Wage Strikes Planned at Fast-Food Outlets

[jasonnfree]

...Whenever we have a recession, firms don't hire and lay people off to decrease costs. Labor is an input cost. Firms will only hire if they have a boost in sales or an expectation of increased sales...

This sounds contradictory so let's sort it out for clarity.

When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

Is it possible that raising the wages of those on the bottom will help the economy since the money they spend will go back in the economy by buying necessities? Incomes at the top don't always buy retail as much but invest in other ways, may be not helping the economy.

 

[Kimura]

...Whenever we have a recession, firms don't hire and lay people off to decrease costs. Labor is an input cost. Firms will only hire if they have a boost in sales or an expectation of increased sales...

This sounds contradictory so let's sort it out for clarity.

When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

Low-wage workers (the poor) spend a larger percentage of any income increase than the wealthy. An increase in the minimum wage at the expense of any profits will increase demand all else being equal.

However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

 

[Ame®icano]

The fault of having people trying to live on a fast food salary and support families on those wages is with the business hiring people who clearly should not be working there in the first place. Don't hire breadwinners. Keep those jobs for what they were intended to be, for kids entering the work force, retirees exiting the work force and someone looking for a little second income.

Right. Then you would agree that we need to stimulate the job market. Create more meaningful jobs so that people are not forced to take these poor paying jobs.

And, of course, let the management of these fast food companies continue to pay minimum wage. For reasons known only to you. Got it.

And who suppose to create those meaningful jobs? Government?

 

[The Rabbi]

It make me insane that some people have actually recommended abolishing the minimum wage. The problem in the US is lack of demand. Firms simply won’t hire until they have increased sales. Consumers won’t spend until they have jobs. Most of the numbers I’ve seen say that between 250,000-300,000 jobs per month need to be created to induce a broad economic recovery. The private sector will not hire until we have demand in the economy.

If we increase the minimum wage, which translates into increased incomes, it will result in more consumption, then firms will hire more people. We have to realize wages are input costs and a source of demand.

By the way, I’ve read BS in the thread about how the competitiveness of wages would be reduced from an increased minimum wage. The may apply to other sectors, such as health care, IT, manufacturing, or banking, where people earn much more than the minimum wage. We’re talking about fast food workers, cahiers, and other low-skilled jobs in the labor market.

The problem is not lack of demand. That was the misdiagnosis that led to FDR's Great Depression and Obama's revisiting the same thing. Supply and demand equal out, as they must. The problem is lack of business investment, which actually creates jobs and expansion. And that is nowhere to be found, largely due to the anti business climate created by Obama.

 

[The Rabbi]

...Whenever we have a recession, firms don't hire and lay people off to decrease costs. Labor is an input cost. Firms will only hire if they have a boost in sales or an expectation of increased sales...

This sounds contradictory so let's sort it out for clarity.

When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

Low-wage workers (the poor) spend a larger percentage of any income increase than the wealthy. An increase in the minimum wage at the expense of any profits will increase demand all else being equal.

However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

 

[Rshermr]

The fault of having people trying to live on a fast food salary and support families on those wages is with the business hiring people who clearly should not be working there in the first place. Don't hire breadwinners. Keep those jobs for what they were intended to be, for kids entering the work force, retirees exiting the work force and someone looking for a little second income.

Right. Then you would agree that we need to stimulate the job market. Create more meaningful jobs so that people are not forced to take these poor paying jobs.

And, of course, let the management of these fast food companies continue to pay minimum wage. For reasons known only to you. Got it.

And who suppose to create those meaningful jobs? Government?

Some gov, some private. In the fairly short term, almost all will be private. You see, if you spend tax dollars on building a bridge, the gov will not do the work. Private contractors will do the work.

Is this too complex???

 

[Rshermr]

It make me insane that some people have actually recommended abolishing the minimum wage. The problem in the US is lack of demand. Firms simply won’t hire until they have increased sales. Consumers won’t spend until they have jobs. Most of the numbers I’ve seen say that between 250,000-300,000 jobs per month need to be created to induce a broad economic recovery. The private sector will not hire until we have demand in the economy.

