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Captain Corea
Joined: 28 Feb 2005
Location: Seoul
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 Posted: Tue Sep 08, 2009 4:59 pm Post subject: |
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^^ and thus the reason most people can still 'live' in North America, but are finding it ever harder to get ahead.
Look at that increase in housing prices! Wow, it's both stunning and sad. |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Tue Sep 08, 2009 7:58 pm Post subject: |
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| DIsbell wrote: |
are you saying that minimum wage jobs, which are mainly low-level service/retail jobs, are being outsourced to china?
manufacturing of simpler goods left the US quite some time ago. American factory workers are nowhere near the minimum wage. |
I said in an previous post in this forum that all that will be left are the low-level service/retail jobs. The low level factory jobs left USA a long time ago when minimum wage laws were introduced. Also, as I said.
It's the unions that have made some of what should be minimum wage jobs turn into decent salary jobs which then leave to China.
Are you arguing in favor of further increasing minimum wage in the low-level service industry? Because the next step will be automation. Self-Scanners and vending machines are replacing people. And yes, we will get used to it, just like we got use to an ABM, much more pleasurable than a big lineup and and a teller with attitude. Technology is getting cheaper, and if we price human labor too high, it can be replaced. I agree with some maximum wages, such as CEO bonus compensation. Minimum wages just affect jobs in the long-run as capital intensity/labor ratio can be adjusted. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Sep 08, 2009 7:59 pm Post subject: |
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| If the data was controlled for inequality it would look much worse. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Sep 08, 2009 9:28 pm Post subject: |
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| gakduki wrote: |
| I agree with some maximum wages, such as CEO bonus compensation. |
I don't believe maximum wages are off-topic in a thread about the minimum wage, so . . .
I agree with this. Boards of Directors (BoD) have every incentive to give CEOs massive pay increases, not least because the CEO's decisions can have major impact on their salaries. This dominoes into a market effect where to be competitive, a corporation has to offer a CEO massive compensation to compete with other corporations. The shareholder gets lost in this cycle pretty quickly. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Sep 08, 2009 9:33 pm Post subject: |
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| Kuros wrote: |
| The shareholder gets lost in this cycle pretty quickly. |
And the shareholders are not usually individuals but institutions like CALPERS, OTPP, mutual funds, hedge funds etc. These institutions have demonstrated a solid pattern of being completely asleep at the switch regarding their duty to push management around. These fund managers didn't see risk as a management problem but a math problem. It was something to be hedged. So they let happen whatever happened. Each increase in exec pay at a comparable firm increased the "market rate" for "talent". This became an ugly cycle. It's a big problem. |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Wed Sep 09, 2009 6:52 am Post subject: |
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The two biggest problem2 with CEO salaries (sorry to change the subject, but no reply to me has been made yet) are that
1. nearly every year the corporation hires a consultant to discuss what its CEOs should get paid. If the consultant doesn't think the CEO's should get paid more, the consultant will soon be out of a job. So give them more, they deserve it, its a vicious cycle when the consultant can say well at comparable companies..., as was mentioned.
2. Company's are legally responsibly to hire the best possible management. If they don't their shareholders will sue them. It is easy to say that the highest paid people are the best (they must have experience too and a track record.) But all else the same, if you don't pay your CEO's alot, it can be argued they are not top quality, and if the shares preform bad, the BOD can be sued. |
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DIsbell
Joined: 15 Oct 2008
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| Posted: Wed Sep 09, 2009 7:54 am Post subject: |
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| gakduki wrote: |
| DIsbell wrote: |
are you saying that minimum wage jobs, which are mainly low-level service/retail jobs, are being outsourced to china?
manufacturing of simpler goods left the US quite some time ago. American factory workers are nowhere near the minimum wage. |
I said in an previous post in this forum that all that will be left are the low-level service/retail jobs. The low level factory jobs left USA a long time ago when minimum wage laws were introduced. Also, as I said.
It's the unions that have made some of what should be minimum wage jobs turn into decent salary jobs which then leave to China.
Are you arguing in favor of further increasing minimum wage in the low-level service industry? Because the next step will be automation. Self-Scanners and vending machines are replacing people. And yes, we will get used to it, just like we got use to an ABM, much more pleasurable than a big lineup and and a teller with attitude. Technology is getting cheaper, and if we price human labor too high, it can be replaced. |
what salary jobs that ought to be minimum wage jobs in particular, have been largely outsourced to China? |
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T-J
Joined: 10 Oct 2008
Location: Seoul EunpyungGu Yeonsinnae
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| Posted: Wed Sep 09, 2009 8:53 am Post subject: |
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Back to the minimum wage argument. The wage should be left to the market. The need to attract employees from competitors, particularly in the typically lower paying service industries keeps wages at an appropriate level.
