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Guest Post: The Minimum Wage Forces Low-Skill Workers To Compete With Higher-Skill Workers
Submitted by George Reisman via the Ludwig von Mises Institute,
The efforts underway by the Service Employees International Union, and its political and media allies, to raise the minimum wage from $7.25 to $15 per hour would, if successful, cause major unemployment among low-skilled workers, who are the supposed beneficiaries of those efforts.
The reason is not only the fact that higher wages serve to raise costs of production and thus prices, which in turn serves to reduce physical sales volume and thus the number of workers needed. There is also another equally, if not more important reason in this case, and it is a reason which is only very inadequately described by reference to the substitution of machinery or automation for the direct labor of workers when wages are increased.
This is the fact that a low wage constitutes a competitive advantage for less-skilled workers that serves to protect them from competition from more-skilled workers. In other words, a wage of $7.25 per hour for fast-food workers serves to protect those workers from competition from workers able to earn $8 to $15 per hour in other lines of work. The workers able to earn these higher wage rates are not interested in seeking employment at the lower wage rates of the fast-food workers.
But if the wage of the fast-food workers, and all other workers presently earning less than $15 per hour, is raised to $15 per hour, then these more capable workers can now earn as much as fast-food workers as they can in any of the occupations in which they had been working up to now.
Moreover, the widespread rise in wage rates to $15 per hour will cause unemployment in all of the occupations affected. The unemployed clerks, telemarketers, factory workers, and whoever, who otherwise would have earned between $8 and $15 per hour, will have no reason not to apply for work in fast food, which will now pay as much as any other occupation that is open to them. And since those workers are more capable, it is overwhelmingly likely that to the extent that they do seek employment as fast-food workers, they will be preferred over the low-skilled workers who presently work in fast-food establishments. Thus, the rise in the wage of the fast-food workers will serve as an invitation to the competition of large numbers of workers who do not presently think of working as fast-food workers and who, being better qualified, will almost certainly take away their jobs.
Between less employment overall in the least-skilled lines of work such as fast food, and the incentive created for vastly increased competition for employment in those lines coming from more qualified workers, the effect could well be to close those lines altogether to the employment of workers at the low end of skill and ability. That, of course, would deprive these people of the opportunity to acquire skills and abilities from work experience that otherwise would have enabled them to become capable of performing more demanding jobs later on.
What the demand for a $15 an hour minimum wage represents is a case of low-skilled workers being led to reach for a high-wage “bird in the bush,” so to speak. Unfortunately, at the high wage, there are both fewer birds in the bush than are presently in hand and most or all of them will fly away into the hands of others, who possess greater skills and abilities, if the attempt is made to reach for them.
This must ultimately be the result even if somehow the present fast-food workers and the like could be enabled to keep their jobs for a time. Even so, practically every time that it became a question of hiring someone new, the new employees would almost certainly be drawn from the ranks of workers of greater skill and ability than those who had customarily been employed in these jobs. Thus, even if not immediately, in time there would simply be no more room in the economic system for workers at or near the bottom of the skills ladder.
No one can question the desirability of being able to earn $15 an hour rather than $7.25 an hour. Still more desirable would be the ability to earn $50 an hour instead of $15 an hour. However, it is necessary to know considerably more than this about economics before attempting to enact sweeping changes in economic policy, changes to be achieved by attempting to organize a mass movement that is based on nothing but a desire for economic improvement and no real knowledge whatever of how actually to achieve it.
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why wait?
Now that wasn'y very nice.
And what does that tell you about the economy?
He was a light-skinned Latino. Unskilled labor has no choice - if I could get my taco for a nickel less, I would be in favor of lowering the minimum wage.
I would gladly take a job at $10/hr providing you pay me in sillver dollars. I would even take a job at $2.50/hr provided you paid me in gold quarter eagles.
Why not extend unemployment benefits to age 66 (full SS retirement age)?
Then we could all work a few years become unemployed and then sit around eating happy meals for the rest of our lives.
Still haven't tried an In N' Out Burger :(
You're not missing much. I like their fries, but their burgers are just burgers. Maybe a little greaser than most.
I've heard good things about getting their fries, "doggy style".
I can see this resulting in people fleeing fast food at its new, higher prices.
I hope so. My wife is addicted to that crap.
I just had a sick vision:
A fat, pimply woman, sitting in a Barcalounger. Now middle-aged, she suffers from a chronic lethargy, as she struggles to make her varicose-veined lower legs and swollen calves cause the chair to go to the 'upright' postition, and asks, 'Why don't you want to have sex with me?'.
She grabs the television remote, and turns the channel to Oprah, as she says, 'I really want a hamburger, darling. Why don't you go out and get us something to eat?'.
Smiling in a once-attractive but now horrific and repelling way, she attempts to lure you by brushing her troll-like hands against her once-firm, but now-sagging and overweight breasts. 'I remember when you liked these, darling', she states, as she farts a little, as she gets up to use the bathroom...
You recall the time when you quit smoking for her. You wonder if she could EVER quit eating this GMO crap that seems to be her addiction. Sighing, you go out through your house, to the garage, and warm up the car, knowing that you will be asked to bring back an extra-large order of fries. You are surprised that you ended up here, in your so-called 'middle-age', with such a dilemma, assesing the medical costs of this woman, and trying to think of ways to maximize your income, as you once again service this fat cow, on your way to your own early death...
just don't open the garage door, things will "work themselves out"
Once engaging and charming, she married her prince. After the honeymoon, when flowers, gifts and acts of random kindness filled the time together, babies arrived to both their delight. She who was once the princess became mommy. He who was once the only man who moved her to sheer delight became daddy. Children became the center stage and 18 years later, when feeding the children, cleaning the house, working 40 hours a week, maintaining the state of the family was finally over. She looked across the room at her husband, sitting with shoulders slumped, staring at the TV commercial were 20 year old cheerleaders, scantily dressed, as beautiful as women can be, held his attention when she came into the room. He eyes never left the screen as she told him about her accomplishments that day, and her failures and realizations. He was there but he wasn't. Dulled by routine and familiarity, restrained by finances, the couple created a life of dread when comparisons were made but a trustworthy partner should the ship go down (and it will).
typical right wing conservative hypocrit bullcrap viewpoint. what they're really afraid of is not the loss of low wage jobs (do you think that really concerns them?), but that the jobs paying $15 per hour will have to pay a little more to keep the workers from going to the fast food jobs. progressively raising wage rate. what a nightmare for the corporate scumbags! its OK for them to get progressively increasing tax breaks, bail-outs and other government giveways though, right? scum of the earth, and you ZH'ers hypocritically condemming the banksters while covering for corporate capitalist greed and thievery are just as much fools as the rest of the sleeping public you so fondly love to belittle.