If we increase the minimum wage, which translates into increased incomes, it will result in more consumption, then firms will hire more people. We have to realize wages are input costs and a source of demand.

By the way, I’ve read BS in the thread about how the competitiveness of wages would be reduced from an increased minimum wage. The may apply to other sectors, such as health care, IT, manufacturing, or banking, where people earn much more than the minimum wage. We’re talking about fast food workers, cahiers, and other low-skilled jobs in the labor market.

The problem is not lack of demand. That was the misdiagnosis that led to FDR's Great Depression and Obama's revisiting the same thing. Supply and demand equal out, as they must. The problem is lack of business investment, which actually creates jobs and expansion. And that is nowhere to be found, largely due to the anti business climate created by Obama.

Ah. One of the last remaining believers in supply side economics. Good for you. Stupid, but good to have SOMEONE who still believes in Voodoo Economics.

 

[expat_panama]

...low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

...increase in the minimum wage at the expense of any profits will increase demand all else being equal...

--which it never is. When a business loses money on an employee, they let him go. If they don't then they're no longer a business becuase they've become a charity.

...However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

That, plus the fact that gov't run economies ultimately fail --unless one considers Cuba and North Korea success...

 

[Rshermr]

This sounds contradictory so let's sort it out for clarity.

When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

Low-wage workers (the poor) spend a larger percentage of any income increase than the wealthy. An increase in the minimum wage at the expense of any profits will increase demand all else being equal.

However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

Yes there was. You are again completely wrong.

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort, encourage employers to invest in training for their workers, and can increase demand for goods and services—all of which help balance out any potential negative effects.
There may be another factor that comes into play even more during hard times—economic power. Low-wage workers have very little of it, particularly during periods of high unemployment.
When the economy is doing poorly, employers have less incentive to raise wages, while workers, especially those making near minimum wage, have little ability to demand a raise because there is a ready supply of unemployed labor available to take their job. Even though these workers likely become more productive—labor productivity has almost always increased over time and productivity growth during the past two recessions was especially strong—they have less economic power to ask to be paid for their increased productivity. This suggests that during hard economic times, there is a critical role for government to raise the minimum wage to ensure workers are being paid for their economic contributions.
An Increased Minimum Wage Is Good Policy Even During Hard Times | Center for American Progress Action Fund

 

[KevinWestern]

Ah. One of the last remaining believers in supply side economics. Good for you. Stupid, but good to have SOMEONE who still believes in Voodoo Economics.

So Rshermr, you're saying that investing in a business can in no way lead to economic growth and job expansion? Really?

What if Business A needs at least X free dollars to implement a new feature in their itunes app that will attract millions of customers and will allow them to expand their company from 5 employees to 50, and one of the ways to get those dollars is having to pay less in taxes?

 

[TakeAStepBack]

Low-wage workers (the poor) spend a larger percentage of any income increase than the wealthy. An increase in the minimum wage at the expense of any profits will increase demand all else being equal.

However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

Yes there was. You are again completely wrong.

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort, encourage employers to invest in training for their workers, and can increase demand for goods and services—all of which help balance out any potential negative effects.
There may be another factor that comes into play even more during hard times—economic power. Low-wage workers have very little of it, particularly during periods of high unemployment.
When the economy is doing poorly, employers have less incentive to raise wages, while workers, especially those making near minimum wage, have little ability to demand a raise because there is a ready supply of unemployed labor available to take their job. Even though these workers likely become more productive—labor productivity has almost always increased over time and productivity growth during the past two recessions was especially strong—they have less economic power to ask to be paid for their increased productivity. This suggests that during hard economic times, there is a critical role for government to raise the minimum wage to ensure workers are being paid for their economic contributions.
An Increased Minimum Wage Is Good Policy Even During Hard Times | Center for American Progress Action Fund

And yet your post doesn't provide any evidence that there was an increased demand following an increase of the minimum wage....interesting.

You do go out of your own way to make yourself look ignorant, dont you?

