Bush commends America's high unemployment rate

[DeviousJ]

Originally posted by Nimrod
What good is a 20% raise if your dollar is now worth 80 cents?

Ok, in that case you end up with a net loss of 4% - which is almost the rate of inflation anyway. But prices shouldn't be raised to cover the cost of hiring new people, the hiring should be necessitated by the need to increase production (or productivity, depending on the industry). Unemployment at the moment is high enough that the job market is competitive, right? There's a point where the job market is so saturated that wages need to be increased to find employees, but it's not even close to that situation. The biggest problem is probably that the US is still consuming as much (if not more), but actual production (and paying work) of those goods is being transferred to other countries. Big industries are making unprecedented profits, while at the same time cutting workforces - if there was a need to increase wages, they wouldn't have any trouble.

[DeviousJ]

Originally posted by jczeroman


If you think raising the minimum wage is going to create more buying power then you need to read a few books on economics. Just think what would happen if the minimum wage was raised to $100 an hour. Do you think that that $100 would be worth the same that a hundred dollars is worth right now? Do you think that everyoen elses wages would go up at a parellel percent to the increase in minimum wage?

THE DOLLAR HAS NO INTRINSIC VALUE!

Rasing minimum wage hurts the poor and middle class and is absolutely destructive to the economy.

Isn't it a little misleading to quote such an extreme number like that? Only a tiny minority make more than $100/hr, so the majority of people would be given more money. If a sensible minimum wage was established, then the people below that level would benefit, and those above would not. Prices in general would increase to cover the shortfall, sure, but this money would effectively come from the entire population. This would be worse for those earning more than the min. wage, because their money would be worth less, but for those previously below it things would work out better, because their increase in wages would be more than the increase in prices. If by 'poor and middle-class' you meant people on or slightly over the minimum wage level then I'd agree with you, but when I think 'poor' I think of people who aren't earning enough to get by

[Onawhim]

Yes but a higher minimum wage simply raises the Marginal cost for goods or services which would lead to less production overall and fewer jobs for people. So there will be people willing to work for less than minimum wage and people willing to hire for less than minimum wage.

Which in turn will cause even more companies to look overseas for workers which will now be even cheaper to hire then they were before. So i don't think raising the minimum wage is the solution unless you want to hurt the american working class by creating even larger incentives for companies to move production overseas. . .

[DeviousJ]

Originally posted by Onawhim
Yes but a higher minimum wage simply raises the Marginal cost for goods or services which would lead to less production overall and fewer jobs for people. So there will be people willing to work for less than minimum wage and people willing to hire for less than minimum wage. . .

But like I said, it gives poorer people more buying power - hell, some of them may have been unable to buy anything other than absolute necessities before they were granted a minimum wage. If the cost of the increase is borne by the entire population then the average cost rise is very little. And now you have more people able to buy. More buying power=more demand=more jobs, yes? Obviously increasing the minimum wage could be very bad if too many people gain a wage increase because of it.

[DeviousJ]

Originally posted by Onawhim
Which in turn will cause even more companies to look overseas for workers which will now be even cheaper to hire then they were before. So i don't think raising the minimum wage is the solution unless you want to hurt the american working class by creating even larger incentives for companies to move production overseas. . .

The wage gap between US workers and overseas workers varies from significant to immense. If you actually wanted to compete with other job markets directly you'd have to pay people below the cost of living. True, some companies are having to outsource to stay competitive in the current market, but that's because their competitors took advantage of overseas employment to turn over insane profits (not to break even), and these lower costs enable them to price other people out of the market. Corporations find it far too easy to move all of their production out of the country

[Onawhim]

Originally posted by DeviousJ


But like I said, it gives poorer people more buying power - hell, some of them may have been unable to buy anything other than absolute necessities before they were granted a minimum wage. If the cost of the increase is borne by the entire population then the average cost rise is very little. And now you have more people able to buy. More buying power=more demand=more jobs, yes? Obviously increasing the minimum wage could be very bad if too many people gain a wage increase because of it.

yes but you still didn't refute the fact that raising the minimum wage will cause companies to higher fewer workers which does not help the economy, nor did you say anything to refute the fact that it will exacerbate the "problem" of jobs moving overseas.

[DeviousJ]

Originally posted by Onawhim


yes but you still didn't refute the fact that raising the minimum wage will cause companies to higher fewer workers which does not help the economy, nor did you say anything to refute the fact that it will exacerbate the "problem" of jobs moving overseas.

Yes I did - look at the post above, I replied before you edited. And I replied to the job migration bit in the part you quoted. Raising the minimum wage 'exacerbates' the problem as much as keeping wages where they are does, because either way the labour is going to be cheaper overseas.

[Nimrod's Son]

Also it causes low wage workers not to get raises since the company payroll just went up.

[jczeroman]

Originally posted by DeviousJ


But like I said, it gives poorer people more buying power - hell, some of them may have been unable to buy anything other than absolute necessities before they were granted a minimum wage.

