Another Political Idea

[1337 k4th0l1x0r]

[quote name='dairygirl4u2c' post='1283323' date='May 29 2007, 10:16 AM']I agree it can be confusing at first. That's why we're here arguing about it. Moreso because we don't know than because we do.
So that's not a reason for decreasing the wage. If you had it at 2 dollars, or had no minum wage such that the bottom would probably go to two dollars, the wage increases would still be there. Really, they're token gestures so that that position is more enticing than another minium wage job. 2.50 over 2 would keep me there. But, that's not fair when it should be more of a living wage for at least one person to be able to live off.
That's a common misconception that I was once a victim of. A simple thought experiment will I think clear this up. This argument is essentially that inflation will essentially drive everything up because minimum wage increase, and so they will end up being at their current condition again.
The problem with this is that increasing mimim wage is not increasing inflation completely that would cause everythinng to increase. Now, if you were to put fake money into the market, or increase everyone's wages, then that's clearly a case when inflation would nullify the wage increases. So if that's the clear case, minimum wage isn't that, as only some people wages are increasing. There might be a slight increase in inflation but not so much as to nullify the minimum wage. So, proportionally people with minimum wage would get more than the slight inflation increase and they'd improve their standard of living.[/quote]
A wage, not just the minimum but any wage, is essentially the cost of labor. An employer will only pay a laborer up to the point that it is still profitable. This doesn't mean that profit is evil; in fact, profit is a very wise concept. If it costs you more to produce something than you get out of it, it isn't worth producing in the first place. Not only that, but profit as a reward balances out the risk of a loss. If you produce 1000 widgets at a cost of $5 each including labor costs, you're not going to sell them for $5 each because you would have to sell out to break even. As the price goes up, the opportunity to make profit goes up. There are many economic possiblities beyond this point, but that isn't the point here. Suppose that I sell my widgets for $7 a piece. Now if the government comes along and says I must pay my employees a minimum wage above what they're currently making which will drive my widget costs up to $6 each (not just new wages but higher payroll taxes too!). My employees didn't demand a raise. They didn't unionize and ask for more, but I must pay them more. I could, like most anti-capitalists would suggest, eat the loss myself and reduce my profit margin. However, that really means that I'm losing my return on investment and getting too little reward for my risk. Let's raise the price of my widgets to keep the same profit margin and that drives the widgets up to $8.40 each. No problem because now everyone who is buying my widgets has more money. However, I decide that I want to keep the price the same so I want to drop production costs. Let's lay off some of my workers and demand higher efficiency out of the workers I keep. I fire a number of workers proportional to the wage increase and I keep on going at $5/widget cost. Mind you the workers I fire (and even those I don't) may want to work at their old rate. Too bad for them. Suppose I'd rather avoid any problems whatsoever in the future and outsource my production. I can even drop widget production costs by $1 and drop my prices by $1.25 to keep the same margin. These are some of the problems created by wage increases. If you drive the wages up to 'living wage' levels then you will see massive layoffs.

The real economic problems that affect the poor have nothing to do with how much money they make. It's a matter of how much their money is worth. Inflation is sometimes regarded as just a part of the economy, but must we have it? Excess government spending not only requires heavy taxation but also requires the creation and printing of new money. The new money looks exactly like the money that has been in the money supply all along, so those of us who don't get the benefit of printing our own money have our money devalued by the amount of dollars printed. Those who are responsible with money seem to be hurt the most. It's ironic when people claim that when someone gets deeply in debt either by credit cards or taking out mortgages on houses they can't afford that the person should take personal responsibility like it only affects him. When the money is borrowed the money gets created. The so called 'predatory' lenders aren't being predatory to the borrower who can't afford the loan, but to everyone who is responsible with their money. While home ownership rates have increased in the past decades, so has the percentages of homes that have mortgages on them. A mild depression could topple the whole system and send house prices down and inflation to higher levels. The federal reserve has done a good job at manipulating the currency, but unfortunately it increases the future problems while putting off the current ones. Once the bubble pops it will be the poor and middle class who suffer holding worthless dollars while the rich who have profited during the bubble safely ride it out.

[dairygirl4u2c]

You pose an interesting idea with the outsourcing notion.
That's something I'm still trying to come to terms with. I think some things should be outsourced, and some things should not be. We live in a wealthy country, and if the rich outsource everything, the people who actually live here might not benefit. Outsourcing is not the way things would be in a natural environment either, which is often the standard I use. (though they did use horses and such to trade from far away. but that was to a much less degree)
It's a hard line to draw with what and how much should be outsourced. Plus you have to consider that we might not regulate it. I'm not sure minimum wage affects outsourcing much though. This is probably one of those things that are beyond our ability to know.
I might argue that raising the minimum does cause people with more money to have their money valued a little less. And people lose or can't get jobs they'd otherwise get. But, I don't see outsourcing occuring bc of the minimum wage. As I said, to me, we have to set standards for what our society lives in. Again, that's a fundamental value judgment that I am okay with.
England not too long ago didn't have minimum wage law and were at around two pounds, which I think is like two dollars. Then they set the wage, and now it's at five something. That would probably be the case here with no wage, because there's more people than jobs, as evidenced by the unemployment rate. True, there is competiion for workers, but that's for the skilled workers.
I did hear once of a mcdonalds who had their workers in inda taking orders here. but that seems like a freak occurance and more like an experiment. anyway, can you better prove or illustrate that the minumum wage causes outsourcing?