 

[TakeAStepBack]

I already read it. Which is why you're now trying to obfuscate away from the point Rabbi made and from your reply. Here is what your article says about demand:

and can increase demand for goods and services

OK, it can. Sure. But did it? In no way does this article make that case. Jeebus you're a dumb ******, dude.

 

[Rshermr]

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

Yes there was. You are again completely wrong.

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort, encourage employers to invest in training for their workers, and can increase demand for goods and services—all of which help balance out any potential negative effects.
There may be another factor that comes into play even more during hard times—economic power. Low-wage workers have very little of it, particularly during periods of high unemployment.
When the economy is doing poorly, employers have less incentive to raise wages, while workers, especially those making near minimum wage, have little ability to demand a raise because there is a ready supply of unemployed labor available to take their job. Even though these workers likely become more productive—labor productivity has almost always increased over time and productivity growth during the past two recessions was especially strong—they have less economic power to ask to be paid for their increased productivity. This suggests that during hard economic times, there is a critical role for government to raise the minimum wage to ensure workers are being paid for their economic contributions.
An Increased Minimum Wage Is Good Policy Even During Hard Times | Center for American Progress Action Fund

And yet your post doesn't provide any evidence that there was an increased demand following an increase of the minimum wage....interesting.

You do go out of your own way to make yourself look ignorant, dont you?

Ignorance is when a link is provided, but the person who looks at it does not know what it is. You would be the person who looked at it.

Now, most are capable of clicking on a link, and reading the sourced material. Obviously you are not. So, again I will take pitty on you and provide a specific paragraph for your reading pleasure. Hope you can find the sentence. You should look for the word demand. Good luck:

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort, encourage employers to invest in training for their workers, and can increase demand for goods and services—all of which help balance out any potential negative effects.

Hope you were able to find the sentence. But should you choose, and wanted to find the info from many economists, you could introduce yourself to google, and learn how to search. But then, maybe you just enjoy being ignorant.

 

[TakeAStepBack]

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort, encourage employers to invest in training for their workers, [B]and can increase demand for goods and services[/B]—all of which help balance out any potential negative effects.

That's what I just posted, you simple ******.

It doesn't make the case that reising the minimum wage is followed by an increase in demand. They do not make that case. They make the case that raising the M wage doesn't reduce employment. Poorly, but that was the objective of the article. It says nothing about an increase in demand following a raise in minimum wage, except that is CAN increase demand.

Now, where is the information showing that a 2009 of July raise in the M. wage was followed by an increase in demand?

 

[Rshermr]

I already read it. Which is why you're now trying to obfuscate away from the point Rabbi made and from your reply. Here is what your article says about demand:

and can increase demand for goods and services

OK, it can. Sure. But did it? In no way does this article make that case. Jeebus you're a dumb ******, dude.

That would be your opinion. The opinion of a con tool who is also a congenital idiot. So, you know why I value your opinion so.

Here is the thing, me boy. The question was asked by someone who said there was no increase in demand from the minimum wage increase in 2009. One of your con cohorts, equally stupid as you, me boy. And also, like you, incapable of providing a link. Just asked me to believe his word. Which I did not.

Now, if you read the article, as you claim to have, and had any understanding of economics at all, which I am pretty well convinced you do not, you would understand their premise. That you do not, or will not, is not my problem. They simply told you that increasing spending would result from increased earnings resulting from an increase in the min. wage. And, since that is being spent, you SHOULD be able to understand that demand would be increased. If you are too stupid to understand that, not my problem.

If you are saying I am wrong, provide the link, dipshit.

 

[TakeAStepBack]

You've got to be one of the stupidest ***** to frequent the economics forum. Period. I'd neg you if I didn't have to spread it around some more first.

You failed at backing the claim that a 2009 of July minimum wage increase was followed by an increase in demand.

 

[Kimura]

This sounds contradictory so let's sort it out for clarity.

When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

Low-wage workers (the poor) spend a larger percentage of any income increase than the wealthy. An increase in the minimum wage at the expense of any profits will increase demand all else being equal.

However, any government with an understanding of economics can increase demand WHENEVER it so desires, so I can see the point where raising minimum wage for the sake of increased demand may not SOLELY be the entire argument for an increase in the minimum wage. It also boils down to public policy.

