Minimum Wage --Prevents-- Wealth Acquisition!

[Andylusion]

Which companies?

Which companies what ? squander resources?
Oh , phararma. I can't say the specific name of the company, sory, I signed a confidentiality agreement.

Having worked in Pharma myself, I didn't see many there working minimum wage.

That said, as far as examples, before you even responded, I suspected you would list a company in an industry that is heavily regulated and subsidized. Not surprisingly I was right.

In an unsubsidized, unregulated industry, waste is reduced by market forces. Two companies competing with similar products, the one that reduces waste the most, will often do better in the market.

When competition is regulated away, and waste is subsidized, then of course you end up with high levels of inefficiency.

 

[Andylusion]

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

1) I don't really care how much an CEO earns.
2) That doesn't mean it doesn't harm the economy as a whole:
Lately much of the consumption has bee driven by an increase in private debt. This situation is not sustainable in the long run.
In order to have a stable economy an increase in productivity must be coupled with an increase in median wages.

But we've already established that it doesn't harm the economy as a whole. And unless you think 1/2 penny an hour would solve consumer debt, there isn't much a point in bringing that up.

 

[Andylusion]

1A: Who cares? It shouldn't matter to you how much the CEO makes, and his "efficiency" doesn't matter.

Well all the free market system's goal is that : the efficient allocation of resources.

Frankly I couldn't care less about any CEO's performance , but, whenever I hear someone complaining that there are no incentives to invest or that profit margins are low , well franky I have to point out that consumer' don't have money to spend while proffits are going into re-purchasing of assets, so it is not a lack of resources preventing investment. It's just that climbing the asset bubbles is more profitable ( In this case the Fed is equally guilty for maintaining ZIRP ) ... until they burst.

... and frankly if households are in debt and have no money who do you expect to be buying the goods created by companies? and why would anyone invest in a shrinking debt ridden market?

The only way out , other than increasing debt is increasing the exports to a countries which currently has positive trade balances.

Consumer debt has nothing to do with any of those.

Michael Jackson made an estimated billion dollars during his lifetime. When he died, he was on the verge of bankruptcy, and was in the process of selling off parts of his estate.

Debt is simply a function of people buying stuff they can't afford. It's no more complicated than that. Doesn't matter what so-and-so does, or doesn't do, or how much they invest where.

And I'm suggesting there is a lack of resources to invest. The fact remains, if I can earn an ROI of 20% in India, and only 2.3% here in the US, where am I going to invest? In India.

GM may import a Buick built in China

Why do you think GM is planning to build Buicks in China, and import them into the US?

Union labor is too high, and they can make the same car, cheaper in China, and import it to the US.

Incentives. It's all about incentives. Not lack of resources.

The solution is people live within their means. If we encouraged people to save and invest, instead of blowing money on consumables, we wouldn't be having that in this conversation.

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

 

[EdwardBaiamonte]

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes. Jobs and Gates are heroes. Imagine if they had been raised in today's liberal households where the top 1% are vilified. They would probably have become liberal community organizers rather than inventors or suppliers of huge Republican innovations.

 

[CultureCitizen]

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

1) I don't really care how much an CEO earns.
2) That doesn't mean it doesn't harm the economy as a whole:
Lately much of the consumption has bee driven by an increase in private debt. This situation is not sustainable in the long run.
In order to have a stable economy an increase in productivity must be coupled with an increase in median wages.

But we've already established that it doesn't harm the economy as a whole. And unless you think 1/2 penny an hour would solve consumer debt, there isn't much a point in bringing that up.

No. You had establish that. The minimum wage is an extreme case.

The real problem is that productivity is decoupled from income. The decoupling could be worse if there was no minimum wage ( specially with 11 million illegals ) . This means that the internal market is roghly the same size than 20 years ago, aditional growth has been achieved at the cost of debt ( not just mortgage debt, though that is the main component of household debt), but also corporate debt and government debt (which became even larger after the SPM crisis ) .

