If workers have more money, businesses have more customers.

Ferno · Post by **Ferno** » Thu Jul 10, 2014 11:05 pm

First, I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways

This guy has a great point. And he might be onto something.

http://topinfopost.com/2014/06/30/ultra ... are-coming

Spidey · Post by **Spidey** » Fri Jul 11, 2014 7:56 am

The theory is great, but the problem is…we once had that great condition where companies were paying good wages and stuff.

The flaw is simple…

There is no way to insure the consumer will put the money back into the American economy, you can pay someone lots of money, and they can make foolish buying decisions, just like happened in the recent past.

I understand this idea, but it’s too one sided to work…we must also figure out the other half of the equation.

Also if you look at the past, government used to place tariffs on cheap imported goods to protect American business and workers…of course this was when the imported goods weren’t being produced by American owned companies.

Problem is more complex than a simple solution will solve.

Will Robinson · Post by **Will Robinson** » Fri Jul 11, 2014 8:10 am

I don't disagree with his logic overall but I see something that doesn't support his projections of how much it would change two crucial things that he thinks will.

1- there are very few people earning minimum so raising it doesn't increase the funds for that 50% he cites as being at the low end of the wealth distribution.
Only 2% earn minimum wage.

How many more currently earn above minimum but less than $15 that the new minimum will also help? So the question is how much of the net influx will start out in the hands of the low and middle class compared to how much starts in the hands of a minority of the lower class and trickles right past the middle into the profit margin of the upper class?
If there is no mechanism raising of the wages of everyone in the 50% that already earn over $15 that 'new money' just gets passed from the lowest spender to the highest earners without necessarily effecting the middleclass. I'd like to know that increase effects the 50% to the degree he thinks it will before I'd be as optimistic as he is.

2- he thinks this increase will reduce the tax burden by making less people dependant on government. Thus shrinking government. I don't think he has thought that through. Politicians court the lower class with promises to improve their lives by legislating relief. It doesn't matter if the lower class is earning x, y or z they are still the lowest on the totem pole and can be bought for nothing more than words....words that translate into bigger government and increased tax revenue being gathered by politicians to sustain their power base. Look how much government has grown in the last decades and remember how little our lives have improved. We are at a tipping point with the majority now dependent to government for sustenance to some degree already. That is a terrible course to be on.

So he really needs to include a mandatory reform on government not just depend on those that make the rules suddenly becoming friendly to the reduction of their own power...thus suddenly having to do real work, create real solutions, etc to get the voter support instead of continuing the model of polarizing the electorate and pandering with tax revenue to buy them...be it corporate welfare or food stamp welfare the game politicians play is the same and doubling the income of the bottom 2% on minimum wage won't end that game.

Spidey · Post by **Spidey** » Fri Jul 11, 2014 8:15 am

★■◆●, I thought he was talking about the middle class, not the lowest wage earners…guess I should have read further.

No, you really can’t have much affect on the economy by enhancing the smallest sector.

More feel good politics and no action.

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 9:57 am

not true, Spidey. The theory(and I'm not prepared to accept it altogether) is this: lower wage-earners use virtually all available income for essential purchases, hence plowing money into the economy, whereas higher wage earners invest, save and thus retain the capital to some extent. Now, my breakdown of 'lower' wage-earners would stretch to many who consider themselves middle class, for the record. Like I say, this doesn't always work so neatly in the real world, as many of those 'essentials' are now imported from overseas and thus, the labor benefitted is foreign. As you and others indicate, this whole problem(like most) is far too complex to go with one simple fix and leave it at that.

woodchip · Post by **woodchip** » Fri Jul 11, 2014 10:03 am

One of the reasons businesses go over seas is for lower wages. If you think raising the minimum will somehow get more people hired and thus help the bottom line...guess again.
As for low income earners only buying essential items, since when are drugs, booze and smokes essential?

