
Dozen eggs 91 cents / $1 / 89 cents / $2.68 / 295%
Gallon of milk $2.16 / $2.78 / $2.88 / $3.43 / 159%
Loaf of bread 50 cents / 70 cents / $1.72 / $2.79 / 558%
Pound of beef $1 / 89 cents / $2.79 / $3.99 / 399%
Movie ticket $2.69 / $4.23 / $5.39 / $8.05 / 299%
Disney World 4-day (1982)$45.00 / $104 / $176 / $277 / 616%

As you see these numbers and their increases you have to wonder how anyone can survive. I know that most people who work make more than the minimum wage, but not much. I myself make much more than the minimum wage but I have a wife and three small children…and I tell ya, I need to make twice as much as I do to even start feeling like I’m living the American dream. The point is…I don’t even know how a single person could live on $10 an hour in today’s day and age with the costs of just about every thing. A family of four is going to spend $20 just to go to McDonald’s now a days, unless you pound the dollar menu, then you might cut it down to $12.

One other note on this is if I went back even earlier than 1980, the price differences are even greater.

Now I know the idea to actually lower wages is crazy and would never happen. The idea of this thread is more to show how the gap is widening between the upper and lower classes and the middle class soon won’t exist. I believe when you look at the big picture, it’s intended to stay this way and this is a bi-partisan issue…

The rich get richer and the poor…well, you know the story.

Oh yeah...Merry Christmas all. Hope your holiday was grand!

I can see where your going with this. If jobs have to pay more per person, prices will go up.

Except the fact that we live in a credit way of doing things that has got us into trouble! Why loan $100,000 to a person who just got out of school and has no actually work record? Banks give money out to the same one who they know they can not Pay it back. And if they did, 30yrs later you will still be paying on that loan anyway!

I'm as poor as they come, yet I do not buy outside my means. So my home is 92yrs old, car is an 84 and my TV is only 19 in! Opps, found a 36in TV tossed away in the trash and works good! Every year new stuff comes out into the market and people actually buy another Just because it is New.

How we rate our system; how much cash we spend over the X-Mas season is what we call if we are in a resesion or not! Shame most of it was used by Credit so the true facts of us being poor are not really shown.

Being said, I'm even poorer then last year! Prices will continue to go up no matter what they do to our wages. There is no line between being rich or poor anymore. The US is nothing more then Corp, when their is no more money to float around. They will either merged or sell out leaving bigger ones.

Then is Slave Citys. You either work or live like #, some of us just got use to it!

Peace

Seems like a which came first kinda question, just instead of the chicken or the egg its minimum wage and cost of living.

Does minimum wage increases cause the prices to increase, or are minimum wage standards set to keep up with the increases in prices?

IMO minimum wage is way to adjust for inflation. Inflation is cause by the Federal Reserve and the policy of printing as much money as you can as quick as you can, not by what minimum wage is set to at any given time. If you were to lower minimum wage prices would continue to increase and people would be able to buy less and less with less money.

DC

infoseeker26754
I can see where your going with this. If jobs have to pay more per person, prices will go up.

Except the fact that we live in a credit way of doing things that has got us into trouble! Why loan $100,000 to a person who just got out of school and has no actually work record? Banks give money out to the same one who they know they can not Pay it back. And if they did, 30yrs later you will still be paying on that loan anyway!

I'm as poor as they come, yet I do not buy outside my means. So my home is 92yrs old, car is an 84 and my TV is only 19 in! Opps, found a 36in TV tossed away in the trash and works good! Every year new stuff comes out into the market and people actually buy another Just because it is New.

How we rate our system; how much cash we spend over the X-Mas season is what we call if we are in a resesion or not! Shame most of it was used by Credit so the true facts of us being poor are not really shown.

Being said, I'm even poorer then last year! Prices will continue to go up no matter what they do to our wages. There is no line between being rich or poor anymore. The US is nothing more then Corp, when their is no more money to float around. They will either merged or sell out leaving bigger ones.

