1. Xzi

    Xzi GBAtemp's Resident Plok Expert
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    We're at less than 1% inflation per year currently, it doesn't have such an immediate impact no matter what happens to the minimum wage.

    This is assuming we already pay workers roughly the same amount of value they generate for the company, but the reality is that there's a huge gap there. As I said before, the minimum wage in France is closer to $20 USD, and their McD's burgers and fries cost about 60 cents more on average.

    What would happen if unicorns shit candy? There's no point in posing wild hypotheticals, it's been hard enough fighting for a living minimum wage just above the poverty line as-is. The corporations have armies of lobbyists at their disposal, regular working class people do not.
     
  2. Seliph

    Seliph Best Girl
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    Minimum wage should be $69 (⌐■_■)
     
  3. Joe88

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  4. Xzi

    Xzi GBAtemp's Resident Plok Expert
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  5. Hanafuda

    Hanafuda GBAtemp Psycho!
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    Raising the minimum wage won't change that. Prices will be adjusted to keep the margin.
     
  6. Xzi

    Xzi GBAtemp's Resident Plok Expert
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    They can't adjust prices in that manner, the only thing McD's and Wal-Mart have going for them is how cheap they are. They've been making historic profits year over year, that wouldn't change even if the minimum wage was quadrupled. Which again begs the question of why you'd bother defending exploitation, considering it's your tax dollars that have to make up the difference for poverty wages.
     
  7. Seliph

    Seliph Best Girl
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    Do prices just magically raise on their own when the minimum wage is raised? Who is raising these prices? A spooky invisible hand that manipulates the market? An evil little price-raising gnome that hates workers who just want fair compensation?

    Of course not, it's the people with billions upon billions of dollars who don't want to see their profit margins hurt, they're the ones who choose prices, they're the ones who choose how much you get paid.

    This brings about a fundamental issue with Capitalism and with the wage question in general.

    If we want to compensate workers more, their employers will simply make things cost more. If we want things to cost less, employers will pay their workers less. The market isn't some magical force that magically makes prices fluctuate all on its own, there are always people on top of the big ol pyramid scheme who choose how much someone should be paid or how much something should be paid for.

    This is a problem because Capitalism creates a fundamental relationship between worker and employer that is diametrically opposed - employer wants to make the most profit for the least expenditure but employee wants to make the highest wage with the least amount of expenditure (labor intensity or labor hours or both). These two goals fundamentally cannot coexist. Because money = power and employers are the ones with the most money, they are always going to be the ones that win out in a situation like this because they are the ones who dictate the market and politics in general as I stated earlier, because employers are dictators. You cannot seek fair worker compensation without a fundamental overhaul of the current system - a shifting of power from the rich owning class to the everyday working class.

    This is why I see the minimum wage question as one that doesn't have an answer (or at least it doesn't have a good answer for anyone that isn't an employer) and I think it ultimately misses the point. Because we always view this argument through the lens of the magical market that magically changes prices based on magical variables like how much someone gets paid when in reality it is never that simple because we know deep down that the market (even a supposedly "free" market) is always controlled by a certain group of people, Capitalists.

    You want more money? Capitalists are just gonna raise prices so it doesn't matter. You want to work less? Capitalists are just gonna cut your pay or make you work faster so it doesn't matter.

    So while simple reforms like a raise in minimum wage or a shortened workweek (think of how we used to have to work 12 hours or more a day during the industrial era but now we mostly work 8 hours or less) are great, they simply aren't enough. Capitalists will always find a way to weasel through these reforms, to keep a hold of their dragon hoard of accrued capital. Because the system is designed to empower them at the expense of yourself and that will always be how it is until we find a better way to organize labor and society as a whole.

    That's basic dialectics for ya, and I think it's also a more realistic viewpoint on this issue. It is naive to assume that a simple rise in wage will solve our problems or that a rise in wage is even realistic in our current system, but it is also naive to assume that prices raised as a result of a rise in wage just spontaneously happen because the magical market made it happen. The whims of the market are all planned and dictated by a group of people who want to accrue more and more and more wealth, and we know who these people are because we're forced to work for them every day of our lives while they leech off our wages time and time again to no avail.
     
    Last edited by Seliph, Apr 19, 2021
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  8. PiracyForTheMasses

    PiracyForTheMasses GBAtemp Regular
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    Might want to get educated on the subject instead of going around spreading false information like a brainless sheep.
     
  9. Xzi

    Xzi GBAtemp's Resident Plok Expert
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    Brainless sheep defend and advocate for the corporations fighting to keep their wages low. Or blame people making less than them when they can't move up the ladder.
     
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  10. notimp

    notimp Well-Known Member
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    Inflation is driven by the expectancy of rising wages, or price setting.

