Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Fishy I often see conservatives try to make this point, and its all well and good. I don't disagree with your premise. The problem is the reality of the situation is that so called "traditional" conservatives (the Reagans, Friedmans, etc) no longer exist in either political or activist circles anymore. Or if they are, they're reeaally quiet.

So feel free to state that the modern day GOP with its elected officials and backers in the media & donors don't represent true conservatism. Problem is, who does then? Whether willingly or not, "traditional" conservatives have allowed their main lever of power, the Republican party, to be taken over by lunatics lock, stock and barrel. My suggestion is that these people start re-asserting themselves or they risk falling further into irrelevancy.

The "traditional" liberal faces the same problem. Liberals cared about actual human beings. Today's progressives care nothing about actual people, their concerns are limited to abstractions: "help the homeless" while ignoring homeless people, "feed the hungry" while overlooking actual people who lack food. Progressives are more concerned with easing their own guilty conscience than any actual assistance to a real-life person. Every problem requires a government solution. The idea that a progressive pesonally do something with his own time, his own money? forget it.

For a "traditional" liberal, that's nonsense. JFK started Volunteers in Service to American (VISTA) and the voluntary Peace Corps and inspired a generation. There's none of that any more, everything is lockstep conformity. "Anything not mandatory is forbidden."

I'd say that neither traditional liberals nor traditional conservatives have very much representation these days, now that Joe Lieberman has retired. You have two sets of full-time political professionals fighting over the fruits of other peoples' labor.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

There is a subtle and extremely perverse problem underlying all of our social welfare efforts, and unless we acknowledge it openly we are never going to solve it.

"We have to do something to help below-average people. The problem is persistent. No matter how much we do, we continue to have below-average people! We must do more!!"


I hope that this fallacy is apparent to all, when expressed this clearly.

Yet this "logic" drives much of our so-called "progressive" agenda yet plenty of people, well-intentioned people, are deceived by it.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

There is a subtle and extremely perverse problem underlying all of our social welfare efforts, and unless we acknowledge it openly we are never going to solve it.

"We have to do something to help below-average people. The problem is persistent. No matter how much we do, we continue to have below-average people! We must do more!!"


I hope that this fallacy is apparent to all, when expressed this clearly.

Yet this "logic" drives much of our so-called "progressive" agenda yet plenty of people, well-intentioned people, are deceived by it.

Perhaps it is time to ask the question, to quote the name of a short-lived game show on GSN: "How much is enough?"

 

[Rover]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Great article here exposing Paul Ryan as a weasel and his budget as a fraud. Even better its in his own word...

http://nymag.com/daily/intelligencer/2013/01/paul-ryan-breaks-down-under-wonkterrogation.html

When the so-called conservative brainiac gets his clock cleaned by 90 year old Joe Biden in a debate, and then by a reporter, I think its time for you righties to give it up.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I wish I could say that I was making this up, but I'm not. Someone please explain to me how the heck a minimum wage increase of a buck and a half is supposed to create jobs? Or at least give me some of what they're smoking?

http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html

 

[Rover]

I wish I could say that I was making this up, but I'm not. Someone please explain to me how the heck a minimum wage increase of a buck and a half is supposed to create jobs? Or at least give me some of what they're smoking?

http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html

I think whatever you're smoking is working well enough, but the concept is simple. Those on the low end of the wage scale tend to spend their money locally. Raise minimum wage = putting more money back into the economy. Think of it like this. NY would be forcing McDonalds to spend more money in their state if they chose to do business there.

Now Joe Libertarian (not to be confused with Joe Lieberman) will argue that McDonalds will simply cut their workforce, but that's not so black and white. The Clown will make an assessment of whether or not that's going to hurt the service their customers come to expect when selling a crappy product, and may choose there's not a lot of fat to trim if you'll pardon the expression. The idea that 100% of costs get passed on somehow is a theory for tenured professors in economics class, but doesn't apply in the real world.

 

[MinnFan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I think whatever you're smoking is working well enough, but the concept is simple. Those on the low end of the wage scale tend to spend their money locally. Raise minimum wage = putting more money back into the economy. Think of it like this. NY would be forcing McDonalds to spend more money in their state if they chose to do business there.

