Minimum Wage Increase: They Never Talks About the SALES

[JoeMoma]

News flash: If the cost to produce a product is greater than or equal to the sales price, no amount of sales will result in a profit.

 

[protectionist]

Just because YOU told us most conservatives support it in no way makes it true.

Most Conservatives do NOT support it and YOU are not a Conservative.

No newbie, boy. I've been in this forum for almost 2 years. Have posted over 8,000 messages. Have received 348 thanks, 415 agrees, and 53 informatives, and 95% of them have been from Conservatives. And if you weren't such a green as grass rookie here, you would have known that. What a laugh all the liberals I've been battling for 2 years, would have, if they heard you talking.

 

[protectionist]

News flash: If the cost to produce a product is greater than or equal to the sales price, no amount of sales will result in a profit.

Here's a news flash for you. I know a guy who has just one product. He sell T-shirts. His price is $10. His total cost is $500/month. He sells about 250 shirts a month (grosses about $2500/month) and his profit averages $2000/month. He's been in this business for about 20 years.

 

[protectionist]

Most of the time when the minimum wage is raised, it is so slight that it affects only a small percentage of the work force. That being said, labor costs are part of the cost of every product and service. A universal doubling of the minimum wage would have a huge effect on the labor costs of almost every product or service. If the minimum wage were to be raised from $7.25 per hour to $15.00 per hour over a short period of time, it will tend to drive the wages of the more skilled workers up also. For example, the shift supervisor who was happy with making $15 per hour to work with and supervise a group of people making $10.00 per hour will not be happy making only $15 per hour supervising those making the same amount, and rightly so since his work is worth more. The supervisor's wage would probably be pushed at least to two or three dollars above minimum. A hamburger joint that sells hamburgers will not only be affected by the increased cost of the labor of its workers, but it will also be affected by the increased labor costs of its suppliers. The cost to produce a product is a very important factor of the market price of a product. If the cost to produce a product changes, then the market price for that product will also change. Apple is not going to sell iPads for $500 they cost $600 to produce.

If low wage workers have more money in there pockets, then this will increase sales. However, if labor cost go up, the cost to produce products and services go up. If the sales price of the products and services are not increased, then the profit margin for each product sold will decrease, and some products may even have negative profit margins. Thus, an increase in labor costs will cause a reset in the market prices of product and services.

Not quite. Regardless of profit margin for each product sold, the firm is still OK because SALES$$$ increase. And if the sales price of the products and services were increased, that would cause LESS money to come in, not more (due to reduced sales)

Also, the greater the increase in MW (and higher wages), the greater the increase in DI and SALES$$$

Minimum Wage Increase: They Never Talk About the SALES

So if the increase in labor cost reduces the profit margin per product to zero at the current price, the profit will still increase because of increased sales?

It wouldn't do that. Generally, it would INCREASE profit margin, because there are relatively very few employees per company compared to the thousands of workers with increased wages to generate sales increases (including the emloyer's own employees), and as I said earlier, for those who could show a legitimate hardship, exceptions could be made (on a sliding scale)

 

[SmarterThanTheAverageBear]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

Um, you are running a REALLY shitty company if you're only profiting $.50 on every $3 earned. For real.

Let me give you a real world example.

I own a steak house.

Our typical steak dinner sales for $18. That is our average. We have $6 in food cost, $6 in ALL other costs, and $6 in profit, on average per meal. 30% for product 30% for labor and utilities and other costs, 30% for profit 10% for incidentals, etc etc.

That's the idea, we aren't always at 30% profit, because we are always giving raises and such and we don't raise prices every time an employee gets a raise.

Your theoretical 16% profit margin at the production level is ridiculous.

 

[JoeMoma]

News flash: If the cost to produce a product is greater than or equal to the sales price, no amount of sales will result in a profit.

Here's a news flash for you. I know who has just one product. He sell T-shirts. His price is $10. His total cost is $500/month. He sells about 250 shirts a month (grosses about $2500/month) and his profit averages $2000/month. He's been in this business for about 20 years.

So his profit margin is $8 per shirt. Profit margin does matter.

 

[protectionist]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

1. Why do you ask ?
2. Why must he have a "higher profit than he had before" ?

 

[Toddsterpatriot]

Ok...Businesses cannot increase their prices. Now can they reduce staff or hours....
Hmm. Soooooooooooooooo.....The money comes from......where?

Try reading the OP instead of coming in here late, and asking dumb questions' Ans still another airhead comes in and confirms the title of the thread >>

Minimum Wage Increase: They Never Talks About the SALES

They Never Talks About the SALES

I hates them. LOL!

 

[JoeMoma]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

Um, you are running a REALLY shitty company if you're only profiting $.50 on every $3 earned. For real.

Let me give you a real world example.

I own a steak house.

