A business will not just close because of a min wage increase, that's silly. They will increase their prices to offset part of the new cost, and absorb the rest, creating a new (higher) equilibrium price. The long term effect is that nothing changes: the increased wages are equally offset by the change in equilibrium price. I literally learned this in ECON 101... but I assume you will disagree with every Economics textbook I've ever read and talk about big macs or something, or try to discredit what I said by telling me to cite an example, knowing that it's impossible.
Schuylaars Sesh - Executive Order and Minimum Wage..
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UncleBuck
Well-Known Member
well, tell that to all your friends on the right. they seem to think it's gonna happen and the sky is gonna fall.
kynes and i have done the 30 year price comparisons, wages come out higher than prices. tokeprep and i did the 3 year comparison last night, wages come out higher than prices once again.
tell me what's not a good comparison if not big macs? running a franchise hits you with all the major costs: food, fuel, and rent, which can help give you a clearer picture of true inflation. they depend on a lot of cheap labor, so we should see the min wage increases reflected rather clearly.
yet when you run the numbers, the equilibrium does not rise enough to wipe out the wage increase, this is simple math.
you are right, citing examples that demonstrate the right wing theory of how things work is inpossible, because their theory is flawed and not based in reality.
Again, I never claimed that increases in the minimum wage were offset by price increases. Minimum wage proponents tend to argue that wealthy business owners and megacorporations can afford to pay workers more than minimum wage, as if they're paying for it. My point was that they don't pay. Instead they raise prices or cut costs so that the consumer pays, including people who earn minimum wage. When the minimum wage is increased, you aren't taking money out of the pockets of rich people and big businesses, you're generally taking out of the pockets of all 300+ million American consumers.
Pricing of individual items isn't necessarily reflective of the actual cost of those items. Using an individual item as a baseline is problematic for that reason.
desert dude
Well-Known Member
How about the complete loss of the textile industry in the US? The only advantage China, India, Bangladesh, et al had was cheaper labor. That industry is now gone from the US.
Labor costs are irrelevant though, not a factor in profitability.
Obama should order $50 per hour minimum wage. After all, doesn't every American deserve (at least) a middle class wage?
Antidisestablishmentarian
Well-Known Member
While not due to minimum wage, it's a good example of wages closing down a business. Or at least leaving the US.
Ive seen all the talk about how greedy corporations are for sending jobs overseas so they pay less wages to make more profit and am left wondering, wouldn't the opposite make sense? Higher wages=less profits.
We we all know what businesses think of that...
desert dude
Well-Known Member
If Chinese businesses had paid a minimum wage of $15 per hour, do you think the US textile industry would have relocated to China? It's a rhetorical question that answers itself.
Probably, they'd still be escaping the overwhelming regulations this country imposes on them.
desert dude
Well-Known Member
Not anymore. There is no longer any need to regulate the textile industry in the US, cause they are gone.
It's OK, though. They were businesses and corporations, hence evil.
Canna Sylvan
Well-Known Member
Food with: HFCS, natural flavors, silica and bacteria gums, preservatives, GMO, pcb lubricant pollution, AGW, and mechanically separated pink slime are the results of Buck's masturbatory commie ideals colliding with reality. I can't wait to see what new ideas to cut costs which kill us because Buck won't keep his mouth shut about things he has no clue.
It's like you deliberately ignore parts of what I say. Wage increases exceed the rise in prices because if a business were to raise prices to exactly match the increased wage, they would be losing profit by not meeting the equilibrium price. They raise prices to compensate for PART of the increased wage expense, while absorbing part of the cost themselves, in order to maximize profits.
If you still don't understand I can take a picture from my freshman ECON textbook. Would that help?
UncleBuck
Well-Known Member
are you suggesting a race to the bottom in which we compete with bangladeshi slave labor kids?
make that the GOP slogan for the next election, that should sell nicely.
UncleBuck
Well-Known Member
so we don't have any disagreement.
If you agree with everything I said, then yes. In my opinion, and from what I've learned from people much more invested in economics than me, raising minimum wage raises prices and lowers profits, while not having a significant effect on consumer purchasing power.
im*possible
If you truly got that out of his comments, then you are as retarded as the dude in your avatar looks.
UncleBuck
Well-Known Member
The only advantage China, India, Bangladesh, et al had was cheaper labor. That industry is now gone from the US.
ChesusRice
Well-Known Member
UncleBuck
Well-Known Member
are they making bootstraps?
Damn we are missing out on these jobs here because of minimum wage laws
nontheist
Well-Known Member
BNB you have done it now, the forum tards are so lathered up you can see the spittle on the posts.
twostrokenut
Well-Known Member
Damn we are missing out on these jobs here because of minimum wage laws
Of course our standard here would be a little higher......what with not having to pay to export the job then pay to import the goods back.....could prolly afford chairs and everything.