Workers’ share of national income plummets to record low

[FiscalSanity]

Warsaw,

Hate to disagree, but labor cost varies a ton from industry to industry. In some manufacturing industries things are so automated that human labor costs are far less then the 50% you seem to think is standard, and I know from my restaurant management days that I generally ran no more then a 28% labor cost. In my current industry labor is less then 20%, because we're a retailer/wholesaler and most of our expense is tied up in the goods themselves.

I do agree that raising minimum wages doesn't do any good though. When i first went to work the minimum wage was $3.25/hr, and the price to buy a can of soda out of a machine had just jumped up to $.50 cents. Today minimum wage is $7.75/hr, and that same soda costs $1.25. Gas had just passed the $1/gallon mark for good. Now we consider $3-4/gallon normal. As far as I can tell every jump in minimum wage has brought a corresponding increase in price, but I suspect that the prices increased by a greater degree the the minimum wage did. Back in 85 I was able to rent a 1 bedroom studio apartment, pay for my car insurance and gas, pay for my food, and still have something left over to go out with (or repair my clunker of a car) on just slightly more then minimum wage (I was making $3.50 instead of $3.25). Today you can rent a studio apartment and have the money to eat on a minimum wage job, but forget having the car or enough extra money to do much more then watch tv very often.

 

[thereisnospoon]

"Let's say the average worker in that store makes $12 per hour. If wages are tripled then prices must triple."

Absolutely wrong. Labor costs are 50% or MUCH less of the cost of production. Ridiculous...

A hardware store does not produce. It is a retail outlet.
If the labor costs triple by government fiat, the money HAS to come from somewhere. Obviously the additional labor cost would be passed along to the consumer.
Another example....Before the great Obama GM/UAW bailout, GM was spending over $70 per hour per worker. GM added roughly $1500 per unit for labor costs.
BTW, the goal in any business is to keep labor cost to no higher than 30%. That's business 101.
It still does not address the fact that you are missing the point.
Higher labor cost without a requisite increase in revenue = higher costs to the business which = higher cost to the consumer or end user.
Another example.....in 2008 Time Warner Cable added 5% to their cable rates to cover the increase in the cost to fuel their trucks. The company lost money on that deal because the gas went up much more than 5%. The marketplace however would not accept the entire fuel increase meaning their customers would have gone elsewhere for their pay tv.
TWC is a huge company. 60% of all employers are small business. Less than 50 employees. Those businesses would absolutely have to increase prices much more to reflect the higher labor costs.

 

[thereisnospoon]

Yes it's the political system , in that it's dominated by corporations, especially on the Pub side. And the lobbyists, who spend much more on lawmakers than campaign contributions, are an even bigger problem...and then there's the corporate media problem...now much more worried about ratings and controversy than the truth, same reason...

Oy vay....Due to your inability to present a logical argument, we're done.
Please feel free to bug someone else with your problems.

 

[hellofromwarsaw]

I said 50% or MUCH less, so obviously I don't think 50% is standard. If I had to try and remember the stat, I'd say 15%. Time Warner raise their prices due to a lot more than gas prices LOL! You math is poor. If you raise your labor costs 30% (under the 15% 0f their costs are labor), it wouldraise the company's costs about 5%. Double labor costs (silly idea), it would raise their cost about 15%...

 

[hellofromwarsaw]

You are sorely misled, and can't handle the truth. Strong, and WRONG...LOL!