Minimum Wage --Prevents-- Wealth Acquisition!

[dblack]

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

I'm not sure I follow there reasoning here, but it sounds like an explanation for how low wages are harmful. I was specifically asking about the notion that income isn't coupled to productivity. Why should it be? Income is a reflection on the value of the product; the end result is what matters. ie producing something more efficiently won't necessarily result in higher income if the value of the product is declining.

 

[danielpalos]

Most liberals don't understand this because they don't really grasp the principles of free market capitalism. They react emotively and without thinking about consequences of what their emotions drive them to do. And when you're dealing with free market capitalism, this can be very costly because you can't put the toothpaste back in the tube. Such is the case with our beloved minimum wage.

Oh sure, it has been considered a wonderful idea through all the years... helped the poor exploited worker be treated at least half-way decently... but it has also produced a society full of idiots who don't comprehend how it has damaged the individual's ability to prosper. It's a big giant ball and chain on our ability to negotiate. In order to understand this, you must understand how the principles of free market capitalism (supply and demand) operate.

As I said, the toothpaste is out already, can't put it back now... So I am not suggesting we should get rid of the minimum wage at this time. Various reasons for that but it all goes back to the toothpaste already being out of the tube... we've already established a free market system around this baseline labor cost, any change now would be somewhat detrimental to a lot of people. The better idea at this point is to leave it alone and focus on making it irrelevant. Raising it is stupid and pointless because all you're ultimately doing is decreasing the value of a dollar.

But now... Let's go back to 1912, when this issue was first being debated. The First Progressive Movement was hell bent on establishing a minimum wage, at that time, for women and children. They tried numerous times to do this and kept running into failure because the Supreme Court continued to rule the minimum wage unconstitutional. This went on for over 20 years in the first part of the 20th century. So when we get to the Great Depression, FDR takes this opportunity to implement a national minimum wage. He says, and I quote:

"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country."

Now...... THAT sounds very familiar, doesn't it? ....Where have I heard THAT recently? Can it not be clearer that this abysmal liberal policy has FAILED? Here we are, 82 years later and the same Progressives are screaming the same thing! The dollar amount is all that is different.

Same argument, same idea, same solution that hasn't worked in 82 years. But it's all about emotion, you see?

Okay, follow me here... think about, what if.... What IF we had not adopted a MW and instead, we promoted individual and collective bargaining? We could have established anti-trust laws where employers had to 'reasonably negotiate' with prospective employees on the specific job available. Of course, we have to understand there were "corporatists" back then who didn't want that to happen. They went along with this "minimum wage" idea because it effectively base-lined labor costs. Think about it for a hot second...

Every wage in America, whether you belong to a union or not, is pretty much determined in relation to the current minimum wage. If that goes up, so do all the wages up the ladder because that is their base line. As long as the minimum wage remains where it is, the motivation for the capitalist is to keep wages the same. so we've stagnated wealth acquisition by base-lining labor cost. You can't negotiate a higher wage because the wage is set according to the minimum you've set. Raising the minimum doesn't help you negotiate, it eliminates the job you're negotiating for. If there were no such thing as a minimum wage, you could negotiate based on market value of labor.

We don't know how free market forces would have worked the past 82 years... Sure, children and women were exploited back in 1912... Sure, people were struggling in 1933... but had we taken a different road, one that encouraged free market capitalism instead of trying to regulate it... we may have experienced a different result. It might be that today, an average worker negotiates $15 hr. for a burger flipper job because no one else wants to flip burgers? It might mean the value of the dollar never declined and $5 hr. buys as much as $15 today? We just don't know because we didn't take that road.

Only the Bad management of a minimum wage prevents wealth acquisition.

 

[Andylusion]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

While there is some truth to that, the solution is the opposite of what you imply.

International trade does not cause debt. Never has, never will.

What causes debt, is government spending more than it makes.

If anything, government spending, causes trade imbalances.

Fix that problem, and most of the trade imbalance will disappear.

A company in China can not force our government to take a loan from them. Our government offers to sell bonds. The Chinese, or Japanese, or anyone, then takes the offer to buy the bond.

If our government refused to sell bonds, more money from trade would go into purchasing goods.

 

[Boss]

Only the Bad management of a minimum wage prevents wealth acquisition.

