The Rich Don't Create Jobs

[thereisnospoon]

First, taxes are not materialized into existence with a fairy and that capitol does not come from nothing. It must first be taken. So your analogy would be better stated as taking the million from the business owner and distributing it to the people.

How about if the business owner has TWO million he's sitting on, then, and the government proposes to tax ONE million and give it to the people?

The point of the analogy was not that it realistically depicts anything that can actually happen in every detail, but that it illustrates that giving more money to people who already have plenty and AREN'T investing it won't accomplish anything. Spreading some (not all) of that money around to those who DON'T have it, and therefore aren't spending it, will.

Of course, when you get down to details, it's important to consider how you go about doing that. But there's no point in considering those details until you acknowledge the plain, obvious overall principle: more money to the rich does NOT create jobs. More money to the middle class and poor DOES.

What it also fails to take into account is the fact that taking that cash from the business owner will have 3 possible effects: it can de-incentivize his creation of the business in the first place.

It's possible that there's a level of reduced profit margin that would do this. Do you have any idea what that level is? Will you acknowledge that there is also a lower level of reduced profit margin that will NOT do this?



No. A business does not charge its customers what it MUST. It charges its customers what it CAN. If the market would bear an increased price, an increased price would already be charged. Now, it is possible that, for a short time, increased consumer demand would result in higher prices, but only until the business and/or its competitors increased production to meet that higher demand.



What reinvestment into the company? Why would anyone invest in a company when there is insufficient consumer demand for its products to justify that investment?



On the contrary, I have taken money that was not being invested and put into the hands of people who will spend it. It was idle money, now its consumption money. Consumption drives investment, so it also increases the amount of the accumulated capital that will be invested (since nobody is talking about taking literally ALL of it).

This is the hole in supply-side thinking: the failure to understand that just because capital has been accumulated does NOT mean it will be invested in anything that creates jobs. That will happen only to the extent that consumer demand justifies doing it.



That's one reason why I keep saying "middle class AND poor" and not just "poor." But let me tell you what would have a bigger and better effect on the disparity of income, and hence on the economy, than anything we could do with the tax code. If the government were to strictly enforce labor law and the right to form unions as it did in the 1950s and 1960s, that would drive wages up, which would redistribute wealth. If at the same time it were to crack down on employment of illegal immigrants, that would reduce the labor glut, which would drive wages up, which would redistribute wealth. If at the same time it were to set trade and tax policy to discourage outsourcing rather than encourage it, that would also drive wages up, which would boost consumer demand which would help the economy.



Agreed about the middle class. More generally, the bigger and more secure the middle class is, the better the economy performs. The more jobs there are that provide a middle-class income, the better the economy performs. But we cannot do this and at the same time help/encourage the rich to become as rich as possible, because these are mutually exclusive goals.

As for the rich, the problem isn't that they CAN'T "surge the economy forward." It's that, under present demand conditions, they WON'T. Reducing their ability to do so slightly, in order to increase their incentive to do so by increasing demand for consumer products, is a net gain.



But I'm NOT ignoring that. I'm taking it for granted, and I have every reason to do so. Capital is not going to disappear. In a capitalist economy, it always exceeds consumer demand. The economy has suffered a downturn over and over for lack of consumer demand, but it has NEVER suffered a downturn for lack of financial capital. Accumulation of capital is a problem only for an economy trying to bootstrap itself into industrialized production and out of an agrarian, pre-industrial state. But we finished that job a long time ago. We have a mature economy, and in a mature capitalist economy the problem is always consumer demand, not capital formation.



No, a flat tax would hurt the middle class. The only way that a flat tax has ever been presented as beneficial to the middle class is by drastically understating the level it would have to be set at to cover current and projected government expenses.

Or do you think that the meme on the left that MOST rich people pay a lower percentage of their income in taxes than the middle class is actually true? I'll grant you (and my somewhat-confused left-wing peers) that there are SOME rich people who do this, but most pay a higher percentage of their income than the average. This means that most rich people would receive a tax cut from any realistic flat tax. The poor might come out with a wash, depending on how much income is set aside as non-taxable. It's the middle class that would get screwed.

No, they would destroy any investment at all as there would be zero reward for risking your capitol after the government confiscated all the profits.