Then is Slave Citys. You either work or live like #, some of us just got use to it!

Peace

That's what I'm talking about though. That's the sad reality. We have to just go ahead and get used to it. And there are more and more people who have to "just get used to it" than there ever has been. But, it's sad life has to be that way for so many when hard work should result in some leisure time and relaxation once in a while. Many Americans can't even afford a simple vacation or a membership in a gym, or a golf course (myself included.) Golf used to be my main passion, even living on a beautiful course up to three years ago when things changed for me. Now, I'm lucky if I golf twice a year.

That's the main difference between the have's and have-not's....the toys. We learn to not live outside of our means.

reply to post by Rezlooper


OR...
reduce corporate tax rates and abolish VAT for basic goods = more people can be employed, get payed better AND can actually afford the goods they need for their money = create real aggregate demand AND a higher average QoL in the process.

Rezlooper
Let’s go backwards and give the elitist corporate owners no choice but to lower their prices.
If we simply can’t afford to buy products, the price has to fall. It’s called supply and demand.

Your vital need for food (demand) doesn't really decline until you're dead (starved).
And what about all the "non-elitist-corporate"-producers in the food industry?
Middle class and small businesses can hardly compete with the predatory prices of big corporations as it is... you want them to starve too?
Lower wages are not the solution... higher purchasing power overall (via lower taxation) is.

ETA:
I forgot to say I'm not a fan of statutory minimum wages at all.

xDeadcowx
Seems like a which came first kinda question, just instead of the chicken or the egg its minimum wage and cost of living.

Does minimum wage increases cause the prices to increase, or are minimum wage standards set to keep up with the increases in prices?

IMO minimum wage is way to adjust for inflation. Inflation is cause by the Federal Reserve and the policy of printing as much money as you can as quick as you can, not by what minimum wage is set to at any given time. If you were to lower minimum wage prices would continue to increase and people would be able to buy less and less with less money.

DC

I think the inflation comes first because of supply and demand. As long as we're going to buy the products, the prices will go up. When we stop buying a product, the price falls. But of course, how do we stop buying toilet paper? Food? Gas?

I agree with the OP completely......in fact, get rid of minimum wage...Stop subsidizing companies. I had a conversation with a few friends the other day and did just what the OP did, while they said the same thing about prices increasing. Here is the thing, if someone is making minimum wage, they are probably on some sort of government program to cover the gap between cost of living and what they make. This allows companies to keep making a profit at the expense of the tax payer.

In a free market system, if the product cannot be made at to make a profit, then it doesn't get made. Saying that a burger flipper shouldn't make a living wage because it is a menial job is pointless. A person that works 40 hours a week at any job should be able to cover the bills. If a 40 hour work week isn't worth a living wage, then maybe the product isn't something that is worth making.

A company like starbucks or mcdonalds pays their employees minimum wage yet sees large profits every year and has enough capital to put into new structures so that they are on every street corner. If their product is so good, then they can stand without tax payer support. If a company has employees on government programs, then they shouldn't be able to use tax breaks. If they need to pay their employees so little, then they need to give into those programs that cover the shortfall.

The free market will find that medium as it once did. Companies will figure out how much it costs to make a product and still make that product to create profit. If a consumer has to drive an extra two miles to get it instead of a taco bell on every street corner, the consumer will drive it because the product is what the consumer wants. The difference between all this is that the employee of a company is paid what the product is worth and the consumer funds their living by choice....the min wage concept and welfare programs allow companies to produce products using my tax dollar without my choice. There isn't a business model in the world that says making a product or service can be done with government support. The company business model says to the creation of the product should take into consideration the cost of production or the product isnt viable.

Prices are not solely based on average income. You'll get inflation no matter what you pay employees. A couple of issues that you are forgetting are: 1) the amount of money in circulation 2) the value of that money in relation to scarcity of resources required for the service being purchased.