So... today you're going to run around in every thread with this "bad management" theme? Is someone monitoring your daily meth intake?

 

[danielpalos]

Only the Bad management of a minimum wage prevents wealth acquisition.

So... today you're going to run around in every thread with this "bad management" theme? Is someone monitoring your daily meth intake?

nope; just my fallacy output; unlike those of the opposing view.

 

[CultureCitizen]

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

I'm not sure I follow there reasoning here, but it sounds like an explanation for how low wages are harmful. I was specifically asking about the notion that income isn't coupled to productivity. Why should it be? Income is a reflection on the value of the product; the end result is what matters. ie producing something more efficiently won't necessarily result in higher income if the value of the product is declining.

Yes... you question was :why is that a problem ?
So, yes, I answered why it is a problem : growing deb + stagnation ... unless you have a positive trade surplus.

Why should it be ?
From a micro perspective , there's no reason .

From a macro perspective : because it will eventually cause a bust ( It already caused one in 2008: too much bad debt ), plus asset bubbles ( stocks are bubbling right now ) and sooner or later they will bust.
Truth said , I am guessing Obama will be reluctant to bust it before the elections.

 

[dblack]

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

I'm not sure I follow there reasoning here, but it sounds like an explanation for how low wages are harmful. I was specifically asking about the notion that income isn't coupled to productivity. Why should it be? Income is a reflection on the value of the product; the end result is what matters. ie producing something more efficiently won't necessarily result in higher income if the value of the product is declining.

Yes... you question was :why is that a problem ?
So, yes, I answered why it is a problem : growing deb + stagnation ... unless you have a positive trade surplus.

Why should it be ?
From a micro perspective , there's no reason .

From a macro perspective : because it will eventually cause a bust ( It already caused one in 2008: too much bad debt ), plus asset bubbles ( stocks are bubbling right now ) and sooner or later they will bust.
Truth said , I am guessing Obama will be reluctant to bust it before the elections.

I was just trying to get a handle on why you felt the disconnection between productivity growth and wage growth was, itself, a problem, rather than simply why low wage growth is a problem. You specifically cited the disconnection as an issue, and I thought there might be some reason for that. It caught my attention because, usually, MW advocates hold the misconception that value is intrinsic, that labor is *really* worth more what the market is willing to pay for it.

 

[CultureCitizen]

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

I'm not sure I follow there reasoning here, but it sounds like an explanation for how low wages are harmful. I was specifically asking about the notion that income isn't coupled to productivity. Why should it be? Income is a reflection on the value of the product; the end result is what matters. ie producing something more efficiently won't necessarily result in higher income if the value of the product is declining.

Yes... you question was :why is that a problem ?
So, yes, I answered why it is a problem : growing deb + stagnation ... unless you have a positive trade surplus.

Why should it be ?
From a micro perspective , there's no reason .

From a macro perspective : because it will eventually cause a bust ( It already caused one in 2008: too much bad debt ), plus asset bubbles ( stocks are bubbling right now ) and sooner or later they will bust.
Truth said , I am guessing Obama will be reluctant to bust it before the elections.

I was just trying to get a handle on why you felt the disconnection between productivity growth and wage growth was, itself, a problem, rather than simply why low wage growth is a problem. You specifically cited the disconnection as an issue, and I thought there might be some reason for that. It caught my attention because, usually, MW advocates hold the misconception that value is intrinsic, that labor is *really* worth more what the market is willing to pay for it.

Low wages have other problems , of social nature : informal economy , crime rate increase , decrease in taxation.
These collateral costs have to be paid by the society as a whole.
If any that would be my argument for having a minimum wage.
I've discussed with Boss about this, I think some exceptions could to be made : startups , part time jobs , low tech services and industries.

 

[CultureCitizen]

International trade does not cause debt. Never has, never will.

What causes debt, is government spending more than it makes.

Imagine a country with zip exports and zip reserves ?
That doesn't make any sense.
You are saying that a company can have zip sales, and make purchases to a foreign company without getting indebted.

 

[CultureCitizen]

As far as exporting.... we already export a ton of stuff. More than most of you realize. Last year was a record year in manufacturing.

But the trade balance remains negative.

The real problem is that productivity is decoupled from income.

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

of course that has nothing to do with link between income and productivity. You lack the IQ to be here.