I refer you to the 1950s and early 1960s, when the top marginal tax rate was at 91% on incomes above $1.6 million (in today's dollars -- nominal dollar amount was lower but that was in 1950s money) and the result you predict did not occur. How do you explain that?

I can explain it, of course. Most investment simply does not come from people in that stratospheric level of income. Most investment comes from smaller investors or from entrepreneurs starting new businesses or expanding existing ones, whose incomes are nowhere near the level where they would run into that kind of tax bite. And since the policies of that time, taken altogether, increased consumer demand over what we have now, the net effect was MORE investment in job-creating activities, not less.

Also simply raising wages accomplishes nothing. If the lowest McDonalds worker earned a million dollars an hour there would be no difference in their economic status. The value of the cash he is paid will naturally fall to equal the value his labor adds in real goods. It would be reflected by the fact a burger would cost you 500 thousand dollars to purchase. This idea that raising labor costs will not affect the price of the goods you are raising the labor costs to buy is absolutely nuts. On what planet are the labor costs not DIRECTLY ties to the cost of the product?

This one. Or at least, on this one labor costs do not DETERMINE the price of the product. That's how my father, who worked as a machinist in the '50s and '60s, could support a non-working wife and three children, send all of us to college, own a home and two cars, all on one full-time blue-collar income. There were a lot of jobs like that in those days. Did the higher wages of those times evaporate in higher prices? No, they did not.

Once again, a business charges its customers what it CAN -- what they can and will pay -- not what it MUST. If it can raise prices, it does. If it can't, because its customers can't or won't pay that much, it doesn't. Generally speaking, except in a few industries that operate very near the bone, rising labor costs don't result in higher prices, or at any rate not in prices rising anywhere near whey would absorb all the wage gains, and on the other side, dramatically FALLING labor costs -- such as when a manufacturer moves its operation to China -- don't result in DROPPING prices that fully reflect the drop in production costs. Prices of goods produced in third-world countries have indeed fallen, but by only a fraction of the companies' savings.

Your premise is based on confiscation and redistribution. So let's say we try it your way.
The business owner LOSES one million. The government( at least this admin) is charged with the duty to redistribute the one million. What's next? Just write checks to people? Seriously? What kind of incentive does that leave for business to produce?
Why would any person or group want to invest in a new venture knowing full well that government is now essentially the "profit police".
Guess what? Not happening. EVER. At least not in our lifetime.
All of you who wish to live in a socialist utopia will have to go elsewhere.
Oh....I almost fell out my chair when I read this.....
"If the government were to strictly enforce labor law and the right to form unions as it did in the 1950s and 1960s"....
First, the federal government has no authority to mandate the right to form unions. That issue is for the states to decide. There are 28 forced union or closed shop states in which at the most, 20% of workers are unionized and there are 22 right to work states. All that entails is a simply that a prospective employee or existing worker cannot be compelled to join a labor organization as a pre requisite for employment nor can that worker be compelled to join a union or pay dues to a union. In those states unionization is on the order of less than 5%.
The federal government never had the authority to mandate unionism.
Unions are being incrementally shut out of the labor market for many reasons. One is unions artificially drive up labor costs which drives up the price of union made goods to the point where those products are priced at non competitive levels.

 

[bripat9643]

OECD has come to the conclusion that "trickle down economics" has failed. If anyone cares what the people who actually study this stuff for a living think...

OECD calls time on trickle down theory - The Globe and Mail

Real economists have come to the conclusion that the free market works. Government doesn't work. The OECD is a gang of political hacks.

 

[FA_Q2]

First, taxes are not materialized into existence with a fairy and that capitol does not come from nothing. It must first be taken. So your analogy would be better stated as taking the million from the business owner and distributing it to the people.

How about if the business owner has TWO million he's sitting on, then, and the government proposes to tax ONE million and give it to the people?

The point of the analogy was not that it realistically depicts anything that can actually happen in every detail, but that it illustrates that giving more money to people who already have plenty and AREN'T investing it won't accomplish anything. Spreading some (not all) of that money around to those who DON'T have it, and therefore aren't spending it, will.

Of course, when you get down to details, it's important to consider how you go about doing that. But there's no point in considering those details until you acknowledge the plain, obvious overall principle: more money to the rich does NOT create jobs. More money to the middle class and poor DOES.