As more money accumulates into bank accounts at the “top”, more has to be printed to keep it in circulation. Actually the rich are hurting themselves through their hoarding and refusal to “trickle back” into the economy. With each additional dollar the the US mints, each of their hoarded dollars becomes worth a fraction less.

Now add to that the fact that resources are getting rarer, and its getting harder to extract those resources. That is the whole point of “peak oil”. There is a bell curve to oil extraction where the amount of energy required to extract an amount of oil is costing more then the energy that can be output by what is extracted. When they average that known “lifetime” curve across all wells, you get an overall view of where we are on the “bell”. ATM we are either very near, if not over the top, of the “peak”. That same concept of “peak” extraction rates/costs applies to ALL resources, not just oil. So if it costs a million dollars to extract an ounce of the resource, then obviously its starting price is going to be a million dollars/ounce.

What many don't realize is that EVERY product or service uses oil at some point in its manufacture, collection, production, transportation, etc... and oil is fast heading the way of the dodo.

Why not introduce a maximumwage instead? Then the companies can pay all their workers more. These worker not being financially astute will spend it on useless items (like a xmas tree decorations and large screen tvs) which keeps the consumer economy going. Highly paid upper management don't spend all their income, they invest most of it to make even more money, this has the effect of making money worthless as luxury items become even more expensive and this effect trickles down to the rest of the market.

For example: Take a house valued at $2.1 million as opposed to a house valued $210,000. I haggle the price of the first one down to an even $2 million and the second down to $200,000. That is a $90,000 difference! That $90,000 between the 2 savings. Another example, a bottle of wine selling at $140 or another selling at $115 compared to a bottle selling at $8 or $12. The second one involves $4 and most people would find that substantial enough to buy one over the other. The second one involves $25 and most people considering both bottles wouldn't even care about the price difference.

My point is that when you start earning shiltoads of money, it looses its value.

ColCurious
OR...
reduce corporate tax rates and abolish VAT for basic goods = more people can be employed, get payed better AND can actually afford the goods they need for their money = create real aggregate demand AND a higher average QoL in the process.

Cinrad
Why not introduce a maximumwage instead? Then the companies can pay all their workers more.

Almost all countries have a minimum wage of some sort. Without it, employees get taken advantage of, especially in times when there is very few jobs to be had

The US is already low compared to a few other countries

en.m.wikipedia.org...

Cinrad
Why not introduce a maximumwage instead? Then the companies can pay all their workers more. These worker not being financially astute will spend it on useless items (like a xmas tree decorations and large screen tvs) which keeps the consumer economy going. Highly paid upper management don't spend all their income, they invest most of it to make even more money, this has the effect of making money worthless as luxury items become even more expensive and this effect trickles down to the rest of the market.

For example: Take a house valued at $2.1 million as opposed to a house valued $210,000. I haggle the price of the first one down to an even $2 million and the second down to $200,000. That is a $90,000 difference! That $90,000 between the 2 savings. Another example, a bottle of wine selling at $140 or another selling at $115 compared to a bottle selling at $8 or $12. The second one involves $4 and most people would find that substantial enough to buy one over the other. The second one involves $25 and most people considering both bottles wouldn't even care about the price difference.

My point is that when you start earning shiltoads of money, it looses its value.

edit on 25/12/13 by Cinrad because: (no reason given)

It's much easier to invest $25 over $4. The folks who are shopping around to save $4 are the ones who will most likely use that $4 savings to maybe catch up on a bill they were behind with, or maybe get their kid some 100% juice over the usual fake punch. They're surely not in a position to invest. That's the point. The rich will continue to invest while the poor don't have that luxury...the luxury of investing their extra dollars to make more dollars.

reply to post by defcon5

defcon5
You're joking right?
Most corporations already don't pay any taxes...
I think it was in 2008, the corporations lobbied the government to bring all their “offshored” money back into the US without being taxed, with the promise that they would increase the number of US jobs. The government allowed this to happen, and what was the end result? The greedy #s got their money then CUT jobs.... As if that wasn't bad enough, they thenhad the balls to ask the government for another such break about a year ago, to which the government told them where they would go stick it.

