The $15 Dollar Wage vs The Skilled Labor Market

originally posted by: bigfatfurrytexan
a reply to: Aazadan

i do, too.

i work hard enough i should be able to do small things, like pay for my oldest son to have a modest car for graduating college. i do things that few people i know can do, and the money I earn still doesn't go far enough for me to be able to take a trip to see the birth of my sisters child in Austin.

The problem is a rotting dollar. We bailed out all the "too big to fails", and dluted the economy. I fail to see how increasing minimum wage by doubling it would be beneficial to anyone.

It's not just a rotting dollar because you can always compensate for that with more dollars. CPI is the problem, from there inflation is calculated, which in turn calculates interest rates and CoL increases. Since Reagan rewrote how CPI is calculated back in the early 80's we've been doing it wrong and everything goes a little more haywire every year. The minimum wage goes off by another 2% followed by all wages derived from the minimum.

Increasing minimum wage is really only part of the issue, it's a bandaid that I could support given the lack of other options but not my preferred fix either. Increasing the minimum and then not fixing the underlying issues only gives the illusion of solving the problem but in the end not really doing anything to fix it. My ideal fix would be that we repair CPI, start working on real fixes to inflation, and let the wage repair itself 2% per year over time. That would let businesses adjust, and fix things for our grand children. Economics work best with slow and steady changes not large jolts to the system. Failing that though, increasing the minimum wage and removing 10 years of wage stagnation can be beneficial.

Better employment terms could fix this too, I don't know why you couldn't drive across your state for a family event. I know that for some people it's finances, for others it's a lack of ability in getting time off, and for others it's a mix of the two. Having an actual market on employment terms could fix that. Like I said to Neo a post or two back, we don't have a market on labor because compensation is a taboo topic. If this stuff were widely known you would be able to go to your boss, say you aren't getting enough days off, or enough of a wage relative to others, and have some good reasoning for an increase. Websites like Glassdoor are starting to help break this taboo but change is slow and there are cultural issues at play too such as the US working more hours per year per capita than any other developed country. Culturally we just don't like to give time off.

originally posted by: bigfatfurrytexan
a reply to: neo96

oh, lets not even get into how this "closes the loop".

step 1; take out loans to handle your financial crisis
step 2: repay those loans by printing money and decreasing the value of the dollar, so the overall impact is reduced
step 3: raise minimum wage to seal off revenue shortfalls after the dollar has been weakened

Rinse and repeat.

originally posted by: bigfatfurrytexan

originally posted by: luthier
a reply to: bigfatfurrytexan

The problem is the rotting dollar? Inflation always happens. Always. You can minimize it or accelerate it.

Why do you think it's ok you get paid the same as a construction working decades ago?

When I did remodelling it just wasn't practical to keep a truck full of tools to loose money every week. So I started installing cabs. It made me sometimes 2k a week then the recession hit. I got screwed by several contractors as a sub.

Carpentry is an incredibly diverse set of skills. To be paid 15 an hour for carrying around 3 grand in tools and beating up your vehicle is absolutley rediculous. It's terrible in Texas where the politicians just let the illegals flock in.

How many times have you seen a whole Mexican crew without a toilet on site. I saw it all the time. Sometimes when I would try and find a little joint compound I would open a five gallon bucket of crap.

The problem is very complex and well beyound the dollar problem though that is an issue as well.

inflation only always happens when you have a fiat economy. when you don't, you have periods of inflation and periods of deflation.

Not exactly. Thats a prediction by Mises and Austrian economists. It's never really been reality. Because the ignorance of money power. Look at how the Rothchilds manipulated gold prices. That was a major reason to move to the Fiat system (so they say).

But yeah inflation and deflation will happen more often without central planning.

A lot more people will suffer, go without food, and commit suicide as well. Which you can say is just life. Maybe it is.

The problem I have with your type of philosophy is the assumption money will not create power which can coerce politics and the market itself.

I can buy up all the steel and play with prices to manipulate other gains or falls in the market. That has shown to be extremely destructive.

I agree with you and neo in principle. I just find it completely unrealistic.

a reply to: Aazadan

the problem with raising the minimum wage is that is corrects wage stagnation by consuming (more) of the middle class. That 2% you talk about....thats middle class folks being pulled under.

a reply to: bigfatfurrytexan

Not if you offset corp tax relief at the same time.

