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

Rezlooper

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%

Should Be: $3.10 / $5.12 /$ 9.16 / $11.29/ 364.10%

If you take the 3.10 wage and the first column costs, you could bank almost 10%
in the last column figures, you would have .002%.

edit on 26-12-2013 by imd12c4funn because: ad calculations

reply to post by Rezlooper


I read your thread and I wanted to weigh in on it.

You mentioned dollar devaluation and money printing, which is really the 900 pound gorilla in the room here. But how is that money created? It is created as debt. That debt is loaned out to businesses. If those businesses can manufacture the *perception* of value, they can pay back the debt with the perceptions of others. This system is corruptible, even with the most noble people on top, and is threatened in current time. This is what the Gold bugs and Bitcoin people understand. But the effect for the rest of us, is slowly, over years, we find the same amount of dollars buys much less.

There are indices which measure how much a dollar buys, and others that measure the minimum wage. The purchasing power of the dollar is falling faster than increases in the minimum wage, even as unemployment rises. The bottom line is poverty is increasing, and a time is coming when working isn't worth it, unless you make substantially more than the minimum wage. At that point the culture in general will start to destabilize. This is true whether you believe it or not, I don't care I am impartial. You can lower the minimum wage and hasten this, or raise the minimum wage substantially and delay it. But certain issues are going to arise in time.

Because of the nature of the political system in the United States, I expect a substantial increase in the minimum wage in coming years, because it is a way for well informed people in office to delay chaos in their terms. Pushing difficult decisions back onto people that come after you is an ongoing trend in DC. They can embrace your minimum wage decrease, but it will bring chaos on their watch, which will damage them. Of course none of it embraces the underlying issue, the divorce of real value from dollar monetary value by high-tech fraudsters. I see it as the birth pangs of a new financial system, more grounded in scientific reality than pieces of paper with all-seeing-eyes on them. Its coming and it will be good. How we move in the mean time doesn't matter much, the long term outcome of it all is to me pretty clear.

Peace! And Merry Christmas!

Complete nonsense. Australia has a high minimum wage and prices are comparable to the US. What's more, is people have money to spend which keeps the economy robust and growing. Business revenues increase. High minimum wages actually helps business, and mitigates recessions.

You see, the economy needs money to keep flowing between business and consumers for it to remain healthy. In the process, taxes skimmed off by government are supposed to be used to provide services to citizens, further strengthening the economy.

www.latimes.com...

www.smh.com.au...

The truth of the matter is that the system is broken and no amount of tweaking will fix it for the long run.Any system put into place will be corrupted by the tendancy of human nature to consider only me,me,me.This is why the rich get richer and keep the poor getting poorer.The people with the money control the government.Giving them the power and ability to supress the ability of those under them to financially advance themselves.

After all if they don't supress the working man they will have less money availible to them to get richer.Put yourself in their shoes and see what you would do.To me these people are sociopaths and don't care about the good of society.The only benefit they want is to themselves.The rest of us are only here to make life easier for them.

What's the answer to this problem? I don't know,but, I think that the result will be rather ugly.That time is coming as the common man can no longer support his family.When the family begins to suffer because they can no longer afford food or bills, there will be a backlash,and it will be very ugly.The huge jump in homeless numbers is pointing the way.What happens when those numbers include most of us,even those who can find a job.Those numbers include more and more whole families.

How will you feel when your children are starving cause the elites have aquired so much money that your kids are dying of starvation.That time is just around the corner.They will not stop until we stop them.They don't care that our families suffer to their benefit.As long as they aquire more and more money that they don't really need,they are happy to watch the rest suffer.I mean seriously, just how much money do you really need? Billions? Trillions? How much is enough.

Where is the moral justification for this.This is nothing more than selfish greed.Money for monies sake.The saying: Money is the root of all evil, comes to mind.

