CDZ The "Living Wage" Time Bomb

[jwoodie]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

 

[martybegan]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

Proponents of raising the minimum wage to a so called livable wage ignore the basic fact that a person's labor has a value, and that value contributes to the cost and value of the product or service being provided. When you overpay for the value added by the labor, you have to increase the cost to the customer of said service or product, and they are overpaying for what they are getting.

 

[midcan5]

Egads. https://www.uvu.edu/woodbury/docs/summaryoftheprimarycauseofthehousingbubble.pdf

 

[Fishlore]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Inflation is not a threat these days. Our bigger worry is deflation, a far more deadly disease. We could actually use a bit higher rate of inflation than we have got.

I don't know why but most conservative posters seem to have learned their economics in high school while studying about Bryan and his "Cross of Gold" speech. They don't have any grasp of modern currency, thinking that we need a dollar "backed by gold" as if that would cure all our ills. All the jabber about "Econ 101" comes from people who never took the course. They cannot admit that so-called Reaganomics was a disastrous failure. Supply side theory was indeed what G.H.W. Bush called it, "voodoo economics." Pathetic

 

[oldsoul]

The aspect of minimum wage increases that proponents of it seem to ignore is the fact that as wages go up, the incentive to automate goes up as well. When a company, such as McDonald's, has to start paying people more, they look for ways to reduce the number of people they need, and to make those who they keep, more productive. This is, IMO, the driving force behind things such as automated fryers. If you don't need someone to watch over the fries and lift the basket when they are done, you may be able to have a smaller workforce. So, increasing the minimum wage, tends to cause those working at, or slightly above, said wage to find jobs more and more scarce. While increases to the wage would help those who are able to find work, what about those who cannot, because they are simply priced out of the market?

Another side of this is that most, if not all, jobs at minimum wage are entry level positions (with the exception of tipped positions such as servers in a resaurant). These are, and always have been, great for people just entering the workforce (ie. High School students looking for a little spending money), but they are woefully inadaquate for those who need to support themselves. I beleive it would serve these people much better to work towards finding and supporting ever better ways for making them more valuable, thus making it more likely they will advance into higher paying positions, instead of artificially raising their "value" with wage controls.

 

[jwoodie]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

 

[Alystyr]

There is another possible consequence of an increased minimum wage that I've seen put forth - increased Union wages.
From what I understand, it possibly has to do with the "prevailing wage" section of Union contracts. If the prevailing wage in a contract area goes up, then so do Union wages.
Just Why Are The Unions Supporting A Rise In The Minimum Wage?

 

[jwoodie]

LIVING WAGE = $15 PER HOUR. COMPRENDE?

 

[Fishlore]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

Thank you for your condescending sarcasm. It helps me understand with whom I am dealing.

Raising the minimum wage doesn't necessarily raise the price of hamburgers for a couple of reasons:

Some or all of the wage increase may be paid for out of profits rather than by price increases. The fast food industry is immensely profitable and there is quite a bit of wage money to skim off the top.

The wage cost per hamburger has been dropping since Mr. Kroc took over the business. Increased productivity is the central core of the fast -food business model. Automated hamburgers mean fewer, better paid hamburger makers.

All employees, from entry level to the executive washroom level are hired for just one reason: their labor contributes more to the company than their wages cost. If the minimum wage employee doesn't meet that criterion, good bye; if she does, she gets the raise.

You ought to consider what happens to the extra money in the low-wage worker's pay packet. Unlike stockholder dividends, worker pay is spent locally on consumer items such as housing, food, and a night out at the hamburger stand. Increasing the dollar volume flowing through the bottom of the income pyramid is broadly stimulative. Trickle up is the real dynamic of the American economy, which is dominated by the consumer sector. Trickle down has created good jobs in China, not on Main St.

 

[jwoodie]

Must I spell L-I-V-I-N-G-W-A-G-E to you? This means DOUBLING the labor cost at McDonalds. Do you understand the profit concept? Do you think McDonalds is a social welfare organization? Even your prescription for "increased productivity" would result in FEWER employees. Is that what you want?

The only reason that government mandated wage increases have escaped being held responsible for these negative effects is because they have been incremental and only kept pace with inflation. The Living Wage concept, if implemented nationwide, will have a much greater impact on inflation (and employment). This may sound benign (or even beneficial) at the moment, but it will make our looming debt/interest problems even worse.

P.S. My sarcasm is generally triggered by responses which seem to intentionally misinterpret my posts, such as substituting the term "minimum wage" for "living wage."

 

[Fishlore]

Must I spell L-I-V-I-N-G-W-A-G-E to you? This means DOUBLING the labor cost at McDonalds. Do you understand the profit concept? Do you think McDonalds is a social welfare organization? Even your prescription for "increased productivity" would result in FEWER employees. Is that what you want?