One of our biggest issues is corperate taxes. Nobody want to come to the us to do business. If you start finding ways to alleviate corperate taxes without altering the revanue stream too much we may be able to use bandaids to start planning on the issues in the political structure. Until they get the message they will be calling their buddies for money 30 hours a week instead of legislating.

originally posted by: bigfatfurrytexan
a reply to: Aazadan

the problem with raising the minimum wage is that is corrects wage stagnation by consuming (more) of the middle class. That 2% you talk about....thats middle class folks being pulled under.

So 1/2 of the population is 2%?

Lol

1/2 of workers can't ever reach the level you are at, but it is their fault for being greedy, but never the record profits for the top 5% which you are in.... Why is that?

Why are they greedy for wanting a decent wage while you get a rediculous wage having never actually worked?

I've watched the minimum wage tug of war for decades. They put up minimum wage a bit and suddenly everyone thinks people have more money to spend so they can afford to pay more. So everyone inflates prices until you have nothing and the complaining for higher wages starts again.

Here is a rough breakdown of where I live

$10/hr x 80hrs = $800.00 x 2 = $1600.00 per month gross. - tax etc. = $1400.00

Per month
800.00 rent one bedroom
200.00 groceries
75.00 power
50.00 cable/internet (entertainment)
35.00 phone (landline)
100.00 clothes
75.00 car insurance
50.00 gas
---------
1385.00 total living expenses

So as a single person working minimum wage you get $15.00 per month to play with...


People may disagree but I think the only solution is government enforced price caps on everything.
So long as people have money to spend the greedy will constantly inflate prices.

a reply to: luthier

we'd likely see a drastic reduction in expense if we wouldn't outspend the entire planet on making machinations of death.

yes, the whole system needs to be reformed. A good example: it can take up to 6 weeks to get into drug rehab. No wonder our prisons are overflowing. it'll only get worse with the rescheduling of opiates, as heroin use will only continue to increase. Completely unchallenged, it will continue to increase. Because we build prisons and not treatment centers to put them in when they use heroin.

The whole thing, top to bottom, is broken.

a reply to: Orangutangman

So long as people have money to spend the greedy will constantly inflate prices.

Wanting a $15 an hour wage is GREEDY because a person thinks they are worth it.

That's not how people are suppose to get paid.

They are suppose to get paid for the work they do.

And ALL jobs are not created equal.

originally posted by: Edumakated
When you put up your own capital to start a business, you can then dictate wages. If I as a business owner risked my own capital to start a business and decide to hire you, I'm paying what we both agree is a fair wage relative to the labor performed. My business's profit margins are of no concern to you as you are not an equity owner.

Successful companies don't put up their own capital to start a business. The new model is crowd funding to produce a small number of prototypes, take that idea and leverage it to a bank which gets a loan in the name of the company (not the name of the owner). If the company fails, it fails but the owner is out very little other than the unrealized potential of their idea. Successful businessmen do not risk financial ruin to create their company, it's the whole point of incorporating it creates a legal entity that protects your private assets.

It is IRRELEVANT how much money I make off you. You either want the job at X wage or you don't. If you don't you can work elsewhere.

No, it's very relevant in regards to it being a fair wage. If I'm writing an app for you that's going to make you $5 million/year in profit, it's totally reasonable that I ask for $120k in compensation rather than the $50k you're offering. Of course, I get to use as leverage the point that I'm making you money. If you turn me down I can point out that at that RoI a delay in finding a new candidate of even 5 days will cost you more than the additional $70k I'm asking.

originally posted by: ketsuko
Now you're telling me I shouldn't make more than the very job level I busted my @ss to not have to work at?!

I think that if you go to college and come out of it making 30-40k/year you were ripped off by your college, and completely failed by an educational system that made you pay for an education that doesn't even get you to the median wage. A profession with that type of monetary value shouldn't cost that much to obtain. Free college would solve part of my objection there.

originally posted by: Sargeras
No, we solve minimum wage etc forever.

Each worker gets paid 1/2 their value to the company.

Ends it all in one move.

It should be criminal to pay less than that, while you get paid for not actually producing crap but stealing production thus value from your workers.

The interesting thing about this, is that the lower you are on the income scale, the closer your wage is to the profit brought to the company. Take someone in Subway, if they make 1 sandwich every 6 minutes for an hour they make 10 sandwiches which means the company gets about $70 if that employee is utilized 100%. There's downtime though and that employee will probably only bring in something closer to $50. Now out of that they'll be paid $7.25/hour, but there will also be payroll taxes, insurance, etc that the employer has to pay which brings their true cost closer to $15/hour. That employee is in essence costing 30% of what they bring in.