Now Joe Libertarian (not to be confused with Joe Lieberman) will argue that McDonalds will simply cut their workforce, but that's not so black and white. The Clown will make an assessment of whether or not that's going to hurt the service their customers come to expect when selling a crappy product, and may choose there's not a lot of fat to trim if you'll pardon the expression. The idea that 100% of costs get passed on somehow is a theory for tenured professors in economics class, but doesn't apply in the real world.

Can you point to any studies that show your "cycle of money" wage increase theory actually works? This article points to plenty of studies that show increases in unemployment.

 

[Almington]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Can you point to any studies that show your "cycle of money" wage increase theory actually works? This article points to plenty of studies that show increases in unemployment.

If you'd had actually READ any of studies that that article mentions, you'd know that increasing the minimum wage increases the absolute number of jobs AND the unemployment rate by increasing the labor participation rate. As the value of labor increases, the number of people actively looking for work increases more than the number of jobs that are created.

 

[Rover]

Can you point to any studies that show your "cycle of money" wage increase theory actually works? This article points to plenty of studies that show increases in unemployment.

Kind of a chicken or the egg thing. Lots of competing factors affect employment levels. Massachusetts has I believe one of the higher living wages in the country and for an industrialized state one of the lowest unemployment rates. I don't imagine the rates in Mississippi or Kentucky are that high, yet unemployment and poverty are rampant.

So, in the end I think some states can demand employers pay a higher wage and some can't. Presumably the market will dictate who can get away with this or punish those that go to far. My expectation would be that New York would be able to pull this off.

 

[MinnFan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Kind of a chicken or the egg thing. Lots of competing factors affect employment levels. Massachusetts has I believe one of the higher living wages in the country and for an industrialized state one of the lowest unemployment rates. I don't imagine the rates in Mississippi or Kentucky are that high, yet unemployment and poverty are rampant.

So, in the end I think some states can demand employers pay a higher wage and some can't. Presumably the market will dictate who can get away with this or punish those that go to far. My expectation would be that New York would be able to pull this off.

I have no problem with that, but then we would need to get rid of the national minimum wage allowing the market to sort out what the best solution is.

 

[MinnFan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

If you'd had actually READ any of studies that that article mentions, you'd know that increasing the minimum wage increases the absolute number of jobs AND the unemployment rate by increasing the labor participation rate. As the value of labor increases, the number of people actively looking for work increases more than the number of jobs that are created.

What does the participation rate matter when there aren't jobs available for them? If you produce $5/hr of productivity, but I have to pay you $7/hr its pretty safe to say that the job won't be offered.

 

[Rover]

I have no problem with that, but then we would need to get rid of the national minimum wage allowing the market to sort out what the best solution is.

I'd prefer the current system lest people start working for slave wages. Think of the federal minimum wage as a way to keep people off the govt dole. Once that's established states can then go their own way above that if they choose to. Some people worship China's society. I don't. I don't see a reason to emulate their compensation for their workers.

 

[Almington]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

What does the participation rate matter when there aren't jobs available for them? If you produce $5/hr of productivity, but I have to pay you $7/hr its pretty safe to say that the job won't be offered.

Because you can generate MORE jobs and have the unemployment rate increase if you have MORE people trying to get those jobs.

For example:
An island exists with 200 people on it. If you increase the pay by $1 per hour (from $10 to $11) and the number of jobs increase by 10% (say from 100 to 110) but the number of people looking for those jobs increases by 20% (from 110 to 132) you will have increased in the absolute number of employed people (100 to 110) but also increased in the number of people who want to work but can't find jobs (10 to 22) thus the unemployment rate increased from 10% to 20%. At the same time the labor participation rate increased from 55% (110 of 200) to 66% (132 of 200).

Thus you have: 1.) More jobs and 2.) Higher Unemployment.

 

[MinnFan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Because you can generate MORE jobs and have the unemployment rate increase if you have MORE people trying to get those jobs.

For example:
An island exists with 200 people on it. If you increase the pay by $1 per hour (from $10 to $11) and the number of jobs increase by 10% (say from 100 to 110) but the number of people looking for those jobs increases by 20% (from 110 to 132) you will have increased in the absolute number of employed people (100 to 110) but also increased in the number of people who want to work but can't find jobs (10 to 22) thus the unemployment rate increased from 10% to 20%. At the same time the labor participation rate increased from 55% (110 of 200) to 66% (132 of 200).