    Price setting theory says, that as companies are setting prices (in expectancy of higher economic growth), trade unions, or the worker itself are going into salary negotiations, also driving higher salaries. As thats not what happened in the past 30 years (price deflation through globalization), we have to look at the other theory which says that growth expectancy is driving inflation. Issue - it has to be growth expectancy that lifts all boats, and that is sustained for that to happen. What you actually have seen is the opposite (two barista jobs to sustain...), so its actually become harder to keep an inflation target of 2% ("or higher").

    See:
    https://www.bbc.com/news/business-53933239
    US historically:
    https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi

    What essentially is happening is, that the money pumped into the economy is centralizing pretty quickly, without it making much impact on the 'real economy'. (More money is made through financial speculation, or investments in foreign developments - so what ever you pump in, doesnt end up with workers or employees - therefore no exploding inflation.) The rich become richer, but they cant spend gains on consumption (another boat?), and they wont invest in ventures in your own country that would allow workers and employees to parttake in growth expectancy (= you dont need most people, which is why you make sure you are employing more and more folks in a service economy close at the minimal wage level and have millennials spend what they earn on consumption and not their future). So higher inflation isnt happening so far - instead, everyone got kind of afraid of revolts in the US, because perceived quality of living declined.

    "But state printed so much money into the crisis -" Yes, and that either ended up with corporations that wont invest into growth because of it, and people, that consumed it away - during a period, where consumption was way down - because of covid. If it would end up with common folks in mass - there could be inflation expectancy - but it isnt.


    On the minimum wage is bad point. FIrst - purchasing power parity of 5 USD is coocoo.

    [​IMG]
    src: https://fas.org/sgp/crs/misc/R45090.pdf

    90% percentile means - you scored better than 90% of the population.

    So - the income for the lowest 10% of society actually was stable at 12 USD (purchasing power, so inflation adjusted) for the past 40 years - while GDP grew 8 fold. And prices 3 fold ( https://www.worlddata.info/america/usa/inflation-rates.php ). (Actually looked up those numbers) - factor out price increases (8 divided by 3), and the poorest 10% are 2.6 times poorer now than they were in 1979 - if it werent for lower prices on imported goods of daily life. And lower production costs.

    Thats trickle down economics. But also thats globalization. (Average prices for goods come down, you get richer because more people can buy them - at the same time your markets increasingly become global - on which you are not paying taxes - and you certainly arent paying your workers more - so the lowest 10% of society (income wise) get nothing of the growth you produced, the middle class (median wages) get nothing of what you produced, and the top 10% get an increase in earnings by 43%. Purchasing power adjusted.)

    Do you now understand, why "inflation" (everyone has more money to spend, so prices increase) isnt what everyone is worrying about?

    Second point. Raising minimum wages forces factory owners and companies to innovate - (watch Peter Zeihan on Citrus growing ;) ( h**ps://www.youtube.com/watch?v=NLKbn8IeNTk ) - "You will not get any more cheap labor.") to be able to pay them - for the first time in a long time, actually creating growth dynamic, where investments would be made domestically as well -- if you would actually call BS and move all your investments to foreign territories, "because thats outrageous" you now get hit by minimum taxes ( https://economictimes.indiatimes.co...-companies-countries/articleshow/82070767.cms ) and you've put yourself in a downward spiral - because it becomes that much harder, to do research and development in developing countries. So essentially, you are killing your business within your lifetime - and thats not taking into account, that you might be "out innovated".. :)

    So thats the pro argument for a higher minimum wage. (Way above 5USD purchasing power adjusted, btw - because f*ck you, work with real numbers for once and not just with misantrop "what I think must be enough to sustain" figures of your imagination.)

    Counter argument - you cant do that currently, because you are coming out of an acute crisis. So raising minimum wage means, the companies that dont make it shed employees, which is the opposite of what you'd want to happen currently. So thats not happening anytime soon - and you have to find other cogs to turn to get to the same result. (In this case, global minimum tax, and infrastructure investments in the US -- which also should lead to an innovation push within the US --

    whats left is the issue, of 'where the low skilled workers are' once infrastructure spending (state money) runs out. And if companies havent found a way to upskill or integrate them in their "growth story" - you'll have issues.

    Or you need to talk more about "automation taxes" - and universal basic income, which imho is not the best way to go -)


    Whats entirely bonkers in the current situation is to proclaim, that the influx of low payed workers is your problem (do you want to work as orange pickers?), or to tell everyone, that lazy people that are living "too good" on minimum wages are the problem.

