Raising the minimum wage is part of the Democrats platform

[alucard13mmfmj]

lol.. raising minimum wage because the dollar is being devalued. lol.

 

[erowe1]

The total amount of money does not have to increase for consumers to have more money to spend. It really can be as simple as just consumers having more money to spend because of higher wages, but things costing more. The compensation for higher wages can really be that simple.

Government can make some subset of the population's wages go up relative to everyone else's with legislation. But they can't make the whole population's wages go up simultaneously unless they increase the money supply. Your repeated assertion that they can doesn't change the laws of economics.

 

[TheGrinch]

Government can make some subset of the population's wages go up relative to everyone else's with legislation. But they can't make the whole population's wages go up simultaneously unless they increase the money supply. Your repeated assertion that they can doesn't change the laws of economics.

Wages aren't the same thing as worth. If you hand out more cash from your own supply, but take more back in, then this absolutely can be achieved without necessarily increasing the overall money supply. Your assertion only holds water if the poorer are keeping more of their money. Especially when you consider that necessary cost of living increases will inevitably lower their ability to save and accumulate worth, then wages do not have to be tied to the monetary supply if price evens it out or even makes for more profits.

This can of course be aided and influenced by inflation, but your continued assertion that inflation is the only thing that has large effect here is flat-out wrong (if I'm understanding you correctly, because I'm starting to get really confused about what we're even arguing anymore).

Here is a video from Milton Friedman. Most of it is about how MW raises disproportionately effect the minorities it claims to help, but listen to from about 3:13 in particular about who this policy really helps:



This is something I'd forgotten about (there are so many flaws in minimum wage laws its tough to keep track), but MW raises only make it tougher for smaller competitors to compete with what they have streamlined... And since competition is another one of those pesky factors that have little to do with money supply, I'd again say your assertion that inflation is the only important factor is flat out false. It is but one way that the privileged manage to manipulate the economy in their favor.

 

[erowe1]

Wages aren't the same thing as worth. If you hand out more cash from your own supply, but take more back in, then this absolutely can be achieved without necessarily increasing the overall money supply. Your assertion only holds water if the poorer are keeping more of their money. Especially when you consider that necessary cost of living increases will inevitably lower their ability to save and accumulate worth, then wages do not have to be tied to the monetary supply if price evens it out or even makes for more profits.

This can of course be aided and influenced by inflation, but your continued assertion that inflation is the only thing that has large effect here is flat-out wrong (if I'm understanding you correctly, because I'm starting to get really confused about what we're even arguing anymore).

Here is a video from Milton Friedman. Most of it is about how MW raises disproportionately effect the minorities it claims to help, but listen to from about 3:13 in particular about who this policy really helps:



This is something I'd forgotten about (there are so many flaws in minimum wage laws its tough to keep track), but MW raises only make it tougher for smaller competitors to compete with what they have streamlined... And since competition is another one of those pesky factors that have little to do with money supply, I'd again say your assertion that inflation is the only important factor is flat out false. It is but one way that the privileged manage to manipulate the economy in their favor.

Don't misunderstand me. I'm not defending the minimum wage. I agree that it hurts people. I'm just saying that the argument that it causes inflation is not a valid argument. I'd be shocked if Friedman said it was. After all, it was he who said, "Inflation is always and everywhere a monetary phenomenon."

When you keep saying things like "If you hand out more cash from your own supply, but take more back in..." you're doing what the previous poster pointed out, which is expanding from what happens to one subset of the economy (in this case your "you") to the whole economy. Without increasing the money supply, then for every "you" this happens to, there is another "they" where the opposite happens.

 

[TheGrinch]

Don't misunderstand me. I'm not defending the minimum wage. I agree that it hurts people. I'm just saying that the argument that it causes inflation is not a valid argument. I'd be shocked if Friedman said it was. After all, it was he who said, "Inflation is always and everywhere a monetary phenomenon."

When you keep saying things like "If you hand out more cash from your own supply, but take more back in..." you're doing what the previous poster pointed out, which is expanding from what happens to one subset of the economy (in this case your "you") to the whole economy. Without increasing the money supply, then for every "you" this happens to, there is another "they" where the opposite happens.

The "they" is the consumers who pay it back to you after you raise wages across the board.

