Huff accidentally gets it right: Minimum wage.

[itfitzme]

Raising the minimum wage is simple...

1) A company either passes the increased labor cost to their customers with higher prices, which in the long run screws the workers with higher priced goods.
2) A company goes out of business if they can't take on the increased labor cost.
3) They fire some workers to pay the remaining workers more each hour.

Wrong, on all three.

First, increased labor costs aren't necessarily "passed on" to the customer. It depends on what the current wages and profit margin are. It also depends on what the upstream margins are. For instance, Wallmart would easily absorb an increase in wages with no change in prices. You are mistaken.

Your second point doesn't mean anything. It's an "if". Sure, " if" .... Followed by whatever...


The third point makes absolutely no business sense. Production output, and thereby, sales volume, is directly proportional to the amount of labor. Reducing the labor employeed reduces the amount of oroduct made, the amount sold, income, and therby the amount of total wages paid. Reducing employees always reduces income. Ther isn't anything to pay other employees more with.

 

[Missouri_Mike]

"But economically.... every penny you pay the employee, has to be paid by the customer.

If you want the Whopper Flopper at Burger King to be paid $15/hr, then you have to charge the customer $15 a burger.

The customer has to pay the cost, of that wage.

...l.

Uh, no...this is absolutely not how it works. Cost isn't the only driving factor in prices. You have heard about this thing called " profit"?


See, price is the result of both the supply and demand for a product. Cost only puts a lower limit on the price. Product demand most certainly will raise price well above the cost of wages, equipmment, and materials. That is how things work, economically.

Profit is the only thing that makes producing any product worth persuing. Without profit you have nothing to purchase.

 

[Missouri_Mike]

Raising the minimum wage is simple...

1) A company either passes the increased labor cost to their customers with higher prices, which in the long run screws the workers with higher priced goods.
2) A company goes out of business if they can't take on the increased labor cost.
3) They fire some workers to pay the remaining workers more each hour.

Wrong, on all three.

First, increased labor costs aren't necessarily "passed on" to the customer. It depends on what the current wages and profit margin are. It also depends on what the upstream margins are. For instance, Wallmart would easily absorb an increase in wages with no change in prices. You are mistaken.

Your second point doesn't mean anything. It's an "if". Sure, " if" .... Followed by whatever...


The third point makes absolutely no business sense. Production output, and thereby, sales volume, is directly proportional to the amount of labor. Reducing the labor employeed reduces the amount of oroduct made, the amount sold, income, and therby the amount of total wages paid. Reducing employees always reduces income. Ther isn't anything to pay other employees more with.

Whatever econ class you failed owes you some money back.

1- The reason Walmart can afford the wage increase is because of size in order to get it initially in place. Once they have out spent their competition, taking out your small operations while doing so, they get an even larger share of the market and raise prices accordingly. This allows them to not only take out mom and pop shops but now local store chains are in the cross hairs.

1A-All labor costs are passed on to consumers. Math simply doesn't work if you leave a major source of production cost off to the side like it doesn't exist. That leads to bankruptcy court.

2- It's not an if it's a when. They either raise prices to reflect the new costs or they go out of business. This even holds true for Walmart. They can afford to bump wages and hold prices for a short time. But not forever. The prices will eventually have to be raised to an acceptable margin of profit to make it worth staying in business.

3- Labor costs have many ways they can be reduced and still maintain the production. Sometimes paying less people over time makes them happy and keeps the company from...well, maybe hiring that 50th employee and kicking in obiecare for all of them. There is also another option I'm sure you never thought of. Automation. No union rules, no minimum wage, no calling in sick and no lawsuits come from machines. And easily replaceable employee can usually have that job turned over to a machine. Higher initial cost but very beneficial in the long run.

 

[OnePercenter]

"But economically.... every penny you pay the employee, has to be paid by the customer.

If you want the Whopper Flopper at Burger King to be paid $15/hr, then you have to charge the customer $15 a burger.

The customer has to pay the cost, of that wage.

...l.

Uh, no...this is absolutely not how it works. Cost isn't the only driving factor in prices. You have heard about this thing called " profit"?


See, price is the result of both the supply and demand for a product. Cost only puts a lower limit on the price. Product demand most certainly will raise price well above the cost of wages, equipmment, and materials. That is how things work, economically.

Profit is the only thing that makes producing any product worth persuing. Without profit you have nothing to purchase.

Who says they don't have profit? If you ask 100 business owners how much profit they should be netting, I can guarantee that 95 will get it wrong. This is all about bad greed. Most employers are taking the easy way out. Instead of nurturing existing customers and developing avenues to create more customers, employers are increasing profits by screwing their employees and taxpayers.

Until you morons get with the program, nothing will ever change.

btw; Ford DID take bailout monies.

 

[Andylusion]

"But economically.... every penny you pay the employee, has to be paid by the customer.

If you want the Whopper Flopper at Burger King to be paid $15/hr, then you have to charge the customer $15 a burger.

The customer has to pay the cost, of that wage.

...l.

Uh, no...this is absolutely not how it works. Cost isn't the only driving factor in prices. You have heard about this thing called " profit"?


See, price is the result of both the supply and demand for a product. Cost only puts a lower limit on the price. Product demand most certainly will raise price well above the cost of wages, equipmment, and materials. That is how things work, economically.

Yes, but profit is not something that can be cut.

If I own the company.... if I don't make a decent profit, then.... I close the company.

This idea that "well they can just cut profit, and pay workers more...." Not happening.

That will never happen. Period. Walmarts profit margin is only 3%. You can look it up yourself.

Wal-Mart Stores Profit Margin (Quarterly) (WMT)

That means that for every $100 worth of product you buy, the huge massive unbelievable profit margin they are earning is.... $3.

And you think they are just going to cut that? Nope. They are going to either hire fewer people, or increase their markup.

Thus far, they have focused mainly on cutting jobs. The average number of employees per store back in 2006, was 320. Today it's 270. What happened between then and now? The minimum wage went up from $5.25 to $7.25 and higher.

You really think they are going to cut profit margin? Not a chance.

This is a McDonald's menu from Norway. The average wage at a McDonald's is $15 an hour. Notice the cost for a basic burger in Norway, is 91 Krone. What is 91 Krone? It's about.... $15.

Shocking..... wow.... it's almost like economics is universal.

 

[Andylusion]

Uh, no...this is absolutely not how it works. Cost isn't the only driving factor in prices. You have heard about this thing called " profit"?


See, price is the result of both the supply and demand for a product. Cost only puts a lower limit on the price. Product demand most certainly will raise price well above the cost of wages, equipmment, and materials. That is how things work, economically.

Profit is the only thing that makes producing any product worth persuing. Without profit you have nothing to purchase.

Who says they don't have profit? If you ask 100 business owners how much profit they should be netting, I can guarantee that 95 will get it wrong. This is all about bad greed. Most employers are taking the easy way out. Instead of nurturing existing customers and developing avenues to create more customers, employers are increasing profits by screwing their employees and taxpayers.

Until you morons get with the program, nothing will ever change.

btw; Ford DID take bailout monies.

You come on here, and flat out lie, and then think we're going to bother discussing the rest of your rambling crap?

No. Ford did not take bailout money. Period. If you can't grasp that, then you have disqualified yourself from this discussion. If we can't trust you will at least be truthful, then why bother discussion anything else?