Lets just say it: The 1% took all our fucking money! Deflation looms.

[Benvolio]

A nation’s resources include its “human capital.” With respect to the United States, I view that resource as finite.

Perhaps, but we have a large pool of unemployed and underemployed and at the present time an incoming flood of replacements for the aborted Americans.

 

[opinterph]

A nation’s resources include its “human capital.” With respect to the United States, I view that resource as finite.

Perhaps, but we have a large pool of unemployed and underemployed and at the present time …

Millennials in the US labor force (AKA Generation Y) are disproportionately suffering from unemployment during the Great Recession and continuing into the current situation. Education helps to increase employment opportunities for this age group and a high school diploma is almost essential. On the other hand, educated minorities in this same age group are disproportionately unemployed when compared to their white counterparts.

Nearly half of Millennials rely upon the leisure and hospitality industry (including food service) and the retail trade industry for their employment. As was mentioned previously, the United States economy is not presently dynamic. It is still suffering a slow recovery, which is compounded by stagnant wages of its middle class workers. What bankside characterized as “drunken vacations to Vegas” is representative of economic activities that are curtailed due to less discretionary income.

Raising the minimum wage would have a ripple effect on wages generally, which would help to improve middle class income. Some people will argue that more income distribution to the middle class would raise prices and cause inflation, but it’s more about how companies choose to split their margin. They can continue to embellish upper management, or they can more equitably share proceeds with the people who actually do the bulk of work.

 

[Kyanimal]

If you are not paying your own employees enough to be able to afford to buy the products they make, services they provide, how can you expect your customer base to be able to continue supporting your business?

Your employees' expendable income supports other companies, the livelihood of your consumers. The smartest thing is to "prime the well", by paying decent wages, which will come back to you in the form of future business.

 

[opinterph]

$10 000 of government debt per capita invested in bridges and roads and infrastructure may help elevate the economy to new levels of productivity.

You may have a valid point.

In his 2013 State of the Union Address, President Obama called for appropriation of an amount greater than $10k per capita. The Society of Civil Engineers suggests a price tag of nearly $3 trillion over the next 15 years to restore a first-world infrastructure to the US.

During the last decade, the United States expended a little more than 3 percent of its GDP on infrastructure. With respect to road spending, perhaps half the total amount was derived from gas taxes, tolls, and other fees levied on drivers.

The [clickable] chart below illustrates all US public construction spending for highways and roads over the past decade or so.




Decaying infrastructure costs U.S. billions each year, report says (The Washington Post; July 2011)

 

[Kulindahr]

Raising the minimum wage would have a ripple effect on wages generally, which would help to improve middle class income. Some people will argue that more income distribution to the middle class would raise prices and cause inflation, but it’s more about how companies choose to split their margin. They can continue to embellish upper management, or they can more equitably share proceeds with the people who actually do the bulk of work.

Income for upper management has a negative effect on the economy: it buys little, because it sits in stock, which does no work at all. Reduce all CEO salaries by 60% and put that into wages instead and it will boost the economy noticeably because it will get spent.

This reminds me of a law I think we need with respect to not-for-profit corporations: no NfP CEO should be allowed a salary greater than that of the President of the United States. That would have the effect of making NfP organizations actually look more like NfP again -- I'm thinking right now of Goodwill, which at the three nearest stores to me have prices on used items that are often higher than the same thing new in retail just down the road. I've stopped donating to them for that reason, and have persuaded others to do the same, because they aren't acting much like a NfP, but like a for-profit entity.

 

[Benvolio]

GWB created the largest deficit (by far) in American history from a budget surplus he inherited from Clinton.

Obama has cut that deficit to less than half of what he inherited from GWB. Less than half.

Republican presidents borrow, Democratic presidents pay the bills.

I ask you again: What is it about drunken-sailor spending, massive debt, and economic collapse that you Republicans find so attractive?

Your graph actually shows that after the democrats took congress in Nov 2006, and contenting, the deficit is higher than it ever was with the Republican congress.

 

[Benvolio]

Millennials in the US labor force (AKA Generation Y) are disproportionately suffering from unemployment during the Great Recession and continuing into the current situation. Education helps to increase employment opportunities for this age group and a high school diploma is almost essential. On the other hand, educated minorities in this same age group are disproportionately unemployed when compared to their white counterparts.

