If workers have more money, businesses have more customers.

[Ferno]

hold on slick. I was not trying to define success. i was merely speaking of a single ingredient in the recipe. please don't put me in that same basket.

[callmeslick]

hold on slick. I was not trying to define success. i was merely speaking of a single ingredient in the recipe. please don't put me in that same basket.

while to an extent I was simply having fun with you all, seriously, if anyone has the idea that appearance trumps old school network, they're whacked.
Likewise, that hard work determines anything near family friends and close relatives. The bottom line is that much of economic success is a matter of who showed up at the poker game with the most chips at the start. The financial fluidity and freedom from fear of failure, coupled with a system that is tilted their way to start with, makes that old money tough to compete with.

[Spidey]

Well, even speaking economically, there is still a very wide variation in what someone might consider “success”.

As far as the “American Dream” and accumulation of wealth goes, yes it is very hit and miss for the individual to obtain great wealth in the US, but the real trick is to use family…something slick is not likely to tell you, and far more likely to succeed.

The “Nuclear Family” was the worst thing to ever happen to the accumulation of wealth…your grandmother is not a burden…she’s an asset!

Each time members go off and start their own lives, the efficiency of the extended family is lost, and accumulation and passing on wealth becomes very difficult.

The way to wealth is the following, and any family can do it…

You begin with keeping the extended family together and getting every member to earn some kind of income, this family income is pooled while the family lives a very Spartan life (grandma is watching any kids) then at some point a member of the family is chosen to either go to college or start a business with the pooled money.

The money earned by this person is also contributed to the family pool, while they also live an austere life, money is also invested in other ways such as land, property, stock and bonds…etc, this goes on for generations, till at some point the wealth becomes self-sustaining.
There is more to it than that, but that is the basics, any family can do it and it is very likely to succeed, but requires a great deal of discipline to accomplish.

Everything in this country seems to have been deliberately configured to keep people from accumulating wealth, from the idea of leaving the nest to the idea that grandma is better off on SSI than living with the family, all the way to the damn inheritance tax that people are convinced is a “fair” thing.

[Will Robinson]

Did someone say 'appearance trumps connections'?
I said that connections gives those few that have them a huge advantage but anyone can gain success by being the right person to the customer/employer.

You don't need to have the old money family behind you to be successful. There are plenty of successful people...more than the trust fund babies...out here in the real world that achieved plenty by way of being smart and confident and capable. They are usually much more interesting and inspiring as well.

I measure my success as being greater than a number of people who have substantially more net worth. I've had friends of extreme wealth that couldn't do a damn thing well, couldn't even handle being spoiled rich.

Your grandfather supposedly owned a bank. How good are you at actually creating a successful life out of no money versus simply managing to not squander it before you die? (And the more he left you the less talented you needed to be even in that pursuit.)
You don't even have the ability to answer that question with any basis in fact if you told the truth about your inherited wealth!

[callmeslick]

Did someone say 'appearance trumps connections'?
I said that connections gives those few that have them a huge advantage but anyone can gain success by being the right person to the customer/employer.

You don't need to have the old money family behind you to be successful. There are plenty of successful people...more than the trust fund babies...out here in the real world that achieved plenty by way of being smart and confident and capable. They are usually much more interesting and inspiring as well.

I measure my success as being greater than a number of people who have substantially more net worth. I've had friends of extreme wealth that couldn't do a damn thing well, couldn't even handle being spoiled rich.

Your grandfather supposedly owned a bank. How good are you at actually creating a successful life out of no money versus simply managing to not squander it before you die? (And the more he left you the less talented you needed to be even in that pursuit.)
You don't even have the ability to answer that question with any basis in fact if you told the truth about your inherited wealth!

since I never had to operate under those circumstances(even if I wanted to, the reality is that the network and inherited cash was there)I'd have no way of knowing, although I made my professional life, and status within it, from outside the loop(very consciously), but still had the education that came with birthright. Bottom line is that I grew the family money, and continue to do so, and that's all I can hope to do. And, I do so and give a fair bit away to charities,
Oh, and the great-grandfather with the bank had his daughter marry into the really old money(with the land). That sort of thing is another social aside that concentrates and perpetuates wealth.
At any rate, I apologize for the derail, as it struck me as sort of naive the sorts of things that were being said to justify/excorciate those who are poor. The bottom line for me is this: I agree with the original article. Eventually, the pitchforks will be out for the wealthy, as they were(historically) in France around the revolution, or Russian in the early 20th century. One can see the foundations of that in Mexico already in our modern times, and if we don't right the ship to get back to some measure of economic mobility and close the gap between the rich and everyone else, we have a SOCIETAL problem that will end very violently, if history is our guide.