As bad as ZIRP is, the good news is that it has stopped the debt from getting worse. But it is awfull for people near retirement age and for those holding savings.

This decoupling happened also during the early stages of capitalism also, but it took 40 years before it somehow got fixed.
It is not clear what exactly made the salaries grow again, so it is uncertain if the market will arrange this decoupling by itself.

If something is clear from the circular flow of macroeconomy is that if households don't grow, then the trade balance has to grow or the government has to grow( even through debt). But you can't have it all the way most republicans want it :
A) low wages, high income inequallity
B) Small government
Unless the trade balance changes drastically, and then, I think it's better to have more dependency on local economy ( the internal market ) than on the foreign economy which is a lot harder to controll ( and will become even harder to controll as other economies start to catch up with the US or even surpass it).

Macroeconomy is NOT microeconomy multiplied by N !!

 

[CultureCitizen]

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes. Jobs and Gates are heroes. Imagine if they had been raised in today's liberal households where the top 1% are vilified. They would probably have become liberal community organizers rather than inventors or suppliers of huge Republican innovations.

Oh Ed,
I didn't know you were a secret fan of Obama.

 

[EdwardBaiamonte]

The real problem is that productivity is decoupled from income.

the beauty of Republican capitalism is that it links them. So if we want a more equal sharing of wealth as productivity rises we need to switch to Republican capitalism.

Do you have the IQ to understand?

 

[EdwardBaiamonte]

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes. Jobs and Gates are heroes. Imagine if they had been raised in today's liberal households where the top 1% are vilified. They would probably have become liberal community organizers rather than inventors or suppliers of huge Republican innovations.

Oh Ed,
I didn't know you were a secret fan of Obama.

Obamacare proves Obama is a socialist not a capitalist so why would I be a fan.

 

[dblack]

The real problem is that productivity is decoupled from income.

Why is that a problem?

 

[EdwardBaiamonte]

The real problem is that productivity is decoupled from income.

Why is that a problem?

well, we want all Americans to have a rising standard of living as Republican capitalist inventions are supplied so ideally that standard of living would be tied to general productivity increases. I cant think of what would be better to tie it to.

 

[CultureCitizen]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

 

[CultureCitizen]

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes. Jobs and Gates are heroes. Imagine if they had been raised in today's liberal households where the top 1% are vilified. They would probably have become liberal community organizers rather than inventors or suppliers of huge Republican innovations.

Oh Ed,
I didn't know you were a secret fan of Obama.

Obamacare proves Obama is a socialist not a capitalist so why would I be a fan.

Indeed , he is a 0.1%.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes.

 

[EdwardBaiamonte]

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes.

better that they be vilified by liberal swine??

 

[EdwardBaiamonte]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

of course that has nothing to do with link between income and productivity. You lack the IQ to be here.

 

[CultureCitizen]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

of course that has nothing to do with link between income and productivity. You lack the IQ to be here.

Well Ed,
I'd say you lack the IQ to be alive at all . But since you've apparently made it past puberty , I'll have to bear with you and your obnoxious comments.

 

[CultureCitizen]

The solution is people live within their means. If we encouraged people to save and invest, instead of blowing money on consumables, we wouldn't be having that in this conversation.

Just people ?
If you look at the charts in my previous post you'll see that households and corporations are equally indebted.
So how do you propose to encourage corporations to "save and invest instead of blowing money on" ... whatever they are spending it.

 

[Andylusion]

The solution is people live within their means. If we encouraged people to save and invest, instead of blowing money on consumables, we wouldn't be having that in this conversation.

Just people ?
If you look at the charts in my previous post you'll see that households and corporations are equally indebted.
So how do you propose to encourage corporations to "save and invest instead of blowing money on" ... whatever they are spending it.

That's true. Corporations though, are simply a group of people. If we teach people to save and invest, and not be in debt, that will filter into the corporations...... to some extent.

The other side to the coin, is that there are additional incentives created by government, that affect corporations.

I personally, only learned about this in the last year. I was listening to a podcast of a show that focused on finances. In the process, a guy called in asking how he should replace some equipment. The host suggested the obvious, save up the cash, and buy it.

