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Korean Job Discussion Forums
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Kuros
Joined: 27 Apr 2004
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 Posted: Mon Nov 13, 2006 2:25 am Post subject: |
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| superacidjax wrote: |
| Octavius Hite wrote: |
superacidjax, sorry but you have some errors and some serious mixing of topics.
So Wal-mart took those cost savings and instead of actually passing them onto the consumer they took them and gave them to shareholders.
Now....
That's a good thing except the vast majority of min. wage workers don't own stock, thats probably 30 million Americans (at least). That means that 30 mil. people are not benefitting whatsoever from offshoring. |
That's where I disagree, if shareholders win, the economy will will as those shareholders will then have extra earnings to invest in new industries, thus creating new employment opportunities.. or they'll spend that money, thus creating jobs from their spending.. |
Provided the money actually goes to the shareholders...
...see my post above on exponential increase in CEO earnings...I'm also willing to PM a Stratfor article on the subject to anyone interested (a bit long and off-topic for this).
I agree with you on the larger scope of it. Lou Dobbs is not necessarily right should he say Americans are losing manufacturing jobs. Now, when Americans start losing the really high-paying jobs I'll be worried. |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Mon Nov 13, 2006 2:29 am Post subject: |
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| cbclark4 wrote: |
| huffdaddy wrote: |
| cbclark4 wrote: |
My math is based on level supply demand there's an econimic term for that something like everything else stays the same or some such. |
I'm going to try to listen to my better judgement, which says don't get involved in an economic discussion with someone who doesn't even know the term ceteris paribus. |
My latin is not so good. It took me three tries to pass Macro.
I still like math.
When I have a widget that takes an hour to build. It Costs $5 in material and $5 in labor the total cost is $10.
Now I sell this widget for $10 because I don't need no stinkin' profit. Profit is for Imperialists.
When the Minimum wage is raised to $10 then my widget costs $15.
I have to raise the price to $15.
What else can I do?
I refuse to layoff my labor.
cbc |
This is a fantasy. We are talking reality. In reality, you sell at a profit. You sell your $10 dollar widget at, say $11 to make $1,000 on sales of 1000 widgets. Now, if your can sell 1,500 widgets bydropping your price to $10.75, you will because you then will make $1,175. That's a rise in profit of 11.75 percent. Pretty damned skippy. And that's not including the discounts you get for buying in greater bulk from your suppliers. So, your costs go down on materials.
Get it?
Now, let's take your scenario, which is grossly incorrect. First, your labor is $5. the raise in the minimum wage under consideration is from 5.15 to 7.25, or about 40 percent. Thus, your cost rises to$7.21, not $10. Your new cost is 12.21. Your previous mark-up was, say, 20%. Price: $12.00
For 1000 widgets you had $2000 profit. Oops! Now, you are losing money!
Except.... your customers just got a 40% raise. Now they are buying 40 percent more widgets. 1400 widgets. For 40 percent more widgets parts, you get a discount from suppliers of 40 percent. Now your cost is $10.21. You are selling 1400 widgets at $12.00. Total profit: $2,506. Heck, you can even absorb $500 more cost from your suppliers, less sales, or paying your employees more and make the same profit.
Nice, huh? |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Mon Nov 13, 2006 2:29 am Post subject: |
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I disagree with the notion that shareholders getting more money will mean economic prosparity for the little guy, thats just not true. The things that rich people buy are all made elsewhere: plasma tvs, yachts, sports cars, etc.
Also if people are so rich from stocks then they can afford to pay a little more to ensure that all American's make a reasonable living.
And I don't know too many millionaires shopping at Wal-Mart. |
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Tiger Beer
Joined: 07 Feb 2003
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| Posted: Mon Nov 13, 2006 2:37 am Post subject: |
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The reality is not that inflation/job cuts would occur if minimum wage goes from say US$5.15 to say US$6.15 (even thats a high jump). But basically thats a tank of gas a week (US$40) given to minimum wage earners. Thats not going to create job losses and inflation.
