Minimum Wage Increase: They Never Talks About the SALES

[protectionist]

Perpetual motion!!!

And don't forget you have to PAY THEM for their birthday holidays.

 

[JoeMoma]

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.

You OP is about ALL companies. Methinks you are trying to move the goal posts.

 

[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.

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

Well, it did have a Tennessee Titan on the cover...

 

[protectionist]

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.

Regardless of whatever the hell it was you just said, companies may have no wage employees at all, and still benefit from THOUSANDS of MW raised customers. There. I fixed it for you.

 

[protectionist]

You OP is about ALL companies. Methinks you are trying to move the goal posts.

No goal posts. Yes. ALL companies are in the scenario. So ?

Maybe you should read the thread. You're bringing up things that have already been addressed long ago. DI increase is the same among MW raised workers throughout a community. But companies' SALES$$$ benefits vary according to the # of MW workers who have to get raises (by govt law). Companies who have zero or few MW workers benefit the most. Companies with more MW workers benefit less. A few companies (those with very large #s of MW workers) may only break even, or even lose money.

I've said about 20 times in this thread that the hardship companies could be granted exemptions, or partial exemptions, if they could prove hardship condition.

If you had read the thread before coming in here, you wouldn't have to be wrongly thinking about "goal posts", and I wouldn't have to go through the trouble of repeating all this for about the 20th time.

 

[JoeMoma]

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.

You OP is about ALL companies. Methinks you are trying to move the goal posts.

No goal posts. Yes. ALL companies are in the scenario. So ?

So, increasing sales does not always increase profits. Especially when the costs to produce the product is increased. Assuming that the price of the product is fixed as suggested in your OP, the profit margin will decrease. It's not a good business decision to sell product at a loss. That contradicts your theory that the same market price for a product is optimal both before and after an increase in the labor costs.

 

[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" ?

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

That wasn't the question.

 

[protectionist]

So, increasing sales does not always increase profits. Especially when the costs to produce the product is increased. Assuming that the price of the product is fixed as suggested in your OP, the profit margin will decrease. It's not a good business decision to sell product at a loss. That contradicts your theory that the same market price for a product is optimal both before and after an increase in the labor costs.

1. No not always. But only in a small minority of companies ((those with very large #s of MW workers) is it likely there would be hardship.

2. I don't recall saying anything about "market price for a product being optimal both before and after an increase in the labor costs" What I recall I said about market price, was pertaining to the bell-shaped curve of prices vs income, not about increases of ANY costs.

I have another forum to deal with now. See ya.

 

[bripat9643]

I'm not surprised you support increasing the minimum wage because you are a socialist moron, and you are certainly no conservative.

You've already been instructed that most Conservatives SUPPORT a MW raise, so don't try to slip that foolishness by us again. You got burned with it before. Now you're burned with it again. Maybe you're a masochist ?

Bwa ha ha ha ha.

Anyone who supports a rise in the minimum wage most likely you isn't a conservative. You aren't a conservative. I don't know where you get this stat, but most likely it misdefines the term "conservative," just like you do. Conservatives don't support socialism and big government.

Your delusions about your forum achievements are charming, to say the least.

 

[bripat9643]

I'm outta here. I, et al also, have already made our points. Crystal clear.

Yes, you've proven you're an economic ignoramus and a buffoon. That much is crystal clear.

 

[bripat9643]

He said it would cause jobs to be lost. FALSE! Employers function with a number of employees that bring them the most income/profit. They CANNOT reduce staff. Any more or less employees results in SALES and income reduction. Layoffs result in losses, not gains.

Where is the chart that shows employers the precise number of employees they should hire in order to get the most income/profit?


He (and Banderas too) said prices would be raised (or fees created) to compensate for the wage losses, and these losses would just be "passed on" to the customers. More FALSE! scare talk. Businesses CANNOT raise prices because they are already fixed at a market price, related to maximization of sales/income. Any change in price (up or down) results in reduction of SALES and income.
Where is the chart that shows employers the precise price level they need in order to get the most sales/income?

He said businesses will move away from LA. FALSE! (in most cases). Does Gamm think that closing down a business and moving to another location can be done scott (no pun intended) free ?

Did anyone say moving was free?

Depending on the business, moving costs can vary from just barely economical, to completely UNeconomical, and the latter is much more often the case. Imagine a machine shop with over 100 large production machines, having to pack then all up and move miles away.