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 10:21 am

woodchip wrote:One of the reasons businesses go over seas is for lower wages. If you think raising the minimum will somehow get more people hired and thus help the bottom line...guess again.
As for low income earners only buying essential items, since when are drugs, booze and smokes essential?

so, you seem to suggest that these are what low-income Americans spend money on, as opposed to food, diapers, clothing,transportation, etc. What a fool you are, to suggest that purchase of drugs, booze or smokes has a class definition. The vast number of your impoverished fellow citizens are just trying to live, woody, and to suggest otherwise is an insult to them, and to the intelligence of most readers of this board.

woodchip · Post by **woodchip** » Fri Jul 11, 2014 10:33 am

callmeslick wrote:
woodchip wrote:One of the reasons businesses go over seas is for lower wages. If you think raising the minimum will somehow get more people hired and thus help the bottom line...guess again.
As for low income earners only buying essential items, since when are drugs, booze and smokes essential?
so, you seem to suggest that these are what low-income Americans spend money on, as opposed to food, diapers, clothing,transportation, etc. What a fool you are, to suggest that purchase of drugs, booze or smokes has a class definition. The vast number of your impoverished fellow citizens are just trying to live, woody, and to suggest otherwise is an insult to them, and to the intelligence of most readers of this board.

And what a fool you are if you think impoverished Americans are even working as they are collecting welfare. Minimum wage earners are typically high school or college workers who are not saddled with all those expenses you like to present.

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 1:38 pm

you really need to get out more. Mimimum wage workers come in all ages, sexes, ethnic groups and the like. To denigrate them with the stupidity such as Woodchip puts forth is repellent. Further, his own dubious argument STILL doesn't address why additional income wouldn't help the broader economy. Why? Because last I noticed, most alcohol and tobacco products are made in the USA, sold in American stores, employing Americans, all of whom would be working at higher wages, as most of those employers start near the bottom of the wage scale.

woodchip · Post by **woodchip** » Fri Jul 11, 2014 2:16 pm

The stupidity of slick is apparent as he doesn't even take the time to do a simple google search regarding the topic:

First, people should acknowledge that this rather heated policy discussion is over a very small group of people. According to the Bureau of Labor Statistics there are about 3.6 million workers at or below the minimum wage (you can be below legally under certain conditions). That is 2.5 percent of all workers and 1.5 percent of the population of potential workers. Within that small group, 31 percent are teenagers and 55 percent are 25 years old or younger. That leaves only about 1.1 percent of all workers over 25 and 0.8 percent of all Americans over 25 earning the minimum wage.

http://www.forbes.com/sites/jeffreydorf ... -is-false/

In the future slick, stop calling people stupid who are brighter than you are.

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 2:19 pm

the article in question was about overall worker's wages. NOT just the minimum. The question is around the gap that has grown steadily between entry level wages and CEO/stockholder returns. ALL working people in the nation, not just the percentage at the minimum, are underpaid, grossly.

woodchip · Post by **woodchip** » Fri Jul 11, 2014 2:21 pm

Now you are defensively expanding what you posted to make yourself look good.

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 2:24 pm

from the article:
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

now, Woody, explain where the focus is or was the MINIMUM WAGE. By the way, I don't have the bucks this dude does, but I've been saying the same thing to my friends and schoolmates for years. My fear is the pitchforks, and at this rate, they will be coming....soon. As soon as the working class stops beating each other up and reviling 'liberals', 'teabaggers', 'progressives', 'activists', hippies' and 'rednecks' and realizes WHO is laughing to the bank, the game gets ugly.

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 2:36 pm

in the hope that Woody merely misunderstood me, my definition of 'lower income' workers in the US today would be any individual making less than $30,000 per year, or any family of 4 with less than $50K income. Virtually all of them are pulled really tight in this economy, and every one is getting screwed by the investor class, and has been(increasingly) for decades, if not since the Civil War.

Tunnelcat · Post by **Tunnelcat** » Fri Jul 11, 2014 3:07 pm

Well, the inverse is certainly true. Those who have LITTLE OR NO MONEY can't spend what they don't have, and they're are more likely to steal to survive. Why is it that conservatives think all poor people are lazy, good-for-nothing thieves that don't want to work for a living? There are quite a few rich people that don't have to work either and they can be just as lazy, crooked and unproductive as anyone else. And since money is power, they are far more destructive.