If we're talking on individual levels, then what you call "inflation" is wealth accumulation, and thus not inlflation at all. It is just silly that you'd compare a normal employee/employer/consumer relationship where the owner of the business has created the relationship with his own capital, and apply that to what the Feds do, which is print money out of thin air. The marked difference is that the former is putting up their wealth without expanding the overall supply. You ever heard the saying, it takes money to make money? That's what's going on here, not inflation.

Monetary inflation is not synonymous with price changes, even though it does contribute to them. I mean, you see prices go up or down across the board for many reasons. If gold costs more, then gold watches are going to cost more. If gas prices go up, well, just go to the store right now. Everything is way expensive. If there are less competent doctors, then their wages will go up, and the prices will go up. We see this all the time. Everything does not just exist in an inflationary vaccum.

Thus, minimum wage can still be used to manipulate the market in their favor without necessarily having to have inflation. These people have already accumulated a large enough supply of capital (which again is accumulation, not inflation), to get by just fine putting up more of their money for a market with less competition to get more back.

 

[erowe1]

The "they" is the consumers who pay it back to you. If we're talking on individual levels, then what you call "inflation" is wealth accumulation, and thus not inlflation at all.

What I am calling inflation is an increase in the money supply.

ETA: After I typed this, it looks like you edited your answer to include "after you raise wages across the board." Raising the minimum wage does not raise wages across the board. It raises some wages relative to others. You can raise nominal wages across the board (but not real wages) by increasing the money supply. Or you can raise some peoples' real wages at the expense of other peoples' real wages. But you can't raise real wages across the board.

It is just silly that you'd compare a normal employee/employer/consumer relationship where the owner of the business has created the relationship with his own capital, and apply that to what the Feds do, which is print money out of thin air. The marked difference is that the former is putting up their wealth without expanding the overall supply. You ever heard the saying, it takes money to make money? That's what's going on here, not inflation.

What I'm saying is that the former is NOT inflation. Only the latter is.

If gold costs more, then gold watches are going to cost more.

That's not inflation. That's a change in prices in one subset of the economy. People will decide to spend less getting their nails done so that they can afford the more expensive gold watch, and then the price of getting one's nails done will go down. They won't just keep buying the same amount of gold, while they have to pay higher prices for it, and still buy the same amount of everything else at the same time, without paying lower prices for something. Net inflation is zero.

If gas prices go up, well, just go to the store right now. Everything is way expensive.

Not everything. At least not just because of gas prices. If inflation goes up, it's a monetary phenomenon, like Friedman said.

 

[TheGrinch]

Not everything. At least not just because of gas prices. If inflation goes up, it's a monetary phenomenon, like Friedman said.

OK sorry, pretty much everything is affected by gas prices. However, this simply does not mean that prices have to go down somewhere else. Understand? Because I really am done trying to explain how prices do not necessarily have to negatively correlate with one another. Costs and prices are correlated, and there can be a positive correlation between prices (what I'm arguing) but the price of one thing does not negatively correlate with the price of something else. That is simply false.

It also doesn't mean that the overall amount of money in circulation has to be expanded, when there is plenty of unused capital in plenty of bank accounts already. They can all rise along with all wages rising, because there is unused capital to accommodate it, and with these laws, less competition for them to risk it.

Thus, market manipulation can occur even without inflation, and doesn't need it to balance anything out. Inflation simply aids in the manipulation of the market.

Prices are a reflection of supply and demand on both the labor and consumer side, and any manipulation of that is going to have an effect. However, this does not mean that the market has to be inflated to accomodate rising labor costs and prices, when there is already plenty enough monetary supply to accomodate that. Again, if the government forces EVERYONE to pay more, then everyone is going to charge more, and don't need inflation to support this. They jsut need to put up more of their capital to get it back.

Again, inflatino only helps to accomodate this. It doesn't make this any less relevant or less sustainable without it.

 

[erowe1]

OK sorry, pretty much everything is affected by gas prices. However, this simply does not mean that prices have to go down somewhere else.

Correct. It only means that if the money supply stays constant.

That is simply false.

RoyL?

It also doesn't mean that the overall amount of money in circulation has to be expanded, when there is plenty of unused capital in plenty of bank accounts already.

You keep bringing this up. I don't see how it fits in. Are you saying that raising the minimum wage causes the rate of savings to go down? If you are, I'd like to know why you make that connection. And more importantly, supposing that does happen, is the reduction in the savings rate permanent, such that people just keep depleting their bank accounts without ever adding to them again and going into debt without ever paying it down? Or will the savings rate get back to normal again, in which case, its affect on the money in circulation will only have been temporary, and the long-term marriage between the money supply and inflation will remain in tact?

