Push for Higher Minimum Wage

Off Topic Politics & World Issues
281

[quote]NickViar wrote:
cwill was talking about artificial inflation. [/quote]

YEah, I’m not.

I understand the arguments behind government (central bank) intervention. I don’t agree with them, outside the basic theory that slow, steady inflation is preferable and more stable than peaks and valleys, or massive, quick swings in either direction.

Human interaction in the market, and things like “bubbles” happen. I mean look at things like fashion, Hollywood and music. Movies and bands come in and out of flavor all the time…

I’m not on board with government manipulation. I do, however, understand the ideas behind it.

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And by slow I’m talking closer to 3% a decade, not 3% (compounding) a year.

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Is it possible to have long periods of deflation? If the value of a currency rises due to deflation and people can afford to buy more things (and in America they will) won’t the resulting competition for goods guarantee some inflation? This assumes the government is not excessively taxing imports.

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[quote]cwill1973 wrote:
Is it possible to have long periods of deflation? [/quote]

Sure.

And when your mortgage is $1400 a month today, and still $1400 a month in 15 years, but your paycheck has been deflated down to $2000 a month from $4000 a month over the same time period… You’re fucked, unless you refi. Which you can’t do unless you pay in the equity you lost as your property value deflates. Which you can’t do because you can’t save any money because you debt to income ratio is now 1.42 when it was 2.86.

Interest rates would be shit, because there is no inflation risk. Great for the borrower, shit for the lender… Credit dries up… No more margin… The rich stay rich, and the poor have less rungs on the latter.

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[quote]countingbeans wrote:

[quote]pittbulll wrote:
@ Beans just some food for thought my Daughter is 2 years older than you . I respect her opinion a lot . But I would not listen to any revisionist history from her either . So don’t take my opinions personally and believe me when I tell you I have ZERO butt hurt :)[/quote]

You are acting like a god damn moron here.

If a 20 year old with 12+ years of education and experience in auto repair told me I needed XY & Z done on my car, I’m not going to argue and talk out of my ass about how much older than him I am, because I’m smart enough to understand my limitations, and humble enough to admit people have more knowledge and experience than me in many areas.

Business happens to be an area where my education and experience trumps your butthurt ramblings about how old you are. [/quote]

I am glad you are on the job :slight_smile: you will have to excuse me if I do not share your admiration of your self .

I think we need to contact all the businesses that have started with out consulting some one with your expertise …

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[quote]cwill1973 wrote:
Is it possible to have long periods of deflation? If the value of a currency rises due to deflation and people can afford to buy more things (and in America they will) won’t the resulting competition for goods guarantee some inflation? This assumes the government is not excessively taxing imports. [/quote]

It all evens itself out on a long enough timeline. The issue is (and the pro-central bank people will shout this to the heavens) most people just dont’ live that long, lol. Most people can’t sustain the “peaks and valley’s of an unregulated market”. (I don’t agree in principle, but seeing as the central bank system is NEVER going away without a completely social breakdown, and even then it will be temporary, you just kind of give in, lol.)

One important thing to keep in mind is credit. Too much is bad, but not using it is even worse. There is very little means available to the “typical individual” that are a faster or better path to wealth than leverage. (The typical person being people other than Steve Jobs, or Ozzy Ozborn, who don’t have insanely valuable talents.)

Credit becomes an issue whenever you see any sort of shift in economic activity. If people are saving, interest rates react, if people are spending, interest rates react. So on and so forth. You don’t want people to not want to lend because they can’t make money doing so. This screws poor people who need leverage more than those who are wealthy and have the capital.

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[quote]countingbeans wrote:

[quote]cwill1973 wrote:
Is it possible to have long periods of deflation? If the value of a currency rises due to deflation and people can afford to buy more things (and in America they will) won’t the resulting competition for goods guarantee some inflation? This assumes the government is not excessively taxing imports. [/quote]

It all evens itself out on a long enough timeline. The issue is (and the pro-central bank people will shout this to the heavens) most people just dont’ live that long, lol. Most people can’t sustain the “peaks and valley’s of an unregulated market”. (I don’t agree in principle, but seeing as the central bank system is NEVER going away without a completely social breakdown, and even then it will be temporary, you just kind of give in, lol.)

One important thing to keep in mind is credit. Too much is bad, but not using it is even worse. There is very little means available to the “typical individual” that are a faster or better path to wealth than leverage. (The typical person being people other than Steve Jobs, or Ozzy Ozborn, who don’t have insanely valuable talents.)