Well Ed,
I'd say you lack the IQ to be alive at all . But since you've apparently made it past puberty , I'll have to bear with you and your obnoxious comments.

Ed is frustrated with other posters that are obnoxious as well. That's spilling over onto you. He's normally not like this.

Andy ,
During our discussions you have probably noticed I refrain myself from falling into name calling or direct insults.
Our points might be oposed, but I try to have a minimum amount of references to support my posts.
This is not so with special Ed.

 

[EdwardBaiamonte]

If any that would be my argument for having a minimum wage.
.

you lack the IQ as a liberal to understand capitalism so all your arguments on all political subjects call for a Nazi liberal bureaucracy to violently impose your will, in this case a minimum wage that would screw customers and those who cant get jobs at the higher artificial wage. Too bad America is all about freedom!

 

[EdwardBaiamonte]

Our points might be oposed, but I try to have a minimum amount of references to support my posts.

so then show us one significant liberal position that can be supported or admit you lack the IQ to be here as a typical liberal.

 

[EdwardBaiamonte]

Low wages have other problems ,

so do high minimum wages including creating unemployment, raising prices and opening the libcommie Nazi door to controlling not only the price of labor and all prices but the the entire economy.

Yesterday Culturecreep was arguing for a world wide libNazi bureacracy to determine which industries and products in every country were "mature" and therefore able to be engaged in free trade.

 

[dblack]

Why is that a problem?

Short answer : The internal market doesn't grow.
True exports are growing , but imports are growing faster .
Where does the differential come from ?
Debt.
Actually private debt is twice as big as public debt. And debt can't grow forever.

I'm not sure I follow there reasoning here, but it sounds like an explanation for how low wages are harmful. I was specifically asking about the notion that income isn't coupled to productivity. Why should it be? Income is a reflection on the value of the product; the end result is what matters. ie producing something more efficiently won't necessarily result in higher income if the value of the product is declining.

Yes... you question was :why is that a problem ?
So, yes, I answered why it is a problem : growing deb + stagnation ... unless you have a positive trade surplus.

Why should it be ?
From a micro perspective , there's no reason .

From a macro perspective : because it will eventually cause a bust ( It already caused one in 2008: too much bad debt ), plus asset bubbles ( stocks are bubbling right now ) and sooner or later they will bust.
Truth said , I am guessing Obama will be reluctant to bust it before the elections.

I was just trying to get a handle on why you felt the disconnection between productivity growth and wage growth was, itself, a problem, rather than simply why low wage growth is a problem. You specifically cited the disconnection as an issue, and I thought there might be some reason for that. It caught my attention because, usually, MW advocates hold the misconception that value is intrinsic, that labor is *really* worth more what the market is willing to pay for it.

Low wages have other problems , of social nature : informal economy , crime rate increase , decrease in taxation.
These collateral costs have to be paid by the society as a whole.
If any that would be my argument for having a minimum wage.
I've discussed with Boss about this, I think some exceptions could to be made : startups , part time jobs , low tech services and industries.

Uh huh. Yeah.

Anyway, I was asking about your comment regarding productivity. But I guess you don't want to talk about that.

 

[Pedro de San Patricio]

Most liberals don't understand this because they don't really grasp the principles of free market capitalism. They react emotively and without thinking about consequences of what their emotions drive them to do. And when you're dealing with free market capitalism, this can be very costly because you can't put the toothpaste back in the tube. Such is the case with our beloved minimum wage.

Oh sure, it has been considered a wonderful idea through all the years... helped the poor exploited worker be treated at least half-way decently... but it has also produced a society full of idiots who don't comprehend how it has damaged the individual's ability to prosper. It's a big giant ball and chain on our ability to negotiate. In order to understand this, you must understand how the principles of free market capitalism (supply and demand) operate.

As I said, the toothpaste is out already, can't put it back now... So I am not suggesting we should get rid of the minimum wage at this time. Various reasons for that but it all goes back to the toothpaste already being out of the tube... we've already established a free market system around this baseline labor cost, any change now would be somewhat detrimental to a lot of people. The better idea at this point is to leave it alone and focus on making it irrelevant. Raising it is stupid and pointless because all you're ultimately doing is decreasing the value of a dollar.