Thus you have: 1.) More jobs and 2.) Higher Unemployment.

I'm still trying to figure out where the additional jobs come from. Its going to cost employers more to hire someone, but for some reason they are going to create more positions

 

[Almington]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I'm still trying to figure out where the additional jobs come from.

Increased demand from people having more money to spend.

 

[MinnFan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Increased demand from people having more money to spend.

If thats the case why not just make it $50/hr? Think of how much demand that would produce.

For enough of an increase in demand you have to assume that nobody loses their current job, prices don't go up due to increased costs and profit margins somehow increase despite increased burdens on the business.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

If you'd had actually READ any of studies that that article mentions, you'd know that increasing the minimum wage increases the absolute number of jobs AND the unemployment rate by increasing the labor participation rate. As the value of labor increases, the number of people actively looking for work increases more than the number of jobs that are created.

How does a minimum wage increase increase the absolute number of jobs? I'm not going to argue with you that the number of people looking may go up, but you're mandating an increased price floor, so how would an increased price convince someone to make a purchase on something that isn't exactly prestige from the prospective of the buyer? If you read about the studies closely in that article, there's no NET increase in employment. The minimum wage increase is a cause for an auction on skills. That doesn't mean a net increase in jobs. At the most, they're kicking out the lower skilled workers and replacing with higher skilled workers in order to cover the cost. That's not an increase in jobs. That's keeping them flat.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Good story about the classic "problem of the commons" as it applies to commercial fisheries and the cod population in the North Atlantic: you want to make sure there always are enough young fish around to grow into mature fish, while with livelihoods at stake you also want to allow a decent annual "harvest" too.

 

[Rover]

If thats the case why not just make it $50/hr? Think of how much demand that would produce.

For enough of an increase in demand you have to assume that nobody loses their current job, prices don't go up due to increased costs and profit margins somehow increase despite increased burdens on the business.

As I said to you earlier, presumably the market will decide whether a hike has gone too far or not. 50/hr one would assume would be going to far. $8.75 an hour? Not so much in an already wealthy state.

Non-philosophical opposition to minimum wage hikes generally revolves around two premises: 1) Employeers will seek to break even on the impact to their bottom line so they're raise product prices which will drive away business and force closures or 2) Employees will lay off people to keep their net salary costs identical regardless of how much each person is being paid.

This is all well and good in a theoretical libertarian universe which we don't live in.

For businesses, there's other factors. Maybe you do take a hit on costs against your bottom line, because you're already operating with as few workers as possible or you rely greatly on service and cleanliness and will take an even bigger loss if you cut back on either. It could also be that the added costs of labor are offset by a rising economy or a drop in food prices for example. Maybe you eat part of the costs, and pass part onto the consumer but since its a small amount they don't notice.

Bottom line is 8.75 an hour is probably a top wage in Kentucky, but its not in NY so the state can most likely absord it.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

As I said to you earlier, presumably the market will decide whether a hike has gone too far or not. 50/hr one would assume would be going to far. $8.75 an hour? Not so much in an already wealthy state.

Non-philosophical opposition to minimum wage hikes generally revolves around two premises: 1) Employeers will seek to break even on the impact to their bottom line so they're raise product prices which will drive away business and force closures or 2) Employees will lay off people to keep their net salary costs identical regardless of how much each person is being paid.

This is all well and good in a theoretical libertarian universe which we don't live in.

For businesses, there's other factors. Maybe you do take a hit on costs against your bottom line, because you're already operating with as few workers as possible or you rely greatly on service and cleanliness and will take an even bigger loss if you cut back on either. It could also be that the added costs of labor are offset by a rising economy or a drop in food prices for example. Maybe you eat part of the costs, and pass part onto the consumer but since its a small amount they don't notice.

Bottom line is 8.75 an hour is probably a top wage in Kentucky, but its not in NY so the state can most likely absord it.

What basis are you using that 8.75 is able to be absorbed without repercussions, without using "the libertarians didn't say it" as your answer? Please use some financial backing.