[PublicAnimalNo9]

Well, if the Mexican Mennonites were part of that march, I hope they handed out clothespins for people's noses.

[jeff744]

Lemmy Lemmy:

jeff744 jeff744:

but when labour costs rise say $5/hour per employee and they are still using an old price they will be raising it to recover their losses

They can TRY to raise their prices, but that doesn't mean they'll be able. In general, businesses don't set prices, consumers do.

jeff744 jeff744:

I know of a couple places that have been trying to get their prices increased because the main company set Canada wide prices and labour is killing their profits.

Again, if businesses set prices, everything would be $1M. Wages are determined by Marginal Revenue Product of Labour (MRPL). That means that wages are a RESULT of revenue generated, not a factor in it. You're thinking is backwards. Labour doesn't kill profit. Labour creates profit.

A lot of companies set generalized prices, I have seen a lot of place where the product is the exact same price everywhere, that is where minimum wage and others become killers and cause prices to go up. I am aware of the full system but in a lot of places where the wage is as low as possible it is there for a reason, when wages go up some businesses do have to increase prices to stay in business. When places that pay minimum wage are forced to raise the wages against their will and are already stretched one of two things happen, layoffs or prices go up a bit to cover the costs. Eventually that price becomes the norm because everyone has the money to pay the increased price because all the price change did was maintain the balance.

If you want to go deeper, more money will cause an increased demand and also bring up the price. Higher wages means higher prices.

[Lemmy]

jeff744 jeff744:

A lot of companies set generalized prices, I have seen a lot of place where the product is the exact same price everywhere, that is where minimum wage and others become killers and cause prices to go up. I am aware of the full system but in a lot of places where the wage is as low as possible it is there for a reason, when wages go up some businesses do have to increase prices to stay in business.

Again, that's a fallacy. Businesses can stick whatever price they want on the tag, but if they don't sell product at that price, it's not really "the price", is it? Increasing prices can just as easily put a business OUT of business. Businesses that make the mistake you're making aren't going to be in business very long.

jeff744 jeff744:

When places that pay minimum wage are forced to raise the wages against their will and are already stretched one of two things happen, layoffs or prices go up a bit to cover the costs. Eventually that price becomes the norm because everyone has the money to pay the increased price because all the price change did was maintain the balance.

Well, the answer is b): layoffs. That's what minimum wage laws do, they create unemployment. Businesses can't arbitrarily raise prices for ANY reason without offsetting changes in quantity sold and revenue. To know if they gained or lost, we need to know about elasticity and market structure.

jeff744 jeff744:

If you want to go deeper, more money will cause an increased demand and also bring up the price. Higher wages means higher prices.

What do you mean by "more money"? But you're absolutely wrong when you say "higher wages means higher prices". You've got it totally ass-backwards. Higher price means higher wages. Wages are a result of prices (well, revenue [P x Q] at the margin), not a cause.

[BartSimpson]

tritium tritium:

andyt andyt:

Just the usual trite arguments - lets race to the bottom, create a society of a few haves and more and more have nots. Yeah, that will be pleasant.

Isn't that the type of economy that fueled Communism in Russia?

A few haves and more and more have-nots is what fueled the end of Communism in Russia.

[BartSimpson]

To deal with immigration problems you need to start by rescinding the minimum wage. Foreign workers frequently work for less-than-legal wages and domestic workers are unable to compete against them for that reason.

Then you end welfare assistance to able-bodied individuals.

Nature will do the rest.

[andyt]

BartSimpson BartSimpson:

To deal with immigration problems you need to start by rescinding the minimum wage. Foreign workers frequently work for less-than-legal wages and domestic workers are unable to compete against them for that reason.

Then you end welfare assistance to able-bodied individuals.

Nature will do the rest.

You're right nature will do the rest. There are a lot of able bodied people on welfare - their minds, not so much. Good luck trying to get them hired and retained. So I guess you'll have a lot of people starving to death on the streets. Since most of them won't go quietly, you'll have a lot more crime than you do now. So you hire cops and build prisons and hire prison guards, who make 10 times what a welfare person does. Before you know it, you're spending more than you were to begin with. It's insane to think that a single person getting $600 a month on welfare wouldn't trade that in for even the $1300 a month on minimum wage - if they could. Parents get more welfare, but they also need to earn a lot more to make up for childcare. Certainly for a parent it doesn't make sense to take a minimum wage job, they get less (if you count childcare costs) than on welfare. If you send those folks to work, what are you going to do with the kids?

[Bruce_the_vii]

Some people think it's high wages that cost jobs, not minimum wage.