The supposition is both true and false though. Giving more to the rich CAN create jobs in that it spurs investment. If there is greater profits there can be greater risks. That is simple economics and the reason why absolutely no one is talking about raising the capital gains tax. Now before we go further, I am going to concede that in this current economy, it is not the lack of capital that is the problem so in our current situation cutting taxes on the rich is worthless for the most part.

On that same token, more money in the hands of the poor and middleclass also creates jobs. The problem is that they need jobs in the first place in order to get that money and government crating non productive jobs or 'spreading' the wealth is not going to help that situation. At best, it creates a temporary band aid and at worst it will sink us further than we are now. The problem as I see it is that in the past such a band aid was helpful because the economy corrected itself. There is a different world out there today though and that is why I think the stimulus hurt more than anything. The underlying sickness is not gone and we have nothing to show for it. We need to fix the source of the problem.

What it also fails to take into account is the fact that taking that cash from the business owner will have 3 possible effects: it can de-incentivize his creation of the business in the first place.

It's possible that there's a level of reduced profit margin that would do this. Do you have any idea what that level is? Will you acknowledge that there is also a lower level of reduced profit margin that will NOT do this?

Of course. That level is different for each buisness though and largely depends on the current state of the economy. In other words, we are at that point for the vast majority of business today.

No. A business does not charge its customers what it MUST. It charges its customers what it CAN. If the market would bear an increased price, an increased price would already be charged. Now, it is possible that, for a short time, increased consumer demand would result in higher prices, but only until the business and/or its competitors increased production to meet that higher demand.

That is utterly false and completely ignores the how business works. As an example:
I create product A at a cost of 100 dollars. If I charge 200 to sell the product I can make a profit of 100 per unit. HOWEVER, if I sell that same product at 150 my customer base could easily double or even exceed that so that the lower cost INCREASES my profit. Now, if you take some of that profit away making the product cost, say 130, per unit then the 150 dollar price is now no longer acceptable. Increasing my price to 200 is now the favorable option because I will increase profits even though I will lose half my customer base.

You see, taking cash from business is not going to simply net you cash without consequences as you seem to be implying. They are going to make up the lost income or simply get out of the business entirely. Businesses charge whatever maximizes their profit weather that is through lowering the price or raising it. Each time you dip your hand into a business's profits the end item must raise in price. That is the only way a business can stay on top. You seem to be operating under the impression that a business nets these huge profit margins. I can assure you that the VAST majority of business certainly does not. Sure, you hear about the massive corporations that do so but that is not the average business. My father's construction business in its height routinely seen expenses well in excess of a million dollars EVERY MONTH. He never seen profits that were past six figures a year. That is an extremely small margin of profits. Today, the business is at zero profits. It remains open solely because he does not want to pull out before the economy returns as that would be a massive missed opportunity. The vacuum left from others going out of business will be rather large. However, his patence is waning and it is likely that he will shut down soon.

What reinvestment into the company? Why would anyone invest in a company when there is insufficient consumer demand for its products to justify that investment?

Business owners tend to be completely invested into their business. That is in general how small business works.

On the contrary, I have taken money that was not being invested and put into the hands of people who will spend it. It was idle money, now its consumption money. Consumption drives investment, so it also increases the amount of the accumulated capital that will be invested (since nobody is talking about taking literally ALL of it).

This is the hole in supply-side thinking: the failure to understand that just because capital has been accumulated does NOT mean it will be invested in anything that creates jobs. That will happen only to the extent that consumer demand justifies doing it.

There is no 'idle' money. It does not exist in the general sense. In order for your cash to be idle, you would need to put it in a tin can and burry it or stuff it in your couch. Otherwise, that cash is not idle. Your also still ignoring the effect that taking the cash had in the first place. Little more on that later.

That's one reason why I keep saying "middle class AND poor" and not just "poor." But let me tell you what would have a bigger and better effect on the disparity of income, and hence on the economy, than anything we could do with the tax code. If the government were to strictly enforce labor law and the right to form unions as it did in the 1950s and 1960s, that would drive wages up, which would redistribute wealth. If at the same time it were to crack down on employment of illegal immigrants, that would reduce the labor glut, which would drive wages up, which would redistribute wealth. If at the same time it were to set trade and tax policy to discourage outsourcing rather than encourage it, that would also drive wages up, which would boost consumer demand which would help the economy.