That's completely wrong and not supported by facts. there was a min wage increase in July 2009 and no corresponding increase in demand.

The private sector won’t hire the additional 250K-300K new workers per month until we have adequate aggregate demand in the economy so they’ll hire new workers. Please explain to me how keeping the minimum wage static, or decreasing it, will help the situation?

Increased wages = increased income which leads to increased consumption resulting in firms hiring more people. Obviously, an increase of even $12 or $15 isn’t going to give individuals the ability purchase a new car or condo on the beach. What if these workers aren’t living in poverty? Are you implying that they wouldn’t spend the additional money provided by an increased minimum wage? I wonder if you’d argue that tax cuts for everyone are unnecessary since most of the individuals who benefit from them aren’t living in abject poverty?

Generally, if people earn more $$$$ through increased wages (as opposed to the vast majority of the one percent, who tend to earn their $$$$ through things like investments and a rigged tax system written by lobbyists to favor capital gains over income) then an increased wage would result in spending more $$$$, creating jobs for others, etc. People could pay their car note, mortgage, get out of debt, etc. People would pay more in taxes, mostly property and sales tax, which would relieve state and local manipulates. The key is higher incomes, not increased debt loads via private credit expansion.

Here’s the bottom line: wages are both an input cost and source of demand. If you decrease wages, demand will tank, which has way more dire consequences than any cost savings as a results of paying workers less. This is definitely the case give our pathetic and laughable minimum wage, which is couldn’t possibly be described as a living wage by any rational human being.

 

[Toro]

I support this.

The cost of a Big Mac will go up to $8. Nobody will buy it and coronary disease will be cut in half.

 

[expat_panama]

... low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--

--can only increase the chance that a low pay worker will find himself on the 'bad' list.

...possible that raising the wages of those on the bottom will help the economy since the money they spend will go back in the economy...

Raising wages of poor people would do that. The way to raise bottom worker wages is by say, lowering educational costs or lowering taxes on capital equipment for the poor to use on the job. Enacting a law setting a higher minimum wage would make the low value employee a company liability so he'd have to be laid off and replaced with higher quality labor and/or capital equipment.

A business is not a charity. It has to justify its existence by paying the owner for his time and investment. If it doesn't it folds and the owner puts his money where it's needed.

 

[depotoo]

Yup. I am serious.

McD's is not gm or enron. Quite difference, me boy. And in the case of enron and gm, it took YEARS. The fact that you just heard about it after the fact had nothing at all to do with what was going on for years, in the case of gm, as they mismanaged their company. But it was going on in the 1970's. And the management who owned stock options {the general public and 401K's do not own stock OPTIONS. They own stocks) had all the time they needed to exercise their options. And make MILLIONS.

Read. It will help. Ignorance is curable.

By the time that gm, for instance, tubed, the vast majority of stock options had been exercised under the control of the investment managers used by the managers who owned the stock options.

after the fact? Really? No, you are being selective in your outrage, plain and simply. And so far as the options versus stocks, you just might want to educate yourself. Because you are wrong.

Read. It will help. Ignorance is curable

So, let me understand this. You think that gm went down the tube in a really fast manner. And that it was not obvious that they were in trouble for YEARS.
Sorry me boy. You are totally wrong. And that is easily provable.

And you think that those gm ceo's did not exercise their stock options over the years and make tens of millions??? Sorry me boy. You are totally wrong. And that is easy to prove.

And you think that I was wrong about the difference between stocks and stock options?
Sorry me boy. You are totally wrong. Show me a single person who owns gm stock options who is not a member of upper management of gm. You can not, of course. And you can not buy or trade stock options. Get a grip.

Here is the thing, me boy. I am not outraged at all. Why should I be. I just try to help you to understand some of the things that you do not understand. Or, perhaps, that you are simply lying about. I have no way of knowing where your ineptness springs from. Just trying to inform you. But you seem uninterested in truth. Sorry about that.

Just wow! You really seem to want to put words in people's moths. Of cours I know the difference. But you did not educate yourself to find out who all called in their options, buddy.