The little inflation that does occur causes the ones with more money to have it valued less. Plus when you pay the ones at the bottom more, often they pay higher ups less, in addition to lay offs. There's only one pie, and if you give more to some, you take from others. That's a fundamental value that I'm okay with. We can always allow the wge to go lower and people to not have anything, and increase the povery rate.
If you're not okay with the lay offs, then it's a fundamental value difference. It's not like we're raising everyone's wages and causing the increase to be meaningless.
Really, the rich should be eating the loss in a perfect world instead of all the bad effects, but such is life that they don't. And it'd be next to impossible to regulate that, but agin such is life.
A bottom line, if you can't afford to pay minium wage, then to me you shouldn't be in business. We could have poor people hiring poorer people, but to me you have to stop that somewhere. Not that I'm against tax credits to small businesses who are affected by the wage. Credits would probvably be fairer because why should only the ones who want to hire people at minimum wage suffer? That's a little gray and not sure to me, but that and the current non-flat tax seem to be the fairest approaches.

I'm not sure what you're getting at with the housing and borrowing, and how that show why minimum wage is bad.
I do note the interesting point you made though about how predatory lending damages others other than the borrower. (I think it oes at times hurt the borrower too unfairly but that's beside the point)

Edited May 30, 2007 by dairygirl4u2c

[dairygirl4u2c]

if the person has gotten their princple back, and is simply taking interest from the person, then that's unfair interst collecting if the person is stuck in a cycle. they do have to make money by interest of the people, but not if the only way they can is to leech off those unable to pay.

[gamesfanatic04]

Fair Tax, there I fixed all the economic problems

[dairygirl4u2c]

sure, in theory
everyone's got different ideas on "fair" though

[adt6247]

[quote name='dairygirl4u2c' post='1284202' date='May 30 2007, 10:52 AM']Really, the rich should be eating the loss in a perfect world instead of all the bad effects, but such is life that they don't.[/quote]
Why? Why is this a good goal? Why do the rich deserve less return on investment? Do they not have the same property rights as the poor.

This whole idea of government regulating the market is an exercise in extreme and preposterous arrogance. I'm not just talking about modern western liberals, or socialists, but also distributists. Any regulation on how much a given person or corporate entity can produce, sell, pay its employees, or use its assets for the goal of economic redistribution is foolish arrogance.

Here's a principal that I've learned, and continually see the confirmation of: the market is smarter than you are. If you set minimum prices or minimum wages, you will destroy buisinesses, and impede growth. In any given transaction, the price for an item is NEVER more than someone is willing to pay. If they weren't willing to pay that price, they would not.

This can be taken to wages. If someone is willing to work for a wage, they will do so. If they are not, they won't. It's as simple as that. If a market is unregulated, ultimately, all contributers will maximize the value of every transaction.

If there were no minimum wage, wages of everyone in the country would indeed be MUCH lower in terms of absolute dollars. But, those dollars would be worth more, and everyone would have roughly the same purchasing power as they do now. If it's the same, after adjusted for inflation, why change it?

First, inflation penalizes fiscal responsibility, i.e., saving. It encourages usury, which is sinful. Think about it -- someone with a 30-year fixed interest mortgage WANTS inflation to happen rapidly, so although they will be paying the same dollar amount per month for the next 30 years, those dollars become worth less every year, and as they get their inflation-adjusted raises, they effectively are paying a cheaper mortgage every month.

Before people engage in discussions about economics, they should probably read at least a freshman-level economics textbook. Remember, no matter how smart you are, the market is too big, dynamic, and unwieldy for you to understand it. Thinking you can make things better through regulation is folly.

[Anomaly]

[quote name='dairygirl4u2c' post='1322588' date='Jul 10 2007, 01:25 PM']sure, in theory
everyone's got different ideas on "fair" though[/quote]too bad you're gone.
everyone may have different ideas on "fair", but moral principles can be used as foundation to discern "fair" in many specific instances. In those terms you can discuss what's 'fair'.

[Cow of Shame]

[quote name='Anomaly' post='1341538' date='Jul 26 2007, 05:20 PM']too bad you're gone.[/quote]

what happened to her?