Wage and price controls simply do not work.
So, who are the retarded fucks downvoting me? At least have the balls to fess up and put fourth why you think I'm wrong.
If minimum wage goes up, so will the costs of staying in business. That means that either the business needs to cut costs elsewhere, potentially reducing the quality of their product (think about that in the context of McDonalds,) lay off workers (pricing yourself out of a job is not a good idea,) or by passing the increased costs along to customers. Passing the increased costs along to the customers will have a few effects, including diminishing the utility of the increase in minimum wages. It will also reduce the demand for your product, leading to less need for more workers. Not that people shouldn't eat less McDonalds, but I tend to think that social engineering is a bad idea.
Price controls are working very nicely to float the RE market and keep assets far out of reach for working people. Whether you support it or not it's happening. Tax the oligarchs of the asset class to fund an earned income prebate to restore some purchasing power to the proles. Cost structure doesn't change for a single business. Gross corporate profits for the Walton's, Buffet and their ilk take a hit. Tell me how this doesn't help 99% of Americans 80% of which have been getting collectively fucked by the system for 30 years. Please enlighten this fucktard...
I would argue that what you are talking about in RE is A) not sustainable and B) is going to break. Keeping assets far out of reach for the working people means that there isn't enough demand for a real market. If you look at the institutional investors buying housing to rent out, well, the price of the property should be a function of how much rent it can bring in. That also means that working people are going to be priced out of the rental market, be forced to live in very shitty conditions, or the institutional investors (or rather the idiots that buy the securities sold by those institutional investors) are going to lose money. RE is not a functioning market.
As for the minimum wage, you brought up Walmart. The profit margin is 3.62% and it has 2.2 million employees. Certainly some of them are not minimum wage employees, but the bulk are going to be at or near minimum wage. You're talking about giving them roughly an $8/hr raise. A lot of them are part time too. So, 30 * 52 * 8 * 2mil = ~$25billion dollars. That is a little under a quarter of their gross income and a full $8 billion more than their net income. Believe me, that will be made up for with higher prices and/or fewer employees.
The problems aren't that minimum wage is too low. The problems are crony capitalism and excessive fees and regulations preventing small businesses from succeeding up and off shoring jobs for lower wages. People no longer know how to be self sufficient, and in many instances, run afoul of the authorities if they try. The biggest problem is that the lifeblood of our economy, crude oil, is getting more expensive. We will not legislate our way out of this mess with simple fixes like raising the minimum wage. The good jobs are simply disappearing and the ones that are left are simply not productive enough for everybody to make a living. It's only going to get worse from here on out too.
A little off topic, but Texas deregulated electricty. Now we pay twice as much as any state that didn't and service quality is lower (poles, wires, etc). Some things are done better by governments when the focus isn't profit but quality; like drinking water, roads, electricity, etc.
EV:
Hello? Hello? Anyone home??? The clue is MINIMUM WAGES. That means YOUR CUSTOMERS GET RICHER TOO! We've had this argument before recently. Peter Schiff's publicity stunt - 15 for 15, implying that a $15 per hour minimum wage (i.e DOUBLE the minimum wage) would result in 15% increase in Walmart prices. Walmart CUSTOMERS would get the SAME MINIMUM WAGE INCREASE. Would you buy less if prices went up by 15% BUT YOUR WAGES DOUBLED?
Or look at it in reverse: minimum wages were halved in order to make Walmart prices 15% cheaper. Winning?
Before that we had the youtube video with the guy implying that you can't give a 20% wage rise to workers in a burger joint because it would wipe out a ten cent profit margin - i.e. you could give your minimum wage workers a 20% wage rise and pay for it with a ten cent increase in the price of burgers (doubling his before-inflation profit margin) - are you really gonna buy less burgers after a 20% pay rise because the price of burgers went up by 10 or 20 cents?
How about, you can keep raising the minimum wage until we can't dig resources out of the ground fast enough to keep up with demand (at that point you will get your uncontrollable cost-push inflation)?
Okay, I'll calm down now. Try this:
Forget money and debt for a minute. How is it even possible for us to build houses if no-one can afford to buy them? How can GM build cars that no-one can afford to buy? Yes, I know about all the BS debt and money transfer mechanisms but the fact is that we had the LABOUR and the RESOURCES to build those houses and cars. Not only that, we have plenty of left over labour. Minimum wage too high or minimum wage too low? Look back at the 15 for 15 example. But I suspect something else also is involved.
Admittedly, increase in minimum wages will make us less competitive with other countries. So what are you going to do - drop minimum wages or fiddle the exchange rate? What will the other country do in return?
Why are real estate prices so sticky? If the minimum wage went down, shouldn't house prices and rents go down to match the decreased buying power? How much of the wealth of the wealthy is tied up in real estate? How much real estate is owned outright and how much is tied to debt? I ask these questions purely to point out that the poor are stuck between low wages of foreign countries and high mortgages / rents in their own country. And TPTB don't want real estate prices to go down because then their "investments" would be underwater and they'd have to be productive for a change. And don't forget, it isn't just the mortgage that the poor cannot afford. The local supermarket has a mortgage too, which has to be accounted for in the pricing.