Imagine a machine shop with over 100 large production machines, having to pay higher wages than the business could support. Imagine that business running at a loss, just because some politicians, who couldn't pass an Econ 101 class, created a stupid law.

1. The "chart" is in their books. It is the dollar amounts of sales that comes from selling at various prices. That price than brings them the most sales is the "MARKET PRICE". This is the price you see on the shelves for all products. Rather than do the trial and error approach, many employers just use the copycat method and just go with what competitors are charging.

That's just plain wrong. The market price is the price the produces the greatest profit. Zero is the price that brings in the most sales.

Talk about someone who doesn't know anything about economics. You should just shut your mouth on the subject before you embarrass yourself further.

Obvious to anyone with a brain, when I said the market price is the price that brings in the most sales, I was talking about the price at the top of the bell-shaped curve of prices vs income, which brings in the most profit-generating sales, RELATIVE to other prices along the curve. If you understood this simple graphic, you wouldn't have had trouble understanding what I was saying. On the left side of the bell, are prices that, of course, could bring in more sales, but that's meaningless because the price is too low to maximize income. That's understood. On the right side of the bell, there are less sales than at the MP AND less income, as sales drop off becau se the price has gone too high.

ROFL! So now your admitting the market price is not the one that brings in the most sales. You seem to be trying to say it's the price that brings in the most profit without actually saying it.

If a firm thought raising the price would produce more profit, it would have done that already prior to an increase in the minimum wage. So how does raising the MW suddenly allow it to make more profit at a higher price?

 

[bripat9643]

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

You have yet to explain why sales would increase if wages are increased. Do sales increase when the cost of materials increase? Does a rise in the price of beef cause the sales of McDonald's hamburgers to increase?

 

[Anathema]

That doesn't make a grain of sense.

Let's see if this will explain it.....

A fast food restaurant sells their delux burger for $3.25 while their employees are making $7.50 an hour. If they start paying their employees $10 an hour and the price of the burget stays the same, then they were overcharging for the burget when they were paying $7.50 an hour because somehow they're able to eat (haha) the added expense without changing the price. If the cost of the burger goes up when they increase the hourly rate then they've exceeded my value estimate for their product. They are also now overpaying their employees for their level of skill and the level of necessiry of their job. Either way, I no longer want to do business with them.

 

[rightwinger]

First increase profit margins, then we can discuss increasing the minimum wage.

Profit margins have increased...wages have not

Corporations are in record growth....employees don't see any of it

 

[BlackSand]

Do you even realize how hollow this response is? You don't even have an argument. Any idiot taking an Econ class knows that consumer spending is what drives this economy. Consumer spending comes from paychecks. This isn't hard to grasp.

Consumer spending doesn't give a shit whose paycheck any money comes from.
You can be a consumer with or without a paycheck ... There are a lot of people buying stuff that don't get a paycheck.

.

 

[rightwinger]

I have seen the price of burgers increase dramatically over the last year. The wages did not go up, the price of beef did

Prices were raised accordingly and the market adjusted to the new price of hamburgers. Same thing happens with wages

 

[Dragonlady]

Every cost associated with the making and selling of burgers had increased over the past 20 years except the minimum wage. Burger chains are recording record profits and yet somehow, the work for the people who make and sell the burgers is not worth more. That's some twisted logic you conservatives have got going there.

 

[bripat9643]

Every cost associated with the making and selling of burgers had increased over the past 20 years except the minimum wage. Burger chains are recording record profits and yet somehow, the work for the people who make and sell the burgers is not worth more. That's some twisted logic you conservatives have got going there.

Costs have increased inline with the rate of inflation, just like the minimum wage. The only exception has been the cost of meat which has become more expensive because of government ethanol mandates.

 

[bripat9643]

I have seen the price of burgers increase dramatically over the last year. The wages did not go up, the price of beef did

Prices were raised accordingly and the market adjusted to the new price of hamburgers. Same thing happens with wages

The market "adjusted," which means sales declined.

 

[Toddsterpatriot]

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.

Regardless of whatever the hell it was you just said, companies may have no wage employees at all, and still benefit from THOUSANDS of MW raised customers. There. I fixed it for you.

companies may have no wage employees at all, and still benefit from THOUSANDS of MW raised customers

Which means the companies with many MW employees will benefit even less than if they recaptured the entire increase in higher sales.
Hmmmmmm.....some might even go under.
Unless your OP explained why unprofitable businesses can't go under?