[Lemmy]

Bruce_the_vii Bruce_the_vii:

Some people think it's high wages that cost jobs, not minimum wage.

That's kind of like saying "What temperature kills humans? When it's too hot or when it's too cold". There is a "correct" wage for each job. That correct wage is Wage = MRPL. Any other price for labour and the market doesn't properly clear.

[andyt]

Lemmy Lemmy:

Bruce_the_vii Bruce_the_vii:

Some people think it's high wages that cost jobs, not minimum wage.

That's kind of like saying "What temperature kills humans? When it's too hot or when it's too cold". There is a "correct" wage for each job. That correct wage is Wage = MRPL. Any other price for labour and the market doesn't properly clear.

Hmmm - companies functioned quite well when the ratio of CEO pay to average worker was 20:1, yet now that ratio is more like 500:1 (in the US). There seems to be some flexibility in this MRPL concept.

The Fraser Institute, a well known bunch of radical lefties, makes the point that cheap labor allows companies to not invest in productivity - new machinery, new systems of production etc. They make the point that immigration depresses wages and keeps Canada from becoming more productive. So it seems we could have less immigration, with companies investing in productivity, which allows them to pay their workers more, since they are now more productive, (and less workers are needed for the same output, so we don't need to keep importing immigrants) or we can go the road we're going down - emulate the 3rd world with having lots of low pay labor being very low in productivity, but a few people at the top reaping all the profits.

The Fraser Institute makes this argument, because they are for lower taxes. They point out that if you pay workers more, they can pay more taxes to the govt, but still be at a lower tax rate than if they are earning shit wages. So everybody wins here - lower tax rates on higher incomes means more govt revenue, less social problems meaning less govt expenditures on social and justice services, means they can lower taxes even more. Wow.

Oh, yeah, and immigrants cost the govt 18 billion are year more in govt services than they pay in taxes, so there's another saving and our tax rates could go down even more. Jeez, keep this up and we'll have negative income taxes before we know it.

[BartSimpson]

andyt andyt:

Hmmm - companies functioned quite well when the ratio of CEO pay to average worker was 20:1, yet now that ratio is more like 500:1 (in the US).

In 1901 Andrew Carnegie worked a deal where he made $480 million dollars in the sale of US Steel. That was a shade more than one million times what his workers earned.

I'd say things are far more equal now than ever before.

[andyt]

BartSimpson BartSimpson:

andyt andyt:

Hmmm - companies functioned quite well when the ratio of CEO pay to average worker was 20:1, yet now that ratio is more like 500:1 (in the US).

In 1901 Andrew Carnegie worked a deal where he made $480 million dollars in the sale of US Steel. That was a shade more than one million times what his workers earned.

I'd say things are far more equal now than ever before.

He can only make that deal once, since he sold his property. Selling property has nothing to do with labor costs.

[Lemmy]

BartSimpson BartSimpson:

andyt andyt:

Hmmm - companies functioned quite well when the ratio of CEO pay to average worker was 20:1, yet now that ratio is more like 500:1 (in the US).

In 1901 Andrew Carnegie worked a deal where he made $480 million dollars in the sale of US Steel. That was a shade more than one million times what his workers earned.

I'd say things are far more equal now than ever before.

You're absolutely correct, Bart (though the Carnegie example isn't a good one because that's a capital gain, not a wage/salary). CEOs who get profit or revenue based bonuses are being compensated on the basis of THEIR MRPsL (or are at least convincing the shareholders so). That's perfectly in-line with the economic theory that you should be paid according to the revenue that you add to your employers' business.

[andyt]

Lemmy Lemmy:

You're absolutely correct, Bart (though the Carnegie example isn't a good one because that's a capital gain, not a wage/salary). CEOs who get profit or revenue based bonuses are being compensated on the basis of THEIR MRPsL (or are at least convincing the shareholders so). That's perfectly in-line with the economic theory that you should be paid according to the revenue that you add to your employers' business.

[Bruce_the_vii]

Lemmy Lemmy:

Bruce_the_vii Bruce_the_vii:

Some people think it's high wages that cost jobs, not minimum wage.

That's kind of like saying "What temperature kills humans? When it's too hot or when it's too cold". There is a "correct" wage for each job. That correct wage is Wage = MRPL. Any other price for labour and the market doesn't properly clear.

How come my expensive to one and all training in Computer Science has a market worth of zero, since some long time now.

[Lemmy]

I'm not totally sure what you're asking (because it reads like you've been into the sauce). But if my Drunk-to-English translator is working, the reason your skill is worthless is likely the same reason the last blacksmith went broke. Demand is cruel.