Minimum wage laws have worked for decades. Australia has a minimum wage of $16.88 and it has worked for them. You also conflate price controls and wage controls with the actual topic being discussed here---raising the minimum wage.
i would disagree with your assertion that minimum wage laws have worked. in what sense have they "worked"? it works to keep low-skill and entry-level people out of the workforce, certainly. but it's a dismal failure in the sense that it has no basis in morality, and damages the economy in that it prevents economic transactions from taking place that would otherwise proceed, to the benefit of both the buyer of labor (employer) and the seller of labor (worker)
what about lower-skill workers that can't produce more than the $16.88 per hr that you mention? clearly, if someone can only produce $16/hr to value to their employer, they won't be hired, if the minimum wage is 16.88.
why do you feel that if someone can produce only 16.00/hr of value to the employer, and the employer is willing to pay 15.00 per hr, that some government bureaucrat has the right to step in and say, no, this transaction is illegal? what moral right do they have to interfere in a voluntary transaction between consenting adults?
"You also conflate price controls and wage controls with the actual topic being discussed here---raising the minimum wage."
how can you possibly not understand that minimum wage is a price control? it's a control on the price of labor. this is pretty elementary, and the poster you replied to is absolutely 100% on-topic, and not conflating anything as you claim.
Re "Minimum wages forces low-skilled workers to compete with high-skilled workers":
THE HIGH SKILLED WORKERS CAN'T GET ANY JOBS EITHER!!!
And if they really are highly skilled then they really should be getting paid more than the minimum wage.
The minimum wage is for low skilled workers. Geddit?
" its OK for them to get progressively increasing tax breaks, bail-outs and other government giveways though, right?"
no, it's not. pull your head out of your ass for a minute, and you'll see the article said nothing of the sort. i don't support any government handouts, whether to individuals or corporations, as it is money stolen (taxed) from people who work for a living. and if you must generalize about "ZHers", i suspect most ZHers feel similarly.
and instead of ignorantly hurling epithets, please provide a specific example of how ZHers are "covering for corporate capitalist greed and thievery".
i don't support theivery and crookedness, whether from individuals, corporations, or the government.
and, gettning back to the topic and away from your irrelevant rant - those that make under $10/hr are paid at that rate because they don't have the skills, training, and/or work ethic to warrant a higher salary, it's a simple matter of supply and demand. if minimum wage were raised to $15/hr, i would have to fire my least valuable workers that don't produce more than $15/hr worth of labor. only a socialist fool would assume that everyone's labor is worth $15/hr. but don't take my word for it - let the clue-by-four of the market slap you upside the head if/when a higher minimum wage is implemented and large numbers of low-wage workers are laid off, outsourced, or replaced by robots.
McDonalds and Walmart have to pay $20/hour in north dakota oil areas. They did not close down. Those are probably some of their most profitable locations.
I know people pulling up stakes and heading that way. Create jobs at home. Here in America. People will work.
Keep in mind that $20/hour in that area may very well not leave a person with any greater of a standard of living than $10/hour in other locales. The regressive tax system and the high cost of living to blame.
That is true. Know 4 who are traveling out together. Towing a small camper as they have already seen that lodging is scarce to unaffordable. Intention is to work hard and live cheaply. Then bring the dollars home to where they are worth more. Damn sounds like talking about different countries instead of states.
In 1964 minimum wage was $1 per hour. Adjusted for inflation for 2013, that is $20.50.
I want to say bullshit but having grown up in ND and knowing how utterly desolate Western ND is… maybe you're telling the truth. That $20/hr goes a long way there.
Did you commies really mean to help out those old baby boomer crackers? Again?
Double the minimum wage - that should fuck us all quite nicely.
I really want to pay $8 for a grande bold at Starbucks.
Fucking cancerous unions - and that rodent Barry who's driven us up shit's creek - burn in hell the lot of you.
Yup fuck those unions - the .gov, the courts, the po-lice and the corporations do a fine job representing the working class...
...if you can't trust a Billionaire Corporate Fascist to take your trailer-dwelling mayonnaise-sandwhich eatin' coon-huntin' interests to heart, then who can you trust?
Rising sun, I agree and of course the pass the cost on to the consumer mentality will be tried and it will fail, so I view the hike in minimum wage as a good thing and long overdue. Yes there will be consequences such as hiring more part time, not subject to min wage, but I am not even sure if that is how it will work, all I know is yes inflation from passing costs may occur, but will be thwarted by the ceiling affect of supply demand, I believe the reduction in sales from that type of increase would lead management to keep prices stable. Ultimately for big box retailers, their margins will shrink and their stock prices will suffer. Which could lead to closings and unemployment, but then again the big box model of most retaliers is one of expansion thru debt, then default and stick investors with the loss, then move on to open in a different name. So this effort to level the playing field will have both its positive and negative consequences, Time will tell, one thing I know is that the minimum wage in an era with billionaires should not be $7, it is a joke. Humanity will eventually have to show up in civilization or else mankind risks isolating itself and eventually creating its own demise.
As long as you have a "profit margin" you can stay in business. There are a number of companies that do quite well without the game stocks have become. The CEO of Nuance communications and others have no problem with killing their stock prices. But I did up ya!
"Humanity will eventually have to show up in civilization or else mankind risks isolating itself and eventually creating its own demise"
care to translate this verbal diahrrea into english?
the gist of your long-winded, rambling, illogical rant seems to suggest that you think that corrupt government bureaucrats have the right to interfere in private transactions of the sale of labor, and implement minimum price controls on labor, and that you support them doing so, for some unexplicable reason.
there is no moral basis to claim that government thugs have such a right.
"I really want to pay $8 for a grande bold at Starbucks."
Make your own coffee you lazy fuck
Really! To good to go to Dunkin Donuts?
I'll gladly pay you $15 today for a job that's only worth $7.25 next Tuesday...
This kind of person will NEVER learn. $15 an hour sounds great, until it's worth less than half the wage when you factor in the job loss and inflation cost of going there. As I don't go to fast food outlets and restaurants, good fucking luck...if I need your services, I'll pay you what you're worth, not what you convince some worthless politician thnks you're worth.