Inflation is more from the high earners spending lavishly everywhere than minimum wage earners getting an extra tank of gas a week.
If there is any problem anywhere.. its that the cost of living is too high already for minimum wage earners to make a decent living in the U.S. Half that should be working go on welfare instead (and get more money there not working than working at minimum wage).. or they start cranking out the meth labs in the rural areas or selling crack in the urban areas.
As far as small businesses who might have to lose a minimum wage earner here or there.. fine.. they'll just go to the next minimum wage job. Across America, there are minimum wage job 'hiring' signs in just about every service industry across the nation already. They are nowhere near filled to capacity because its not adequate wages to live on. |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Mon Nov 13, 2006 2:38 am Post subject: |
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| superacidjax wrote: |
| BJWD wrote: |
| Sometimes, we must confront the law of unintended consequences. |
Yes! Yes! Yes! The book Economics in One Lesson by Hazlit makes that argument for a variety of scenarios. Politicians concern themselves with things they can measure, such as a particular group's economic position rather than with the overall picture.
The law of unintended consequences is the essence of any economic argument. |
But one of the unintended consequences of capitalism is the permanent poor class. The "Free Hand" does not take into account greed. Nor does it take into account the utter fracturing of society. In Korea, under-/un-/low wage employment is aborbed by kids living at home till they marry. It also reduces costs of living per family by magnitudes of that experienced in the West due to kids living alone and ahving their own homes/apts./cars, etc. But capitalism is changing Korea. They are becoming us. And th unintended affects of captialsim are spreading: more ppor, more suicides, more divorce.
The only protection we have against the unintended permanent creation of poor is the MW.
Or should they all just starve? |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Mon Nov 13, 2006 3:05 am Post subject: |
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| superacidjax wrote: |
Offshoring and Outsourcing are benefiting the US and world economy. If you want to read my full analysis of this issue, visit my my blog entry here: |
Yes, I'm aware of comparative advantage. Although the US does benefit, there are several drawbacks which can not be ignored.
One problem with offshoring is that many of the foreign countries we offshore to do not adhere to the same standards as the US. Especially in terms of workers rights and environmental protection. Is it right for the US consumer to benefit from cheaper goods if they are produced in sweat shops? If those factories dump toxins into the environment?
A problem with outsourcing is that we have now left a lot of workers without the security unionized labor provided. Workers who used to make $20+ an hour with health insurance and pension have been replaced with workers making $7 an hour with no insurance or pension. The ultimate costs of providing for the health and welfare of these people has now been passed onto the state, in the way of welfare, medicare, and medicaid.
In terms of minimum wage increases, I'll address a couple of points which have been raised.
First is the unintended consequence of hiring cheaper illegal workers. Does it happen? Sure. That it happens shouldn't mean that we pay our legal workers less, but rather we should do more to stop the illegals from working.
Second is the issue of inflation. The inflation adjusted value of the minimum wage is 30% below its 1979 value. That means they've taken a 30% cut in real pay. Trying to bring minimum wage workers back up to speed may cause a bit of inflation, but considering that they've been pretty much left behind over the last quarter century is reason enough to give them a raise. Leaving them floundering at the current minimum wage is not going to solve their problems.
Ultimately, raising the minimum wage is merely solving a symptom. A more serious look should be taken at addressing the causes of low-wage workers and what can be done to improve their lot. Things like skills training for one. And improving the dismal education that many of those workers have been subject to for another. |
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Mon Nov 13, 2006 9:54 am Post subject: |
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| One other point that I don't think has been addressed is that people making a higher wage are less likely to be tempted to quit for a while and resort to employment insurance if they can make that much more working a regular job. |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Mon Nov 13, 2006 10:06 am Post subject: |
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| EFLtrainer wrote: |
| cbclark4 wrote: |
| huffdaddy wrote: |
| cbclark4 wrote: |
My math is based on level supply demand there's an econimic term for that something like everything else stays the same or some such. |
I'm going to try to listen to my better judgement, which says don't get involved in an economic discussion with someone who doesn't even know the term ceteris paribus. |
My latin is not so good. It took me three tries to pass Macro.