I witnessed the recent minimum wage increases in the state of New York over the past few years and the immediate response of businesses was to raise prices to offset the increased expense. Which immediately wiped out any increase in spending power the increase gave the worker.
I came to the conclusion after observing this that the legislature passed the increase for two reasons. One, to appeal to the working class. And two, to increase tax revenue. By increasing the minimum wage the only real winner is the government. They increase revenue twice. Payroll taxes go up as a result of employers paying more. Secondly because of the inevitable price increases to offset the increased expense to the labor line, sales tax revenue is increased as well.
The only winner is the government. No more buying power or ability to pay down debt, let alone save. Increased tax revenue without raising tax rates on both payroll and sales. All done in the name helping the little guy, while no help is actually given. Brilliant! |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Wed Sep 09, 2009 7:18 pm Post subject: |
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| T-J wrote: |
| Increased tax revenue... All done in the name helping the little guy, while no help is actually given. Brilliant! |
Well taxes should pay for services. In a functioning democracy that's what happens; increased taxes would pay for more police, more teachers and better infrastructure. These things help poorer people more than richer people. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 7:58 pm Post subject: |
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| RufusW wrote: |
| T-J wrote: |
| Increased tax revenue... All done in the name helping the little guy, while no help is actually given. Brilliant! |
Well taxes should pay for services. In a functioning democracy that's what happens; increased taxes would pay for more police, more teachers and better infrastructure. These things help poorer people more than richer people. |
The problem is, govts track record at supplying those things, at anything resembling a reasonable price, is abysmal. Especially schooling. Do you know how much the federal govt spends per pupil per year in the US? |
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steveinincheon
Joined: 14 Jul 2009
Location: in The Shadows of Gyeyangsan
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| Posted: Wed Sep 09, 2009 8:23 pm Post subject: |
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Back to the minimum wage laws - Most economic theory stipulates that lower income earners spend a far greater proportion of their disposable income than higher earners do. Paying low wage workers a slightly higher base wage will see more money going directly back into the economy than letting it stay in the hands of corporate management.
Second, having low income workers unable to earn a basic living wage will cause more people to go into debt, which is the last thing that is needed in any Western country.
Third, I don't know how minimum wage laws work in all of the English speaking world, but when I worked at a grocery school in high schoolin Michigan, I know that teenage workers under 18 could be paid a base wage that was lower than the federal minimum.
Fourth, greater enforcement of the minimum wage laws could increase legal employment opportunites - again back in Michigan most manual farm labor is done by migrant workers who earn far below the legal minimum. Enforcing labor laws would open up oppurtunities for legal work.
Finally, a lot of neoclassical economic theory and the laissez-faire anti-regulatory approach has been invalidated by the recent economic crisis. Too many of the assumptions inherent to the economic textbooks that you and I read in college no longer hold in today's world. Read this NYT article by Krugman for more details http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=1&scp=3&sq=krugman&st=cse
I'm not saying that continually increasing the minimum wage is the answer, but this economic crisis could be far worse had very basic regulatory controls not been in place |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 8:45 pm Post subject: |
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| steveinincheon wrote: |
| Back to the minimum wage laws - Most economic theory stipulates that lower income earners spend a far greater proportion of their disposable income than higher earners do. Paying low wage workers a slightly higher base wage will see more money going directly back into the economy than letting it stay in the hands of corporate management. |
This idea that rich people somehow hoard their money really frustrates me. Them having a big ol' pile of cash, doesn't in any way affect the next guy down the street from also building a pile of cash. Also, that wealth he created is stored in banks, who lend that money out so other entrepreneurs can borrow it and create more jobs. If you take away that incentive for entrepreneurs to create wealth you also take away long-run economic benefits for us non-entrepreneurs eg jobs.
| Quote: |
Second, having low income workers unable to earn a basic living wage will cause more people to go into debt, which is the last thing that is needed in any Western country. |
Most people on minimum wage have no dependents. The minimum wage is more than adequate to support a single person. Therefore most people who go into debt, do so for reasons other than trying to survive.
| Quote: |
| Third, I don't know how minimum wage laws work in all of the English speaking world, but when I worked at a grocery school in high schoolin Michigan, I know that teenage workers under 18 could be paid a base wage that was lower than the federal minimum. |
This was true when I started working as a 15 year old, in New Zealand. When this was abolished the number of young people in the work force dropped. And they have now had to introduce training programs for young people as they can't find work, as they have no job skills.
| Quote: |
| Fourth, greater enforcement of the minimum wage laws could increase legal employment opportunites - again back in Michigan most manual farm labor is done by migrant workers who earn far below the legal minimum. Enforcing labor laws would open up oppurtunities for legal work. |
I don't think there is much of an issue with enforcement. If you are paying taxes, you are being payed the min wage.