A lot of locals these days are run by corrupt Mobsters who make large salaries in membership dues. I think that Unions overall have a place in free-markets as voluntary-associations. Having experienced the food service industry as an employee i found the work to be nothing less than soul crushing. As a future owner-operator and SB owner I empathize with the push for better margins especially with today's high failure rate.
I cannot however advocate the governments intervention in the free markets in any way however i do not think that passing this bill will be as damaging as the opposition leads us to believe. Lower skilled workers face tough challenges in today labor markets and there is no right answer. If it was up to me i would have Franchise corporations lower operator expenses to offset new higher wage platforms put i don't think this is even on the table.
I wish all workers out there the best in their efforts to earn living wages.
Truely Yours,
Musashi Miyamoto
.
P.S. Fuck McDonalds
"I cannot however advocate the governments intervention in the free markets in any way"
But the U.S. government has a history of siding with corporations and aiding them in the crushing of Unions. Meaning, no free market!
What you say is true, but it also was once much worse with respect to the government being on the side of business. It was right out there in the open and you also had the MSM right behind big business with absolutely no sympathy for the worker.
I see the argument here.
Have you ever realized what 'fascism' is?
Italian Fascism promotes a corporatist economic system.[3] The economy involves employer and employee syndicates being linked together in corporative associations to collectively represent the nation's economic producers and work alongside the state to set national economic policy.[3] Mussolini declared such economics as a "Third Alternative" to capitalism and Marxism that Italian Fascism regarded as "obsolete doctrines".[4] It supports criminalization of strikes by employees and lockouts by employers as illegal acts it deems these acts as prejudicial to the national community as a whole.[77]
Actually, fascism, as defined, is 'the perfect merger of the corporation and the state'.
SO...
IF the GOVERNMENT of the CORPORATES decides that $15.00 an hour is 'good', then, naturally, the CORPORATE BANKERS will simply 'print moar money' in order for this to be. McDonald's will aquiese, and the government will legislate, and the IRS will collect even MOAR in taxes, and the sheoples will be temporarily satisfied (until April 15, 2015).
I suppose that this argument you two are having does not take in to account the TRUE nature of government.
Kleptocracy!
Higher minimum wages will speed the implementation of robotics. We're stuck with that.
Yup
Mechanic masterchef: Robots cook dumplings, noodles and wait tables at restaurant in Chinahttp://www.dailymail.co.uk/news/article-2261767/Robot-Restaurant-Robots-cook-food-wait-tables-Harbin.html
Dude, Paulie had one of those in the 80s!
https://www.youtube.com/watch?v=cku6oPGWW7Q
... and if only horses weren't so damn lazy - too slow, always having rest breaks, eating too much hay. Why if they worked harder then they could have kept their jobs instead of getting replaced by the motor car. Stupid horses.
(Even though it is obviously sarcasm, I can't help feeling horrible for typing that. I do sooo like horses.)
I, for one, welcome the robots. Now where is that 4 hour working week that was supposed to accompany them?
The implementation of robotics will occur exponentially whether or not minimum wages rise.
I have heard a bit of robot talk on this site and at the risk of totally ticking you off I would like to ask you to elaborate, if you don't mind. Back in the 80's as a student I was highly interested in getting into this field, but life got in the way. What is your experience with the increase in the use of robots?
No risk of ticking me off. Would it matter anyway? After all, I'm just another face at a keyboard. Or a bot. Often times I run across articles, posts, comments, ideas I do not understand. If I have a true desire to understand that which I do not, I do my best at researching it. Enough at least to satisfy my curiosity.
I, for one, welcome the robots. Now where is that 4 hour working week that was supposed to accompany them?
Wouldn't the introduction of robots open the door to higher payer jobs to service robots? And the cost of fast food would drop so I can afford to get a large frosty from Wendy's every day?
http://www.huffingtonpost.com/2013/08/30/minimum-wage-robot_n_3844413.html
barter for the motherfucking win
I actually like this debate. There is no way, NO WAY, that the minimum wage is going to $15. In fact, it'll go down in 5 to 10 years.
TPTB are in a race to the bottom. Countries / societies are already cutting deals, no taxes, build your factory for you, etc. How long before they offer to work for food? Hell, Asian countries are already doing it, basically.
But you burger flippers go for it. I'll enjoy watching from the sidelines.
"TPTB are in a race to the bottom. Countries / societies are already cutting deals, no taxes, build your factory for you, etc. How long before they offer to work for food? Hell, Asian countries are already doing it, basically."
Oh really? Have you seen the riots in Bangladesh etc?
Yes, I saw.
Did you see how fast that garment factory was back up & running, AT A LOWER WAGE, because it cost money to refurbish, and TBTP ARE NOT GOING TO CUT THEIR PROFIT MARGINS?
wages and lifestyles will erode because TPTB won't stop until they control / own everything.
Riot all you want.
"Riot all you want" You'll see, you really are a toady.
Thats how we got where we are today. To many damn people standing on the sidelines watching. Not my problem mon! Until of course it becomes your problem. Then we have a tendency to yell and bitch when the injustice hits home. But of course it is hitting home and we still sit on the sidelines.
"the population is too damn high!" and until this is rectified (which i believe is being planned for us), expect dislocations in economics and environment. for what it's worth, i'm not a breeder but you won't march me into the pen.
It won't go down, thats just crazy talk. It might suffer a little in real terms by keeping it steady for a while, which has happened a lot over the years.
We're sorry but your father's multinational collapsed early this morning . . .
On the one hand, TPTB want low wages. On the other hand, they want high real estate prices.
errr, correct that: TPTB want low wages but high prices.
Solution: lend money to idiots and endless bailouts to TPTB. Debt is just a prop that TPTB use to enable them to beg / extort.
The parking lot across from the waterfront harbour and docks in my town is FILLED with F-350, Dodge RAM and other massive, expensive late-model trucks.
Why?