I apologise for what seems to be a rant here.Seeing families becoming homeless so that the rich can aquire more and more money boils my blood.The minimum wage is just a small part of a system that is badly broken.Small tweaks are not gonna fix the problem.

reply to post by defcon5


you almost nailed it! Imagine say,Toyota,made in japan,selling cars in the US.They would pay taxes on every car sold here.But,by having a Toyota North America subsidiary,they sell the car that cost 10k to manufacture to Toyota NA for 21k,they sell it to a dealer for 22k,and the dealer sells it for 23k.The dealer makes a grand,Toyota NA makes a grand,and the bulk of the profit goes offshore!
Its not labor costs,its creative book keeping!
As a side note,I'm a machinist.We needed to hire a new guy in the shop.Had an interview with a guy that worked at Ford in Detroit as a machinist.The guy could barely read and write! His entire job was to push a button and watch the machine,and if it had a problem,he would call a REAL machinist to fix it! And he wanted an 80k starting salary,with bennies! Twice what I made as a supervisor in AZ! I really don't appreciate what unions did to our manufacturing base

reply to post by Rezlooper


Only one problem.

No one is going to lower prices ever.

You get rid of the min wage and then people really won't be able to buy anything.

Another recession will kick in and we'll be in bigger trouble.

reply to post by Rezlooper


i really do not think the 'starve the elite fat-cats' will work

they have amassed tons of money, wealth, enough to withstand a prolonged siege by a population that refuses to buy their goods today


the Fed Reserve has set up the ever-inflationary paradigm.. so that the machine can only operate with ever increasing inflation, which includes minimum wage...


note:

on jan 26th postage stamps go to 46 cents... that exceeds the 1.2 % COLA i got as both retired/vet
~so~ here it is again, the bottom tier of the socio-economic ladder will be funding the Perks & bloated retirement of the postal service as the corps & top paid folks get either low cost bulk rates or get tax deductions for their mailing costs... the people that subsist on nickles & dimes will be paying 7% more for a stamp to mail their monthly payments to or get their "stuff" repossessed or discontinued ... cars/furniture/ cable TV/ etc


Another example of how the deck is stacked against the poor & favors the well off
i thought that obama was to change all that... the only chanGe i see is he is a Nobel Prize richer and does more golf than actual work

lonegurkha
The truth of the matter is that the system is broken and no amount of tweaking will fix it for the long run.Any system put into place will be corrupted by the tendancy of human nature to consider only me,me,me.This is why the rich get richer and keep the poor getting poorer.The people with the money control the government.Giving them the power and ability to supress the ability of those under them to financially advance themselves.

After all if they don't supress the working man they will have less money availible to them to get richer.Put yourself in their shoes and see what you would do.To me these people are sociopaths and don't care about the good of society.The only benefit they want is to themselves.The rest of us are only here to make life easier for them.

What's the answer to this problem? I don't know,but, I think that the result will be rather ugly.That time is coming as the common man can no longer support his family.When the family begins to suffer because they can no longer afford food or bills, there will be a backlash,and it will be very ugly.The huge jump in homeless numbers is pointing the way.What happens when those numbers include most of us,even those who can find a job.Those numbers include more and more whole families.

How will you feel when your children are starving cause the elites have aquired so much money that your kids are dying of starvation.That time is just around the corner.They will not stop until we stop them.They don't care that our families suffer to their benefit.As long as they aquire more and more money that they don't really need,they are happy to watch the rest suffer.I mean seriously, just how much money do you really need? Billions? Trillions? How much is enough.

Where is the moral justification for this.This is nothing more than selfish greed.Money for monies sake.The saying: Money is the root of all evil, comes to mind.

I apologise for what seems to be a rant here.Seeing families becoming homeless so that the rich can aquire more and more money boils my blood.The minimum wage is just a small part of a system that is badly broken.Small tweaks are not gonna fix the problem.

No need to apologize...my blood is also boiling as I am out here on the road, traveling for my work (selling apparel at craft shows, markets and fairs) and I see first hand what is happening to America. They tell us things are getting better, but not from where I'm viewing. I see that there are many shoppers coming out but they aren't spending any money. I see literally hundreds of vendors just in the shows i work who are barely making it right now because they have the expenses, but buyers aren't spending. Back up north in Wisconsin, my product sold pretty well over the summer, but only when I hit the right shows where the tourists with money from Chicago were, and now down here in FL, it's been a nightmare how slow it really is. Thousands of vendors converge on FL this time of year, and all I hear from the many I talk with, is that this year is exceptionally bad. Even last year they made money, but not this year. What is going on? Fear! Fear of the unknown...with so many concerned about the future of America in regards to civil unrest, Obama and Obamacare. Also, you have 1.3 million Americans getting cut off from their unemployment on the first of January, food stamps and welfare has already been cut, and how many millions of Americans being cut from their health insurance and forced to pay exorbitant amounts of money to stay covered. There is too much uncertainty and it's only getting worse.