Spidey · Post by **Spidey** » Fri Jul 11, 2014 4:36 pm

Lower paid workers use all of their income for essentials is probably true, but the sectors of the economy that benefit are…

1. Mercantile class (not going to produce many good jobs)
2. Energy sector (again not going to produce jobs, as up and down demand usually doesn’t, only increased populations produce the need for more jobs.)
3. Food and drink (again not going to produce good paying jobs)
4. Etc…etc.

These sectors are already doing fine, and can increase revenues without creating jobs.

Sure the people who get the raises will see their standard of living increase, but there is not going to be any real boost to the economy. So if you make the argument that the minimum wage increase will help “those” people…nobody in their right mind could make an argument against that, assuming they keep their jobs.

But this idea there will be a great benefit to the economy, is just wrong.

We need to do things that will produce more good jobs, unless that’s not the real problem, but I believe it is.

............................

In my opinion the road to real recovery begins with honest consumer education, and learning how to “keep it in the family” so to speak.

Some of the sub groups in this country know what I’m talking about, but it needs to be expanded to the scale of the entire economy, not just “groups”.

Spidey · Post by **Spidey** » Fri Jul 11, 2014 4:45 pm

tunnelcat wrote:Why is it that conservatives think all poor people are lazy, good-for-nothing thieves that don't want to work for a living?

That's called a loaded question, and should never be answered by anybody with half a brain.

(because it's not true)

Will Robinson · Post by **Will Robinson** » Fri Jul 11, 2014 5:12 pm

Slick, the problem is the article mentions raising the minimum wage...getting support for it etc.
All that is fine but there is no federal medium wage...federal medium plus wage etc.

So if you raise minimums you aren't likely increasing the wage of very many....

callmeslick · Post by **callmeslick** » Fri Jul 11, 2014 6:17 pm

Will Robinson wrote:Slick, the problem is the article mentions raising the minimum wage...getting support for it etc.
All that is fine but there is no federal medium wage...federal medium plus wage etc.

So if you raise minimums you aren't likely increasing the wage of very many....

the article spends the most time on the overall disparity, and that affects FAR, FAR, more than merely minimum wage workers. We have to at least get back a bit toward the CEO/entry level professional ratio of 40:1 that we had until around 1980, and the only way that was kept intact was from the marginal rates in the tax code.

Top Gun · Post by **Top Gun** » Fri Jul 11, 2014 7:31 pm

As a wise man once said, eat the rich. There's only one thing that they're good for.

Spidey · Post by **Spidey** » Fri Jul 11, 2014 7:42 pm

Steven Tyler the wise man…now there’s a concept.

Top Gun · Post by **Top Gun** » Fri Jul 11, 2014 8:35 pm

Hey, even a broken clock, right?

Will Robinson · Post by **Will Robinson** » Fri Jul 11, 2014 10:10 pm

Slick I understand he talks about the disparity but he doesn't mention how to close the gap other than the effect raising the minimum wage has had and would have. That's why I think the article is heavy on sentiment and light in solutions.

PS: for you guitar players....Eat the Rich, that's a fun song to play. Lots of cool riffs going on.

callmeslick · Post by **callmeslick** » Sat Jul 12, 2014 7:18 am

Top Gun wrote:As a wise man once said, eat the rich. There's only one thing that they're good for.

or kill the poor.....Jello Biafra said that.

callmeslick · Post by **callmeslick** » Sat Jul 12, 2014 7:19 am

Will Robinson wrote:Slick I understand he talks about the disparity but he doesn't mention how to close the gap other than the effect raising the minimum wage has had and would have. That's why I think the article is heavy on sentiment and light in solutions.

PS: for you guitar players....Eat the Rich, that's a fun song to play. Lots of cool riffs going on.

as I said, I put forth the ONLY way to up the entire lower 50% of the range, he hinted at it, and merely called the minimum wage raise a 'start', as I recall.

Krom · Post by **Krom** » Sat Jul 12, 2014 7:55 am

Saying only a tiny portion of people make minimum wage, while technically accurate still misses the point. A much larger portion of the population make more than $7.25/hour minimum wage but less than the proposed $15/hour. It would affect a lot more people than the few who only make minimum wage. It would affect everyone who makes less than $15/hour, which I'm pretty sure is actually a HUGE portion of the population.

Spidey · Post by **Spidey** » Sat Jul 12, 2014 8:20 am

Well define “huge” and please explain how this would not cause unemployment in the 9 to 13 dollar or so area.