But now... Let's go back to 1912, when this issue was first being debated. The First Progressive Movement was hell bent on establishing a minimum wage, at that time, for women and children. They tried numerous times to do this and kept running into failure because the Supreme Court continued to rule the minimum wage unconstitutional. This went on for over 20 years in the first part of the 20th century. So when we get to the Great Depression, FDR takes this opportunity to implement a national minimum wage. He says, and I quote:

"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country."

Now...... THAT sounds very familiar, doesn't it? ....Where have I heard THAT recently? Can it not be clearer that this abysmal liberal policy has FAILED? Here we are, 82 years later and the same Progressives are screaming the same thing! The dollar amount is all that is different.

Same argument, same idea, same solution that hasn't worked in 82 years. But it's all about emotion, you see?

Okay, follow me here... think about, what if.... What IF we had not adopted a MW and instead, we promoted individual and collective bargaining? We could have established anti-trust laws where employers had to 'reasonably negotiate' with prospective employees on the specific job available. Of course, we have to understand there were "corporatists" back then who didn't want that to happen. They went along with this "minimum wage" idea because it effectively base-lined labor costs. Think about it for a hot second...

Every wage in America, whether you belong to a union or not, is pretty much determined in relation to the current minimum wage. If that goes up, so do all the wages up the ladder because that is their base line. As long as the minimum wage remains where it is, the motivation for the capitalist is to keep wages the same. so we've stagnated wealth acquisition by base-lining labor cost. You can't negotiate a higher wage because the wage is set according to the minimum you've set. Raising the minimum doesn't help you negotiate, it eliminates the job you're negotiating for. If there were no such thing as a minimum wage, you could negotiate based on market value of labor.

We don't know how free market forces would have worked the past 82 years... Sure, children and women were exploited back in 1912... Sure, people were struggling in 1933... but had we taken a different road, one that encouraged free market capitalism instead of trying to regulate it... we may have experienced a different result. It might be that today, an average worker negotiates $15 hr. for a burger flipper job because no one else wants to flip burgers? It might mean the value of the dollar never declined and $5 hr. buys as much as $15 today? We just don't know because we didn't take that road.

I'm so sad that you're from Alabama. What you posted here is why I'm so glad the government got me the fuck away from there.

 

[EdwardBaiamonte]

... Sure, children and women were exploited back in 1912....

how on earth can you be exploited unless someone forces you to take a job? If you take the the best job offer in the entire world he is not an exploiter but a hero!!
Don't forget that capitalism is competitive. Unless you provide the best products and jobs possible you are driven into bankruptcy.

 

[danielpalos]

... Sure, children and women were exploited back in 1912....

how on earth can you be exploited unless someone forces you to take a job? If you take the the best job offer in the entire world he is not an exploiter but a hero!!
Don't forget that capitalism is competitive. Unless you provide the best products and jobs possible you are driven into bankruptcy.

doesn't that simply lead to crony forms of capitalism without a social bailout with a social safety net?

 

[CultureCitizen]

I was just trying to get a handle on why you felt the disconnection between productivity growth and wage growth was, itself, a problem, rather than simply why low wage growth is a problem.

It all boils down to the economic flow model.
Assume you set up a clothes factory in a country which is a subsistence economy.
You import cotton.
You export clothes
You pay market price wages ( subsistentce levels )... in other words you take advantage of cheap labour.

Then asume global markets start going down.
What would you do if you wanted to expand your market to local consumers?

 

[CultureCitizen]

Yesterday Culturecreep was arguing for a world wide libNazi bureacracy to determine which industries and products in every country were "mature" and therefore able to be engaged in free trade.

Indeed ... this worked both for south korea and China.
Though in South Korea it was actually a bargain between entrepreneurs and the government.

Read "Bad Samaritans" by Ha Joon Chang.

 

[dblack]

I was just trying to get a handle on why you felt the disconnection between productivity growth and wage growth was, itself, a problem, rather than simply why low wage growth is a problem.

It all boils down to ...

So anyway, you claimed that:

The real problem is that productivity is decoupled from income.

... and that just doesn't add up. Productivity is completely value neutral. If someone is very productive at arson, I see no reason they should have a higher income. On the other hand, if someone manages to cure cancer, but does so in an utterly inefficient manner - who really cares? Wouldn't we still want to reward them handsomely?