Our typical steak dinner sales for $18. That is our average. We have $6 in food cost, $6 in ALL other costs, and $6 in profit, on average per meal. 30% for product 30% for labor and utilities and other costs, 30% for profit 10% for incidentals, etc etc.

That's the idea, we aren't always at 30% profit, because we are always giving raises and such and we don't raise prices every time an employee gets a raise.

Your theoretical 16% profit margin at the production level is ridiculous.

Well, the point of the example was that if the profit margin is reduced enough due to increased labor costs, no increase in sales will be enough to result in a profit.

 

[Toddsterpatriot]

Fine. So if total disposable income increases by $1 billion, they can buy, at most $1 billion more in goods and services. And total profits still fall.

No, profits increase. Especially for millions of companies who don't pay MW wages (or ANY wages) For them it is clear cut 100% GAIN.

No, profits increase.

Nope.

Especially for millions of companies who don't pay MW wages

If those companies get some of the increased income, those that pay it get even less.
Larger losses than your original, really stupid, claim.

 

[JoeMoma]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

1. Why do you ask ?
2. Why must he have a "higher profit than he had before" ?

Go back a read you OP. According to you, he will have a higher profit due to increased sales.

 

[Toddsterpatriot]

Most of the time when the minimum wage is raised, it is so slight that it affects only a small percentage of the work force. That being said, labor costs are part of the cost of every product and service. A universal doubling of the minimum wage would have a huge effect on the labor costs of almost every product or service. If the minimum wage were to be raised from $7.25 per hour to $15.00 per hour over a short period of time, it will tend to drive the wages of the more skilled workers up also. For example, the shift supervisor who was happy with making $15 per hour to work with and supervise a group of people making $10.00 per hour will not be happy making only $15 per hour supervising those making the same amount, and rightly so since his work is worth more. The supervisor's wage would probably be pushed at least to two or three dollars above minimum. A hamburger joint that sells hamburgers will not only be affected by the increased cost of the labor of its workers, but it will also be affected by the increased labor costs of its suppliers. The cost to produce a product is a very important factor of the market price of a product. If the cost to produce a product changes, then the market price for that product will also change. Apple is not going to sell iPads for $500 they cost $600 to produce.

If low wage workers have more money in there pockets, then this will increase sales. However, if labor cost go up, the cost to produce products and services go up. If the sales price of the products and services are not increased, then the profit margin for each product sold will decrease, and some products may even have negative profit margins. Thus, an increase in labor costs will cause a reset in the market prices of product and services.

Not quite. Regardless of profit margin for each product sold, the firm is still OK because SALES$$$ increase. And if the sales price of the products and services were increased, that would cause LESS money to come in, not more (due to reduced sales)

Also, the greater the increase in MW (and higher wages), the greater the increase in DI and SALES$$$

Minimum Wage Increase: They Never Talk About the SALES

Regardless of profit margin for each product sold, the firm is still OK because SALES$$$ increase.

OMG. You're trying to make a MW increase look bad, by defending it so stupidly.
Now I get it, you're not a huge fucking moron, you're only pretending to be a huge fucking moron.
Now your stupidity makes sense. College professor, that was the best!
Thanks for the laughs.

 

[Toddsterpatriot]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

1. Why do you ask ?
2. Why must he have a "higher profit than he had before" ?

Why must he have a "higher profit than he had before" ?

Because some idiot claimed his increased sales would make up for the increased expense.
Oh, right, you're the idiot who made that claim.

 

[JoeMoma]

Most of the time when the minimum wage is raised, it is so slight that it affects only a small percentage of the work force. That being said, labor costs are part of the cost of every product and service. A universal doubling of the minimum wage would have a huge effect on the labor costs of almost every product or service. If the minimum wage were to be raised from $7.25 per hour to $15.00 per hour over a short period of time, it will tend to drive the wages of the more skilled workers up also. For example, the shift supervisor who was happy with making $15 per hour to work with and supervise a group of people making $10.00 per hour will not be happy making only $15 per hour supervising those making the same amount, and rightly so since his work is worth more. The supervisor's wage would probably be pushed at least to two or three dollars above minimum. A hamburger joint that sells hamburgers will not only be affected by the increased cost of the labor of its workers, but it will also be affected by the increased labor costs of its suppliers. The cost to produce a product is a very important factor of the market price of a product. If the cost to produce a product changes, then the market price for that product will also change. Apple is not going to sell iPads for $500 they cost $600 to produce.

If low wage workers have more money in there pockets, then this will increase sales. However, if labor cost go up, the cost to produce products and services go up. If the sales price of the products and services are not increased, then the profit margin for each product sold will decrease, and some products may even have negative profit margins. Thus, an increase in labor costs will cause a reset in the market prices of product and services.

