How minimum wage works.

[Plane]

 First of all, if you want to say that minimum wage increases are not inflationary , you will have to explain inflation in terms of money remaining the same value while it requires less work to get the same amount.

      This is not going to be easy , explaining how increases in mini wage are not necessarily inflationary is akin to an explanation of how water is not necessarily wet.

      Now you start with a contract to work for an hour for six coins, the minimum wage goes up and you now get eight coins per hour.  IN the fine print you would find that the six coins were quarters but the eight coins that replaced them are dimes.


        This doesn't convert overnight, but it is fast enough that the inflation is fully felt in less than two years.

         If you think I am wrong , consider that the people who think minimum wages are effective also think that they need to be increased on a regular basis.

     So who really looses from the minimum wage?
      People with a lot of cash , and people on fixed income .

       Who wins from the minimum wage?

      People who have borrowed a lot to buy income producing property.

      Hey that is me!

         Bring it on President Obama.

[kimba1]

again I`m not talk about of that . I`m talking about the broader effects to the wages. if you remember I was against raising the minimum wage till I realized how small the wage is compared it was 15 years ago. you stated the work is the same but did not compensate the value of the pay as time went by. everything else has gone up in price but not labor?? again it all looks like businesses have been undercutting their employee for quit sometime now and to claim not able to pay is very invalid. not many business are charging the same price today as ten years ago so how are they not able to handle it? this is mainly the topic that the value of pay has gone down but employer refusing to adjust basicly.

you analogy about the coin value does not work due to the fact wages are based on the total value not the number of coins.  are you saying a business is not dependant on income from profit but more on savings from overhead? not exactly a stable businesses model

[Xavier_Onassis]

Economists have recognized that the market responds both logical and illogically. Since people forced to be logical all the time, there needs to be a buffer of some sort fo fluctuations, and this is best done through programming a small amount of inflation into the economy: about 2 to 3 percent. If this is not done, what ou will see are wild fluctuations which cause booms and busts.

The few that have capital have used this to their advantage: they do not allow the powerless to acquire the power they need (through strikes and threats of strikes) to receive their share of inflation or their share of increases in productivity. And they seek to panic everyone by telling us that there are people who are are not worth existing, because they are insufficiently useful to deserve to earn enough to provide for themselves. This used to be only a small number of people, but now somehow the guy in Detroit who has to avoid freezing to death in the winter, must compete with the guy in Zamboanga, who does not, Just too bad, but that is the way things are. The landlord raises the rent every year, Kellogg's raises the price of cornflakes because Cargull raised the profits on corn. Tough shit, my brother, you need $12 an hour and a 40 hour week to survive, but you are3 worth only $5 an hour and we only need you 25 hours a week. Move in with the grandparents, live in your car, apply for foodstamps, it's your problem, not mine.

[Plane]

   Do you think Cargill is able to raise the profit on corn?

[Plane]

the fact wages are based on the total value not the number of coins. 

No , not total value , a fixed amount of coin is the minimum wage, a fixed number of dollars has no fixed value at all.

Way back when the dollar was a contract with the government to deliver to the bearer a fixed quantity of precious metal, the value of a Dollar was much less an intangible than it is now as a fiat.

    The one thing that makes a dollar worth more than a sou is that people are willing to work to get them, or give up products and services to get them. That is all there is , do not over think it.

      The minimum wage is not a floor on the value that must be paid for an hours work, it is a floor on the coin that can be called legal wages.

      This is the same thing as a ceiling on the value of the dollar.

[Xavier_Onassis]

Of course Cargill can raise prices.  They can and they do. They have a major share of the corn. Transportation and storage are major factors in the price of commodities like corn.

Prices are set to get a maximum profit. If they charge too much, customers will find a substitute or do without.
In the US Pfizer has a monopoly on Viagra, which typically retails for $12.50 per pill. In other countries, the same substance and dosage can retail for under $2.00.

The 50 milligram pill sells for the same price as the 100 milligram pill.

Cargill does not have a monopoly on corn, but it is a bulky product and can spoil, so transportation and storage are costs that affect the price.Odds are the Chinese can grow corn, but they cannot compete for the American market because of transportation and storage costs.

[Plane]

    The weather is wrong in China, at least it is for now, they are not liable to compete with our corn crop.

      But they are certainly welcome to try , you are right in enough of your statement that I think you could make the small jump to understand the rest.

Prices are set to get a maximum profit. If they charge too much, customers will find a substitute or do without.

