reply to post by Antigod
You have proven that you don't know what inflation is, should have stayed awake in those economics classes.
Your link puts up a banner that says "Minimum wage rise is maximum idiocy". No credible source would post a headline that sounds like it was
written by a seventh grader.
Your quote is nothing but opinion, no examples, no numbers crunched.
And they expect people to register to read this juvenile propaganda, before you can read the poorly written article.
Your claims that Ben and Tesla were primarily motivated by greed completely lacks any level of logic or reason.
Just because Ben was a self made moderately rich man, doesn't mean his motives were based on greed.
That Tesla was a bad business man and spent all his money on research is more of an indication that he cared nothing for money, not greedy at all.
There is no evidence that raising the minimum wage has any effect on employment or inflation, although many studies have been done on the subject.
The minimum wage was highest in 1968, which was a pretty good year economically.
The second chart shows the unemployment rate going back to 1948. If there was a strong relationship between the minimum wage and over-all
employment, the unemployment rate would have risen during the nineteen-sixties and fell back during the nineteen-seventies and eighties. In fact, the
Notice this site posts actual numbers to back their conclusions.
So that Tesla made the equivalent of millions supports your opinion that he did it altruistically? That Franklin who wrote books on how to make money
and was a rampant capitalist businessman supports you belief he was doing everything for altruism?
The quotes etc were referencing research by a couple of qualified economists. Not my fault you didn't like what you read. Most research shows minimum
wage increases at the least cause unemployment, and they do cause rises in the cost of living. That restaurant that went bankrupt in the USA as a
result of the court ruling to raise the way of the servers. Prices in the restaurant went up massively to cover the pay (sounds a lot like inflation
doesn't it?). Oh, then it shut down because people stopped going in there. Was actually a thread on ATS on it. In fact you should type 'minimum
wage' into the ATS search engine and have a peruse through all the sackings and closures that resulted from raising it.
Labour cost $10 an hour, item takes two hours to make, item cost $20. Labour costs $15 hour for 2 hours, and you think the purchase price will still
be $20? No, it will be $30. You know, that sounds like inflation too. Then you get the middle class qualified staff who get shirty about only paid $2
more an hour than the totally unskilled people who didn't have to spend years in college and tens of thousands on their education, and who have now
seen prices go up as their waiters and unskilled factory workers are getting higher wages. Short term, they'll strike for pay rises to get their old
standard of living back (again feeding inflation). Perhaps I should have directed you to the
'wage push inflation'
entry in the dictionary.
Benefits of a solid understanding of economics.
And no, you haven't posted any solutions as to how small companies can afford massive scale investment in R&D or equipment. Or why anyone will bother
doing research that will take up a lifetime and probably have a null yield if there's no chance of a major payoff, or at least a high pay packet as a
researcher. I will cut you some slack for medical stuff, as a lot of it in the past was for humanitarian reasons, by drs in their spare time.
Like I said, when asked to provide any back up yourself, you decline to engage or even respond on the matter. You haven't once posted any semblance
of a workable system. You shown no comprehension of how a market economy functions or how mass production lowers prices, or the function of 'economy
of scale' in providing cheaper goods to the consumer. Mass production/economy of scale and innovation for profit are THE reasons we have a wide range
of luxury and high tech consumer goods affordable to most.
Example: economy of scale and mass production lowering prices. See this as a progression from a non Industrial society to modern, or a totally modern
scenario moving from small scale production to mass.
Solo knitter buys yarn at $2 a ball, takes 10 balls to knit a blanket and 30 hrs of time (by hand). Minimum wage $10, so cost of blanket
, not including overheads (virtually nil), not including transport and tax. Note labour is the dominant cost.
Outcome: only rich people can afford a blanket. No-one on $10 an hour can afford a $320 blanket.
Small cottage industry buys yarn from factory at a discount ($1.50 a ball) and has a knitting machine. Blanket knitted in 10 hrs, cost of
. Labour still dominant cost, but partially mechanizing process cuts labour hours (thanks to the individual who invented the
knitting machine in the Elizabethan era- to make a profit). Still virtually no overheads, maybe a couple hundred dollars investment needed.
Mass production'/factory sets up, buys yarn by the lorryload from yarn factory. The yarn factory realizes it will make more cash per month selling
huge amounts at $1 even though more labour is required because of the scale of the purchase, and the two have a contract. The cottage industry borrows
money from bank to buy specialized expensive equipment so that each worker can run the equivalent of 10 machines. So now the blankets cost $10 in
yarn, 1 blanket is produced an hour so labour is $10 . This base cost is then raised to cover the repayments to the bank, any tax etc, and in a decade
the equipment will paid off.
This puts the factory owner into the top 1% BTW.
Blanket is $20 plus overheads (say 15 a blanket) Cost of blanket $35
, $35 blanket affordable but not cheap to employees on $10
Mass production/corporation. The factory expands, and having invested in some R&D to make production more efficient doubles the number of blankets per
labour hour. they also realize that if they purchase their own yarn making facility yarn will be 50c a ball. Requires a VERY large capital investment
(tens of millions), but the banker agrees to the loan. So now our costs are $5 yarn, $5 labour $10. Repayments per blanket to the bank are about the
same per unit sold.
Factory owner now extremely wealthy, blankets cost $10 plus similar overheads (which have decreased per item because more blankets can be manufactured
). So blankets thanks to massively rich capitalist manufacturer now cost $10 plus $10 overheads. Cost of blanket $20
$20 dollar mass produced knitted blanket is easily affordable by $10 minimum wage unskilled employee.
That is why we need a small section of people with masses of money in banking and manufacturing. It massively reduces the item cost to purchasers.
Multiply this reduction in cost this by 'everything we eat wear and use'
and you can see why the standard of living in industrialized/modern
countries is better than in pre-industrial ones. You be permanently stuck at the small scale cottage industry state with the blanket costing $115
without huge companies and massive capital investment.
I hope this explains why labour costs are so integral to item cost inflation, and why large amounts of capital are critical to industry.You need the
1% to find the investment cash for the mass production equipment. It's why, even though wealth is unevenly distributed, the standard of living in an
industrialized capitalist society is better for most than if the wealth was evenly distributed.
Example: $10 an hour buys you about 1/11th of a blanket under 'cottage industry conditions', buys you 1/2 a blanket under 'mass prod/corp'
conditions. The productivity of each labour hour is so much higher under the latter system, that even an 'unfairly' small share of the wealth is
significantly more than you'd get under the 'cottage industry' system where everything is evenly distributed, as the overall level of wealth in the
cottage industry system is WAY lower.
If you want to know how I know all this stuff, I ran a small cottage industry briefly so I understand about unit costs from experience. You can't
compete with large scale manufacturers on cost.