So a small business with a few 10 dollar an hour workers have to give a five dollar an hour raise…that’s 10,400 a year each employee. (assuming full time) Not including employer contributions.

Sure no sweat, because now everyone has more money to spend.

Someone once said on this board…don’t you think employers would have figured this out long ago?

Problem is still exactly as I stated before…no guarantee the money will return to your business…some will remain in the US economy, but will cause a major shake up. (some businesses will prosper & some will bite the dust)

Risky proposal...

Spidey · Post by **Spidey** » Sat Jul 12, 2014 1:44 pm

Putting aside the “minor” issues with the minimum wage such as unemployment and inflation…the largest danger by far is the possibility of complete failure of the program.

One likely scenario for failure is as follows…

Example: Company X

X is medium sized and has a regular budget like all businesses.
Marketing
Supplies
Taxes
Payroll…etc…you get the idea…

X’s payroll budget is 500k, and like most medium businesses they have people above and below the 30k mark (15 dollars per hour)

The government passes a law that requires a minimum pay of 15 dollars per hour, and the company makes the logical decision of lowering the pay of the employees above 30k to compensate for the increase.

The result is the payroll budget is balanced, but no more money is flowing into the economy as predicted. In fact people who once had expendable income…no longer have any.

Even if the payroll adjustments weren’t immediate, the process would still take place over the long haul, as a result of a long term side effect, end result the account manager now makes as much as the janitor.

Think your college degree is worth squat now, wait till many higher paying jobs are reduced, to offset the higher wages of people without a degree.

Think it can’t happen? If you do please explain why and state your years of experience running a business to confirm your expert opinion…mine is 24.5.

Will Robinson · Post by **Will Robinson** » Sat Jul 12, 2014 3:32 pm

Krom wrote:Saying only a tiny portion of people make minimum wage, while technically accurate still misses the point. A much larger portion of the population make more than $7.25/hour minimum wage but less than the proposed $15/hour. It would affect a lot more people than the few who only make minimum wage. It would affect everyone who makes less than $15/hour, which I'm pretty sure is actually a HUGE portion of the population.

That is what I asked in my first post. How many would be caught up under that umbrella because if it is only say another 5% on top of the 2% of people at minimum now then the middle class isn't going to see much benefit yet the 2% will.

You think the group that has 50% of the wealth in america are people earning under $15 an hour. I'm not so certain. I pay $15 an hour to relatively unskilled helpers. The change wouldn't effect me directly but when I take the family out to dinner and a movie I think in restaurants and movie theaters I'd see a price increase because those places are staffed with minimum wagers.

I guess that would trickle up to me because then I'd be raising my prices to offset the cost of living.

Which begs the question, how does it help the lower earners because now everyone has raised prices to offset the new wage increase for the lower class...if the new minimum doesn't go any further than the old minimum due to rising prices spurred by the impact of the wage increase.

there must be some economics 101 explanation why the cycle isn't truly perpetually linear like that but it's above my paygrade to understand it. I bet what ever the explanation though there is someone who gets stuck with the added cost and I bet it is never the 2%er's

Krom · Post by **Krom** » Sat Jul 12, 2014 8:33 pm

Agreed, assuming it fails to cause a statistically relevant reduction in jobs, the article doesn't address the real elephant in the room following the suggestion: Inflation. Sure, income inequality would improve anyway, but only because the money the super rich are taking in would be worth less, not because the people at the bottom would be making more. Although to some extent, the more wealth is concentrated, the less its worth anyway.

As for how many people make $15/hr or less, the reason I guess it would be a significant portion of the population is probably because I live in a fairly depressed area and the vast majority of job postings I see nearby are in the $8-11/hr range.

Will Robinson · Post by **Will Robinson** » Sat Jul 12, 2014 9:13 pm

Krom wrote:As for how many people make $15/hr or less, the reason I guess it would be a significant portion of the population is probably because I live in a fairly depressed area and the vast majority of job postings I see nearby are in the $8-11/hr range.

I think there is more turnover in that range as well so the postings are more frequent even if you are in a well off area.
People who have more have more to lose so they are less willing to tell the boss to piss off.