Now, look at my example above of the software developer, it's an example I actually pulled right off of Reddit from a few weeks ago when someone was asking about how to negotiate for a higher salary. Their proposed salary is only costing 1% of what they bring in and after other expenses is around 2%. It's easy to say employees should be getting a 50/50 split with their employers, but it's actually just not reasonable. Would you pay a mid level software developer 1 million per year? Companies would be even less able to afford that than they would a $25/hour wage to the Subway employee.

All in all this goes back around to the idea that you will NEVER be paid what you're worth if you're working for someone else. It is quite literally impossible in our current system. When you take a job with someone you are agreeing to accept less than you're worth in exchange for being able to use their infrastructure and offload the risk to them.

originally posted by: neo96

This is pretty interesting, you get a star (which is a system I avoid involving myself with at all). I've come up with my own calculations using purchasing power that minimum wage today would be worth about $24/hour (depending on the exact metric it varies between 22 and 26) based on 1955 and 1967 wages. Interesting to see the value of silver has followed a similar trend, that's not something I was aware of.

originally posted by: bigfatfurrytexan
a reply to: Aazadan

the problem with raising the minimum wage is that is corrects wage stagnation by consuming (more) of the middle class. That 2% you talk about....thats middle class folks being pulled under.

Shrinking wealth inequality does shrink some of the middle class. Take an elastic band and pin it to something in the middle. Now stretch it out, that represents the range of wages we have now. Let it contract a bit and it represents the wages after a minimum wage increase. Afterwards everyone is now closer to the minimum. On the flip side though if you mark where the various pieces of elastic line up before and after the increase, a lot of people also end up closer to the middle than they were before too.

The thing about staying as we're going though is the middle class are going to be pulled under anyways, that 2% a year isn't stopping. The median wage in this country has less purchasing power now than minimum wage used to have. Honestly, I have serious doubts that we're ever going to fix it... I suspect we'll move to a new economic system first. So in the absence of permanent change, I would still rather have the impact of a temporary change that can help a little bit. I don't know how to solve the problem of those on Social Security and other fixed income though, but under the current system those people are still being screwed because they get increases based on CPI... a CPI that claims there has been no noticeable increase in the cost of living in over a decade.

originally posted by: neo96
Wanting a $15 an hour wage is GREEDY because a person thinks they are worth it.

Really? I thought a person gets paid the amount they tell the employer they're worth. If the employer disagrees they don't hire them. The push for $15 that you're seeing right now is a direct result of the failure of unions. Rather than collective bargaining happening on an industry by industry basis you're seeing it happen on a social level. It's a market correction because wages have been depressed for too long.

a reply to: bigfatfurrytexan

Yep. I lost my first business partner to alcohol. It was thousands to get him in. He was part Cherokee and the sauce made him someone else. Every few years a relapse would happen. He could never afford a real inpatient program. Actually Catholic hospitals were his only help. They would give him little bits of wine until he was weaned off.

It's a mess. And yes this min wage proposal and ones that don't offset the business expense of higher labor cost won't work.
I think regulations are needed in the market bit so many of the ones today seem more in line with making it hard for start ups to compete with bigger politically connected bussinesses.

originally posted by: Aazadan

originally posted by: bigfatfurrytexan
a reply to: Aazadan

the problem with raising the minimum wage is that is corrects wage stagnation by consuming (more) of the middle class. That 2% you talk about....thats middle class folks being pulled under.

Shrinking wealth inequality does shrink some of the middle class. Take an elastic band and pin it to something in the middle. Now stretch it out, that represents the range of wages we have now. Let it contract a bit and it represents the wages after a minimum wage increase. Afterwards everyone is now closer to the minimum. On the flip side though if you mark where the various pieces of elastic line up before and after the increase, a lot of people also end up closer to the middle than they were before too.

The thing about staying as we're going though is the middle class are going to be pulled under anyways, that 2% a year isn't stopping. The median wage in this country has less purchasing power now than minimum wage used to have. Honestly, I have serious doubts that we're ever going to fix it... I suspect we'll move to a new economic system first. So in the absence of permanent change, I would still rather have the impact of a temporary change that can help a little bit. I don't know how to solve the problem of those on Social Security and other fixed income though, but under the current system those people are still being screwed because they get increases based on CPI... a CPI that claims there has been no noticeable increase in the cost of living in over a decade.