[callmeslick]

another point that I've been reading about of late, is that the actual gap in wealth is to some extent hidden from view:
http://www.bloomberg.com/news/2013-04-2 ... shore.html

that issue(money havens around the world) is a global one, affecting the global economy.

[Burlyman]

If workers have more money, the currency wouldn't be worth as much. LOL

[callmeslick]

If workers have more money, the currency wouldn't be worth as much. LOL

why?

[callmeslick]

although, as I stated, this article is about way more than minimum wage, I just saw an interesting statistic:
there were 13 states that raised their state minimum wage on Jan 1 2014. Those states, so far this year, have seen 47% higher job growth than the other 37 states. Hmmmmm.

[Ferno]

I was wondering who'd be the first to catch that rather important bit.

[Will Robinson]

although, as I stated, this article is about way more than minimum wage, I just saw an interesting statistic:
there were 13 states that raised their state minimum wage on Jan 1 2014. Those states, so far this year, have seen 47% higher job growth than the other 37 states. Hmmmmm.

Each and every state had growth of 47%? Or collectively they had it...and, if so, was one or two of them a state where they had a big labor demand like N. Dakota for instance?
Oil boomtown/state driving the numbers up...or something like that? Summer temporary employment numbers mixed in there perhaps? Pardon the skepticism but your party has recently brought number crunching to new 'lows'...

[Spidey]

I’m willing to bet none of those states doubled the minimum wage*, sure a small cost of living or “raise” will always have positive results, as the bulk effects of having a minimum wage at all is already being felt.

Florida the state with the most growth raised the minimum 14 cents, Ohio was 10 cents.

The average difference in growth was .24% nothing to write home about, and in many ways statistically insignificant because of all of the variables.

Yup, like I said…stats, studies and polls…the new propaganda.

*Wasn't that the real debate.

PS…I went to several sites and I don’t know where the hell that 47% number came from…that would imply states that raised their minimums were producing jobs at nearly 2 to 1.

[Will Robinson]

...

PS…I went to several sites and I don’t know where the hell that 47% number came from…that would imply states that raised their minimums where producing jobs at nearly 2 to 1.

I'm betting slicks proctologist has seen the source.

[woodchip]

although, as I stated, this article is about way more than minimum wage, I just saw an interesting statistic:
there were 13 states that raised their state minimum wage on Jan 1 2014. Those states, so far this year, have seen 47% higher job growth than the other 37 states. Hmmmmm.

Hmmm indeed. CA with the highest minimum wage is not one of the 13. The state that has the highest job growthin the country is ND and did not raise it's minimum wage. As to your 47% increase, I have to wonder what mushrooms you are ingesting:

"In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent."
http://www.npr.org/blogs/thetwo-way/201 ... eport-says

So the other non-minimum wage states also saw job growth increase. I suggest in the future slick, you quote more than just headlines to prove a point.

[...]

[Spidey]

And because of the fact that they are using averages, many of the states that did not raise the minimum might be out pacing ones that did, but one or two might be performing really badly, bringing the average down.

I’m not saying that’s true, but it could be a possibility. (where is the breakdown?)

In other words, you could rearrange the headline to say:

“North Dakota produces more jobs than 13 states that raised their minimum wages.”

And look at all those bloggers that suck that BS up, without even questioning a damn thing.

[callmeslick]

the ONLY significance of those stats is this: Raising the minimum does not KILL jobs. Anything further is speculation.

[woodchip]

the ONLY significance of those stats is this: Raising the minimum does not KILL jobs. Anything further is speculation.

And NOT raising the minimum wage does not kill jobs either

[callmeslick]

the ONLY significance of those stats is this: Raising the minimum does not KILL jobs. Anything further is speculation.

And NOT raising the minimum wage does not kill jobs either

right, but then again, no one ever made that claim.

[snoopy]

Here's the line that I think Burly is taking, which I think is a valid question:

How will raising minimum wage affect product prices? The additional payroll costs will have to come from somewhere - so if they don't cause a loss in jobs, I think the logical answer is that they will cause an increase in prices. So, for businesses that pay minimum wages to serve product to higher wage customers it'll cause more money to flow from the rich to the poor - but in cases where the business pays minimum wage to serve minimum wage customers larger numbers will circulate, but the customers won't really have any extra buying power with their larger paychecks.