Meanwhile, the largest corporations have over a trillion dollars hoarded away.

reply to post by Rezlooper


This turned out to be a really good topic to bring up, thanks.

I honestly don't have much to add currently, but I do think this discussion you brought up is thought provoking.
If any good ideas hit me through the day about this topic I'll come back and add them.

Good thread Rez.

reply to post by Rezlooper


I think your argument for eliminating the minimum wage, (with the idea that if we get poor enough, the price of products will surely come down) is total nonsense.

Furthermore, I see no evidence to back up your theory that minimum wage increases are the driving force behind inflation.

When I graduated high school in 1975, I had a job at a convenience store making $2.10 an hr., which was the federal minimum wage at the time. In that same year 1975, you could purchase a brand new volkswagen beetle for $1,999.00. Today, that same volkswagen beetle will cost you at least $20,000,00+ which is a ten fold increase.

Based on that example, if wages had just kept up with inflation, they would be $21.00 per hr. today. It hard for me to imagine that minimum wages are driving inflation when the price of a car goes up ten fold while wages are only increased by 3 and half times.

In 1975, the average CEO to worker wage ratio was about 30 to 1 which means that the average worker in America had to work 30 days to earn what the CEO of their company earned in 1 day. Today that ratio has risen to 273 to 1, which means that same worker has to work 9 months in order to earn what their CEO earns in a day.

www.epi.org...

From 1978 to 2012, CEO compensation measured with options realized increased about 875 percent, a rise more than double stock market growth and substantially greater than the painfully slow 5.4 percent growth in a typical worker’s compensation over the same period.
Using the same measure of options-realized CEO pay, the CEO-to-worker compensation ratio was 20.1-to-1 in 1965 and 29.0-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.

Based on those figures, I'd say inflation has more to do with the acceptable pay scale for those at the top of the ladder as opposed to those at the bottom. I think the real problem may have more to do with outsourcing & greed.

As I see it, there is really only one fix to the minimum wage dilemma and not only will it fix the problem, it's a permanent fix that will collectively save us millions in the long run because Congress won't have to waste time re-visiting this issue in the future. Then they can just get on with the naming of post offices, which seems to be the only thing they can accomplish anyway.

And yes, I agree that we should do away with the federal minimum wage, "as we know it today."

The way to fix it is to pass legislation that ties the compensation of the lowest paid employee of any given company to that of the highest compensated employee via a CEO to worker ratio. Even to the point that if the CEO is willing to work for free, he is welcome to find employees who are willing to do the same. This system doesn't set an actual "minimum wage" in dollars and cents, but it will insure that those at the bottom move up the ladder at the same rate as those at the top, eliminating the ever widening gap that's killing us today.

I'm not saying that ratio has to be 30 to 1. It may end up being 50/1 or 100/1, that's something we'd have to decide as a nation. All I know is that it would stop the unfettered greed at the top while those at the bottom are left to depend on public assistance, (employer subsidies, as I prefer to call them.) for survival.

But then I could be totally wrong. Maybe it really is this ever increasing federal minimum wage that's driving company owners like the Walton's into poverty.

www.dailykos.com...#

Walmart, one of the richest corporations in the world, refuses to pay its employees a livable wage or provide any form of decent healthcare, increasing reliance on government assistance, and the need for a social safety net.
At over $446 billion per year, Walmart is the third highest revenue grossing corporation in the world. Walmart earns over $15 billion per year in pure profit and pays its executives handsomely. In 2011, Walmart CEO Mike Duke – already a millionaire a dozen times over – received an $18.1 million compensation package. The Walton family controlling over 48 percent of the corporation through stock ownership does even better. Together, members of the Walton family are worth in excess of $102 billion – which makes them one of the richest families in the world.