No, the point of all of this is that it doesn't give poorer people more buying power. It actually reduces it. Every time minimum wage goes up, the dollar loses value. Why is it when the mini9mum wage was 1.35 an hour that people could afford houses and cars with one income? The answer is because the dollar was worth more. I think you understand that much of it, so I will end that tangent.

Minimum wage hurts so many things that I can't begin to list them all and provide all the data to show you. This argument may be pointless.

Minimum wage increases:

•Increases overall payroll expenses causing losses of jobs in small business and hiring freezes in bigger business.

•makes it so only large corporations can afford to hire workers, reducing competition between mid-sized and large companies. Effectively removing the ability for businesess to grown beyond smal sizes.

•Lowers the value of the dollar and increase inflation because suppliers have to provide the same service at a greater cost. In order to offset that cost they must raise prices or provide less services. If they provide less services then then they are effectively providing less competition to the market and bigger companies can get away with higher prices and crappier service.

•make it harder for the unemployed to find work. If a company can hire 10 workers at $5 an hour suddenly has to pay $6 an hour they must fire one employee to keep their payroll even or raise their prices to offset that cost. This eliminates entry level job opportunities for those without work.

•causes no *real* wage increase for those "benefiting" by the increase. These people are still on the lowest wage in the country/state. Because companies know that these people just had an increase in wages/buying power and they will raise prices for profit. Do you think that companies are going to be benevolent? They are going to charge as much as they can. They know they can charnge more because the lowest wage earners just got an increase.

•hurts the middle class (especially lower middle class) because they do not get pay raises equal to the percentage that minimum wage earners got. If minimum wage is $7 and a person working for a year has gotten a *real* raise to $7.10, that raise usually just gets "absorbed" into the minimum wage again when it goes up to $7.25. That person lost buying power because they were 2.5% ahead of minimum wage when they were getting $7.10. Now they fall back down to the lowest group of wage earners when the wage gets "raised" to $7.25.


Most people understand that the value of the dollar is not based on any stander and is thus, flexable. But they don't make the connection that raising the minimum wage doesn't raise *real* wages.

[DeviousJ]

Originally posted by jczeroman
*too much to quote*

I'd agree that this is all possible, but it's not absolute. If the minimum wage was raised by 1 cent, it wouldn't have the same effect as raising it by 1 dollar. I believe there can be a balance.

And I'd still argue that poorer people gain more buying power, because they're getting an effective raise which is way over the cost of providing it. If you have 10 people, and 5 of them get a raise of 2 dollars, then the cost of this is borne by everyone - so they all effectively lose a dollar. The net outcome is that those 5 people get a dollar more in real terms, while everyone else loses a dollar. In a way it narrows the gap, although it's hardly better for everyone. Obviously I don't know a lot about economics, so correct me if I'm wrong here.

I can see how the increased payroll would be a problem, as you and Mike mentioned, but increasing the minimum wage doesn't happen very often so it should be planned for properly. (Remember, this thread is supposed to be about unemployment rates.) You'll have to explain something to me here - when a new minimum wage is introduced, is this enforced by the government with no subsidy or tax relief?

And I still believe that company profits should take a hit before layoffs are considered. I'd agree with your point on the lower-middle classes effectively sliding down the pay scale though.

[jczeroman]

Originally posted by DeviousJ


And I still believe that company profits should take a hit before layoffs are considered. I'd agree with your point on the lower-middle classes effectively sliding down the pay scale though.

Alright, you gave me a really open-minded response there. I think that most of our discussion is rooted in two philosophical questions: should we work to "close the gap" between poor and rich or should we work to make everyone richer in general but still with large gaps in wealth?

The problem I see with the "close the gap" idea is that it works: the gap does get closed. Unfortunately the gap get closed to the lowest common denominater because it is easier to make policy to tear down the rich quicker and more efficiently then it is to bring up the poor. That is ultimately what we saw in soviet Russia -- communism cliches aside -- they achieved "equality" by effectively removing the wealth of the rich and distributing it among everyone equally. The problem is that such methods simply don't work. Sharing does not comply with human nature, and it never ever will unless done by force (which would take away freewill/humanity and be self-defeating). This is why I ultimately favor symbiotic relationships in human society -- they build up and improve upon civilization, while sacrifice and sharign ultimately tear down in the long run. I guess ultimately it is a matter of preference.

When a company takes a cut in profits that money costs more jobs in the future. Businesses just don't sit on piles of cash and horde it -- they invest it in things that will make them more wealth. Those things (assets) are often people who are benefitted because without extra money (profits), a company couldn't make/buy assets (employees, trucks, factories), and people would not have jobs. Jobs are created, not because certain companies want to share their money with people, but because people are needed to make the company richer. At teh same time, those people are getting richer because the company pays them in direct perpotion to how much they benefit the company. To me, that seems absolutely as fair as humanly possible. Again, you might disagree, and I respect that.

