Goodbye Middle Class

[bigmike]

Originally Posted By: greenaccord02
Minimum wage needs to be a living wage if it's worked full time. It doesn't matter what anybody thinks about it, that's all some people can get and it's a [censored] of a lot better than them being on welfare.


How many hours factor into this argument though? I work more than 40 per week, for instance.

 

[Spyder7]

Originally Posted By: eljefino


Internal upgrades are rife with brinkmanship. If a town or state lets its roads crumble until the feds step in to pay to fix the potholes, that's not fair to a jurisdiction that has its act together. If one party is governor and the other president, that state may or may not get the shaft. Look at the recent NJ/NY tunnel fiasco. Some pols are actually afraid of the successes of others (the incumbent) and will sabotage anything... look at that mostly-built supercollider buried in the desert.

If we "give" wired broadband internet to mountaintop hermits, that annoys investors in satellite internet. Just can't win.


Isn't that ultimately resolved at the level of government who has jurisdiction? I'm not seeking a connection between the fed and say pot holed roads in Boise, Idaho.

Or the relationship between those pot holes and federal subsidies to other countries.

Although I do see how subsidizing other nations means the fed has to make up that revenue going out by some other means to make up for the shortfall. Either by borrowing from other countries, increasing taxes, or reducing monies paid to state governments in transfer payments of whatever form.

The biggest contradiction I see (within both our countries) is that we are both presently in the red and engaged in deficit spending, while sending money overseas in "aid." The rub is that the deeper we go in the red, the more we have to pay to service that debt. And that ultimately falls to the taxpayer.

I'm okay with giving aid where its truly needed - provided the books are first balanced at home. Otherwise the logic of burying ourselves in red ink while providing hand outs to other nations escapes me completely.

-Spyder

 

[pbm]

Originally Posted By: Spyder7

The biggest contradiction I see (within both our countries) is that we are both presently in the red and engaged in deficit spending, while sending money overseas in "aid." The rub is that the deeper we go in the red, the more we have to pay to service that debt. And that ultimately falls to the taxpayer.

I'm okay with giving aid where its truly needed - provided the books are first balanced at home. Otherwise the logic of burying ourselves in red ink while providing hand outs to other nations escapes me completely.

-Spyder



Spyder:

EXACTLY. We need to stop ALL foreign aid (except for natural disasters such as tsunamis, earthquakes etc..) until we get our house in order. We are going BANKRUPT while our elected officials are being bought by foreign governments (and other SPECIAL INTERESTS).

 

[PandaBear]

Foreign Aid is not something you can easily take out. You want cheap oil? You need dictators in your pocket or a butcher in their backyard. You have to pay up with string attached. This is like the campaign contribution from big donors on both sides. Whoever dare to declare a policy against them would get their campaign funding cut, dare no more.

Free(er) market comes with more volatility and in theory more reward and efficiency. As long as the volatility is factored in and accounted for, that's all good. Some bank collapses and bail out is inevitable so you better charge the benefactors during the good time to pay for it. The same goes for health care, deregulated you have more choices and in theory employers or consumers limiting coverage to what they want so people don't abuse it on luxury treatments if not wanted. But you have to have some oversight so insurance companies don't cut you off when you file a claim as well as consumer filing fraudulent fraud.

Don't want regulation? Good luck finding a lawyer when you need help and find yourself on the short end of the stick... oh wait...

 

[SteveSRT8]

"You're coming back with the typical argument that is common throughout this thread from several members: if it costs more than it should cost, its due to government regulations.

In fact, pretty much everything posted in this and several other threads is responded to with the same exact same argument: government and its regulations are the problem.

Does this not strike you as just a bit too catch all to be used to answer the wide range of issues that this repeatedly comes back as the response to?"


Spyder: gross oversimplification on your part. You may feel free to extrapolate this to death, but your conclusion is in error. I am not typing a book on this, just commenting.

I simply proposed the lifting of SOME regulations. I am by no means seeking abolition of our government. For instance, insurance companies in our country must sell policies within strict geographic areas only due to the special interest groups perverting our political system by writing their own legislation. This happens a lot and actually restricts free market competition.

It has been estimated that prices would drop considerably if just this one action was taken. Hardly abolitionist, eh?

I actually wish my government would simply follow the constitution of our country. It was a great blueprint by people seeking to avoid EXACTLY where we are today!

 

[Spyder7]

Originally Posted By: SteveSRT8

I actually wish my government would simply follow the constitution of our country. It was a great blueprint by people seeking to avoid EXACTLY where we are today!


I don't think you need to even go that far back. A lot of the ills of today were forewarned by FDR, in his farewell address. Some of the more salient, and almost prescient points he made:

Quote:

But each proposal must be weighed in light of a broader consideration; the need to maintain balance in and among national programs – balance between the private and the public economy, balance between the cost and hoped for advantages – balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between the actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.