I still like math.
When I have a widget that takes an hour to build. It Costs $5 in material and $5 in labor the total cost is $10.
Now I sell this widget for $10 because I don't need no stinkin' profit. Profit is for Imperialists.
When the Minimum wage is raised to $10 then my widget costs $15.
I have to raise the price to $15.
What else can I do?
I refuse to layoff my labor.
cbc |
This is a fantasy. We are talking reality. In reality, you sell at a profit. You sell your $10 dollar widget at, say $11 to make $1,000 on sales of 1000 widgets. Now, if your can sell 1,500 widgets bydropping your price to $10.75, you will because you then will make $1,175. That's a rise in profit of 11.75 percent. Pretty damned skippy. And that's not including the discounts you get for buying in greater bulk from your suppliers. So, your costs go down on materials.
Get it?
Now, let's take your scenario, which is grossly incorrect. First, your labor is $5. the raise in the minimum wage under consideration is from 5.15 to 7.25, or about 40 percent. Thus, your cost rises to$7.21, not $10. Your new cost is 12.21. Your previous mark-up was, say, 20%. Price: $12.00
For 1000 widgets you had $2000 profit. Oops! Now, you are losing money!
Except.... your customers just got a 40% raise. Now they are buying 40 percent more widgets. 1400 widgets. For 40 percent more widgets parts, you get a discount from suppliers of 40 percent. Now your cost is $10.21. You are selling 1400 widgets at $12.00. Total profit: $2,506. Heck, you can even absorb $500 more cost from your suppliers, less sales, or paying your employees more and make the same profit.
Nice, huh? |
I was trying to do that latin thing Centipede Purdue Bus.
If everything else remains constant.
Your example has my workers buying my widgets.
They can't afford them even with the raise.
There is no way I can produce 1400 widgets I'd have to hire 1400 employees to do that.
Your not holding the constants that ain't fair.
Oh and I have a Citation for those who have challenged me to give up something other than the purity of mathematics.
"Price floors have predictable effects too�. If government attempts to raise the minimum wage higher than the equilibrium wage, the demand for workers will be reduced and the supply increased. There will be an excess supply of labor. Of course, those who are lucky enough to get a job will be better off at the higher wage than at the market equilibrium wage; but there are others, who might have been employed at the lower market equilibrium wage, who cannot find employment and are worse off."
Economics, 1993 Stiglitz, Joseph
This guy was some kind bank VP or something.
Served President Bill Clinton in some role.
I can't rightly determine maybe someone could help with that.
What is a CEA anyway?
Now of course as I have said Raising the Min Wag now is pretty safe the the Labor supply is low (unemployment less than 5%).
I am getting too verbose, get back to me will ya.
cbc |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Nov 13, 2006 12:01 pm Post subject: |
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| EFLtrainer wrote: |
But one of the unintended consequences of capitalism is the permanent poor class. |
This isn't true. The Capitalist Western nations have had, by historical standards, incredible upward labour mobility.
We can't talk "capitalism" and "communism" or "socialism" and blah blah blah if our primary concern is public policy. In all functioning economies in this world, there is a market economy and a strong(ish) state that regulates and facilitates capitalist transactions. I wish it were not so, but it is.
Is the "permanent" underclass a creation of the market or the government? What does your youtube videos say? Consult wikipedia...
So, when you speak of a "permanent poor" class, I want you to actually bloody THINK about our world, the economic history of our world. If you use your mind to do something other than watch youtube conspiracy videos maybe then you will find your mind open enough to see the reality that Capitalism is ultimate human liberation. After all, capitalism is the ability to own and control property. And first and foremost, our property is our bodies and our intellectual, emotional and physical productive proclivities. Any other system strips that from us. Any other system is guaranteed to descend into slavery and will create a REAL underclass, except, in this case, the underclass will be the whole society.