The business owner then explained that to do that would take longer than a year, and the money in the bank would have to be reported as profit, and thus taxed at the 35% corporate tax rate.

Instead, he planned to use the money as a down payment on the equipment, borrow the rest, and then not only would he avoid paying 35% tax on the money, but he could use the interest as a tax deduction.

So the answer to your question is simple. Lower corporate tax rates, and eliminate tax deductions incentives to borrow.

 

[Andylusion]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

of course that has nothing to do with link between income and productivity. You lack the IQ to be here.

Well Ed,
I'd say you lack the IQ to be alive at all . But since you've apparently made it past puberty , I'll have to bear with you and your obnoxious comments.

Ed is frustrated with other posters that are obnoxious as well. That's spilling over onto you. He's normally not like this.

 

[Andylusion]

But if you really want to increase exports, the solution is the same. Make the economy more competitive, with lower regulation, and higher profit margins.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes. Jobs and Gates are heroes. Imagine if they had been raised in today's liberal households where the top 1% are vilified. They would probably have become liberal community organizers rather than inventors or suppliers of huge Republican innovations.

Oh Ed,
I didn't know you were a secret fan of Obama.

Obamacare proves Obama is a socialist not a capitalist so why would I be a fan.

Indeed , he is a 0.1%.

and lets not forget the best way to make the economy more competitive starts with recognizing the top 1% as our heroes.

While I do not necessarily consider them heroes.... I think some ideological bents tend to completely ignore all the good they do.

Walmart, Oracle, Microsoft, L,Oreal, Bloomberg, Amazon, Google, Aldi, Apple, Dell, Disney, and on and on and on....

These are short list of people on the top 50 Billionaires in the world today.

But they directly employ millions on millions of people, and provide hundreds of billions worth of goods around the world, and to top that off, there are hundreds of millions of 1-off jobs created by those people.

How many people have a job in Info-Tech, because of Jobs and Gates Apple/Microsoft?

How many people have jobs driving tractor-trailers because of Walmart?

How many people have data-base / sysadmin jobs because of Oracle?

And I could go on and on and on with that.

Again, does that mean I worship them? Of course not. Some of these people are really messed up in the head. Some of them are complete nut-jobs.

But when people say "oh the rich don't do anything"... bull crap. Hundreds of millions of jobs, only exist because these people created them. Trillions of dollars worth of goods that make are standard of living better, only exist because these people made them.

Did they do it explicitly for our personal benefit? Of course not. Some of them were poor, and just wanted to live rich. Doesn't change the fact we benefit.

 

[Andylusion]

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

1) I don't really care how much an CEO earns.
2) That doesn't mean it doesn't harm the economy as a whole:
Lately much of the consumption has bee driven by an increase in private debt. This situation is not sustainable in the long run.
In order to have a stable economy an increase in productivity must be coupled with an increase in median wages.

But we've already established that it doesn't harm the economy as a whole. And unless you think 1/2 penny an hour would solve consumer debt, there isn't much a point in bringing that up.

No. You had establish that. The minimum wage is an extreme case.

The real problem is that productivity is decoupled from income. The decoupling could be worse if there was no minimum wage ( specially with 11 million illegals ) . This means that the internal market is roghly the same size than 20 years ago, aditional growth has been achieved at the cost of debt

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

1) I don't really care how much an CEO earns.
2) That doesn't mean it doesn't harm the economy as a whole:
Lately much of the consumption has bee driven by an increase in private debt. This situation is not sustainable in the long run.
In order to have a stable economy an increase in productivity must be coupled with an increase in median wages.

But we've already established that it doesn't harm the economy as a whole. And unless you think 1/2 penny an hour would solve consumer debt, there isn't much a point in bringing that up.

No. You had establish that. The minimum wage is an extreme case.