...

Quote:

As we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without asking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

Down the long lane of the history yet to be written America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.


Looking at the society of today, its almost as if he was peering into a crystal ball or using some form of sorcery. To me those words are eerily on the money. I quote FDR only because I can't think of any source so far back who saw so far ahead so accurately.

-Spyder

 

[Tempest]

Originally Posted By: JHZR2

Its not that MCD is doing this out of the goodness of their heart. They are effectively threatening to drop insurance coverage from thousands of employees if they arent waived.

If they werent waived, the law would have required higher levels of coverage for those employees. MCD didnt want to pay it. Their way or the highway, thus the waivers.

Exactly. I never said it was out of the goodness of their hart, it's straight up economics. Price goes too high, they don't buy it anymore because they don't want to raise their prices to pay for it.

And yes, I realize the Davis-Bacon act was passed only for government construction jobs. But the economic effect applies no matter where or how it is implemented. These things that are advertised as "help", are founded in economic discrimination. Wanted effect and actual effect are often quite different.

 

[Spyder7]

Originally Posted By: Tempest
Originally Posted By: JHZR2

Its not that MCD is doing this out of the goodness of their heart. They are effectively threatening to drop insurance coverage from thousands of employees if they arent waived.

If they werent waived, the law would have required higher levels of coverage for those employees. MCD didnt want to pay it. Their way or the highway, thus the waivers.

Exactly. I never said it was out of the goodness of their hart, it's straight up economics. Price goes too high, they don't buy it anymore because they don't want to raise their prices to pay for it.


Interestingly, they seem to have no such hesitation over raising their prices whenever minimum wage goes up.

-Spyder

 

[Tempest]

Originally Posted By: Spyder7

Interestingly, they seem to have no such hesitation over raising their prices whenever minimum wage goes up.

-Spyder

Both health care and the minimum wage are a cost of doing business. Minimum wage is mandated under force of law. If it is increased, one would have to be nuts not to expect them to raise prices or make other cuts in order to pass the cost onto their customers. Which takes more money out of their customers pockets, and so on.

Now, until the Unaffordable care act came around, health care was not mandated. Yet, the evil McDonald's offered benefits anyway. AND, they went out of their way to get a waiver so that they could still afford to offer that coverage, when they simply could have dropped it.
Can you please explain why such an evil company would do that?

 

[Spyder7]

Originally Posted By: Tempest
Originally Posted By: Spyder7

Interestingly, they seem to have no such hesitation over raising their prices whenever minimum wage goes up.

-Spyder

Both health care and the minimum wage are a cost of doing business. Minimum wage is mandated under force of law. If it is increased, one would have to be nuts not to expect them to raise prices or make other cuts in order to pass the cost onto their customers. Which takes more money out of their customers pockets, and so on.

Now, until the Unaffordable care act came around, health care was not mandated. Yet, the evil McDonald's offered benefits anyway. AND, they went out of their way to get a waiver so that they could still afford to offer that coverage, when they simply could have dropped it.
Can you please explain why such an evil company would do that?


Evil is your choice of term, not mine (I don't deal in those types of absolutes, remember?). JHZR2 explained it well already. I have nothing to add to his explanation.

-Spyder

 

[Tempest]

Originally Posted By: eljefino

Your assumption of correlation is a bit overboard. They can pay what they pay because they get away with it. There isn't a situation where regulatory costs go up $100 so they choose to cut payroll by $100, or where the reversal of same causes everyone to get bonuses. Businesses and rich guys don't spend money unless absolutely required. If a business quotes regulation as a reason to pay their employees less, and the employees swallow it without resistance, the business wins. They could just as well blame the full moon, if they think people would accept that.

So you are actually saying that regulation impose no cost on companies??

 

[eljefino]

Originally Posted By: Tempest
Originally Posted By: eljefino

Your assumption of correlation is a bit overboard. They can pay what they pay because they get away with it. There isn't a situation where regulatory costs go up $100 so they choose to cut payroll by $100, or where the reversal of same causes everyone to get bonuses. Businesses and rich guys don't spend money unless absolutely required. If a business quotes regulation as a reason to pay their employees less, and the employees swallow it without resistance, the business wins. They could just as well blame the full moon, if they think people would accept that.

So you are actually saying that regulation impose no cost on companies??


I'm saying one should not take the boss at his word. Everyone has an ulterior motive.

 

[bigmike]

Originally Posted By: Tempest
Originally Posted By: Spyder7

Interestingly, they seem to have no such hesitation over raising their prices whenever minimum wage goes up.

-Spyder

Both health care and the minimum wage are a cost of doing business. Minimum wage is mandated under force of law. If it is increased, one would have to be nuts not to expect them to raise prices or make other cuts in order to pass the cost onto their customers. Which takes more money out of their customers pockets, and so on.