Also, you should note the difference between real and absolute poverty. |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Mon Nov 13, 2006 12:54 pm Post subject: |
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Socialism is not the absence of capitalism.
cbc |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Mon Nov 13, 2006 4:05 pm Post subject: |
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| cbclark4 wrote: |
Your not holding the constants that ain't fair.
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It's impossible to hold things constant.
| Quote: |
"Price floors have predictable effects too�. If government attempts to raise the minimum wage higher than the equilibrium wage, the demand for workers will be reduced and the supply increased. There will be an excess supply of labor. Of course, those who are lucky enough to get a job will be better off at the higher wage than at the market equilibrium wage; but there are others, who might have been employed at the lower market equilibrium wage, who cannot find employment and are worse off."
Economics, 1993 Stiglitz, Joseph |
Yes, but what is the equilibrium? The recent studies which look at the effects of minimum wage increases in individual states seem to show that we are below the equilibrium. Numerous states have higher minimum wages (see http://www.dol.gov/esa/minwage/america.htm) and they don't seem to be suffering adverse effects (even though workers could migrate to these states and employers could emigrate). |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Mon Nov 13, 2006 4:19 pm Post subject: |
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| BJWD wrote: |
| EFLtrainer wrote: |
But one of the unintended consequences of capitalism is the permanent poor class. |
This isn't true. The Capitalist Western nations have had, by historical standards, incredible upward labour mobility.
We can't talk "capitalism" and "communism" or "socialism" and blah blah blah if our primary concern is public policy. In all functioning economies in this world, there is a market economy and a strong(ish) state that regulates and facilitates capitalist transactions. I wish it were not so, but it is.
Is the "permanent" underclass a creation of the market or the government? What does your youtube videos say? Consult wikipedia...
So, when you speak of a "permanent poor" class, I want you to actually bloody THINK about our world, the economic history of our world. If you use your mind to do something other than watch youtube conspiracy videos maybe then you will find your mind open enough to see the reality that Capitalism is ultimate human liberation. After all, capitalism is the ability to own and control property. And first and foremost, our property is our bodies and our intellectual, emotional and physical productive proclivities. Any other system strips that from us. Any other system is guaranteed to descend into slavery and will create a REAL underclass, except, in this case, the underclass will be the whole society.
Also, you should note the difference between real and absolute poverty. |
Get your panties out of a bunch. I want you to bloody realize I should have spoken in terms of bloody percentages. Ther is only so much bloody pie, and there is a reason they call losers losers. They lose. They don't win. They don't get any pudding and they can't buy any meat. |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Tue Nov 14, 2006 8:49 am Post subject: |
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I quoted Clinton's top dog on economics. Play fair it is a qualified citation,
1993 is only one president in the past.
Give one piece of math to back up your cites. Constants work in the real world. Even Chaos theory invokes constaints. Six sigma statistics uses constaints.
The economic tool we refer to as ceteris paribus envokes the holding of everything to be held constaint with the exception of the factors under discusion. It is used throughout most economic textbooks to lead to an understanding of the topic.
We say for instance E=MC^2. The exponent in the above is necessarily a constaint. The reality is in the math.
A cite was asked for a highly regarded "Clintonian" cite was presented.
cbc |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Tue Nov 14, 2006 9:06 am Post subject: |
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| cbc, with your complete inability to use paragraphs and terrible spelling skills (I am plagued by poor typing skills), how can we trust your content? |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Tue Nov 14, 2006 9:12 am Post subject: |
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| cbclark4 wrote: |
| It is used throughout most economic textbooks to lead to an understanding of the topic. |
But NOT to attempt to describe real world conditions. Therein lies the rub.
Oh, and math is not reality. |
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