Trade policy is a big one on that as that is where our ills are actually centered on but the love of unions is misplaced. Certainly the right to form and join a union should be strictly enforced but that is not what you have been talking about. Can you point out where it is not strictly enforced today? I doubt that there is any large scale denial of union rights outside of some government positions.


As you pointed out though, we need a trade policy WITH those higher wages or all you are going to get is off shoring of those same jobs.

As for the rich, the problem isn't that they CAN'T "surge the economy forward." It's that, under present demand conditions, they WON'T. Reducing their ability to do so slightly, in order to increase their incentive to do so by increasing demand for consumer products, is a net gain.

The ultimate problem here though is that government can't accomplish this.

But I'm NOT ignoring that. I'm taking it for granted, and I have every reason to do so. Capital is not going to disappear. In a capitalist economy, it always exceeds consumer demand. The economy has suffered a downturn over and over for lack of consumer demand, but it has NEVER suffered a downturn for lack of financial capital. Accumulation of capital is a problem only for an economy trying to bootstrap itself into industrialized production and out of an agrarian, pre-industrial state. But we finished that job a long time ago. We have a mature economy, and in a mature capitalist economy the problem is always consumer demand, not capital formation.

However, INVESTMENT can be a problem and that is what you are ignoring. There is no investment without profit motive PERIOD. Every dime you remove from that profit motive has a clear effect in reducing the amount of investment that occurs. You cannot take cash from that system and then expect, magically, any fallout not to occur.

No, a flat tax would hurt the middle class. The only way that a flat tax has ever been presented as beneficial to the middle class is by drastically understating the level it would have to be set at to cover current and projected government expenses.

Or do you think that the meme on the left that MOST rich people pay a lower percentage of their income in taxes than the middle class is actually true? I'll grant you (and my somewhat-confused left-wing peers) that there are SOME rich people who do this, but most pay a higher percentage of their income than the average. This means that most rich people would receive a tax cut from any realistic flat tax. The poor might come out with a wash, depending on how much income is set aside as non-taxable. It's the middle class that would get screwed.

It is not a left wing mime, it is a cold hard fact and only true because of one thing: income is not defined as income in the tax code. Somehow capital gains magically becomes non-income. This is another thread entirely though but I must say at least this - I do not support a flat tax without tiers. A flat tax to me is a tax that has no loopholes, provisions, credits or deductions. The reason that you mention a flat tax as it is presented is likely because there are no flat taxes truly being presented at this time. Cain's proposal was a shift from income taxes to sales tax, an asinine idea, and other than that I have heard little in actual true tax reform.

No, they would destroy any investment at all as there would be zero reward for risking your capitol after the government confiscated all the profits.

I refer you to the 1950s and early 1960s, when the top marginal tax rate was at 91% on incomes above $1.6 million (in today's dollars -- nominal dollar amount was lower but that was in 1950s money) and the result you predict did not occur. How do you explain that?

I can explain it, of course. Most investment simply does not come from people in that stratospheric level of income. Most investment comes from smaller investors or from entrepreneurs starting new businesses or expanding existing ones, whose incomes are nowhere near the level where they would run into that kind of tax bite. And since the policies of that time, taken altogether, increased consumer demand over what we have now, the net effect was MORE investment in job-creating activities, not less.

For one, you are talking about an entirely different world where jobs were FAR less mobile. I would also like to know more about the tax code as a WHOLE. The top marginal rate is meaningless. Were there any deductions? Did the tax code work in a similar fashion as it does today? I do not know enough about the specifics of that time to answer you. I do know that there were massive differences in the state of the world in 1950 and the state of the world today.

Also simply raising wages accomplishes nothing. If the lowest McDonalds worker earned a million dollars an hour there would be no difference in their economic status. The value of the cash he is paid will naturally fall to equal the value his labor adds in real goods. It would be reflected by the fact a burger would cost you 500 thousand dollars to purchase. This idea that raising labor costs will not affect the price of the goods you are raising the labor costs to buy is absolutely nuts. On what planet are the labor costs not DIRECTLY ties to the cost of the product?

This one. Or at least, on this one labor costs do not DETERMINE the price of the product. That's how my father, who worked as a machinist in the '50s and '60s, could support a non-working wife and three children, send all of us to college, own a home and two cars, all on one full-time blue-collar income. There were a lot of jobs like that in those days. Did the higher wages of those times evaporate in higher prices? No, they did not.