Because the unionized employees of those who have government-protected monopoly access to the oceanfront are enormously overpaid: $40-$60 an hour plus benefits plus pensions is common. Together with government employees and employers given government grants of timber in the forest industry - and their pensioners and employees - these people enjoy huge incomes. In other areas it's those given access by government to gas and oil who reap the windfalls.
These, not "the banksters", are now the protected, bailed-out New Rich.
WHY can't I trot up to the harbour board office & offer to do their grunt labour jobs for $10 or $15 an hour?????
"These, not "the banksters", are now the protected, bailed-out New Rich." "enormously overpaid: $40-$60 an hour plus benefits plus pensions is common."
HA HA HA HA ENORMOUSLY OVERPAID COMPARED TO BANKSTERS!!! HA HA HA HA HA
Printer fill up the page with HA HA HA for me please
Oh Kreditanstalt what a comic act you are - take it on the road sir
Did you answer my question, Mr.Marx?
Didn't see anyone named Marx......so thought I'd give it a shot.
You answered your first question.
As to your second question:
"WHY can't I trot up to the harbour board office & offer to do their grunt labour jobs for $10 or $15 an hour????? "
are their any fences, gates, locks, walls preventing you from doing so? Because if not, you can.
Bullshit - a unionized shillelagh to a scab's kneecaps is probably the most obvious disincentive.
Many corporations and banks, including but not limited to, foriegn banks, were bailed out by the government after the 2008 debacle over which no one of any real culpability has yet gone to jail. Only a small percentage of them had union employees. Unless of course you consider lobbyists unionizers. In which case many have profited.
Kreditanstalt:
You could always try in a foreign country. But you may have to lower your offer to $2 per hour.
How do you know the dockers are overpaid? Has it ever occurred to you that everyone else might be underpaid? How come GM can afford to make those cars but no-one, except wharfies, can afford to buy them? Yes, I know about crony bailouts and debt etc, but the bottom line is that we had the labour and resources to build them, plus we had plenty of labour left over.
Capitalist minded tradies are paid to build houses that no-one can afford to buy while other capitalist minded tradies are paid to demolish the ones that didn't get sold. The labour is there. The resources are there. The production is there.
You could cut wages to zero. Producers would still have to pay down debt, real estate, parts ( I'm iffy about including "parts" because ultimately they too are labour ), i.e. your customers have no money and yet you still have to charge a real price, therefore demand is zero. Everyone forgets that one man's worker is another man's customer. That is why the Chinese sell to the US, not their fellow Chinese.
This piece is completely hilarious until you realise that they actually believe what they're saying is true and that they hate the rest of their brothers and sisters on earth that much that they're completely satisfied to talk of them and their lives as dismissable binary calculations.
The constant lie that minimum wages increase costs and are the seeds to the destruction of labour itself are completely stuck in the ideological belief that the employer can never take a lower profit and that profit is always redeemable through machinery.
Thank goodness the Von Mises school is filled with dreadfully dull, sexually repressed and patently psychopathic entities that the rest of the world can see through to prevent the promulgation of their ideas taking hold in the real world.
You sound woefully unprepared.
Not another Libertarian 'prepper' trolling me with nonsensical ideas, please spare me!
Not another conformist statist sheep trolling us with conventional, 'mainstream', acquiescent, pro-Establishment ideas, please spare me!
Yep you're another one on this site too, endulging yourself in Nietzschean-cum-Libertarian wank fantasies about how great it is to live atop the mountain and that anyone who thinks different, through experiencing real-lfe, is just the proof of your self appointed title of Zarathustra.
Lonely, cynical and benighted opinions manifesting themselves in an pure idolatory of the false abstraction of reality that is economics in the Austrian form.
"Convictions are more dangerous enemies of truth than lies"
Another unemployed and bitter-at-the-world liberal arts major, I see.
Those evil capitalist/libertarians at huffpost laid off another one.
Wrong, but truth means nothing so why bother guessing?
If you must though, just imagine I'm an unemployed, black, mother of thirteen from Detroit, maxing out on welfare whilst laughing at how many of your tax dollars I can blow at Wallmart on a daily basis.
This is the only way to ensure you keep the bile levels at a high enough level to keep the gattungswesen negating comments flowing.
Cant even spell WallMart correctly... must Eurotrash.
Who gives a fuck if YOU can spell Walmart or Wal-mart correctly? Must be Americantrash.
W A L M A R T
You're right, I apologise I didn't spell it like W A L M A R T does. I would like to say it was down to a visceral hatred of them which prevented my hands typing the word correctly but alas it was just a 'typo'.
Glad I'm considered Eurotrash though, that's even better than what I was called above.
Bonsoir!
"Glad I'm considered Eurotrash though, that's even better than what I was called above."
To ZH11 - I didn't call you Americantrash. I objected to you being called "Eurotrash" because you spelled Walmart incorrectly.
Bonsoir et bonne chance 2014
I know you didn't ajax, I was responding to the guy above you, through you.
Thanks for the objection though I appreciate that.
Cant even spell WallMart correctly... must Eurotrash.
To be able to think critically is to be prepared for those who can not.
"To be able to think critically is to be prepared for those who can not."
Oh for fuck's sake, look at what happened to Glenn Gould:
https://www.youtube.com/watch?v=Ae6ctuy-1ic
As has been said before if wages don't matter why not pay $50 for minimum wage ... why stop there lets's make it $100. As seen in Zimbabwe where everyone was pulling down better than CEO wages ... everyone was a freaking multi Trillionare! Still couldn't buy much though.
ZH11:!!! Right On.
Can any poster on this site please name one place on earth where the successful implementation of Herr Mises' economic dogmas has taken place?
Europe just went through a bout of "Von Mises" ideas and I do not see a booming economy anywhere there. Von Mises is just another crackpot economist whose stupid ideas will be thrown into the dustbin of history.
I have a question for these minimum wage haters - What if the price of beef doubled for McDonalds? Would we see such fierce "hair on fire" responses from the inhabitants of RightwingWorld? I bet you would not hear a peep out of them.