No it wouldn't open opportunities. Either the farmer would find a way to do the work mechanically. Or he would have to hire less workers, or he would go out of business.
Sigh. There has never been a time in the past 100 or so years when the ruling class have ever actually implemented true free market principles. They love to pay lip service to the free market but it is nothing more than a convenient scape goat for the failure of govt actions. The past century has been typified by creeping regulation into every facet of life.
Double sigh to the Krugman article. I posted a thread on this on Sunday night. Scroll down and find the thread "Krugman make me cry". The man is a grade A moron.
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I'm not saying that continually increasing the minimum wage is the answer, but this economic crisis could be far worse had very basic regulatory controls not been in place |
Such as? |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Sep 09, 2009 8:50 pm Post subject: |
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| steveinincheon wrote: |
Back to the minimum wage laws - Most economic theory stipulates that lower income earners spend a far greater proportion of their disposable income than higher earners do. Paying low wage workers a slightly higher base wage will see more money going directly back into the economy than letting it stay in the hands of corporate management.
Second, having low income workers unable to earn a basic living wage will cause more people to go into debt, which is the last thing that is needed in any Western country.
Third, I don't know how minimum wage laws work in all of the English speaking world, but when I worked at a grocery school in high schoolin Michigan, I know that teenage workers under 18 could be paid a base wage that was lower than the federal minimum.
Fourth, greater enforcement of the minimum wage laws could increase legal employment opportunites - again back in Michigan most manual farm labor is done by migrant workers who earn far below the legal minimum. Enforcing labor laws would open up oppurtunities for legal work. |
These are good points.
But your last one is going to get the most attention:
| Quote: |
Finally, a lot of neoclassical economic theory and the laissez-faire anti-regulatory approach has been invalidated by the recent economic crisis. Too many of the assumptions inherent to the economic textbooks that you and I read in college no longer hold in today's world. Read this NYT article by Krugman for more details http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=1&scp=3&sq=krugman&st=cse
I'm not saying that continually increasing the minimum wage is the answer, but this economic crisis could be far worse had very basic regulatory controls not been in place |
| Krugman wrote: |
But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed�s best efforts. |
Krugman has taught me more than a few things about economics, but he's still a partisan at the end of the day. He cannot be trusted to present the opposing argument fairly.
I think this is true, though:
| Krugman wrote: |
the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. |
Anyway, it takes us well astray of the question of minimum wage laws. To point #4, I don't have any confidence that better enforcement of the current wage laws is going to help with the massive illegal population; the only cure for that is comprehensive immigration reform. To point #1, the money doesn't stay in the hands of corporate management, its passed on to the consumer. Any business is run for a profit. Walmart is infamous not simply because it pays its workers so little, but because it pays its workers so little to maximize profit (Compare to CostCo, which pays its workers double what Walmart does, well over the minimum wage laws, and still makes handsome profits). If you raise the minimum wage, the cost goes directly to the consumer. Now we might want that, but lets not kid ourselves that we're just withholding money from those at the top, they'll make sure they get theirs. Point #2 is excellent. Point #3 is very helpful, too. Wait staff also get below minimum wage. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Thu Sep 10, 2009 7:15 am Post subject: |
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| T-J wrote: |
I witnessed the recent minimum wage increases in the state of New York over the past few years and the immediate response of businesses was to raise prices to offset the increased expense. Which immediately wiped out any increase in spending power the increase gave the worker......
All done in the name helping the little guy, while no help is actually given. Brilliant! |
Simply not true. The workers who get a minimum wage raise will benefit. If a business, Mcdonalds for example, were to raise its prices by a corresponding amount, that cost would be shared by all its customers, not just its' own workers. Minimum wage workers, who are a small minority of the workforce would get the benefits of a raise, but all consumers in the economy would share in the cost. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Sep 10, 2009 7:36 am Post subject: |
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| jaykimf wrote: |
| ...the cost would be shared by all its customers, not just its' own workers. Minimum wage workers, who are a small minority of the workforce would get the benefits of a raise, but all consumers in the economy would share in the cost. |
Well played. Minimum wage is about a moral imperative. We cannot expect people to work for subsistance level wages. Yes, minimum wages create inefficiencies - but the end result is a better standard of living for society.
I know you Americans hate that word, but that's what you are - a society. Europe realised it about 60 years ago. Stopping child labour produced an inefficiency in the free market - anyone complaining about it now? |
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