Thread: How the minimum wage works

Originally Posted by ba1025

Actually i did post a chart showing the stagnation of total compsnsation mover the last 7 yrs. it is the only period of expansion that has occurred in sonce the great depression. it's just the truth.

I don't understand your point. How would you care for those w/o the resources to afford care that is rising at a 15% a year rate the last time I looked? have you seen how much less we the taxpayer borrow to pay for prescription drugs under the VA plan rather than that drug compant welfare medicare has?

Why are those costs skyrocketing if we have "paralyzed" that sector? Elaborate and explain how we provide care as well or should the elderly go out on ice flows?

You have the cart before the horse in my opinion. Costs of care of various types would not be so high if it were a true market universe, and if sociologically we had not moved away from family care of the elderly.

I don't know that the sociological aspect is avoidable, but I do know that a true open market would lower prices.

I can think of one ridiculous cost. the no value added maze of paper work my cardiologist office has to wade through for even me an established patient. WTF value does having "insurance" specialists in every practice due to the vastly different forms, rules, exception et al. how did we provide care in the 1970s when so many more were insured w/o the "form" experts?

Exactly.

-dale

Originally Posted by ba1025

I already apologized for that remark in a previous thread. i apologize again too you. I'd delete it but I think it's better to say i was wrong than to pretend i never said it

There's no need to apologize.

Originally Posted by ba1025

I have a severely mentally ill brother He is dirt poor on SSD with no prospects of moving up. I agree with helping the poor move up but there are some poor who will never have prospects and aren't as lucky as my brother to have family that can step in and need the nanny state. I live in the greatest nation on earth and it's best epitomized by the fact even w/o family my Brother (at least in CT) would have a roof, a full belly and access to healthcare/social workers to keep him out of homelessness.

I agree 100% with the notion that it's better to help people become un-poor. I think some states have the right idea by trying to provide health care for people coming off the "rolls" so they can afford to work. To someone with kids and no insurance state sure looks better than MCd's and the loss of health care for their kids. I think programs like that or ones that give breaks to business for employing/training low skilled workers are great methods to reduce the burden on the state while improving quality of life for it's citizens. it's too bad many fight these programs as socialism and perpetuate even worse forms of the Mommy state. Ideologues suck, I'll take a pragmatist like that evil Reagan and that no good Clinton any day

how would you suggust we help the poor become un-poor?

We capitalists believe in charity through free will. There are people who truly care about others and devote their lives to help those who need help. Without the government, there will be more of these organizations around.

There are studies after studies that show conservatives give more to charity than liberals, capitalists more than socialists, republicans more than democrats, church goers more than non church goers. I'm not saying liberal socialist non church going democrats are heartless. I'm saying that they believe in different ways of helping people. They feel they have done their part after paying taxes. If they want to do more, they add more taxes.

Using government is the least efficient way of helping people. We see that again and again through FEMA, Walter Reed, wastes in Medicare and Medicaid, Social Security...etc. Show me one government service that you think is running great.

Liberals are a funny breed. Time and again we see how government is inept and their solution is to add more government. If we really want change, we should cut government rather than expand it like how Obama wants.

Originally Posted by dalem

You have the cart before the horse in my opinion. Costs of care of various types would not be so high if it were a true market universe, and if sociologically we had not moved away from family care of the elderly.

I don't know that the sociological aspect is avoidable, but I do know that a true open market would lower prices.



Exactly.

-dale

In a true market, the rich would get Porsche style health care and the poor would get the used car lot.

Originally Posted by zraver

In a true market, the rich would get Porsche style health care and the poor would get the used car lot.

a) Even if true, so what? A used car is better than no car at all, and lots of what you get in a Porsche doesn't improve your trip from A to B in any way.

b) To stretch your analogy a little more , if you set artificial prices and limit peoples' choice of cars, pretty soon there is no impetus for anyone to maintain a used car stream, and no impetus for manufacturers to make cheap cars. Who suffers from that? The poor, of course, because you are not increasing their buying power in that restricted market at the same rate you are raising prices.

-dale

Originally Posted by dalem

a) Even if true, so what? A used car is better than no car at all, and lots of what you get in a Porsche doesn't improve your trip from A to B in any way.

b) To stretch your analogy a little more , if you set artificial prices and limit peoples' choice of cars, pretty soon there is no impetus for anyone to maintain a used car stream, and no impetus for manufacturers to make cheap cars. Who suffers from that? The poor, of course, because you are not increasing their buying power in that restricted market at the same rate you are raising prices.

-dale

Government assistance to the poor as regards medical expenses increases the market by increasing the number of people who can make use of it. rather than a niche market serving a small community suddenly it can expand to serve a wider population and this spurs both profit and innovation.

Originally Posted by ba1025

http://research.stlouisfed.org/publi...0801/cover.pdf
Do you think it's coincidence they never updated it?

I updated it through 2006, which means that three years of data has been added, and adjusted figures for 2001-2003 based on BEA updates have been entered. There's still one piece of information that BEA has not published for 2007, and so I don't have a figure for last year. You'll see for the majority of the current expansion, labor's share has remained above average. You should also notice that peaks tend to occur during a recession, and troughs during the middle of an expansion - in other words, labor's share tends to be countercyclical and this expansion has proven thus far to be no exception.

Just sat back and followed the whole thread. What a ride. At times it was like the McLaughlin Group with people talking on top of one another. Shek, I don't know what possessed you to start a minimum wage thread. I would have expected it to get a reply or two at best, but you unleashed a fury, and an interesting one at that.

I didn't know enough to speak to the topic, but some things resonanted with me. For example, as a business owner like gungrape, I know I have to pass wage increases along to customers. Seems like a simple one-two cause and effect, but in actuality, there are other effects. My raising prices in a competitive market, risks losing business, because a competitor who didn't raise wages or his price will now be the low bidder.