Another question, how do Australia with $15/hour & Denmark with about 17$/hour do it without their economies collapsing?
ZH11: This piece is hilarious when you realize that the high-skilled workers can't get jobs either!!!
The minimum wage is a minimum. That means highly-skilled workers should be paid more. Otherwise, why bother to develop your skills?
This article is so much crap it is hard to believe that readers would mistake it for what it is, Corporate propaganda.
I recently posted a comment re the second biggest employer in our county and the worker problems there do to cheap labor. A due with a FLintstone avatar called bullshit wanting to know where the place was as if he could not believe such exists. Were I to do so, would probably end up in the person who gave me the info being fired. Not a lot of employers in our county. But the amazing thing is that there a people so insulated as to what is really happening in America that they find such conditions exist hard to believe. And therein lies a major problem.
Last night I was in the local walmart. The meat, not processed meat, shelves were damn near bare. Two people said they would have to go somewhere else. My wife could not find what she was looking for. I asked a dude who works there what was happening with their shelves. He said they were cutting hours dramatically. He was a part time worker to begin with and had his hours cut yet more. He was also employed to work loading and unloading but was out on the floor as they had little help. Are we to BELIEVE It IS WALMARTS WAGES THAT ARE CREATING THE PROBLEM?
Zero Hedge has printed any number of articles on wealth redistribution and wage destruction over the years. It is all coming to pass. Yet a quick scan of the comments continues to blame unions and Obama. Those are views that can only be held by either people profiting off continued wage destruction and/or just plain ignorance.
"The reason is not only the fact that higher wages serve to raise costs of production and thus prices, which in turn serves to reduce physical sales volume and thus the number of workers needed. There is also another equally, if not more important reason in this case, and it is a reason which is only very inadequately described by reference to the substitution of machinery or automation for the direct labor of workers when wages are increased."
Never mind the fact that the corporations have been allowed to offshore American jobs to those who allow slavery and are declared enemies of our own way of life. Instead consider that in many factories in China it has been cheaper to use cheap labor than to install robotics and automation (google it bitchez's).
There is no mention in this article of the declining power of unions and the escalating power and profit margins of corporations and our paid for "GOVERNORS"! Again, where are the references to the massive redistribution of wealth from the middle class to the top 1 percent and it's impact on GDP?
This article does little to address the total scope of job destruction and the reasons for it. Yet how many posts on Zero Hedge have called attention to the true value of todays $7.25 an hour? Google how much it would cost Apple to make Icrap here versus overseas and then google their profit margin and the money made off an enemy and held offshore in the banks of those who would fuck us in minute to avoid supporting the country that gives them the freedom and the power to fuck people over. Apple Inc. needs their very own Snowden.
Working both Union and non-union jobs in Florida in the past (when unions actuall had at least enough power to reduce worker fatalities) I can tell you "FEW" of the contractors were going broke.
Low wages will not decrease the speed with robotics will be implemented. Ask Applebees, as if their waitresses face a rosy future in either case. When business to squeeze out more profit it will be used. Thats a good thing. It leads to more jobs. But you want make some really good profits? Take care of those who work for you irregardless of the machines you hire.
Good God it ain't no wonder howl the kleptocracy gets away with what it does. Take some freaking time and go to where the real people live.
Well said!
Apparentely though you're just a conformist, statist, sheep for not worshipping at the altar of profit and kissing the feet of your local billionaire.
what is it like living in your binary world?
no, actually you are a statist sheep if you think the government has the right to interefere in private transactions.
personally, i prefer to be free, to make my own decisions about when, how, and at what rate to buy or sell anything.
i don't support the nanny-state, nor care for weak-minded persons that think the government is a solution to anything.
maybe you enjoy a life of being bent over while the nsa anal-probes you and monitors your every conversation, and the illustrious president sends your children off to die in glorious battle in the middle east or asia, because they hate us for our freedoms so much over there.
but, one day soon, government apologists will learn, and learn dearly, the time is coming.
Akarc,
I apologize if I offended you, but I am here to learn and simply asked you a question. I vaugely remember your post and my comment and if I could remember which article it was, I would go back and see if you answered me. I don't necessarily like where I live and am thinking about place that might be nice to move to and also places to avoid. Again, my primary agenda is to learn. Like everyone else I will occaisionaly be a smart ass and maybe even be an asshole from time to time. But that was not my intent in the excahnge that you referenced.
If you like, you can refresh my memory and answer my original question.
Regards,
Fred
Yo Fred. I take no offense. I learn much from this site, enjoy the back and forth and make an effort to be an "asshole". Though I must admit it does come fairly easy. Genetics me thinks.
The company I referred to operates in more than one state. However I will not name it as it could result in a job loss or two or three. If you are moving and have to work for a living might I suggest avoiding what is referred to as the armpit of Florida. Other than the state jobs and University it is an area of historically low wages and under education. It appears they like it that way. Enjoy.
Danke. I think Franklin County is this area. I read that they had a 40% home vacancy rate, does this sound about right? There are some military bases around there also.
https://www.youtube.com/watch?v=1JPreVoErw4
This is all you need to learn. Bring this to the front and center stage and the rest will fall into place.
Nolite te bastards carborundorum mofos.
Solve 9-11 and the Rest-Will-Fall-Into-Place
Come on boys, save us.
People seem to have forgotten the concept of goodwill. Maybe these corporations are becoming economically 'toxic' because of all the ill-will they are spreading around.
Goodwill is an intangible force that does boost a company's bottom line and forsaking it perpetuates the vicious circle
"People seem to have forgotten the concept of goodwill."
AMEN!
"Never mind the fact that the corporations have been allowed to offshore American jobs to those who allow slavery and are declared enemies of our own way of life. Instead consider that in many factories in China it has been cheaper to use cheap labor than to install robotics and automation"
Just how do you plan on keeping China out of the global economy? Foxconn is planning to install a million robots, so it is becoming more economical for them to robotize.