Once again, a business charges its customers what it CAN -- what they can and will pay -- not what it MUST. If it can raise prices, it does. If it can't, because its customers can't or won't pay that much, it doesn't. Generally speaking, except in a few industries that operate very near the bone, rising labor costs don't result in higher prices, or at any rate not in prices rising anywhere near whey would absorb all the wage gains, and on the other side, dramatically FALLING labor costs -- such as when a manufacturer moves its operation to China -- don't result in DROPPING prices that fully reflect the drop in production costs. Prices of goods produced in third-world countries have indeed fallen, but by only a fraction of the companies' savings.

Again, false. Labor costs DIRECTLY impact the cost of the end product. FACT: if it costs 10 bucks to make a hamburger the price WILL be more than 10 bucks. There is absolutely zero way to get around this fact. You can dance around demand all you want but when you raise the cost of production you raise the cost of the unit. If you manage to raise that cost past the demand then what you are left with is no product, a poor rich man and a whole lot of people out of a job. IOW, you end up where we are today....

You can do all the things that you stated today as well anyway. I have a single income, own a few cars and a home (my kid has not gone to college yet though). There is nothing stopping you from doing that. The reason that there are fewer of those jobs though has zero to do with the income disparity. It has far more to do with trade policy and the massive idiocy of Americans when it comes to credit. I can own my own home, drive 2 cars and do whatever the hell I feel like not because I make a stellar living. I do it because, other than my home and one car, I have NEVER had a line of credit. Again though, another thread...


Oh boy, far too much and way too many different things here in one post

 

[FA_Q2]

That's why, in the past when THIS WAS ACTUALLY DONE SUCCESSFULLY (note: THAT is "reality"), a "tax shelter" was provided in the form of a deduction for investment in job-creating activity. The idea of a confiscatory tax isn't to collect it. It is precisely to drive the income into a shelter, and then to make sure that the shelter is something that will benefit the economy.

As for driving it "overseas," this will accomplish nothing for the taxpayer unless that overseas investment is tax deductible. Otherwise, he'll owe taxes on the money that he no longer has because it's been invested overseas.

But, again, you missed a key fact there. That 'shelter' is meaningless as the money must come out of it eventually and will then be taxed. Because of that, you have to be FAR more conservative with your investments. There is ALWAYS the chance that an investment will sink and money lost. The risk is worth it because the rewards are high. Make those rewards small and then the risk will be far to grate, hence decreased investment.

As far as driving them overseas, the only tax that would be incurred would be the initial tax on the money. After that, they would be enjoying the non-confiscatory taxes where they invested and therefore it would be FAR more appealing to pay the tax now and not have to worry about it on all that profit they were generating overseas.

 

[OohPooPahDoo]

I love how progressives pretend that authoritarian and totalitarian socialism are some kinda ******* "story" like the Wizard of Oz...

They act like the Tin Man (Stalin) is make believe and the Lion (Mao) is make believe and the scare crow (Lenin) is make believe, then in 1995 Dorthy woke up and thought it was a dream..

Dude, STOP SMOKING CRACK ROCK

 

[Dragon]

Demand is based on availability and price.
1.The product exists
2. The product is priced appropriately

Demand is based on income and desire.
1. The product is desired.
2. Those who desire it have the money to buy it.

See how that works? It's not a function of supply. It's a function, with respect to any PARTICULAR product, of both desire and income; and overall, just of income.

Labor works the same way. Labor is a commodity. Supply and demand.
1. The product( people to do the job) exists
2. The product is priced appropriately.

By framing it that way, you argue that workers should accept any wage offered even if their children will starve on it, and if not, then they aren't "pricing their labor appropriately" and it's their fault. You can, of course, argue this way if you have no soul.

But even so, the price of labor relative to the price of goods on the market is also the measure of the ability to buy, and thus of whether goods produced can be sold. Not only are low wages bad for workers, they are also bad for the economy and, ultimately, bad for business.

The only people they are not bad for is those who measure their success in terms of how much of the nation's production they can hog to themselves.

 

[The Rabbi]

Demand is based on availability and price.
1.The product exists
2. The product is priced appropriately

Demand is based on income and desire.
1. The product is desired.
2. Those who desire it have the money to buy it.