What is shameful is that CEO Mike Duke makes more money in one hour, than his employees earn in an entire year.

I'm not sure what the CEO Mike Duke to Walmart employee ratio is, but it's huge. Just assuming that Mike Duke's Walmart employees work 40 hrs. per week for 50 weeks out of the year, (allowing for a 2 week vacation) that's 2000 hrs. for a full time employee. This means that the current ratio for CEO Mike Duke to Walmart employee compensation is currently 2000 to 1. Go figure!

find out why the minimum wage was enacted into law in the first place, and you will know why we have it now...I will say this again...without minimum wage, employers would eventually pay just enough, so you could survive to the next day to come in and work...look at 3rd world countries, and how businesses pay those people there, and you will see how they would pay workers here.

reply to post by Rezlooper


How about the introduction of a maximum wage. That might help sort out the increase in wealth disparity that is occurring..

Happy Christmas..

Don't agree. most huge corporations just use this as an excuse to pad their bottom line. Make them pay their workers more to earn a respectable living. Profits still can be made.

jimmyx
find out why the minimum wage was enacted into law in the first place, and you will know why we have it now...I will say this again...without minimum wage, employers would eventually pay just enough, so you could survive to the next day to come in and work...look at 3rd world countries, and how businesses pay those people there, and you will see how they would pay workers here.

It's called subsistence level wages and you're exactly right. That's exactly how "outsourcing" to countries that don't have any standards in place is far more damaging to workers in America than increasing the minimum wage and/or correcting the inequality currently being experienced here at home.

By the way, prior to the Civil War, a subsistence level wage was also known as "Slavery."

defcon5
Just on kind of a side note.
I recently read somewhere that if the minimum wage had kept pace with inflation since the 70's, it would now be around $40k/year. Funny that the average American now makes about $40k/year. So through money manipulation, and through passing unfair laws, the average American is now making the 1970's equivalent of minimum wage.

For years there was a conspiracy theory that some were out to drop the US standard of living because Americans were tearing through the planets resources at a break-neck pace. I have to wonder now if there is any truth to all that. If we all were making more, we would be consuming more. We'd have a golden age, for a short time, followed by a quick return back to the dark ages after the ride was over and the resources gone.

You've made a lot of excellent points. I agree with pretty much everything you've said in this thread, up to this point. And thank you for being the voice of reason. This is one of those issues that sometimes try my patience, and push just the right / wrong buttons...


Anyway... I get what you're saying about the hypothetical "golden age" and the end of the ride, so to speak, and it does seem to be a fairly logical view. However, I'll point out that if so many companies didn't employ the tactic of planned obsolescence with so many products, and actually built things to last, this problem of rapidly consuming resources could be drastically reduced. Even if people could afford to buy more.


Of course, this could pose additional challenges to the economic system. Longer lasting products could equate to less demand for products, even if more people could afford to buy them.


It's somewhat scary to think that our way of life is unsustainable, and IMO it's obvious that we need to seriously re-think the way we handle these things, as a society.

reply to post by blkcwbyhat

Yeah, I worked at Ford in the IT department, the stories I can tell about what the unions would pull is just ridicules. Despite that however, Ford is actually doing pretty well for itself compared to the other manufacturers. That said, I now live in a “right to work” state, and what the employers get away with down here is even more atrocious.

No... we need to clamp down on tax avoidance and tax evasion.
Not lower an already low and unlivable wage.

iwilliam
Anyway... I get what you're saying about the hypothetical "golden age" and the end of the ride, so to speak, and it does seem to be a fairly logical view. However, I'll point out that if so many companies didn't employ the tactic of planned obsolescence with so many products, and actually built things to last, this problem of rapidly consuming resources could be drastically reduced. Even if people could afford to buy more.