The only reason that government mandated wage increases have escaped being held responsible for these negative effects is because they have been incremental and only kept pace with inflation. The Living Wage concept, if implemented nationwide, will have a much greater impact on inflation (and employment). This may sound benign (or even beneficial) at the moment, but it will make our looming debt/interest problems even worse.

P.S. My sarcasm is generally triggered by responses which seem to intentionally misinterpret my posts, such as substituting the term "minimum wage" for "living wage."

I did not misinterpret your post. "Minimum wage" is a legal term that has been used in economics for years., "living wage" is a journalist item.

The idea that raising the minimum wage reduces employment is a central belief in lemonade stand economics. Would you like a link to some peer-reviewed economic research that proves the idea false?

Job loss from automation productivity is a real issue these days. Holding wages down so that people are cheaper than machines has a long history in America. Do you know the folk song about John Henry and the steam drill?

McDonalds is teetering on the edge because todays fast food customers have other preferences. I have no sympathy for an entrepreneur who claims to be unable to operate within the rules. Would you like to free Mickey Dee's from those onerous government food inspections? It would save a lot of money.

I've listened to capitalists bellyache about how tough it is to make a profit all my life. Close up shop! Nobody needs your multi-million dollar franchise network. You can be replaced by a hard working Syrian immigrant with a food truck. Better food. Better prices. Better jobs.

 

[oldsoul]

There is another possible consequence of an increased minimum wage that I've seen put forth - increased Union wages.
From what I understand, it possibly has to do with the "prevailing wage" section of Union contracts. If the prevailing wage in a contract area goes up, then so do Union wages.
Just Why Are The Unions Supporting A Rise In The Minimum Wage?

Don't get me started on Unions. They have their place, and they should stay there. I have never worked under a union contract, and God willing, I never will. I am an adult, and I don't need to make someone else rich "speaking on my behalf". Don't get me wrong, I am not anti-union. As I stated, they have their place, and they have done things to make the work-life balance better for everyone who works for someone else. However, in a lot of cases, they are overburdening companies with labor costs, and bullying their members, and members' families. In too many cases they have become nothing more than legitimized criminals.

 

[jwoodie]

Must I spell L-I-V-I-N-G-W-A-G-E to you? This means DOUBLING the labor cost at McDonalds. Do you understand the profit concept? Do you think McDonalds is a social welfare organization? Even your prescription for "increased productivity" would result in FEWER employees. Is that what you want?

The only reason that government mandated wage increases have escaped being held responsible for these negative effects is because they have been incremental and only kept pace with inflation. The Living Wage concept, if implemented nationwide, will have a much greater impact on inflation (and employment). This may sound benign (or even beneficial) at the moment, but it will make our looming debt/interest problems even worse.

P.S. My sarcasm is generally triggered by responses which seem to intentionally misinterpret my posts, such as substituting the term "minimum wage" for "living wage."

I did not misinterpret your post. "Minimum wage" is a legal term that has been used in economics for years., "living wage" is a journalist item.

The idea that raising the minimum wage reduces employment is a central belief in lemonade stand economics. Would you like a link to some peer-reviewed economic research that proves the idea false?

Job loss from automation productivity is a real issue these days. Holding wages down so that people are cheaper than machines has a long history in America. Do you know the folk song about John Henry and the steam drill?

McDonalds is teetering on the edge because todays fast food customers have other preferences. I have no sympathy for an entrepreneur who claims to be unable to operate within the rules. Would you like to free Mickey Dee's from those onerous government food inspections? It would save a lot of money.

I've listened to capitalists bellyache about how tough it is to make a profit all my life. Close up shop! Nobody needs your multi-million dollar franchise network. You can be replaced by a hard working Syrian immigrant with a food truck. Better food. Better prices. Better jobs.

$15 minimum wage: For or against?

 

[HenryBHough]

A house I bought for $4,100 in 1967 recently was resold for $387,000. It had not been enlarged, just reasonably maintained.

Does that tell you anything about what happens when the economy is treated as a toy?

 

[oldsoul]

Must I spell L-I-V-I-N-G-W-A-G-E to you? This means DOUBLING the labor cost at McDonalds. Do you understand the profit concept? Do you think McDonalds is a social welfare organization? Even your prescription for "increased productivity" would result in FEWER employees. Is that what you want?

The only reason that government mandated wage increases have escaped being held responsible for these negative effects is because they have been incremental and only kept pace with inflation. The Living Wage concept, if implemented nationwide, will have a much greater impact on inflation (and employment). This may sound benign (or even beneficial) at the moment, but it will make our looming debt/interest problems even worse.

P.S. My sarcasm is generally triggered by responses which seem to intentionally misinterpret my posts, such as substituting the term "minimum wage" for "living wage."