 

Yes!   Cargill always charges as much as they can, who would they be giving free corn to?
So Cargill cannot raise prices they can't and they don't, they just do as well as they can at the auction.
Because the price is not entirely under their control , and won't be until they can form a corn cartel.

Cartels or trusts like that are bad for the consumer , one of the most beneficial roles of government is the use of antitrust laws to encourage the rise of competition, which is very good for consumers.
One of the bad things government can do is nationalize an industry and close down competition, monopoly is the same disadvantage to the consumer even if it is the government forming the cartel.

Patent and copyright laws are intended to give monopoly rights to inventors and authors, in this case the consumer is not disadvantaged unfairly because without the inventor or author the product or composition would not exist , it is only fair to encourage invention and new work by allowing the inventor and author the maximum benefit from their work and investment.

In the case of drugs The US became very good and strong in the international competition by having good patent protection. After the patent expires all drugs become generic.

Not long ago the copyright law was strengthened so that it takes a lot longer for copyright to expire. Who benefits from this? Stephen King ? Stephen Kings estate? Stephen Kings readers?

[kimba1]

I've don't recall coin amount mention on the minimum wage only dollar amount. But again ii'm talking about the need to increase the spending power of the worker. I did not counter you statement less people will be employed but the remaining ones will be able to sustain and grow the businesses. The goal here is to increase spending. Larger number of low wage worker will only sustain walmart and not much else.

[Xavier_Onassis]

The first thing that poor people are likely to spend money on is food. Wal*Mart's prices are lower on canned and packaged foods, but not on meat and produce , at least here in Miami.  Wal*Mart's price on bananas is 69 cents a pound all the time: many Latino markets here sell for an low as 4 lbs. for a dollar. Meat, chicken, fish are all higher by a good 20%. Rent is another major drain on poor people.

Raising the minimum wage generally helps  more people than it hurts. Abolishing the minimum wage would be a disaster.

[kimba1]

It kind of boils down to with minimum wage can a person afford the basic stuff. If not than the wage needs to be attentioned. Also if the basics is the only thing covered than alot if businesses go nowhere

[Plane]

  I see as pernicious the assumption that all jobs must be sufficient for supporting a person, and that all smaller jobs must be abolished.

    In between the lemonade stands that kids like to erect, and the job a guy needs to first establish his household there is a spectrum of potential jobs that could exist but do not.

    So young people who have little experience are either idle or participate in black market jobs , many participating in legal employment  not at all, until they enter the full competition of the job market.

     A 16 year old can earn pretty good money while he lives with his parents, but most 16 year olds are not competitive against 18 year and older workers .

     Why not let some people work for tiny wages? Forbidding this does not produce a higher paying job nearly as much as it destroys the lower paying job.

      Why indeed do any employers hire any employees?  It is because the skill and effort of the employee will produce value for the employer above what the employer must pay for it, no other formula works .

   If you are inexperienced , you are thereby low skill, how do you amass experience and thereby valuable skill?

    For little, which breaks the law?
    Or for nothing, which is legal. 

[Xavier_Onassis]

It is not a question of "letting some people work for tiny wages". No one wants to work for tiny wages. People who work for tiny wages do not do so because they see it as a wonderful thing: they do it out of desperation.

Companies manage to educate their workers to do the job when they really need them. They just would rather take the training out of the hides of the poor prople they hire.

No one is going to do away with the minimum wage, just like this country will never elect a Libertarian. People are too smart for that.

I went to work when I was 18 putting wheels on Ford Falcons. The training consisted of about three days. And I got paid for it. $2.35 per hour, almost three times the minimum age at the time of 80¢ an hour. And then 80¢ would buy me FOUR GALLONS of gas for my Studebaker and FOUR POUNDS of chuck steak.

[kimba1]

but that not what`s going on part-time jobs will not be effected and entry level jobs will still happen and the primary goal is spending power not ability to support. but we`ll see whose right. I`m pretty confident in my belief in fact our talk has actually strengthen my resolve. if that's the right phrase.

[Plane]

  Whatever.

   This is one time when it would be very good for me to be wrong.

    But I think we can already see a lot of reduction of entry level jobs and reluctance to bear the cost of training.

     This is the fruit if the mini wage, and a bigger mini wage will hand over more of this fruit along with more rapidly shrinking money.

       It is like holding sand in your hand, if I hand you more sand will you be holding more sand?

[Xavier_Onassis]

We do not live in times of poverty and want. This country is far better off than it was in 1962 when I worked for Ford. There is PLENTY of money and resources to allpow everyone to have a decent life. 

Fatcats crying poverty and wanting to hire people for nothing is a bucket of shit.