Not quite. Regardless of profit margin for each product sold, the firm is still OK because SALES$$$ increase. And if the sales price of the products and services were increased, that would cause LESS money to come in, not more (due to reduced sales)

Also, the greater the increase in MW (and higher wages), the greater the increase in DI and SALES$$$

Minimum Wage Increase: They Never Talk About the SALES

Regardless of profit margin for each product sold, the firm is still OK because SALES$$$ increase.

OMG. You're trying to make a MW increase look bad, by defending it so stupidly.
Now I get it, you're not a huge fucking moron, you're only pretneding to be a huge fucking moron.
Now your stupidity makes sense. College professor, that was the best!
Thanks for the laughs.

Sometimes I have that same thought about various posters here a USMB with how they defend some of the positions they take.

 

[Wyatt earp]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

Um, you are running a REALLY shitty company if you're only profiting $.50 on every $3 earned. For real.

Let me give you a real world example.

I own a steak house.

Our typical steak dinner sales for $18. That is our average. We have $6 in food cost, $6 in ALL other costs, and $6 in profit, on average per meal. 30% for product 30% for labor and utilities and other costs, 30% for profit 10% for incidentals, etc etc.

That's the idea, we aren't always at 30% profit, because we are always giving raises and such and we don't raise prices every time an employee gets a raise.

Your theoretical 16% profit margin at the production level is ridiculous.

30% profit margin for a steak house is a real world example? Lmao get real. Try 1 to 6%

The Average Profit Margin for a Restaurant Chron.com

 

[Toddsterpatriot]

Say a manufacturer of widgets sells widgets for $3.00 each. Each widget costs $2.50 to produce and $0.50 of that cost is labor (minimum wage labor). The manafacturer sells 10 million widgets a year making a net profit of 5 million.

Then the minimum wage is doubled so that the labor cost of each widget is now $1.00 per widget. Each widget now costs $3.00 to produce. By how much must sales increase for the widget manafacturer to have a higher profit than he had before?

Keep in mind that according to the OP that the price can not be raised because the original market price was already the ideal price. Also, the manufacture cannot lay people off because that would result in a decrease in sales and a decrease in profit.

1. Why do you ask ?
2. Why must he have a "higher profit than he had before" ?

Why must he have a "higher profit than he had before" ?

the most important aspect of this is NEVER MENTIONED. Not a word. That is the increase in DISPOSABLE INCOME resulting in INCREASES SALES$$$. All businesses get this, and generally it far outweighs labor increases, since the number of wage raised consumers (not just those at the minimum wage) by far outnumbers any one employer's workers who are getting wage increases.

LOL! Perpetual motion. Each company has 10 MW employees but benefits from 100 MW customers. Perpetual motion!!!

That's a good one.

 

[Dirk the Daring]

I have at my desk two magazines, both Sports Illustrated. One has a cover date of May 18 1998, a price of $3.50, and has 110 pages. The other is dated May 11 2015, has a price of $4.99 and is only 60 pages.

Now if the ideal market price is set by what people are willing to pay, and cannot be increased due to raised production costs, then explain to me who in their right mind would CHOOSE to pay a dollar and a half more for 50 less pages? Personally, I blame Protectionist. And his friend of course over at ABC.

 

[protectionist]

Fine. So if total disposable income increases by $1 billion, they can buy, at most $1 billion more in goods and services. And total profits still fall.

No, profits increase. Especially for millions of companies who don't pay MW wages (or ANY wages) For them it is clear cut 100% GAIN.

No, profits increase.

Nope.

Especially for millions of companies who don't pay MW wages

If those companies get some of the increased income, those that pay it get even less.
Larger losses than your original, really stupid, claim.

As I said, for millions of companies who don't pay MW wages (or ANY wages) > For them it is clear cut 100% GAIN. That's not stupid. It's fact.

 

[Toddsterpatriot]

Fine. So if total disposable income increases by $1 billion, they can buy, at most $1 billion more in goods and services. And total profits still fall.

No, profits increase. Especially for millions of companies who don't pay MW wages (or ANY wages) For them it is clear cut 100% GAIN.

No, profits increase.

Nope.

Especially for millions of companies who don't pay MW wages

If those companies get some of the increased income, those that pay it get even less.
Larger losses than your original, really stupid, claim.

As I said, for millions of companies who don't pay MW wages (or ANY wages) > For them it is clear cut 100% GAIN. That's not stupid. It's fact.

Perpetual motion!!!

 

[protectionist]

I have at my desk two magazines, both Sports Illustrated. One has a cover date of May 18 1998, a price of $3.50, and has 110 pages. The other is dated May 11 2015, has a price of $4.99 and is only 60 pages.

Now if the ideal market price is set by what people are willing to pay, and cannot be increased due to raised production costs, then explain to me who in their right mind would CHOOSE to pay a dollar and a half more for 50 less pages? Personally, I blame Protectionist. And his friend of course over at ABC.

The person who wants to read an up to date magazine.