[DeviousJ]

True, but it just means companies expand more slowly, not that they necessarily implode under the weight of their payroll. Ok, here's my experience of the situation - after I finished highschool (at 16) I was going to college (16-18, before university) but I'd been convinced to take a job with a tour operator, which I figured might be a half-decent summer job. In case you don't know, a tour operator basically sells seats on flights - anyway, it was a small, family-owned business mainly focusing on Italy as a destination. The problem was, most of the people who worked there were on a pitiful amount of money (for example, I was getting less than $3/hr). But the company itself was doing very well - so well in fact, that the owners (and their daughters who worked there) rolled up to the building every day in their sports cars while everyone else had to ride the bus. In this kind of case, the profit levels are high enough to absorb a wage increase for workers in general, without it spelling death for the company. I understand this isn't necessarily the case, which is why I assumed the government helped out with the transition, particularly with regard to small businesses.

Personally, I think everyone who wants to work should be able to. And I think you'd agree with me on this, since the alternatives are either a welfare state which picks up the slack (which you don't seem to be big on) or lots of people dying of hunger. But the point of work is not just work itself, but to provide the means to live. If low-paid jobs don't pay enough to live on, then that wage has to be raised. It's all very well to believe in this idea that people who work to put themselves in a good position should be rewarded for it, but not everyone has that chance and at the end of the day, *someone* has to do these jobs. I don't know if it's economically possible for everyone to be above the poverty line and for the economy to sustain itself, but I'd like to believe that it is. Communism is an extreme example, but I do think everyone should be given a chance to provide for themselves. And often, the lowest paid work is some of the hardest.

[meow]

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[Nimrod's Son]

Originally posted by DeviousJ
True, but it just means companies expand more slowly, not that they necessarily implode under the weight of their payroll. Ok, here's my experience of the situation - after I finished highschool (at 16) I was going to college (16-18, before university) but I'd been convinced to take a job with a tour operator, which I figured might be a half-decent summer job. In case you don't know, a tour operator basically sells seats on flights - anyway, it was a small, family-owned business mainly focusing on Italy as a destination. The problem was, most of the people who worked there were on a pitiful amount of money (for example, I was getting less than $3/hr). But the company itself was doing very well - so well in fact, that the owners (and their daughters who worked there) rolled up to the building every day in their sports cars while everyone else had to ride the bus. In this kind of case, the profit levels are high enough to absorb a wage increase for workers in general, without it spelling death for the company. I understand this isn't necessarily the case, which is why I assumed the government helped out with the transition, particularly with regard to small businesses.

Personally, I think everyone who wants to work should be able to. And I think you'd agree with me on this, since the alternatives are either a welfare state which picks up the slack (which you don't seem to be big on) or lots of people dying of hunger. But the point of work is not just work itself, but to provide the means to live. If low-paid jobs don't pay enough to live on, then that wage has to be raised. It's all very well to believe in this idea that people who work to put themselves in a good position should be rewarded for it, but not everyone has that chance and at the end of the day, *someone* has to do these jobs. I don't know if it's economically possible for everyone to be above the poverty line and for the economy to sustain itself, but I'd like to believe that it is. Communism is an extreme example, but I do think everyone should be given a chance to provide for themselves. And often, the lowest paid work is some of the hardest.

One thing people miss is that it's not the same 3.5% of people that aren't working constantly. People constantly move in and out of the unemployment statistic. People who want to work, will.

[PkPhuoko]

sometimes communism isnt the worst looking situation

[Nimrod's Son]

Originally posted by PkPhuoko
sometimes communism isnt the worst looking situation

Bah, that's the speech of lazy people.

Communism has never fucking worked.

[PkPhuoko]

Originally posted by Nimrod's Son
Bah, that's the speech of lazy people.

Communism has never fucking worked.

speech? try comment


never worked but looks nice on paper sometimes.

I think an adapted version of communism could work. Militarys have communist aspects in them. Everyone has a job no matter what, everyone has trained field, and everyone of set group gets paid X amount, is given a house, etc etc. If you want to make more you can bust your ass and move up.

kinda 1/2 way communist 1/2 way class system

[Nimrod's Son]

Originally posted by PkPhuoko


speech? try comment


never worked but looks nice on paper sometimes.

I think an adapted version of communism could work. Militarys have communist aspects in them. Everyone has a job no matter what, everyone has trained field, and everyone of set group gets paid X amount, is given a house, etc etc. If you want to make more you can bust your ass and move up.

kinda 1/2 way communist 1/2 way class system

Yeah, except everyone is fucking miserable and most people don't try because hey already have their free house and subsidy.

[PkPhuoko]

Originally posted by Nimrod's Son
Yeah, except everyone is fucking miserable and most people don't try because hey already have their free house and subsidy.

i had tons of money and had a great time. Made tons of cash off of cost of living allowance as they pay you nicely.


Most of the people who are miserable are either single and either fat or ugly, or have kids. No matter what type of society you live in being fat, ugly, or having kids will make you miserable.

[Nimrod's Son]

Originally posted by PkPhuoko


i had tons of money and had a great time. Made tons of cash off of cost of living allowance as they pay you nicely.


Most of the people who are miserable are either single and either fat or ugly, or have kids. No matter what type of society you live in being fat, ugly, or having kids will make you miserable.

Uh, you're talking about running the country as forced lifetime millitary-like service and you don't think people will be miserable?

Holy crap!