What middle class, though? Wealth inequality has put the middle class in the lower class. Despite what some folks may think...that represents me (i am grossly undercompensated for my talents, but the market I live in makes it all work out and I get to learn new things....manna for a freshman college dropout).

I agree....we likely will end up in a new economic system. But before we get there, we will have these "$15 minimum wage" band aids that will only delay it (and make things continually worse along the way).

originally posted by: bigfatfurrytexan
What middle class, though? Wealth inequality has put the middle class in the lower class. Despite what some folks may think...that represents me (i am grossly undercompensated for my talents, but the market I live in makes it all work out and I get to learn new things....manna for a freshman college dropout).

I agree....we likely will end up in a new economic system. But before we get there, we will have these "$15 minimum wage" band aids that will only delay it (and make things continually worse along the way).

There's still a middle class, it's just not around the 50th income percentile. Middle class is closer to 65-85, upper middle at 85-90, and upper at 90+. In contrast with povery being the bottom 20, and 21-50 being the poor.

a reply to: bigfatfurrytexan

That depends what worse is. The depression had people jumping out windows. Inflation/deflation can actually create a legit public health problem.

That is what the safety net term actually came from. We didn't want to have such economic disasters again. Europe went socialist after ww2 to take care of so many devastated lives. It's all make believe anyway. Like I said the deer I eat don't use ATMs and they seem to go on living somehow.

Morality at some point needs to be addressed in accordance with the morals set out by the constitution.

There was a time when I was a carpenter I quit and basically bagged at whole foods for the same money with benefits and stock options. I had all my tools stolen and truck and the cops could have cared less. Even when they caught the guys driving my truck.

originally posted by: ketsuko
a reply to: TerryMcGuire

How about this?

It's a f***ing insult. I worked fast food in high school and determined that it was a crap job. I then applied myself to go to college so that I wouldn't be stuck working a crap job and could do something better and get paid commensurate with that level of education and ability.

Now you're telling me I shouldn't make more than the very job level I busted my @ss to not have to work at?!

On the contrary, I make no such allegation. You followed the master's direction. He promised you more it you sacrificed more. Just like me. College education and the best I could find for work was to manage that crap fast food joint you did'nt want to work at, along with all the other people didn't want to work there either except unlike you, they either did not have the gumption to pick themselves up and move up the ladder or could not find as you did the conditions to do so. To me it was a slave job overseeing other slaves.

So back to school for me. But not college, instead one year of day schooling and then 5 years of three hours a night two nights a week of schooling to train for my craft. That gave me enough to live on, raise a family and retire to the country and live on the bank of my favorite river. All as a slave.A house slave, but still a slave. So why would I turn around and tell you you should not make more than that entry level job? I wouldn't. How you come to that conclusion is a wonder to me.
Unless you still consider yourself so above the other slaves that maybe you now think of yourself as free of all that.

originally posted by: JBDTheBeast
a reply to: tinner07

So are you going to start demanding 60 when guys like me start making 30 an hour.

No, you won't get it....

My total package is just a bit over $50 an hour. Places in CA total package is over 100.

The problem I see is the downfall of the Unions in this country.

You say you do "general construction" ... wtf does that mean??? nothing.

When the Unions are strong, the economy does well. Break the Unions, break the economy.

Minimum wage is for starter jobs, not careers.

But in todays economy with corps moving good paying jobs overseas in the name of profits I can see why there are not a lot of job opportunities.

Sure some places have jumped min wage to 15, but the cost of living there the skilled trades are in the 100 range.

originally posted by: Sargeras
a reply to: JBDTheBeast

If you think working fastfood is easy or carefree... Lol.
The problem is as always in economics, supply and demand.

This simple principle actually works very well when there is balance.

But that is long gone now, decades of idiotic open borders policies have guaranteed that labor prices stay low because of an all but infinite supply of cheap illegal labor.

Thus we are at a tipping point, wages must go up to keep working class people from being priced out of the market entirely by inflation.

Either build a wall and throw all the illegals across it to restore balance, so supply and demand can actually work correctly, or minimum wages must rise.

It is very simple to understand.

You hit the nail right on the head here, thanks for saving me time to type it. Starred