[Spidey]

The point I think everyone is missing here is…10 or 15 cents won’t make any difference either way, most people at the lower end get larger raises then that, every year anyway.

And then using these COL adjustments to cloud the larger issue of raising the minimum by a significant amount is a sort of brainwashing.

But yes, anytime you raise costs, there will be inflation…some companies will just suck it up, because of pricing pressures, but in the long run...yea...inflation, will result

[Spidey]

I hate to break it to everyone but the reason we are seeing job growth at all is because banks are lending again and people are once again choosing to go into debt.

Remove the debt, and see how flat job growth becomes, we had 4 decades of runaway debt spending before the crash. And before that we had massive growth for different reasons, such as a result of WWII.

Believe me, nobody is running out to buy a new TV because they got a 10 cent raise. In order to create jobs you must get to a threshold and have the need for more workers.

Most businesses operate within 2 thresholds, one at the lower end, that causes layoffs, and one at the higher end, that creates jobs, but there is also slack in the middle. In other words the corner market won’t hire a new stock boy just because their customers are spending a little more, or they have a few more customers. Same goes for the other way round.

[callmeslick]

I hate to break it to everyone but the reason we are seeing job growth at all is because banks are lending again and people are once again choosing to go into debt.

Remove the debt, and see how flat job growth becomes, we had 4 decades of runaway debt spending before the crash. And before that we had massive growth for different reasons, such as a result of WWII.

are you seeing a massive growth in personal credit? I'm not, but I only look at the numbers from two banks and one, at least, is real conservative.

Believe me, nobody is running out to buy a new TV because they got a 10 cent raise. In order to create jobs you must get to a threshold and have the need for more workers.

Most businesses operate within 2 thresholds, one at the lower end, that causes layoffs, and one at the higher end, that creates jobs, but there is also slack in the middle. In other words the corner market won’t hire a new stock boy just because their customers are spending a little more, or they have a few more customers. Same goes for the other way round.

when the thrust of the article was the gap between top end wages and investment earnings and entry level pay, I don't see where this is an issue. As pointed out in the article, the theory is that paying the lower end more will create exactly the demand that puts businesses into the higher end, as you describe it.

[Spidey]

Well, excuse me for going with the flow, rather than an anal retentive attraction for the OP.

[callmeslick]

Well, excuse me for going with the flow, rather than an anal retentive attraction for the OP.

just trying to steer the flow back onto something a bit more tangible than trying to guess the point at where hiring picks up, which varies widely across business models and types.

[callmeslick]

this article might seem unrelated, but let me try and explain why it's informative:
http://www.delawareonline.com/story/mon ... /12981743/

now, revenues were flat, earnings even a bit lower. That should suggest less hiring, stagnant wage increases, and I'm not sure what will really transpire.
However, note that we stockholders(my share is peanuts compared to a Senior exec or Board Member, so using 'we' is a stretch) get a 4% raise. Moreover, we just had a raise two quarters ago, so my raise as a non-worker is around 9% over the past year. This is a microcosym of why the gap keeps growing and we cannot 'afford' raises for workers....

[Spidey]

I would assume DuPont pays its employees pretty good…am I wrong?

[snoopy]

I would assume DuPont pays its employees pretty good…am I wrong?

Maybe so, but that doesn't excuse the widening of the gap between the "rich" (in this case stockholders) and the rest of us (in slick's prediction, line employees).

I tend to agree with Slick, at least philosophically: If we want to get back to a strong middle class, companies need to have a closer gap between the top and bottom earners (say, the CEO makes 10x the lowest paid employee).

[callmeslick]

I would assume DuPont pays its employees pretty good…am I wrong?

generally, but benefits are nowhere what they were 20 years ago.

[callmeslick]

I would assume DuPont pays its employees pretty good…am I wrong?

Maybe so, but that doesn't excuse the widening of the gap between the "rich" (in this case stockholders) and the rest of us (in slick's prediction, line employees).y

I tend to agree with Slick, at least philosophically: If we want to get back to a strong middle class, companies need to have a closer gap between the top and bottom earners (say, the CEO makes 10x the lowest paid employee).

probably 10X is unrealistic, but for my entire childhood, the President of DuPont made roughly 20X starting chemist pay, likewise CEO. At current time, I think the ratios are around 200X

[Spidey]

First off, I wasn’t trying to make any “excuses” and many people hold DuPont stock, like in your retirement fund.