I did not misinterpret your post. "Minimum wage" is a legal term that has been used in economics for years., "living wage" is a journalist item.

The idea that raising the minimum wage reduces employment is a central belief in lemonade stand economics. Would you like a link to some peer-reviewed economic research that proves the idea false?

Job loss from automation productivity is a real issue these days. Holding wages down so that people are cheaper than machines has a long history in America. Do you know the folk song about John Henry and the steam drill?

McDonalds is teetering on the edge because todays fast food customers have other preferences. I have no sympathy for an entrepreneur who claims to be unable to operate within the rules. Would you like to free Mickey Dee's from those onerous government food inspections? It would save a lot of money.

I've listened to capitalists bellyache about how tough it is to make a profit all my life. Close up shop! Nobody needs your multi-million dollar franchise network. You can be replaced by a hard working Syrian immigrant with a food truck. Better food. Better prices. Better jobs.

$15 minimum wage: For or against?

Against.

 

[hadit]

Some 62% of the American work force earns $20/hr or less. Raising the MW to $15 will see most, if not all, of them demanding and/or receiving raises (some quite substantial) at the same time. <sarcasm>Of course we can double the MW with absolutely no negative effects at all.</sarcasm>

 

[Wyatt earp]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

Thank you for your condescending sarcasm. It helps me understand with whom I am dealing.

Raising the minimum wage doesn't necessarily raise the price of hamburgers for a couple of reasons:

Some or all of the wage increase may be paid for out of profits rather than by price increases. The fast food industry is immensely profitable and there is quite a bit of wage money to skim off the top.

The wage cost per hamburger has been dropping since Mr. Kroc took over the business. Increased productivity is the central core of the fast -food business model. Automated hamburgers mean fewer, better paid hamburger makers.

All employees, from entry level to the executive washroom level are hired for just one reason: their labor contributes more to the company than their wages cost. If the minimum wage employee doesn't meet that criterion, good bye; if she does, she gets the raise.

You ought to consider what happens to the extra money in the low-wage worker's pay packet. Unlike stockholder dividends, worker pay is spent locally on consumer items such as housing, food, and a night out at the hamburger stand. Increasing the dollar volume flowing through the bottom of the income pyramid is broadly stimulative. Trickle up is the real dynamic of the American economy, which is dominated by the consumer sector. Trickle down has created good jobs in China, not on Main St.

You don't have a clue about the profits at fast food places, Mcdonalds only owns like less then 10% of it's stores, the rest are own by small business folks, the profit margins are slim.

 

[Fishlore]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

Thank you for your condescending sarcasm. It helps me understand with whom I am dealing.

Raising the minimum wage doesn't necessarily raise the price of hamburgers for a couple of reasons:

Some or all of the wage increase may be paid for out of profits rather than by price increases. The fast food industry is immensely profitable and there is quite a bit of wage money to skim off the top.

The wage cost per hamburger has been dropping since Mr. Kroc took over the business. Increased productivity is the central core of the fast -food business model. Automated hamburgers mean fewer, better paid hamburger makers.

All employees, from entry level to the executive washroom level are hired for just one reason: their labor contributes more to the company than their wages cost. If the minimum wage employee doesn't meet that criterion, good bye; if she does, she gets the raise.

You ought to consider what happens to the extra money in the low-wage worker's pay packet. Unlike stockholder dividends, worker pay is spent locally on consumer items such as housing, food, and a night out at the hamburger stand. Increasing the dollar volume flowing through the bottom of the income pyramid is broadly stimulative. Trickle up is the real dynamic of the American economy, which is dominated by the consumer sector. Trickle down has created good jobs in China, not on Main St.

You don't have a clue about the profits at fast food places, Mcdonalds only owns like less then 10% of it's stores, the rest are own by small business folks, the profit margins are slim.

Can you tell me what percent of franchisees operate more than one location? Do you know what the initial buy-in is for a McDonald'a franchise? Do you know the average sale price for a franchise? No, you don't know any of these things. How can I tell? because you parrot the silly hog-wash about "small business owners." Friend you could hock everything you own and you wouldn't have half the money needed to buy even a faltering franchise location.

You don't know the basics and you don't know the numbers. What do you think the median "profit margin" is for a franchisee? Good luck finding that one on the Google.

Just to burnish your fast-food expertise, Ronald McDonald refers to his local operations as "restaurants," not "stores." And you say I haven't a clue? Really, it is to laugh.

 

[oldsoul]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

Thank you for your condescending sarcasm. It helps me understand with whom I am dealing.

Raising the minimum wage doesn't necessarily raise the price of hamburgers for a couple of reasons:

Some or all of the wage increase may be paid for out of profits rather than by price increases. The fast food industry is immensely profitable and there is quite a bit of wage money to skim off the top.