Prices are a reflection of supply and demand on both the labor and consumer side, and any manipulation of that is going to have an effect.

Of course it's going to have an effect. It's going to have countless effects, as I have said all along. In some parts of the economy these effects will involve prices going up relative to other prices. In other parts they will involve prices going down relative to other prices.

Again, if the government forces EVERYONE to pay more, then everyone is going to charge more, and don't need inflation to support this.

Raising the minimum wage does not force everyone to pay more for everything. It forces some people to pay more for some things.

Keep listening to Friedman, though. He'll bring you around eventually.

 

[TheGrinch]

You keep bringing this up. I don't see how it fits in. Are you saying that raising the minimum wage causes the rate of savings to go down? If you are, I'd like to know why you make that connection. And more importantly, supposing that does happen, is the reduction in the savings rate permanent, such that people just keep depleting their bank accounts without ever adding to them again and going into debt without ever paying it down? Or will the savings rate get back to normal again, in which case, its affect on the money in circulation will only have been temporary, and the long-term marriage between the money supply and inflation will remain in tact?

How do you not understand this?

No, they're not permanently depleting their savings. It's called investment, where you expect to eventually get back more than you put in. It's a rather simple concept. Many millionaires and billionaires have a significant portion of their wealth tied up in investments and assets.

Thus, you invest more in your employee's wages, you charge more, you make as much if not more than the profit level you made. That simple and basic business. And again, when this is government-mandated across the board, it hurts the smaller competition (jsut as Friedman said) and so you're also investing that money with less risk of failing to more competition.

Also, do you know what competition does? It drives prices down. What then would you suppose that restriciting competition with barriers or entry will do? You got it. It will raise prices

 

[erowe1]

Thus, you invest more in your employee's wages, you charge more, you make as much if not more than the profit level you made.

If you can do that, then why not do it already? Why wait for the government to increase the minimum wage?

Also, do you know what competition does? It drives prices down. What then would you suppose that lowering competition will do? You got it. It will raise prices.

If at any point in this thread you thought I said that minimum wage would not increase some prices, you misread what I said. But inflation isn't just some prices increasing while others decrease.

 

[TheGrinch]

If you can do that, then why not do it already? Why wait for the government to increase the minimum wage?

Companies do do that already. Why do you think they don't just pay everyone minimum wage? Because they have competition for skilled labor.

So, no they don't wait for the government to raise minimum wage to decide if they want to pay more for more skilled employees, but the big boys sure are ready to get the government to give them an opportunity to restrict competition, even if it means higher minimum wages (and thus higher prices or volume of customers they can get with less competition).

 

[erowe1]

Companies do do that already.

If they're already charging the price that maximizes their profits (which I agree they are), then how could they raise their price and still make even more profits?

Why do you think they don't just pay everyone minimum wage? Because they have competition for skilled labor.

But you said they could raise their employees' wages, raise the prices they charge their customers, and raise their own profits all at the same time. If that's the case, then they shouldn't pay anyone at all minimum wage. They should pay everyone as much as they want, while they charge whatever price they have to to earn the revenue they need to pay them, and all their customers will just keep buying as much as they ever did, and their profits will go up. It's the magical world of TheGrinchWhoStoleDC, where there really is such a thing as a free lunch.

 

[TheGrinch]

If they're already charging the price that maximizes their profits (which I agree they are), then how could they raise their price and still make even more profits?

Because it's another way it restricts competition. The make more profits through these types of regulations that only serve as more barriers for entry for others. The big boys have ways to ease the burden of higher wages that can otherwise cripple smaller businesses who cannot afford to pay or charge what they're forced to. Friedman and Dr. Paul back me up on how the regulatory environment works.

The former is how they maximize profits in a truly free market. The latter is how they maximize mroe profits in a manipulated market. Understand?

Your question is kind of akin to asking why someone would steal if they can earn something the legimiate way? Answer is that it's much easier to do the former, even though it's not right.

But you said they could raise their employees' wages, raise the prices they charge their customers, and raise their own profits all at the same time. If that's the case, then they shouldn't pay anyone at all minimum wage. They should pay everyone as much as they want, while they charge whatever price they have to to earn the revenue they need to pay them, and all their customers will just keep buying as much as they ever did, and their profits will go up. It's the magical world of TheGrinchWhoStoleDC, where there really is such a thing as a free lunch.