[callmeslick]

that 'many people hold...' argument is often used to justify such matters, but the fact of the matter is that we're still placing more value on investment income than on labor income(wages). That a lot of people have, say 100 share interest in their mutual fund, retirement plan, or other investment doesn't justify that imbalance, when I'm sitting on 40 times that much, and the CEO gets 200 times that much, annually, not to mention some of the board members hold 20,000 times that much. If you pay inflated dividends, the rich get richer, far richer in fact.

[Will Robinson]

Why not impose a maximum and minimum wealth threshold.

Since slick has 40x the median (just working off his numbers here for the sake of discussion) and he cites a 10x number as being representative of the good old days...from now on, any time someone reaches 40x the median wealth accumulation of a working class they are to surrender enough the put them back at the 10x level.
The surrendered funds go directly to a pool that is distributed to the working class.

This way the gap stays maintained at around 10x and the excess goes directly, bypassing government, into the wealth of the lower end of the working population. Call it 'capitalism dividends distribution'...quarterly checks sent out to all the working people on the wrong end of the gap.
This way the system that enables people to acumulate such excesses remains unbroken and yet maintains acceptable excess limits.
It would be interesting on many levels. For example, what if the wealthy people with the means to generate such wealth decided once they hit a 10x level they would coast instead of continue striving for more...their time obviously more value to them than money they don't get to keep. Would that simply open the opportunities for others to step up to fill the void in 'excess wealth generation'? Or is that not necessarily something anyone can just step into?

How about it slick? Want to fork over 75% of your excessive wealth?

[callmeslick]

Why not impose a maximum and minimum wealth threshold.

Since slick has 40x the median (just working off his numbers here for the sake of discussion) and he cites a 10x number as being representative of the good old days...from now on, any time someone reaches 40x the median wealth accumulation of a working class they are to surrender enough the put them back at the 10x level.
The surrendered funds go directly to a pool that is distributed to the working class.

This way the gap stays maintained at around 10x and the excess goes directly, bypassing government, into the wealth of the lower end of the working population. Call it 'capitalism dividends distribution'...quarterly checks sent out to all the working people on the wrong end of the gap.
This way the system that enables people to acumulate such excesses remains unbroken and yet maintains acceptable excess limits.
It would be interesting on many levels. For example, what if the wealthy people with the means to generate such wealth decided once they hit a 10x level they would coast instead of continue striving for more...their time obviously more value to them than money they don't get to keep. Would that simply open the opportunities for others to step up to fill the void in 'excess wealth generation'? Or is that not necessarily something anyone can just step into?

How about it slick? Want to fork over 75% of your excessive wealth?

the easy answer is no, but the above requres a bit more comment. First off, where you get 'my status' for medians etc, I have no clue. I never mentioned the 10-fold or 40-fold figures relative to wealth,but was talking of income disparity. You know as well as I that no one will ever be able to pass the sort of law you propose. Moreover, it wouldn't yield a long-term benefit. Sure, at the outset it might sound fun, but it would be a disaster. Why? You focus on personal wealth, which is a function not just of the individual's income, but their thrift, their family economic history, etc. How, exactly would you propose the divestiture work. You might have trouble grasping this, but your idea works like this: In reality, my net worth is likely about 50 times the median, if you don't factor for age, of the US adult population. So, at the outset, I'd have to divest about 20% of my net worth, immediately, to comply the the Will Act(as we'll call it). Now,Warren Buffett has roughly one million times the median, so he'd have to immediately divest around 98% of his assets. So, under the Will Act, you would need a massive, immediate, divestiture of the entire upper tier of the society. All at once. Any idea how that might affect the markets? Any idea how that effect would play upon the viablity of the entire national economy? In short, your idea is beyond stupid, it is moronic, in large part because you clearly didn't understand or even bother to try and understand the words I wrote regarding income. You, as so often, were focused upon a snarky, ideologically driven 'witty' response that contributes precisely ZERO to the discourse. Attaboy!