The wage cost per hamburger has been dropping since Mr. Kroc took over the business. Increased productivity is the central core of the fast -food business model. Automated hamburgers mean fewer, better paid hamburger makers.

All employees, from entry level to the executive washroom level are hired for just one reason: their labor contributes more to the company than their wages cost. If the minimum wage employee doesn't meet that criterion, good bye; if she does, she gets the raise.

You ought to consider what happens to the extra money in the low-wage worker's pay packet. Unlike stockholder dividends, worker pay is spent locally on consumer items such as housing, food, and a night out at the hamburger stand. Increasing the dollar volume flowing through the bottom of the income pyramid is broadly stimulative. Trickle up is the real dynamic of the American economy, which is dominated by the consumer sector. Trickle down has created good jobs in China, not on Main St.

You don't have a clue about the profits at fast food places, Mcdonalds only owns like less then 10% of it's stores, the rest are own by small business folks, the profit margins are slim.

Can you tell me what percent of franchisees operate more than one location? Do you know what the initial buy-in is for a McDonald'a franchise? Do you know the average sale price for a franchise? No, you don't know any of these things. How can I tell? because you parrot the silly hog-wash about "small business owners." Friend you could hock everything you own and you wouldn't have half the money needed to buy even a faltering franchise location.

You don't know the basics and you don't know the numbers. What do you think the median "profit margin" is for a franchisee? Good luck finding that one on the Google.

Just to burnish your fast-food expertise, Ronald McDonald refers to his local operations as "restaurants," not "stores." And you say I haven't a clue? Really, it is to laugh.

How arrogant of you. Can you answer any of your own questions? Furthermore, what do your questions have to do with the topic at hand anyway? Your arrogance is astounding...

 

[Wyatt earp]

The Law of Unintended Consequences:

Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.

As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.

At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.

These doom-and-gloom fiscal scenarios have been circulating on the Interwebs for years. Their prophesies never turn out. Remember Glenn Beck and his gold coin scam? Raising the minimum wage and other wages does not increase the money supply (M1) and does not produce inflation.

Like doom-and-gloom about the housing bubble? Do you really believe that a $15/hr LIVING WAGE* at McDonald's will not raise their prices for hamburgers? Won't other wages have to be raised in order to maintain a differential for attracting more qualified employees? Don't you think it will discourage entry level employment?

*Did you even read the OP before posting your response?

Thank you for your condescending sarcasm. It helps me understand with whom I am dealing.

Raising the minimum wage doesn't necessarily raise the price of hamburgers for a couple of reasons:

Some or all of the wage increase may be paid for out of profits rather than by price increases. The fast food industry is immensely profitable and there is quite a bit of wage money to skim off the top.

The wage cost per hamburger has been dropping since Mr. Kroc took over the business. Increased productivity is the central core of the fast -food business model. Automated hamburgers mean fewer, better paid hamburger makers.

All employees, from entry level to the executive washroom level are hired for just one reason: their labor contributes more to the company than their wages cost. If the minimum wage employee doesn't meet that criterion, good bye; if she does, she gets the raise.

You ought to consider what happens to the extra money in the low-wage worker's pay packet. Unlike stockholder dividends, worker pay is spent locally on consumer items such as housing, food, and a night out at the hamburger stand. Increasing the dollar volume flowing through the bottom of the income pyramid is broadly stimulative. Trickle up is the real dynamic of the American economy, which is dominated by the consumer sector. Trickle down has created good jobs in China, not on Main St.

You don't have a clue about the profits at fast food places, Mcdonalds only owns like less then 10% of it's stores, the rest are own by small business folks, the profit margins are slim.

Can you tell me what percent of franchisees operate more than one location? Do you know what the initial buy-in is for a McDonald'a franchise? Do you know the average sale price for a franchise? No, you don't know any of these things. How can I tell? because you parrot the silly hog-wash about "small business owners." Friend you could hock everything you own and you wouldn't have half the money needed to buy even a faltering franchise location.

You don't know the basics and you don't know the numbers. What do you think the median "profit margin" is for a franchisee? Good luck finding that one on the Google.

Just to burnish your fast-food expertise, Ronald McDonald refers to his local operations as "restaurants," not "stores." And you say I haven't a clue? Really, it is to laugh.

Parrot? I think not, ya do know this is the CDZ correct? So why don't you stay on toppic and not make it a personal attack when you know you are starting to lose?

Btw if you must know, I am 50 doing well and have four high school friends

One owns three Arybys

One owns three hot dog stores

One owns a staffmart franchise

One owns a dance studio.

All in chicago they are far from rich, just upper class the only three friends I have that are millionaires is one who inherited his dad's automotive stores in Michigan, my old girlfriend who won the Illinois state lottery in 1997 and another old girlfriend who became a lawyer.

I know all about the profit margins of the small business. You don't have a clue.