Japan has off shored jobs to the U.S. Americans build Japanese cars. A French company builds subway cars in the U.S. Offshoring isn't just a one way street. Even China is losing jobs to other low wage countries. Some manufacturing is returning to the U.S. but it is more robotized.
"Even China is losing jobs to other low wage countries."
Correct they are. And we will buy from/subsidize them also. Just as we have paid brazillian cotton farmers not to plant cotton and at least one (been awhile since I checked) Texas candy maker has moved to brazil to get around the sugar restrictions.
It is kind of like closing the door after the horse gets out. My preference however would be to see us bring China up to what was our level regarding human rights and individual freedoms. Opposed to what is apparently happening. Them bringing us down to their level.
We have destroyed anything resembling a free market while shipping our jobs and technologies to countries that have profited off of child abuse, slavery and human rights abuses. There is no way the American worker could compete on such a playing a field. However, with continued wage destruction, that time may/or has come.
We could have taken a hard line and said something like, we will be glad to do business with you "fairly". But we did not for 2 reasons.
1. The corporate machine saw the gold at the end of the tunnel, and
2. Americans were more than happy to throw their moral compass and constitutional freedoms out the window in order to buy something cheap.
As much as I rail about the corporate/government alliance I am always mindful that in the end, the blame lies in laps of each and every one of us.
There is nothing in our Constitution that requires the United States to allow countries to sell their goods here. We should remember this.
How seriously should anyone take an article where the author is too fucking stupid to consider that if the minimum wage were raised to $15 per hour, then employers of skilled labor must pay more than $15 to entice workers to be trained for and take high skilled jobs? Not seriously at all.
College educated young adults are already working at minimum wage jobs. Raising the minimum wage doesn't address the permanent loss of jobs in the name of globalist "free market" plans to bring our economy down to third world standards. Those who control the money have gamed the system to where the only outcome is an army of debt slaves willing to work for slave wages.
Wages are set by how many people want a specific job and are qualified to do it. Employers sometimes must raise wages to attract good people, sometimes there is a major surplus of good people looking for the jobs the emplyer has. Unskilled, I commanded a low wage. After traing in the Navy and then a long stint in a technical college, I was offered a much higher wage by employers. I was home in my small town drinking at a party and some guy there whose olb man owned a business was talking about his old man can't find anyone local to work for him in the technical side of his business. I said, hey man, I just graduated from school with those skills. He says, hell go down and see the old man monday morning. So I go down, tell him what I trained in, he says go back in the shop and take on a couple jobs sitting there. A coule hours later he looks at the finished product and hires me. This was how empoyment once was, before the Human Resource Iditos got between owners and job applicants. The fucks know jack shit about the work, but claim to know who to hire, thank god I never had to go through very many of those dickheads.
If low wage workers want a raise, they should ask for it, if they can be replaced with ease, then it is not likely they will get that raise. Pretty simple idea, supply and demand. It is too bad that on the grander scale of markets, that government manipulates everything. Markets work at the basic level, but corporate bosses and their paid for politicians are now engaged in manipulation to benefit the top.
Don't be cheap....open your heart and give those uneducated, unskilled, low IQ people more money.
What? and let them spend that extra money to get an education and skill that will compete with my little princess? Are you nuts? Keeping them on the treadmill is the only thing keeping the competition down
"Don't be cheap....open your heart and give those uneducated, unskilled, low IQ people more money."
Marc Rich began his career in the mailroom at Philipp Brothers NYC but at least he was paid enough to live in NYC ... you short-sighted asshole
Why not a $50/hour minimum wage? Why not $100/hour?
Really, tell us, why not?
it's NOT the wage that's the issue Akak it's the environment the wage has to exist in that's the problem, this debate just illustrates the REAL problem and the solution isn't going to be found in pay raises. This entire article is tertiary/tangential to the problem at hand
The purpose of raising the minimum wage is to prevent working people from living in poverty and/or needing public assistance. Paying $200 per hour would make the minimum wage $400,000 per year. While I'm pretty sure we would all like to make $400,000 per year, workers don't need to make that much to escape crushing poverty. Thank for playing.
Thanks, Timmy, but I assumed that my post would be clearly identified for the sarcasm that it was.
why feed the meme?? that's too easy for you akak
" While I'm pretty sure we would all like to make $400,000 per year, workers don't need to make that much to escape crushing poverty."
While I'm pretty sure we would all like to make $400,000 per year, workers don't need to make that much to escape crushing poverty........yet.
FIFY
akak re why not a $50 / 100 per hour minimum wage: Why not indeed. How about, as long as price inflation is less than minimum wage inflation, we can raise the minimum wage? Given that minimum wage component is less than total price, percentage wise the society gets more demand. When will this stop? As labour becomes an increasing proportion of profits, return will diminish but otherwise when we run out of resources.
Actually, of course, in the real world the first problem is competing with third world labour. But we could easily compete plus maintain our standard of living with either tariffs, fiddling the exchange rate, or wipe all debt and real estate prices, and reprice the whole country to compete. That is another debate.
McDonald's is the graveyard where MBA's go to die.
Don't worry about the higher skilled workers taking the lower skilled worker jobs. According to the propagandists, they need to open the borders to bring in more workers to fill the jobs already left vacant by this so called low skill labor shortage.
Ever wonder how they find jobs here for less than minimum wage? It's that damned ol profit margin thingy. Obviously a corporation can not make money without abusing people.
It is nothing more than a tax increase, additionally it encourages inflation. It's a win win for both sides.
"McDonald's is the graveyard where MBA's go to die." and if you eat the food there you might as well be putting a loaded gun to your head as well.
NihilistZero and cynicalskeptic:
My sentiments exactly.
http://www.youtube.com/watch?v=KO5JS-kuBQ0
Jack Burton was involved in the natural language parser for Monster.com. The HR community is absolutely useless. This include anyone that uses Linkedin. You have the entire economy being run by profit instead of growth.