[callmeslick]

now, to follow up Wills silly scheme, I return to cite that we had a method to restrict personal income levels. It was called the Marginal Tax Rate in the Income Tax Code. In the period from 1952 to 1969, the rates of Federal Taxation on all annual income in excess of $150,000(likely about $500,000 corrected for inflation, maybe a bit more) was taxed at someplace between 78% and 92%. What that did was disincentivize huge annual windfalls, and force people into long-term capital gains type investments. The result was multi-fold:
1. it kept executive salaries in check
2. it moved incentives for execs toward long-term stock options, which required laser-focus on long-term corporate planning
and growth.
3. it freed up capital within corporate salary structures for rank and file employees, growing a viable middle class which further
bolsters a consumption economy.
4. it prevented excessive corporate gambling for short-term profits, further stabilizing the economy.
The sad thing is, it worked REALLY GOOD for EVERYONE. The wealthy remained so, and were able to prudently preserve their wealth though investment with fueled long-term economic planning by corporate America. The middle class grew, economic mobility was robust(the best in the world, by far). It allowed tax rates for most income to be reasonable and still fund the necessary things government needs to do.
Then, we got Reagan Republicanism. Government is evil, everyone should strive for maximum greed, and trust us, that greed will allow money to trickle down to the 'little people'. The whole theory is and was pure BS. The problem was, a lot of the wealthy, even the formerly civic-minded Old Money, liked the freedom to return to the excesses and greed of the past, and getting them to give even that much up as this stage will be difficult. It wouldn't be, if the working people of the US banded together and demanded a return to what was proven to work. However, we live in the age of ideological extremes and the working people have been neatly divided into folks who argue over sheer idiocy, focused on an 'enemy' or 'enemies' who really aren't, and thus preserving a status quo which benefits around 4% of the populace. Keep up the good work!

[Will Robinson]

Yes, it is a terrible 'idea'...if it had been offered as a sincere plan....
(I love how how you leapt to swat at it as much as you could, and so soundly too)
Such an eager and prolific lecturer you are when your bag is so full of your own wind!

It was primarily a tongue-in-cheek presentation of hypothetical thought excercise and, judging from your response, it provided a damn fine mechanism too if I may say so myself! You exceeded all my expectations.

Because, it is a terrible idea, and yet so very much of your Party's rhetoric and election success is based squarely on promoting the fundamental of that silly premise using class warfare and straight up anti-rich attacks of all sorts.

[callmeslick]

I got the idea that it was not a serious idea, but what you are doing is mocking an issue that affects the very core of the US economy. Why?

[Will Robinson]

I got the idea that it was not a serious idea, but what you are doing is mocking an issue that affects the very core of the US economy. Why?

Not mocking the issue...(can that even be done?) I'm pointing out the hypocrisy that gets real deep real fast when you accept the premise of the rhetoric you guys toss around to rally the dumbmasses and hypothetically apply it to reality.

I dont think those that use that kind of rhetoric are immune to ridicule. In fact they deserve much worse. So, if it struck a nerve, you got off lucky.

[callmeslick]

what, about my proposal(return to tax and regulation used successfully in the past) is 'rhetoric' worthy of dismissal, Will? Further, if folks aren't 'rallied' to the idea, and to unite against those who have divided them against their economic self-interest, what good is done?

[Will Robinson]

what, about my proposal(return to tax and regulation used successfully in the past) is 'rhetoric' worthy of dismissal, Will? Further, if folks aren't 'rallied' to the idea, and to unite against those who have divided them against their economic self-interest, what good is done?

Are you really that self absorbed and knee jerk to the bone? Please go and look at when you said anything about a 'return to tax and regulation'...see there? AFTER I made my comments about your party's rhetoric.

So if I was talking about your rhetoric used to create class envy and I was doing it BEFORE you brought up a different tangent of taxes and regulation how did you get so lost?

[callmeslick]

what, about my proposal(return to tax and regulation used successfully in the past) is 'rhetoric' worthy of dismissal, Will? Further, if folks aren't 'rallied' to the idea, and to unite against those who have divided them against their economic self-interest, what good is done?

Are you really that self absorbed and knee jerk to the bone? Please go and look at when you said anything about a 'return to tax and regulation'...see there? AFTER I made my comments about your party's rhetoric.

So if I was talking about your rhetoric used to create class envy and I was doing it BEFORE you brought up a different tangent of taxes and regulation how did you get so lost?

that BS about 'creating class envy' is just that. It isn't an artificial creation, if 95% of the populace is being screwed over. It isn't 'rhetoric' to remind people of the reality that they've been brainwashed to ignore, in favor of pointing fingers at immigrants, Democrats, Republicans, liberals, the Evil Media, communists, the 'Gay Agenda', etc,etc, etc. I'm not self absorbed, but I've been talking about this issue for literally decades now, and I have stuck to the point throughout this thread. What you are doing is merely the bidding of the folks who wish to maintain the disparity and continue to grow it. I'm sure they're tickled pink that their little minions are working daily to keep the masses divided and confused.