I'm fairly certain by observation that raising the minimum wage effectively reduces the middle class in the long run. We know it raises inflation, costs of living, hurts small businesses, etc. I'm not sure why I'd be FOR it unless I was the one that couldn't get anything better. With all the opportunity there is, I don't know why anyone would settle for minimum wage for any extended length of time.

 

[Spyder7]

Originally Posted By: bigmike

I'm fairly certain by observation that raising the minimum wage effectively reduces the middle class in the long run. We know it raises inflation, costs of living, hurts small businesses, etc. I'm not sure why I'd be FOR it unless I was the one that couldn't get anything better. With all the opportunity there is, I don't know why anyone would settle for minimum wage for any extended length of time.


We nearly doubled ours overnight (it went from somewhere around $5/hr to its current $10 an hour rate), through a series of steady annual increases between 50 cents to a dollar an hour, with the bulk of the increase occurring over the last few years.

During the early initial increases, I observed no overt negatives. Over the course of the last series of increases, which took it from about the $7.50/hr mark to the $10/hr mark, the case has been to the contrary. Inflation has been significant and across the board. There has been no, or little, in the way of corresponding increases at wages already above minimum wage. And the cost of living has risen sharply.

Its worth noting that prior to the initial increases, it had been pretty stagnant for years. It rarely increased, and overall the increases did not keep pace with cost of living increases seen in sectors paying wages at anything above minimum wage.

With that in mind, and based on my own observations, I conclude that the early increases - up to about the $7.50/hr mark - merely brought it up to parity with the increases that had been seen everywhere outside of minimum wage jobs. Consequently, it seemed to have little detrimental impact as I observed no unusual cost of living or inflationary trend above the norm seen during the years it remained stagnant.

After it passed that midpoint in its increase, though, it ceased to function as what minimum wage increases are meant to do (keep rough parity with increases in wages that occur above the minimum wage), and it then artificially attempted to push it above what the market could bear without the market hitting back - in the form of the inflationary trend that followed each successive raise above that midpoint, and the resultant cost of living increase).

To me it then crossed the line it was intended to remain within, and the result was that even though minimum wage earners incomes increased, those increases were swallowed by corresponding cost of living increases. Meantime everyone already making above minimum wage, simply watched as our purchasing power/discretionary income sank as those same cost of living hit us as well, but without any corresponding increase in our wage that was anything close to the proportional minimum wage increase.

I therefore don't see minimum wage as being a bad thing. Nor is an increase necessarily bad. There is a line that is easily crossed, however, where good intentions produce unintended consequences as artificial measures create too much of a "good thing" that turns out to benefit to nobody, and actually work to the detriment of the majority.

-Spyder

 

[dwendt44]

There have been wild claims here everytime we raise the minimum wage. They largely are false.

In you case above, there could easily been other factors the happened to influence the economic factors mentioned.
Inflation and cost of living can and do have many factors involved.
What happens in other countries can influence your country's economic conditions.
As a major exporter of oil, wood, and other resources, demand and economic conditions in the U.S. for example, can influence prices and trends in your country.

 

[Spyder7]

Originally Posted By: dwendt44
There have been wild claims here everytime we raise the minimum wage. They largely are false.

In you case above, there could easily been other factors the happened to influence the economic factors mentioned.
Inflation and cost of living can and do have many factors involved.
What happens in other countries can influence your country's economic conditions.
As a major exporter of oil, wood, and other resources, demand and economic conditions in the U.S. for example, can influence prices and trends in your country.


To be clear, I'm not arguing against the increases in above themselves. I just think the latter increases occurred too fast and pushed it artificially high. I can cite as proof of that argument that during the initial increases, up to about the midway mark, there was some corresponding increases seen in jobs paying above minimum wage (not quite to the same extent, but that misses the mark anyway) while there was no detrimental impact observed.

The secondary increases came much faster and more markedly, and at that point the corresponding increases in sectors above minimum wage slowed to the point they pretty much stopped altogether during the last hike from $9 to $10/hr. And as the pace and magnitude of the increases in minimum wage rose, so too did inflation and cost of living increases at about the same rate, and roughly in proportion.

There may well have been other factors at play. But again, I'm not arguing against minimum wage nor minimum wage increases. I'm simply theorizing, based on observation (not scientific, merely anecdotal), that there does seem to be a point when there is going to be unintended blow back.

And even with other factors likely weighing in too, it does stand to reason that with minimum wage jobs making up a large sector of the economic engine, if you double it almost overnight you're going to see inflation surge and corresponding increases in cost of living.

As so many businesses rely largely, or in part, on minimum wage labor, if you double the wage, you're doubling the lion's share of labor cost for many businesses. As this is an across the board increase, business does not have to eat any of the cost and can pass the entire increase onto consumers in the form of price increases for their goods and services.