See how that works? It's not a function of supply. It's a function, with respect to any PARTICULAR product, of both desire and income; and overall, just of income.

Labor works the same way. Labor is a commodity. Supply and demand.
1. The product( people to do the job) exists
2. The product is priced appropriately.

By framing it that way, you argue that workers should accept any wage offered even if their children will starve on it, and if not, then they aren't "pricing their labor appropriately" and it's their fault. You can, of course, argue this way if you have no soul.

.

Gosh are you dumb. Workers are free (note the word "free") to accept whatever wage they want, or hold out for a better wage. Employers are free to offer any wage, or hold out for a lower wage. If no one accepts their offer, they have no employee. If the worker accepts no offer, he has no job. Both parties are made better by making the transaction. Whether the worker has children or not is irrelevant here.

 

[Dragon]

Workers are free (note the word "free") to accept whatever wage they want, or hold out for a better wage.

A hungry belly makes no free bargains, and no one makes a free agreement when his children are hungry, either. The only free agreements that are ever made, are made between equals in power.

 

[The Rabbi]

Workers are free (note the word "free") to accept whatever wage they want, or hold out for a better wage.

A hungry belly makes no free bargains, and no one makes a free agreement when his children are hungry, either. The only free agreements that are ever made, are made between equals in power.

So children are better off when their parents don't work than when they do work? Are you on something?

 

[Dragon]

A hungry belly makes no free bargains, and no one makes a free agreement when his children are hungry, either. The only free agreements that are ever made, are made between equals in power.

So children are better off when their parents don't work than when they do work?

Do you know how to read for comprehension? Do you see ANY relationship between my sentences and yours, other than that both include the word "children"? Do you understand that there is absolutely no logical way to get from what I said to what you said?

 

[The Rabbi]

A hungry belly makes no free bargains, and no one makes a free agreement when his children are hungry, either. The only free agreements that are ever made, are made between equals in power.

So children are better off when their parents don't work than when they do work?

Do you know how to read for comprehension? Do you see ANY relationship between my sentences and yours, other than that both include the word "children"? Do you understand that there is absolutely no logical way to get from what I said to what you said?[/QUOTE]
Yeah,a ctually there is.
So I ask again, are children better off when their parents are employed or when they are unemployed? You bring up the sniveling Dickens-world of starving children (even though the children are probably stuffing themselves on pizza playing nintendo, but it's your fantasy. Do what you want). So I ask, are the children better off with parents working or not?

 

[Dragon]

Yeah, actually there is.

Then you need to explain it, 'cause it sure ain't obvious. All I was saying was that the choice to accept or reject a job offer isn't nearly as "free" as you make out. It's "free" only in the sense that neither the employer nor the government is directly pointing a gun at the person's head and threatening punishment if they don't take the job. But circumstances may well be.

Again: the only free bargain possible is between equals. Which is, of course, the main reason for collective bargaining and unions. A single employee is NOT the equal of his employer and so cannot bargain freely with him. But all of the employees collectively ARE the employer's equal, and can make a free bargain. Of course, that's also why so many employers hate unions. They don't want to bargain with equals; they want to rent slaves by the hour.

 

[The Rabbi]

Yeah, actually there is.

Then you need to explain it, 'cause it sure ain't obvious. All I was saying was that the choice to accept or reject a job offer isn't nearly as "free" as you make out. It's "free" only in the sense that neither the employer nor the government is directly pointing a gun at the person's head and threatening punishment if they don't take the job. But circumstances may well be.

Again: the only free bargain possible is between equals. Which is, of course, the main reason for collective bargaining and unions. A single employee is NOT the equal of his employer and so cannot bargain freely with him. But all of the employees collectively ARE the employer's equal, and can make a free bargain. Of course, that's also why so many employers hate unions. They don't want to bargain with equals; they want to rent slaves by the hour.

Failed to answer the question.
A worker and an employer are equals. They both want something and have something to offer. Just like someone buying a new car or any other economic transaction.
You've drunk the union kool aid if you believe they are unequal.

 

[Oldstyle]

Yeah, actually there is.

Then you need to explain it, 'cause it sure ain't obvious. All I was saying was that the choice to accept or reject a job offer isn't nearly as "free" as you make out. It's "free" only in the sense that neither the employer nor the government is directly pointing a gun at the person's head and threatening punishment if they don't take the job. But circumstances may well be.