Nearly half of Millennials rely upon the leisure and hospitality industry (including food service) and the retail trade industry for their employment. As was mentioned previously, the United States economy is not presently dynamic. It is still suffering a slow recovery, which is compounded by stagnant wages of its middle class workers. What bankside characterized as “drunken vacations to Vegas” is representative of economic activities that are curtailed due to less discretionary income.

Raising the minimum wage would have a ripple effect on wages generally, which would help to improve middle class income. Some people will argue that more income distribution to the middle class would raise prices and cause inflation, but it’s more about how companies choose to split their margin. They can continue to embellish upper management, or they can more equitably share proceeds with the people who actually do the bulk of work.

It is no a matter of embellishing upper management. It is a matter of supply and demand. Management is critical to the survival and profitability of any business, and qualified or proven management are worth high wages. Since companies compute for proven management, their salaries are often very high.
On the other hand, workers with no particular skills are one of the things that the world has an excess of. That is why companies can ship jobs overseas to countries where worker have no skills and no little or no education. And, it why immigrants can compete successfully with Americans for low level jobs.
In the middle are many people who do their jobs well and acquire valuable experience. They are paid well above the lowest level and as I keep reminding you, American wages are the highest in the world, and our median income and standard of living are near the very top.
You fail to answer the "some people" who argue that raising middle class (and minimum wage) would be inflationary. Remember, some jobs will be eliminated, and the resulting inflation will hurt the unemployed, the lower income, and the welfare classes worst of all. Ultimately the inflation hurts the middle class.

 

[bankside]

Income for upper management has a negative effect on the economy: it buys little, because it sits in stock, which does no work at all.

This is not quite true. Money doesn't "sit in stock." The owners of that money expect their stock to do something. If someone owns a hundred million in mining stocks, they expect mines to be built. If someone owns a hundred million in automotive stock, they expect new factories to be put up to build cars. If someone owns half a billion in utility stocks, they want that money building dams and transmission lines.

Reduce all CEO salaries by 60% and put that into wages instead and it will boost the economy noticeably because it will get spent.

Where will it get spent? On household electronics built with copper from non-existant mines? On cars built in non-existent factories? On a house that's denied a building permit because the regional electric grid has no new capacity?

This reminds me of a law I think we need with respect to not-for-profit corporations: no NfP CEO should be allowed a salary greater than that of the President of the United States. That would have the effect of making NfP organizations actually look more like NfP again -- I'm thinking right now of Goodwill, which at the three nearest stores to me have prices on used items that are often higher than the same thing new in retail just down the road. I've stopped donating to them for that reason, and have persuaded others to do the same, because they aren't acting much like a NfP, but like a for-profit entity.

I agree with that but I think you could reign in the excesses of not-for-profits by just eliminating tax deductions on donations made to them. If people want to give something, let them give it. Don't bribe them with tax refunds.

 

[kallipolis]

I agree with that but I think you could reign in the excesses of not-for-profits by just eliminating tax deductions on donations made to them. If people want to give something, let them give it. Don't bribe them with tax refunds.

Noteworthy...and praiseworthy....

 

[opinterph]

You fail to answer the "some people" who argue that raising middle class (and minimum wage) would be inflationary. Remember, some jobs will be eliminated, and the resulting inflation will hurt the unemployed, the lower income, and the welfare classes worst of all. Ultimately the inflation hurts the middle class.

Yes, inflation hurts the middle class. That’s a good argument to include an automatic cost of living adjustment to minimum wage legislation so it adjusts with inflation. President Obama has called for that provision in the law.

While the federal minimum wage was only $3.35 per hour in 1981 and is currently $7.25 per hour in real dollars, when adjusted for inflation, the current federal minimum wage would need to be more than $8 per hour to equal its buying power of the early 1980s and more nearly $11 per hour to equal its buying power of the late 1960s.

US Department of Labor

In fact, today’s minimum wage of $7.25 buys less than the minimum wage did through all of the 1960s, 1970s and much of the 1980s. Raising the minimum wage to $9 an hour in 2015 would give us about the same real value as the $3.35 minimum wage of 1981.

Five myths about the minimum wage (Washington Post; Opinion – Betsey Stevenson; April 2013)

Minimum Wage Hikes Do Not Cause Inflation (Jeannette Wicks-Lim; January 2013)

 

[opinterph]

Your graph actually shows that after the democrats took congress in Nov 2006, and contenting, the deficit is higher than it ever was with the Republican congress.