I'm not joking at all.

Middle class and small businesses cannot afford to "lobby the government" to avoid taxation, which clearly creates an unfair disadvantage for them.
What I'm talking about is giving small businesses a chance to compete again by leveling the playingfield.
Small businesses cannot employ/pay anyone, nor offer goods for affordable prices when they simply cannot compete.

The cost of living isn't really tied to the minimum wage but to the value of the dollar. Raising the minimum wage would have very little effect on the cost of living if "job creators" were to be honest about it, which they wouldn't. But people would rather say that the working poor are greedy than say the bosses are greedy.

reply to post by Rezlooper


I've had a few Accounting classes and it was said that the increase in cost is related to the increase in demand. However, when the cost of supplies is constant, and the cost of overhead is controlled and fairly constant, then the cost of labor is a possible fluctuator, but if labor is held constant and not allowed to increase (0 overtime, 0 pay increases, etc.), then just because demand increases, it should NOT mean an increase in costs. The increase in labor should be directly related to the increase in demand and total costs should go up at the same proportions, not exponentially so they should not affect retail prices because the profit margin already in place should be sufficient to cover and the increase in demand should end in an increase in profits. The supplies may even be at a lesser cost per unit if bought in large bulk quantities, as is normal for many companies that buy their supplies in bulk, so while they will have to buy larger quantities of supplies, again, the cost is going up proportionately, not exponentially.

And, so unless I am missing something, the only reason costs are going up exponentially is that the CEO's of companies are 'snowing' the consumers into thinking there must be some increase in costs somewhere to account for the exponential increase in retail pricing.

Any one have any other thoughts here??

defcon5

ColCurious
OR...
reduce corporate tax rates and abolish VAT for basic goods = more people can be employed, get payed better AND can actually afford the goods they need for their money = create real aggregate demand AND a higher average QoL in the process.

The following is my opinion as a member participating in this discussion.

You're joking right?
Most corporations already don't pay any taxes...
I think it was in 2008, the corporations lobbied the government to bring all their “offshored” money back into the US without being taxed, with the promise that they would increase the number of US jobs. The government allowed this to happen, and what was the end result? The greedy #s got their money then CUT jobs.... As if that wasn't bad enough, they thenhad the balls to ask the government for another such break about a year ago, to which the government told them where they would go stick it.

As an ATS Staff Member, I will not moderate in threads such as this where I have participated as a member.

The old me would have never starred this post...the new me wants to give you a butt load of them! One will have to suffice.

ColCurious
I'm not joking at all.

Middle class and small businesses cannot afford to "lobby the government" to avoid taxation, which clearly creates an unfair disadvantage for them.
What I'm talking about is giving small businesses a chance to compete again by leveling the playingfield.
Small businesses cannot employ/pay anyone, nor offer goods for affordable prices when they simply cannot compete.

The way I read it, it appeared you meant big corporations. You are correct, small businesses need to have MAJOR tax breaks. I believe that some are paying around 50% right now. The big companies have lobbied that in to keep them from competing.

Most big companies don't pay any taxes, and offshore money to avoid taxes. That is what I was referring too about the “tax holiday” above. When they got the “holiday” they almost immediately started one of the largest layoffs in US history. These big corps are the scum of the earth, IMHO, and until someone stands up to them, nothing will get better.

reply to post by defcon5


I thought the trade agreements, like NAFTA, are actually put in place to get rid of tariffs. So where would the taxes you are referring to come from since there aren't taxes on international trade between certain countries due the trade agreements, or at least not import/export duties/tariffs??