Again: the only free bargain possible is between equals. Which is, of course, the main reason for collective bargaining and unions. A single employee is NOT the equal of his employer and so cannot bargain freely with him. But all of the employees collectively ARE the employer's equal, and can make a free bargain. Of course, that's also why so many employers hate unions. They don't want to bargain with equals; they want to rent slaves by the hour.

But Dragon...when you impose a minimum wage you ARE pointing a gun at someone's head. You've imposed an artificial number into an equation that would normally be determined by supply and demand.

Also, I'm not quite sure why you think a single employee should BE the equal of his employer. The employer risked their capital in building the business. Why should someone who didn't invest in a business have the right to tell someone who DID how to run that business? They DO have the right to go elsewhere if they don't like the wages or the working conditions but that's it. And Dragon? Employers don't want "slaves"...they want good employees. Good employees are sought after...even fought over by employers. If you treat your good employees badly someone else will come along and snatch them away.

Unions are a function of that right to go elsewhere...only it's a collective threat which carries more weight than just one person leaving. The problem with unions...and it eventually morphed into a HUGE issue...is that it is human nature to want more than what you already have. Union leadership wasn't content with safe working conditions and a wage that reflected the market...they kept pushing the envelope until it was almost impossible to fire a union employee and they had amazing benefit packages that their ancestors would have been astounded by. Collective bargaining in effect became extortion as the unions looked for more and more money and benefits and unions weren't there to protect good workers...they were there to protect awful ones.

 

[The Rabbi]

Old, I am still wondering over this "equal" business. When you buy a car you aren't the equal of General Motors. When you write a book you aren't the equal of the publisher. In fact, there is virtually no negotiation of an economic nature that takes place between equals. I dont know even what "equal" in respect of what means. Equal net worth? Equal income? Equal education? Equal intelligence? It is a non-statement.

 

[Big Black Dog]

Looking back on my life, I can honestly say that I have never been hired by a poor man.

 

[FA_Q2]

Yeah, actually there is.

Then you need to explain it, 'cause it sure ain't obvious. All I was saying was that the choice to accept or reject a job offer isn't nearly as "free" as you make out. It's "free" only in the sense that neither the employer nor the government is directly pointing a gun at the person's head and threatening punishment if they don't take the job. But circumstances may well be.

Again: the only free bargain possible is between equals. Which is, of course, the main reason for collective bargaining and unions. A single employee is NOT the equal of his employer and so cannot bargain freely with him. But all of the employees collectively ARE the employer's equal, and can make a free bargain. Of course, that's also why so many employers hate unions. They don't want to bargain with equals; they want to rent slaves by the hour.

Lofty goals for the union and one they no longer actually accomplish. You see, that all ended the day that unions figured out they could FORCE a perspective employee to pay them whether or not that employee wanted to be a part of the union. Then we went even further when entire career fields were forced to be unionized.

I noticed that you have dodged my union laws challenge. Care to address that?

 

[MikeK]

While I completely disagree with tax breaks for the "job creators", let's face it, the poor create even fewer jobs than they do...

Does your reasoning include the fact that even the poorest among us must spend some money for basic survival, which to some modest degree serves to stimulate the economy.

Circulation is as important to a nation's economy as it is to a living organism. Even when government takes money from one segment of the population and gives it to another it is good for the health of the economy. It is circulation.

 

[The Rabbi]

While I completely disagree with tax breaks for the "job creators", let's face it, the poor create even fewer jobs than they do...

Does your reasoning include the fact that even the poorest among us must spend some money for basic survival, which to some modest degree serves to stimulate the economy.

Circulation is as important to a nation's economy as it is to a living organism. Even when government takes money from one segment of the population and gives it to another it is good for the health of the economy. It is circulation.

Wow.
Let's really get the economy rolling and take all the assets of the top 5% and redistribute them to the bottom 25%. That'll really make us a powerhouse!
Where do they teach this stuff??

 

[bripat9643]

Workers are free (note the word "free") to accept whatever wage they want, or hold out for a better wage.

A hungry belly makes no free bargains, and no one makes a free agreement when his children are hungry, either. The only free agreements that are ever made, are made between equals in power.

That's utter horseshit. Ask the Jews who survived the holocaust if freedom from government coercion is meaningless.