The real problem is that productivity is decoupled from income. The decoupling could be worse if there was no minimum wage ( specially with 11 million illegals ) . This means that the internal market is roghly the same size than 20 years ago, aditional growth has been achieved at the cost of debt ( not just mortgage debt, though that is the main component of household debt), but also corporate debt and government debt (which became even larger after the SPM crisis ) .

As bad as ZIRP is, the good news is that it has stopped the debt from getting worse. But it is awfull for people near retirement age and for those holding savings.

This decoupling happened also during the early stages of capitalism also, but it took 40 years before it somehow got fixed.
It is not clear what exactly made the salaries grow again, so it is uncertain if the market will arrange this decoupling by itself.

If something is clear from the circular flow of macroeconomy is that if households don't grow, then the trade balance has to grow or the government has to grow( even through debt). But you can't have it all the way most republicans want it :
A) low wages, high income inequallity
B) Small government
Unless the trade balance changes drastically, and then, I think it's better to have more dependency on local economy ( the internal market ) than on the foreign economy which is a lot harder to controll ( and will become even harder to controll as other economies start to catch up with the US or even surpass it).

Macroeconomy is NOT microeconomy multiplied by N !!

not just mortgage debt, though that is the main component of household debt), but also corporate debt and government debt (which became even larger after the SPM crisis ) .

As bad as ZIRP is, the good news is that it has stopped the debt from getting worse. But it is awfull for people near retirement age and for those holding savings.

This decoupling happened also during the early stages of capitalism also, but it took 40 years before it somehow got fixed.
It is not clear what exactly made the salaries grow again, so it is uncertain if the market will arrange this decoupling by itself.

If something is clear from the circular flow of macroeconomy is that if households don't grow, then the trade balance has to grow or the government has to grow( even through debt). But you can't have it all the way most republicans want it :
A) low wages, high income inequallity
B) Small government
Unless the trade balance changes drastically, and then, I think it's better to have more dependency on local economy ( the internal market ) than on the foreign economy which is a lot harder to controll ( and will become even harder to controll as other economies start to catch up with the US or even surpass it).

Macroeconomy is NOT microeconomy multiplied by N !!

People whose labor is worth less money, than the minimum wage, are unemployed.

Now are you interested in what's best for your graph? Or what's best for those people who are currently earning $0/hour? Sometimes smart people get so focused on their graphs and charts, they miss the purpose. What is best for the unemployed worker? To get a job that at least earns something? Or to be unemployed, thus not counted on a graph, so your chart looks better?

If Republicans wanted wages to be low, they sure failed.

America IS the 1%: You need just $34,000 annual income to be in the global elite... and HALF the world's richest people live in the U.S.

A truck driver is the top 1%. Assistant manager at Burger King is the top 1%.

But let's review where we are.

You pointed out that wages are decoupled from productivity. I generally agree.

Theory... CEO pay is too high, and if we confiscated it, and distributed it to the employees, that would fix the difference.

Reality: McDonald's CEO makes 1.1 Million (Much of which isn't cash), and has 1.7 Million workers. That's 64 cents a year, per employee.

CEO pay is not the cause of low wages.

Alternative theory: Does the data include all taxes, and benefits, fees and mandates? Does the chart include money spent to meet regulations and controls on business?

The chart that looks at raw wages does not seem to include all the costs of doing business.

The amount of money that can be paid out in wages, is reduced by taxes, unemployment compensation, and so on, plus benefits such as health care mandates.

I worked at a factory years ago, and they paid $8/hour. Why? Because like most factories, they don't know when the orders are going to dry up. When worked slowed down, they sent people home. When people went home, they applied for unemployment compensation. When they collected unemployment compensation, the company had to pay out

That seems obvious, but most fail to grasp that also regulations and controls on the business itself, have the same effect. If I have to pay out a million dollars in EPA expenses to clean up some aspect of my operation... where do you think that money comes from? Lower wages.

I can't pay you in wages, the money I spent meeting some arbitrary EPA guideline.

You noticed that the divergence in productivity and pay, really became obvious in the 1970s. Regulations exploded in the 1970s. Coincidence? Possibly. I doubt it.