    Also you cant just destroy globalization and call it a day (then everything would be produced in the US again!), because that would topple the economic system. You can set the incentives differently and get people to invest in the US again - but that also takes state money (structural investments). If you'd only work with "whips" on investors - that might increase the "f'k you" factor.. ;) So you work with both. (Incentives and taxes.)

    Also kind of by now - corporations have realized, that the whole story has reached people, so they might either invest in racial revolts to keep them occupied ( ;) ) or try to do something about it - because an entire generation is starting to believe more and more, that capitalism isnt working for them anymore..

    (So what you usually do as corp is to tell people "everyone can become app millionaire" and call it a day. (New innovation field ("its now become accessible to more people"), with new _global_ growth dynamics, where you can siphen off money on structures up top ("we provide the Amazon Web Storage and computing"). For it to become a little more just, usually you need state involvement. The diversity play - largely is there to be sure to make products and services, that also could scale in India, and with women in india, and... so thats also a proposed growth driver.

    But then overall you might need consumption reduction, because of climate change and stuff..

    Now square that circle.. ;) )
     
    Last edited by notimp, Apr 19, 2021
  11. notimp

    notimp Well-Known Member
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    Over time -

    Lets say FED keeps inflation stable at 2%, but you raised minimum wages by more than 2%.

    If you increase product prices by more than 2% - and your competitor has the puffer not to, you get pushed out of the market, and they get more market share. How can they do so - because, they have higher productivity (or better credit score), how do you get higher productivity or better credit score? You invest in innovation (if you have the reserves).

    Issue out of the crisis, this might cost more jobs shortterm (companies that dont make it), so its not what any administration will implement currently. (Raises social costs moreso, than if people remain in work. Shortterm. Long term tax earnings should increase, because you are triggering an investment push.)

    Also, while its not eaten up by price inflation, higher minimum wages lead to more innovation on the grass roots level (upstarts), because for a time people have more money to spend on 'interesting new stuff'.
    Then it gets eaten up by inflation.

    But then again, out of the Covid crisis, you will not propose higher minimum wages, because you are actually worried, if restructuring can keep up with job losses (short term), so to push for more people potentially losing their jobs, is not going to happen currently.

    edit:

    The Biden plan to raise federal minimum wage ( https://www.cnbc.com/2021/04/14/bid...-wage-would-boost-growth-oecd-april-2021.html ) is a way around that. Government can afford to raise wages - they wont go bankrupt (US isnt greece, yet. ;) ). As a result they draw in more talent, than if the private sector _wont_ follow - so private sector gets worse talent if they do not also raise wages.

    They wont raise wages - if they cant (without becoming bankrupt) - but as you turned the entire economy to become more geared towards investments (international minimum taxes, state investments into infrastructure), 'best talent' is what you would want _right now_ at a premium. So private sector - if they can - might follow. Also raising wages, ...

    And inflation risk wont follow - because other companies cant (without going bankrupt), and raising prices in goods of daily life (inflation driver), can not be implemented to compensate, without raising risk of social unrest. So inflation wont rise. Probably. Theoretically.

    At the worst, you are getting better talent into federal jobs - which nevertheless is needed, once infrastructure spending runs out - as explained above.. :)

    So no 'general minimum wage' - but again the push for innovate and invest now - or die (get outcompeted, outinvested by your competition, because now is the time to do so...).

    Its not decided yet - because risk of companies trying to become more competitive by shedding workers is real, out of the crisis.
     
    Last edited by notimp, Apr 19, 2021
  12. Hanafuda

    Hanafuda GBAtemp Psycho!
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    Not true. There is also the Filet-o-fish.
     
    Last edited by Hanafuda, Apr 19, 2021
  13. FAST6191

    FAST6191 Techromancer
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    What are you using to measure inflation that you are getting 1%?

    If the plight of the poor unfortunates that never landed a marketable skill is indeed such a concern of yours I would have thought you would have been all about that rental cost (I would say mortgage but... hahaha, though home prices are similarly iffy if it is even a possibility. San Francisco is something of a special case https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html but has some good data, have a more averaged one if you want https://www.areavibes.com/library/rent-vs-ownership/ ), medical costs, fuel expense (even more so if you want to consider an expectation of travel that many endure these days, said minimum wage types tending also not to be those that can lounge around in their boxers doing remote work) and other such things.