So, it's important to me not to raise wages as long as I can. Eventually, the cost of living will force me to increase them. My guys have been hammered by rising medical costs for years. Now rising fuel costs are adding fuel to the fire. I just gave them a 10% raise, but it's not helping much. In construction, labor is the biggest expense. That makes the pass-on fairly stiff.

There's another reason to raise wages that wasn't touched on in this thread: productivity. If one carpenter gets 25% more work done in a day compared to another who equally skilled, I pay him more. It's partly defensive, because custom construction is a small world where picking off someone else's top people is fairly common. It always starts out with the question, "what is ole Jad paying ya?" If the wage is good, the conversation ends; if not, it goes something like this: "well, we're paying $30/hr for lead carpenters; come and see me if you're ever looking for a job."

Just for perspective.

Here's what a $20/hr man costs me.

$20.00 Base wage
1.24 Employers Social Security contribution:
.29 Employers Medicare contribution:
2.22 Workers Compensation insurance
.65 Liability Insurance
.85 Unemployment/Gross receipts taxes, overhead
.14 Prorated damages to equipment and repeat work
--------
$25.39

So, $5.39 is "hidden" cost. That particular employee worked 1,100 hrs in 2007, which is low. Another employee who earns $25/hr worked 1,300 hours last year. I worked 1,900 hours (doesn't rain in the office:( . )

Anyway, this is the kind of stuff that employers have to think about. A 10% raise is really a 13-14% raise. When Uncle Sam or the state raises the minimum wage, the employee is better off, the government makes out with higher payroll tax receipts; the insurance companies with higher workers comp premiums, and the local jurisdictions with higher gross receipts taxes. Me and my customers, we just get the shaft.

Originally Posted by zraver

Government assistance to the poor as regards medical expenses increases the market by increasing the number of people who can make use of it. rather than a niche market serving a small community suddenly it can expand to serve a wider population and this spurs both profit and innovation.

It's not that kind of clean relationship because govt money always comes with restrictions on how you can use it. Besides, it doesn't go to the poor as simple clean cash they can spend as they see fit - a new and separate system is created for the transaction. It doesn't help the main market of medicine as much as it could.

-dale

JAD, do you employ alot of people?

Originally Posted by Ironduke

JAD, do you employ alot of people?

Never had many on my payroll. Use subs mostly. On some jobs there may be 10-20 people working and only 2-3 are mine. I'd have to check, but I think 7 full-time was my high point. I am weeny.)

Originally Posted by JAD_333

Just for perspective.

Here's what a $20/hr man costs me.

$20.00 Base wage
1.24 Employers Social Security contribution:
.29 Employers Medicare contribution:
2.22 Workers Compensation insurance
.65 Liability Insurance
.85 Unemployment/Gross receipts taxes, overhead
.14 Prorated damages to equipment and repeat work
--------
$25.39

So, $5.39 is "hidden" cost. That particular employee worked 1,100 hrs in 2007, which is low. Another employee who earns $25/hr worked 1,300 hours last year. I worked 1,900 hours (doesn't rain in the office:( . )

Anyway, this is the kind of stuff that employers have to think about. A 10% raise is really a 13-14% raise. When Uncle Sam or the state raises the minimum wage, the employee is better off, the government makes out with higher payroll tax receipts; the insurance companies with higher workers comp premiums, and the local jurisdictions with higher gross receipts taxes. Me and my customers, we just get the shaft.

As a business owner how mmuch higher was your net income( the real one) between 2001-2007? Did it grow faster than inflation? Please think about it you don't have to respond. is there any reason to think those paying minimum wage didnt see an increase in profits during an economic expansion?

Originally Posted by gunnut

We capitalists believe in charity through free will. There are people who truly care about others and devote their lives to help those who need help. Without the government, there will be more of these organizations around.

There are studies after studies that show conservatives give more to charity than liberals, capitalists more than socialists, republicans more than democrats, church goers more than non church goers. I'm not saying liberal socialist non church going democrats are heartless. I'm saying that they believe in different ways of helping people. They feel they have done their part after paying taxes. If they want to do more, they add more taxes.

Using government is the least efficient way of helping people. We see that again and again through FEMA, Walter Reed, wastes in Medicare and Medicaid, Social Security...etc. Show me one government service that you think is running great.

Liberals are a funny breed. Time and again we see how government is inept and their solution is to add more government. If we really want change, we should cut government rather than expand it like how Obama wants.

Ok first off I agree in a perfect world private charity should provide for those in need. It didn't in the past. What's changed to make you think it will now?

I have got to say ol' evil bastard bill Clinton put a professional in charge of FEMA after the MI river floods and it was a pretty well run agency the rest of his term. I think that's the key in govt. We need to keep the political hack ratio as low as possible. That's congresses s role. They failed when they approved a horse farmer to run FEMA

Nothing prevented private charity from aiding NO, Nothing is preventing it now. There aren't the $ to do the task no more than there were before FEMA

Sometimes, just sometimes social programs arise because of a niche that arose that our capitalist culture didn't/couldn't fill

Provide me the evidence that there was no niche to fill and private charity was effectively fulfilling those rolls and I'd be the first to call for tearing the govt programs down. Absent that what you propose is someday even though there is no profit in it a capitalist society will fulfill those tasks.


Now, what I can agree on is the DISGUSTING amount of waste. Why did we the taxpayer pay to move rail lines in MI to open up to put casinos on the coast???????? Good ol' Trent....never saw Federal money he wasted a bad thing. it's not capitalist to have the federal govt aid business. What's the system where govt/business work in synergy? That's one example. It's both parties whenever they can. We really do need a line item veto

Do you really think these govt agencies were started against the will of the majority and had no valid mission?