I honestly have no clue what this whole paragraph means.

(ETA: ok, I think I see what you're getting at. They don't just pay everyone whatever they want, because they have to compete with other companies both for price and labor. However, when you manipulate the minimum price of labor, the ones lobbying for this come out ahead of others, and is far from a free-market situation where the rules are different).

 

[Anti Federalist]

I hope they raise the minimum wage to a million dollars so that we can all be millionaires!

Why not a billion dollars an hour?

"Then we'll all be rich, rich as Nazis".

 

[erowe1]

Because it's another way it restricts competition. The make more profits through these types of regulations that only serve as more barriers for entry for others. The big boys have ways to ease the burden of higher wages that can otherwise cripple smaller businesses who cannot afford to pay or charge what they're forced to. Friedman and Dr. Paul back me up on how the regulatory environment works.

The former is how they maximize profits in a truly free market. The latter is how they maximize mroe profits in a manipulated market? Understand?

Then what happens to all the people who work for those smaller competitors who have to go out of business?

 

[TheGrinch]

Then what happens to all the people who work for those smaller competitors who have to go out of business?

Well, of course the skilled ones will find a home at your growing company!

But no, massive unemployment isn't good for most of us. That's yet another reason the Keynesians are always manipulating the system in all of these different ways that favor them.

You won't find me arguing against the idea that we'd all be better off with a truly free market, but that's not what the lobbyists are interested in.

 

[erowe1]

Well, of course the skilled ones will find a home at your growing company!

But no, massive unemployment isn't good for anyone. That's yet another reason the Keynesians are always manipulating the system in all of these different ways that favor them.

So raising the minimum wage increases unemployment?

 

[TheGrinch]

So raising the minimum wage increases unemployment?

Yes, most definitely, which is part of why it's such a flawed model that only benefits a select few (again, Freidman and Dr. Paul know better than me about this and back this up).

As was mentioned earlier, there are 3 responses to wage increases. You either cut costs, raise productivity with less or better employees, raise prices, or risk going out of business if you can't. Not everyone has an infrastructure like Walmart to deal in volume and streamlined methods to be able to offset any wage increases.

 

[erowe1]

Yes, most definitely.

Doesn't that mean that the people who lose their jobs because of a minimum wage increase will make less money?

 

[Anti Federalist]

OMG - the stupidest thing I am going to read all day was right there in those comments.

Steven P. Schonfeld Top Commenter · Wayne State University

I have seen free market choice destroy this city. From the 40's to the '90's, people left for one reason, and one reason only: black people started moving in, and racist whites weren't having it. If government got involved and stopped them from leaving, Detroit would still be on the level with New York and Chicago.

I think that may be the dumbest thing you will read all year.

What's scary?

He believes that, and that government should restrict people's movement, or even worse, re-locate people according to the whim of government.

We will then all join the zvenyas while De-kulakization is undertaken.

You savvy, comrade?

Dekulakization

Telegrams are pouring in from numerous parts of the Soviet Union with the news that deeds of arson and murders of active Communists are being perpetrated by the Kulaks… Soviet farms, village libraries and Soviet bureaus have been burned down by the Kulaks in their fierce opposition against all measures undertaken by our Communist Party and our Soviet Government… Murderous attacks have been perpetrated against Communist village school teachers and social workers, women as well as men… Seven murders and four attempted murders took place in public assemblies or in Soviet bureaus. The roll of our Communist dead contains the names of four Chairmen of local Soviets and one Secretary… A destructive blow at the Kulaks must be delivered immediately!
—Izvestia, November 1928[7]

In 1928 there was a food shortage in the cities and in the army. In response the Soviet government encouraged the formation of collective farms and, in 1929, introduced a policy of mandatory collectivization. Many peasants were attracted to collectivization by the idea that they would be able to afford tractors to generate increased production.

In July 1929 it remained official Soviet policy that the kulak should not be terrorised and should be enlisted into the collective farms. Joseph Stalin disagreed with this, saying, "Now we have the opportunity to carry out a resolute offensive against the kulaks, break their resistance, eliminate them as a class and replace their production with the production of kolkhozes and sovkhozes."[8]

On 30 January 1930 the Politburo approved of the extermination of kulaks as a class. Three separate categories for the kulaks were designated. The first consisted of kulaks to be sent to the Gulags, the second was for kulaks to be relocated to distant parts of the USSR (such as the north Urals and Kazahkstan), and the third to other parts of their province.[9]