You have 70 % college graduates taking business degrees impaling themselves on usury debt cycle. You have C class buyback shares on interest rate crimes not growth. You have corporate Hr running crony capital mutual funds with Kstreet protecting laws at expense of real savings......
You have credit rating of US based on taxing power and crony guys squeezing the cap x out into there pockets... no doubt overseas.. Most people don't give a crap and keep electing these Hobson choice main stream media DNC/RNC shills for corruption... I'm trying real hard to keep believing in hard work and free market but until we get some answers for TBTF and science on JP5 and steel structures, security nonsense I fear nothing but apathy.
WTC 7. Science is ignored apathy wins. We willnever get the answers. One can only pray Snowden may have motivated a few others. It does not now appear that he has.
"WTC 7. Science is ignored apathy wins."
"It looks like a demo" is not science.
So then, look at the science.
Collapse at free-fall speed caused by a few office fires is not science.
"Jack Burton was involved in the natural language parser for Monster.com. The HR community is absolutely useless. This include anyone that uses Linkedin. You have the entire economy being run by profit instead of growth."
Marvellous response. So glad to see you here "highwaytoserdom" and all the best for 2014 - whatever that means.
I am in favor of $15 minimum wage one hundred pissent, and I have my reactionary reasons.
If sociopathically selfish Republicans are against it, I'm for it.
When they raised the minimum to $1.25 in the 1960's the fucking Republicans went berserk, whinning and prognosticating inflationary dislocations.
Every then years I hear the same, lame whinning.
(I have other reasons as well, but I don't want to bore you, not now.)
Let's raise it to $50 then .... or $100. Train engineers in the Pilabara were making $200k per year ... now the trains are automated. There are machines ready to completely make your fast food burger, they are ready to go. The only thing that is holding back adoption is that it is currently cheaper to use people. At $15 probably not, after all you don't want to pay $10 for your fast food burger i'm sure.
Maybe fast food "burgers" at $10 would help solve our out of control obesity problem. Just sayin'
If the machines can do the jobs then let the machines have the jobs. Now where is my four hour working week?
get over the republican / democrat rubbish.
i don't care for republicans either, but they are controlled by the same interests as the democrats, who are equally worthless.
you can't live your life or base your morality on doing the opposite of what someone else does - this leaves you as damged goods, the object of your hatred defines you instead of you defining yourself.
Actually what we're seeing a lot of today is employers deliberately preferring low skilled workers over high-skilled workers, simply because the low-skilled don't cost much. For instance, with H-1B's, usually they are quite inferior to the domestic talent, but they cost half to 1/3rd as much over the long run. In many cases "good enough" is exactly that, "good enough". We see significant tracts of very high skilled workers who have been displaced by relatively low skilled workers in this way.
Those H1-b's must have been imported to work on Obamacare.
I'd tend to agree with you,except the website was built by a Canadian firm. But that company probably got some curry-eaters for real cheap same as in the USSA.
I find it very odd that so many commentators and congresscritters declare doom when raising the minimum wage is discussed. Minimum wage workers are on the brink of starvation.
There is NO discussion when engineers command a higher wages or CEO's or Business Analysts or any other job function and these roles have increasing wages much larger than the $7.75 difference between $15 and the current minimum wage.
Why is it that the weakest members of society are always the ones to get condemned? What a ruthless country this is. Predators all.
We are trained from birth to blame the poor and completely powerless for the circumstances that keep them poor and powerless. No one defends them and it's much more socially acceptable than blaming those actually responsible.
Because we are inherently bullies and cowards. How good for our egos and delusionary"MAN" status by piling on those unable to defend themselves.
To blame those who are actually responsible means that you may have to go up against something that is very likely to kick your ass. In most cases I suspect Americans will choose to be the bully rather than to take on the bigger bully.
There is a bit of a conundrum here. Keeping minimum wages below the threshold of decent living standards implies that thousands of workers have to rely on Uncle Sam's largesse for subsidies and entitlements. You end up having US taxpayers subsidizing the huge gains of companies like Walmart. This is not an argument to raise minimum wages by 'edict', but we should at least remove the hypocrisy that this is about free competitive markets.
Corporations enjoy huge non competitive benefits courtesy of the US Government and the US taxpayers: the discussion about not raising minimum wages should be put on the same program as the discussion about eliminating corporate subsidies. Only then workers will stand a fair chance to bargain competitively for wages and let the markets decide.
"There is a bit of a conundrum here."
No there is not because you are absolutely correct. Corporate websites telling their employee's how to obtain govt benefits????? WTF?????? Their needs to be no discussion about it. If a corporation can not afford to pay their employee's a living wage without a taxpayer subsidy then the corporation must either review their business model or go out of business.
There is no incentive for a business to treat their employee's like human beings while "we the people" pay them not to. Do any of these folk bitchin about food stamps understand they are buying corporate fat cats steak dinners with expensive wine and, getting cheaper, hookers??? Where are Christians on this one?
Those loudmouth dickbags crowing publicly about Jesus aren't real Christians. They're propagandists and shills. Prostitutes.
I, personally, have never met a "real" Christian. I find it interesting that every supposed person claiming to follow the path of Christ picks and chooses which of His teachings he will actually abide by. In other words, they are all a bunch of typical, garden variety, hypocritical humans. I would blame this on the famed "get out of Hell free card" Jesus made available at his crucifiction, but members of the other religious sects seem to suffer the same affliction.
"If a corporation can not afford to pay their employee's a living wage without a taxpayer subsidy then the corporation must either review their business model or go out of business."
If a corporation can not afford to pay their employees a living wage AND THEIR EXECUTIVES A MASSIVE FORTUNE without a taxpayer subsidy, then the corporation must either review their business model or HIRE A TEAM OF LOBBYISTS.
FIFY
I want to see the US minimum wage raised to $15 just to see what happens.
I want $399 per hour and I want Janet Yellen to print it for me.
NOW!
At least the FED made the new counterfeited $100 bills easier to counterfeit.
Got to keep the US wages much higher than chinese. Export as many jobs as you can.
Or... they preparing the way for USD devaluation.