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originally posted in:Secular Sevens
Edited by MoReCoWbELLx2x1:
1/5/2014 4:07:41 AM
51
Raising minimum wage won't help much.
Where are you going to get all the money?
Answer: The government prints more.
What does that do?
Answer: Cause our money to be worth less.
What does that do?
Answer: Make prices rise.
In the end, it won't help much.
It may at first, or actually it will seem like it is helping at first, but then it will not help at all.
Or you have the other option.
Raise minimum wage
Effect: Fire more people to compensate
Third option.
Raise minimum wage
Effect: Prices rise because people can afford more
English
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Oh god...I hope you're just trolling.
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Are you in first grade? Do you think Obama has some money printing machine like Drake and Josh?
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Edited by Florence: 1/5/2014 5:07:16 AMUm When the government raises the minimum wage, the differential in wages isn't made up for by printing money; it's paid for by, you know, employers. And even if the government did institute such a program, inflation would happen at a rate lower than the proportion by which wages were increased (e.g. if the minimum wage was increased by 20% there would be less than 20% inflation as a result). And worker wages only make up a fraction of the costs of goods, so real wages are still raised.
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Because the minimum wage is only raised very little at a time. If you were to change it rapidly like a lot of people want. The company just won't just take a huge pay cut. More money will have to be out into circulation or people will be fired to compensate. Both are bad
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What are you talking about? You raise the minimum wage and the extra cost is born by the employer, usually out of the profits they make, thus meaning that the wealth generated by any particular company is distributed in a different manner. The same money is still flowing through it, just a higher proportion goes on the wages of the lowest paid and not, say, offshore or into a massive bonus at management level. Why are you talking about a programme of quantitive easing being required?
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Please read below
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I did. Your argument below is that a company will lay people off even when their productivity outstrips their hourly wage and it has nothing to do with the need to create more money. Its also nonsense
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You obviously don't know how companies work then. Companies arnt okie dokie making just enough money to profit, they want to make as much as possible. Now if you raise minimum wage they won't be able to make as much. So lay offs will happen, or prices will rise to compensate for the risen pay they have to give.
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Whereas your opinion is that a company will scale down production and release employees as it isn't making as much profit as it'd like. Odds are that it can simply raise prices by a small %age to compensate and make efficiencies elsewhere. Honestly, your argument is nonsensical - you're suggesting that companies will forgo profits as they don't make as much per employee. Theoretically you could argue that they may need to hire more to make profits the same as prior to the MW increase as each MW employee is still producing profit. Crude but more logical that your opinion. A firm can simply absorb by cutting costs elsewhere without affecting employment. They certainly won't need to fire people if they're still producing profit
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You just said it prices will rise. Which means raising minimum wage did nothing. And yes you can say the other side of the argument and that they will have to hire more. But jobs arnt created out if no where. That will take time. And my argument isn't flawed at all, please continue to read below if you believe otherwise. Like I just said, companies arnt of with just making enough money to profit. If one year a company makes a profit of 200M and them MW is risen and they only profit 150M. Do you truly think companies are going to keep making 150M? And not raise profits until more jobs are created (which isn't instantly). Profits WILL HAVE TO RISE. Wether that is by prices rising or lay offs and hour decreases. Profits will have to rise again for companies to be ok or think they are ok. Not to mention small business (that make up the majority of work force in the US) that already have a hard time paying MW and paying employees, raise minimum wage and they won't be able to sustain themselves. Please read the rest of my comments below to the other person it shows my thoughts much better.
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Edited by RIP delta: 1/5/2014 7:49:12 AMHow will getting rid of the means of production help increase profits? Efficiencies in the existing model are more likely to aid profit, not reducing workforce. As for price rises; if you raise the MW by the required amount to reduce poverty - say at least 30%, it is unlikely prices would do it too given that the proportional cost of the wages in the cost of the product is lower than other influences. People often cite small businesses as a reason to keep people in poverty - there has been a suggestion elsewhere in the thread that subsidies can be arranged through the taxation of larger businesses - hell even existing taxation models would work if the collection was improved and/or loopholes and offshores eliminated or minimised
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Edited by Florence: 1/5/2014 7:58:11 AM
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So you think companies are ok with taking profit cuts? 99% of company owners say no. The point of a business is to make money, if you make them pay more, they will find a way to keep their profits. If a company makes 100M the year before the MW increase and then 75M the year after, do you think they are going to be ok with taking less than what they had in previous years? No, because that's not how a business works. They want to continue to make profits from last year and they will HAVE to raise prices to do that (or other things that shouldn't happen). And yes you could exempt small business from this, something like that, but now you have more problems. The bigger companies start to get mad and push for other laws, or when does is a company not a "small business"? Like I said lower in the thread, raising minimum wage ALONE IS NOT the answer. Other things have to happen along with minimum wage for it to work. But just raising minimum wage alone, which so many people want, is not the answer. Because it only causes more problems.
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[quote]You just said it prices will rise. Which means raising minimum wage did nothing. [/quote]I've explained elsewhere ITT why this argument is false.
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This is only true if the minimum wage is higher than worker productivity. Today, it is far, far, below, so a drastic increase wouldn't necessarily cause layoffs.
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Edited by MoReCoWbELLx2x1: 1/5/2014 5:26:15 AMYes it will. Employers won't allow their companies to take that big of a pay cut immediately. Unless minimum wage is raised at a slow course, like it is now. But a rapid jump up, which. A lot of people want, will cause layoffs
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Edited by Seggi: 1/5/2014 6:03:03 AMWhat do you mean by saying that the minimum wage is being raised 'at a slow course'? Do you mean the federal minimum wage? Because the federal minimum wage was slashed by about a third under Reagan, and despite the fact that it's been increased several times since then (though still never to the point of 9-10 USD (in 2013 dollars) that it was at in the 70s), because it's not indexed to inflation it's actually been decreasing since 2009.
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Yes I mean federal minimum wage, and yes I know when you compensate for inflation it has decreased. But that's not the point. Raising it will still cause problems.
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It seems that those problems don't include 'increasing the incidence or severity of poverty'.
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Poverty has actually been decreasing over the years
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I make $7.25/hour, but produce $20/hr. The MW is increased to $15/hr. Please explain why I'd get laid off, even though I'm producing $5/hr of profit for my employer. (and FYI, the minimum wage is actually decreasing if you adjust for inflation)
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Edited by MoReCoWbELLx2x1: 1/5/2014 5:36:08 AMBecause now instead of your company making $13 per employee, they only make $5. Which is a HUGE pay cut for a company when you add that to thousands of people. Or a small business. Your scenario will work if the produce increases, to where instead of $20, you make $30 per say. But that is staying the same. So a smart company employer will not allow a company to take that pay cut. Lay offs will happen. [spoiler]To add to this argument my family owns a small business. And just because of Obamacare we would hVe to lay off people (luckily we have under 50 employees). A raise in minimum wage would be the same thing for us.[/spoiler]
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But if they lay me off, they'll lose profit. So they won't. And for the record, I, in no way, support the ACA, nor do I think that our current neoliberal policies are good for small businesses.
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They will lay you off and decrease work times to compensate for it. Because companies (or smart ones) will not take that big of a pay cut immediately.