It may not be the corporations themselves controlling this, it may be the banks who really don't sell any tangible “product”. The guys who seem to be in control of the worlds finances all make money from money, they don't produce or manufacturer anything. You are 100% correct about “planned obsolescence” though. [up]

I do disagree with the idea of lowering minimum wage but I think I have another idea that accomplishes the good parts of what you're trying to bring about. Prices are mostly relative to wages rather than cost to manufacture. A high end store sells high end clothes which cost a lot just because the people that shop at them have a lot of money, a low end store sells clothes at a lower profit margin, because the people there have less money. Manufacturing costs are almost non existent these days, it's all in markup, shipping, and branding.

We have countries we can look at to see what things would be like with a higher minimum wage. In Australia for example, their goods cost roughly 10% more than they do here but their minimum wage is more than 100% higher. We also have our own past to look at. In the 50's and 60's one could attend college, own a home, eat like a king, and have some money leftover all on a 40 hour/week minimum wage salary and last I looked that was hardly a time known as economic failure.

I think the big problem is one of productivity rather than anything else. We have technology these days which makes things so efficient that 1 person now does the work of 30 people just 30 years ago and of 200 people 50 years ago. While this is a great thing, it means there's just not enough work to go around to meet everyones needs. Since 1950 our population has doubled while our productivity has gone up 8x by very conservative estimates (certain fields have had bigger increases than others). We've adjusted for this by creating service sector jobs, but the problem there is these jobs are low skill, low pay. People can't support themselves on them and it's just a matter of time before even these are replaced by technology (check out robot waiters on google sometime... it's already happening).

While I don't want to sidetrack the conversation this is actually the biggest benefit I see to the way Obamacare is currently written. It's forcing a change to our 40 hour work week. One way or another this change has to happen. I see our economic fix as coming from a change to the work week. If we all work 20 hours/week that's twice as many people that can be employed. Wages obviously go down but like I pointed out already price is very elastic and will adjust to the average household income. This would allow everyone to work without government subsidies. I don't know where the targeted work week number should be, but I do believe that's the fix.

In order to enforce a change like this, we would need to change overtime laws so that it's more beneficial to hire a second person at 100% wage than pay the same person more money. For example 100% wage up to 20 hours, 150% wage up to 25 hours, and 250% wage for 26+ hours per week. If you still need to fill 40 hours at a store that pays 10/hour that would be 400/week for 2 people or 625/week to pay just one person. Not a very difficult thing to change in the grand scheme of things. This would create huge demand for employment, lower the number of hours it takes to buy something, and get everyone off wellfare whose willing and able to work.

This even addresses things like planned obsolescence. Companies would no longer be forced to fuel the economy through constant purchases continuing this practice. As part of cutting costs designs would move back towards one time purchases that last forever, repairmen for gadgets would be seen again, and so on. Society would become less wasteful again for a time until productivity once again caught up and created inefficiencies through higher production power.

Anyways, that's my idea to fix things. Simply lower the work week from 40 hours to 20, or 25, or whatever is necessary.

reply to post by Rezlooper


I agree with you, we shouldn't increase the minimum wage. Here instead is what I would do.

1.Start a college program to make college free to anyone who keeps and maintains a 3.0 average. We can make a small cut in the defense budget, say retire two nuclear subs,and I imagine it would put several thousand kids through school every year in savings (imagine what it costs to operate and maintain 2 nuclear subs in a year and you can imagine how much college this could pay for).
2. For people going into engineering or science, make small business grants available if they come up with a business plan that employs at least 3 people.
3. For every living wage job created, give them a tax credit. They can only collect on the credit for as long as the position exists. (Then STOP giving tax breaks to the rich) Tax breaks will ONLY be contingent on verifiable job creation. No more free lunch.
4. The companies that survive will pay a small tax into the finance pool for educating more scientists and engineers, who will in turn provide an educated domestic workforce. No more need to write H1B1 visas.

We need to stop shoring up crappy jobs and focus on creating good ones, that will encourage innovation and creation of new technologies.

We can raise the minimum wage, and create 100s of millions of paycheck to paycheck service jobs and have a 3rd world economy, or we can rebuild our economy with jobs that pay middle to upper middle class wages, and make America a industrial powerhouse for the 21st century. I think we should do the latter. It may take a few years to get going, but we could end up with a recovering and stronger economy in 10 years. We are never going to compete with China if our biggest labor force is a bunch of burger flippers.