Tunnelcat · Post by **Tunnelcat** » Sun Jul 13, 2014 3:02 pm

Spidey wrote:
tunnelcat wrote:Why is it that conservatives think all poor people are lazy, good-for-nothing thieves that don't want to work for a living?
That's called a loaded question, and should never be answered by anybody with half a brain.

(because it's not true)

Well, maybe you don't think it, but there are other conservatives.....

http://www.msnbc.com/politicsnation/gop ... y-laziness

Krom · Post by **Krom** » Sun Jul 13, 2014 4:10 pm

You won't get ahead without hard work, but hard work alone won't get you ahead (you also need a miracle).

Spidey · Post by **Spidey** » Sun Jul 13, 2014 4:30 pm

Almost half of “Republicans” (not conservatives) don’t believe it, so your question is false because the wording implies “all”.

If you were inferring less than all, the same question could be asked of Democrats.

The question should be asked…why would “anybody” believe such a thing. My experience living in the lower class areas of Philly, leads me to believe that being lazy or making bad decisions has something to do with “some” peoples poverty.

But I have no idea why someone would believe laziness is the cause of “all” poverty, makes no sense looking at it from a logical perspective.

Ferno · Post by **Ferno** » Sun Jul 13, 2014 7:06 pm

Krom wrote:You won't get ahead without hard work, but hard work alone won't get you ahead (you also need a miracle).

usually in the form of "it's who you know".

Will Robinson · Post by **Will Robinson** » Sun Jul 13, 2014 7:47 pm

Ferno wrote:
Krom wrote:You won't get ahead without hard work, but hard work alone won't get you ahead (you also need a miracle).
usually in the form of "it's who you know".

Who you know can give some people a huge head start but the impression you give people when you meet them for the first time can do just as much for anyone who does it well.

Ferno · Post by **Ferno** » Sun Jul 13, 2014 8:35 pm

Will Robinson wrote:
Ferno wrote:
Krom wrote:You won't get ahead without hard work, but hard work alone won't get you ahead (you also need a miracle).
usually in the form of "it's who you know".
Who you know can give some people a huge head start but the impression you give people when you meet them for the first time can do just as much for anyone who does it well.

yes, absolutely.

The advice a mother always gives, 'always put your best foot forward', and similar idioms are one of the basic building blocks to a successful life

callmeslick · Post by **callmeslick** » Mon Jul 14, 2014 7:53 am

apologies, it took me a few minutes extra to respond. You see, I was cleaning spewed coffee of my keyboard after reading the string of naivete that preceded this post. Let's be clear, there is one way, and ONLY one way to be pretty certain of success in the current US(or even at any time in the last century or more): be born wealthy, from a family of long-standing status in the country. In other words, 'Old Money'. You get the education, you get the network at birth, you get the rules written so as to preserve most, if not all inheritance. It is mindlessly simple to succeed. In fact, you have to feck up to NOT succeed. Everyone else is operating at a massive built-in disadvantage, and always will be. Work hard? That's nice, but mostly gets you only so far. Be brilliant, inventive and uniquely talented? Once again, a great help up the ladder, but with 10 failures to each success story. I come back to this here from time to time, but it always astounds me that my fellow citizens STILL buy into some variation of the Horatio Alger story when it simply isn't true, and has been, from the outset, a salve for the consciences of the old guard.

woodchip · Post by **woodchip** » Mon Jul 14, 2014 8:49 am

I guess slick it all depends on how you define "success". Until you do you just posted a elitists manifesto as to why we all suck. Success is not measured by how many home you have, how big your boat is or how big a dilettante you are. Grow up slick and stop pretending you are something you are not.

callmeslick · Post by **callmeslick** » Mon Jul 14, 2014 3:06 pm

woodchip wrote:I guess slick it all depends on how you define "success". Until you do you just posted a elitists manifesto as to why we all suck. Success is not measured by how many home you have, how big your boat is or how big a dilettante you are. Grow up slick and stop pretending you are something you are not.

measure it how you wish. I was speaking of the same 'success' scale you all were attempting to define above. And, it came off as extraordinarily naive.
And, in a thread about money, pay and economics, why are you trying to smokescreen me with this BS about your pet definition of success. You know damn well you were talking about economic or employment success.