    Beyond that the consumer price index of various forms is somewhat dubious. Better than nothing but they do things to tweak numbers (at one point say toothpaste was a thing then while before it would have possibly been a branded toothpaste of a given volume today it might be supermarket mouthburner) and often exclude the more interesting things such as above.
    Even if we were to contemplate it then 1% is dubious
    https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm

    That said I am still not sure what problem raising the minimum wage would solve, if it has really ever solved anything and those downsides from the earlier reply (really if I have to pay you are not going to be old, single parent, unskilled, with alternative commitments be it part time job or caring for someone, disabled, sick or whatever saving those times where I absolutely just need bodies or one of the previous means you will be a worker drone that just turns up and does the job before going and will not leave me having to go through the arse ache that is recruiting, and I will be looking favourably at those robots that are only getting cheaper, more capable and otherwise better) are still in consideration.
    Minimum wage, assuming it did something vaguely approximating working as some imagine it here, would at best be a stop gap. I would rather see pressures change things rather than being artificially hopped up -- the palatial houses of US suburbia and debt financed culture being one of the many symptoms. This also assumes it is possible -- ignoring the medical costs rising because we can do more than soup and a round of antibiotics (though cost of sitting in a ward with others guzzling soup and antibiotics has rather climbed as well) then was the whole house in the 'burbs thing been a fantasy cooked up by people enjoying being a global hegemon following a nice big war that took out the competition and later financed by debt on both today that they knew they would never live to repay and taxing future generations? Today Europe has rebuilt itself, Russia is kind of something again, Asia has done enough to be a player and even third world shitholes are actually not that bad in a lot of cases (not to mention also have robots -- was watching a nice report on Bangladesh a while back and rather than hire workers to to make the stylish worn jeans that fashion victims wear they got a robot in instead which could do it for longer, faster and more consistently).
     
  14. Xzi

    Xzi GBAtemp's Resident Plok Expert
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    It's pretty obvious which problems it's meant to solve, first and foremost the problem of people working 40 hours a week and still living in poverty. Secondly corporations' dependence on food stamps and welfare programs to subsidize their ridiculously low wages.

    And again, good luck holding out for the candidate who shows up early to work fast food every day in a suit and tie. You'd be searching and waiting until the day your franchise shuts down. The robots are still quite a ways off too, at least if you want them functioning as intended 24/7 (NSFW).
     
  15. chrisrlink

    chrisrlink Has a PhD in dueling
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    meanwhile Jeff bozo of Amazon is doing retaliatory firings (which is illegal btw) over those who want to unionize how Jeff gets away with it is beyond me it's clear as day he's targeting Pro unionization employees if anything Jeff should be in prison along with trump imo
     
    Last edited by chrisrlink, Apr 19, 2021
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  16. RandomUser

    RandomUser Rosalina in Plush Form
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    Someone on here mentioned something about UBI. I'm curious how will this be funded? Will it cause so much inflation that it would cancel each other out?
     
  17. notimp

    notimp Well-Known Member
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    UBI is a concept, that both people on the left, who cant think of a political position aside from 'hashtags', as well as corporate planners in globalized multinationals can subscribe to.

    It means both "less degrading interactions when being jobless" and "smaller state, more influence for initiatives from the private sector".

    For all the press its getting, it is BS that you can hear both sides peddling hard - not to have to talk about actual societal issues and how to solve them.

    Lets design a different system - whos answer is 'the market will do it', once everyone is less stressed!

    In essence, you finance it via dividends on automation, and by cutting out the social state - so every country in the world becomes more like America, because America is the gutterpunk of crisis management -- while America would have to change nothin (I guess), and start taxing corporations for the first time in several decades.. ;)

    Some say, that some form of it will be needed, when productivity decouples from human work, moreso than it already did (part of GDP that gets created in finance rather than 'the real world economy' meets more automation).

    And yes inflation would be an issue - but as you should have gleened by now - the central banks have tools to not trigger 'hyperinflations' in fact, a few years back, that was arguably their main job.
    edit: Also would depend on what percentage of your population would receive UBI - I guess. As spending capability of low income folks doesnt go up necessarily, the inflationary potential is probably limited as well.

    edit: Also as it is financed via transfer payments - you could monitor, where the price increases take place, and tax those sectorx more - counteracting the inflationary potential.
     
    Last edited by notimp, Apr 20, 2021
  18. notimp

    notimp Well-Known Member
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    Its all about dynamics, not issue solving. Its not a fix. Its a tool.
    Companies are forced to pay higher wages. During a period of "supporting" state investment in infrastructure. If money ended up in the industrial/corporate sector (in the past) - now is the time to invest to get market share (growth expectancy is created through sturctural investment). Minimum wages are a way to force that investment to also go into the 'human' part of your corporate process (Wages and education projects).

    And as a positive side effect, you have more spending money in the broader public for a while (thats not enduring), which also pushes 'seed investing' (grass roots entrepreneurship, bleh).

    If stuff goes wrong, more people are fired to get efficiency up - but all the incentives should be in place that that doesnt happen.

    Apart from coming out of the Covid crisis, that doesnt help in certain sectors.
     
    Last edited by notimp, Apr 20, 2021
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