The graph appears to originate from the CATO Institute.

Don’t Blame Obama for Bush’s 2009 Deficit (CATO Institute; November 2009)

It also appears elsewhere …

Big Spenders, All (Donklephant)

Couldn't interrupt a video this way (The New Arthurian Economics)​

 

[Benvolio]

This is not quite true. Money doesn't "sit in stock." The owners of that money expect their stock to do something. If someone owns a hundred million in mining stocks, they expect mines to be built. If someone owns a hundred million in automotive stock, they expect new factories to be put up to build cars. If someone owns half a billion in utility stocks, they want that money building dams and transmission lines.



Where will it get spent? On household electronics built with copper from non-existant mines? On cars built in non-existent factories? On a house that's denied a building permit because the regional electric grid has no new capacity?


I agree with that but I think you could reign in the excesses of not-for-profits by just eliminating tax deductions on donations made to them. If people want to give something, let them give it. Don't bribe them with tax refunds.

Contributors do not get "tax refunds", they get deductions, reducing their tax bill by the percentage of their marginal tax rate. The remainder comes from their pockets.

 

[Benvolio]

Yes, inflation hurts the middle class. That’s a good argument to include an automatic cost of living adjustment to minimum wage legislation so it adjusts with inflation. President Obama has called for that provision in the law.






Minimum Wage Hikes Do Not Cause Inflation (Jeannette Wicks-Lim; January 2013)

You still do not address the effect of the higher wages and prices on the unemployed and welfare class. Liberals love to concoct "studies" to support their agenda, but common sense should tell you that when cafes, grocers and their suppliers have to pay higher wages, they raise prices to retain profitability.

 

[Benvolio]

The effect of minimum wages on the economy are hotly debated. http://www.washingtonpost.com/blogs...ce-that-boosting-the-minimum-wage-harms-jobs/. Remember, whether they effect inflation on the economy as a whole is less important than the effect on the basics which are most likely to effect the low income people, unemployed, welfare class and immigrants, notably food. If you think the wage increase will not result in higher prices, then you must believe that the employers will willingly accept less revenue and profit. Sorry, that ain't the way the world works.

 

[kallipolis]

. If you think the wage increase will not result in higher prices, then you must believe that the employers will willingly accept less revenue and profit. Sorry, that ain't the way the world works.

Here in Greece much lower wages has resulted in lower revenues, and accordingly lower profits for employers...unlike you I can't speak for the rest of the world....that it has happened here, it can also occur in other countries....

 

[opinterph]

… common sense should tell you that when cafes, grocers and their suppliers have to pay higher wages, they raise prices to retain profitability.

If “common sense” is the standard upon which we are to base our economic policy and if we assume your statement quoted above is correct, then we must deduce that prices are artificially reduced in the current market – because the minimum wage has not been adjusted for inflation. Ergo, cafés, grocers, and their suppliers are currently paying lower wages than the market should require.

 

[Kulindahr]

If “common sense” is the standard upon which we are to base our economic policy and if we assume your statement quoted above is correct, then we must deduce that prices are artificially reduced in the current market – because the minimum wage has not been adjusted for inflation. Ergo, cafés, grocers, and their suppliers are currently paying lower wages than the market should require.

If common sense is the standard, then several hundred CEOs should be fired, because their totally unjustified pay scales are money that should be going to wages.

 

[Benvolio]

If “common sense” is the standard upon which we are to base our economic policy and if we assume your statement quoted above is correct, then we must deduce that prices are artificially reduced in the current market – because the minimum wage has not been adjusted for inflation. Ergo, cafés, grocers, and their suppliers are currently paying lower wages than the market should require.

Wrong. In our economy wages and prices are determined by market forces, i. e. The market for labor. - except when politicians meddle. Entry level wages are held down by the law of supply and demand. Our excess and growing labor supply, combined with the decreasing need for Labor as a result of technology and the ability out source, keep wages down by supply and demand, and have an upward ripple effect as worker displaced at one level compete for jobs at the next high level. Any minimum wage increase is artificial.

 

[smokeshadow]

Well, then Costco has Sam's and Walmart beat: http://www.snopes.com/politics/business/costcoceo.asp

 

[evanrick]

Btf. Wages are artifically low dems can win on that issue alone. Why is this not a cakewalk for dems? Because they are not running on wages they are being stupid and playing defense on obamacare and labor healtgcare education. You win on an issue first.