And even in businesses where there is no direct cost relationship at all, they can easily see that more purchasing power on the part of consumers means they can safely increase prices and profit with no worry that they'll lose sales as a result.

Here is one good example: 2 & 1/2 years ago I rented a car for $20/day for 3 weeks. This was inline with other rental company rates, who either matched or were a few dollars above.

Three weeks ago I checked the rates at various places and found the cheapest car I could rent had jumped to $40/day. A 200% increase in the last 2 & 1/2 years. While their other costs may have increased, likely their single biggest one was minimum wage. 2 & 1/2 years ago they were probably paying the $7/hr or so rate to their employees that minimum wage was then, or maybe a bit more. As minimum wage increased, their costs increased as well and they simply passed it onto the consumer.

Business will charge whatever the market can bear. When minimum wage doubles over a short span, the market can bear more and they will charge more. Result: inflation and cost of living increases.

I see it as good intentions gone awry with nobody winning out in the end. Had they stopped at $7.50/hr and scaled the increases back to match cost of living increases, I believe the sharp increases in cost of living could have been avoided. Instead, in pushing it too high, too fast, the sharp cost of living increases were inevitable, and worked to the detriment of all - including those making minimum wage.

-Spyder

 

[dwendt44]

I'd point out that businesses and corporations that pay well above minimum wage raised their prices right along with those companies that paid minimum or slightly above.
I've known several companies, mostly small ones that paid 10¢-25¢ above minimum. When the minimum went up, they followed alone.
I do wonder if a car rental company has that many employees that are paid minimum however.

There are, I'm sure a multitude of reasons for the rate you paid increased.

 

[JoeWGauss]

Blame this all on Globalism....who was it that first opened negoiations with China in economic terms ?

TPTB in the US (all of them) are responsible for laws and environments that led to what we have now in the USA.

Not only that only Congress can enact and impose trade regulations witin the USA, these other organizations WTO, NAFTA, ect are illegal by our own law of the land in the USA. Unconstitiutional !

There is NO way nations like the US can compete with slave wage countries for jobs.....

The US needs to impose huge tariffs on ANYTHING being produced in countries that operate on slave wages...I have no issue with the US trading with other developed nations that have a similar economic base...

 

[Spyder7]

Originally Posted By: JoeWGauss
Blame this all on Globalism....who was it that first opened negoiations with China in economic terms ?

TPTB in the US (all of them) are responsible for laws and environments that led to what we have now in the USA.

Not only that only Congress can enact and impose trade regulations witin the USA, these other organizations WTO, NAFTA, ect are illegal by our own law of the land in the USA. Unconstitiutional !

There is NO way nations like the US can compete with slave wage countries for jobs.....

The US needs to impose huge tariffs on ANYTHING being produced in countries that operate on slave wages...I have no issue with the US trading with other developed nations that have a similar economic base...


+1. I have no beef with the trade agreement between our countries as we were already each others largest trading partner and I think its been - largely - mutually beneficial. Our economies are also very closely aligned and our style of living and way of life is very similar. There are some differences, but weighed against the similarities, they are pretty minor and of no real consequence.

The same is not true when trading with China and the like. We can't compete with them and its not in our interests to even try to compete using the global model, as it means lowering our standards to match theirs and its just not in the public's interest to even try that.

As ours are democratic nations, I say let them offshore if they want to, but treat everything shipped back as an import and put a tariff on it.

If it built our nations prosperity to the level it had been prior to the move to the globalized model, where the majority is now losing out as we watch our manufacturing backbone crumble away, its not a model worth keeping and it stands to reason we can rebuild the level of prosperity once enjoyed by all by just chalking the global idea up to a failed experiment and moving away from it.

-Spyder

 

[Shannow]

I'm in mixed mind about the tarrifs, but do see the current agenda (and I believe that there is one) as a race to the bottom for the western world.

It's also uplifting to the third world, but will ultimately lead to a lukewarm standard of living for all but those driving their Bentleys to the airport to get on their private jet for a dinner party.

We had a bra factory in town, that was a large scale (for the town employer). It paid well enough that the workers could contribute meaningfully to their household income (even run some single income factories), and even buy the high end bras that they made.

Company decided that it was more economic to move to China, which they did. They told staff that they had to go to China to train the workers there, who lived in boxes with bunks three women high.

But the price of their product remained exactly the same in Oz.

Part of me thinks that if the average punter could then buy that branded bra at a lower price to all Australians, that offset the local pain, then a rational argument for the off shoring could be mounted, and an argument made against tariffs due to the "efficiency" of moving operations.

However, if they just move, sell at the same price, and pocket the difference, they should be tariffed back to their original profitability, or told to sell their product to the Chinese.