Credit becomes an issue whenever you see any sort of shift in economic activity. If people are saving, interest rates react, if people are spending, interest rates react. So on and so forth. You don’t want people to not want to lend because they can’t make money doing so. This screws poor people who need leverage more than those who are wealthy and have the capital.

[/quote]

Are the Feds by artificially keeping interest rates low screwing poor people by de-incentivizing banks from lending as much as they normally would? It seems the average poor person is getting pretty screwed both from inflation and from dried up credit markets. Of course it is good from an investors point of view but not many poor people invest or have the ability to take advantage from increasing asset prices.

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[quote]cwill1973 wrote:

Are the Feds by artificially keeping interest rates low screwing poor people by de-incentivizing banks from lending as much as they normally would?[/quote]

Well, I don’t know that they are keeping them artificially low… I know they are pumping insane amounts of paper into the system, and inflation isn’t “hyper-inflation” (yet…).

SO either we are in a deflationary period, and the Fed is masking it with QE, or the whole of basic economic theory as we know it is wrong. My money is on the former.

I don’t know how they take their foot off the gas at this point either without “crashing” the market, which sends ripples throughout the whole of industry. A lot of the reason we’ve had a “jobless recovery” is that companies are staying mean and lean, keeping cash stores high for the next crash, and because high unemployment drives down wages through competition for those wages.

(This in part helps curb the inflationary actions of QE, because if the U6 was to suddenly drop to 6% not only would the economy be on fire and everyone doing blow off of a hooker’s tits, you would see inflation start to skyrocket after a period of time. Because low unemployment means more competition of labor, which means higher wages are needed to keep good people. This is a raise without added value, etc…)

So because the Fed can’t stop QE, and we are addicted to cheap money, I feel like poor people are MORE screwed by the inflation that is coming over low interest rates.

I can do something with low interest rates… Hyper inflation and I’m kinda fucked investment wise. YOu know what I mean?

Correct. The key is figuring out which one of the options has lube and which one goes in dry.

[quote] Of course it is good from an investors point of view but not many poor people invest or have the ability to take advantage from increasing asset prices.
[/quote]

This isn’t true. Almost anyone can put 10% of earnings away in a 401k or IRA.

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[quote]countingbeans wrote:

[quote]cwill1973 wrote:

Are the Feds by artificially keeping interest rates low screwing poor people by de-incentivizing banks from lending as much as they normally would?[/quote]

Well, I don’t know that they are keeping them artificially low… I know they are pumping insane amounts of paper into the system, and inflation isn’t “hyper-inflation” (yet…).

SO either we are in a deflationary period, and the Fed is masking it with QE, or the whole of basic economic theory as we know it is wrong. My money is on the former.

I don’t know how they take their foot off the gas at this point either without “crashing” the market, which sends ripples throughout the whole of industry. A lot of the reason we’ve had a “jobless recovery” is that companies are staying mean and lean, keeping cash stores high for the next crash, and because high unemployment drives down wages through competition for those wages.

(This in part helps curb the inflationary actions of QE, because if the U6 was to suddenly drop to 6% not only would the economy be on fire and everyone doing blow off of a hooker’s tits, you would see inflation start to skyrocket after a period of time. Because low unemployment means more competition of labor, which means higher wages are needed to keep good people. This is a raise without added value, etc…)

So because the Fed can’t stop QE, and we are addicted to cheap money, I feel like poor people are MORE screwed by the inflation that is coming over low interest rates.

I can do something with low interest rates… Hyper inflation and I’m kinda fucked investment wise. YOu know what I mean?

Correct. The key is figuring out which one of the options has lube and which one goes in dry.

[quote] Of course it is good from an investors point of view but not many poor people invest or have the ability to take advantage from increasing asset prices.
[/quote]

This isn’t true. Almost anyone can put 10% of earnings away in a 401k or IRA.

[/quote]

Agreed. ANYONE can find money to save. If they choose not to understand the rule of 72 (the magic of compound interest) and take advantage of it, then shame on them. I save 10% of EVERY dollar I earn. I accumulated some wealth and leveraged it several times over. ANYONE can do this. I did it on an electrician’s salary back in the day.

The majority of Americans don’t save because, A) they are lazy and un disciplined, B) they are uninformed and lack the motivation to GET informed and, C) they are stupid.

You can’t legislate away stupidity and laziness.

The majority of Americans with poor credit stay that way for WAY too long because they lack understanding on how to repair their credit. It’s not that hard. You write a few letters to the credit bureaus and you pretty much get a 50 point bump immediately. Most people can get a hundred points or so in six months with a little effort. But they don’t. Then they complain about how they cant get a loan cuz of the evil banks. As Beans pointed out, with interest rates so low, the threshold for credit HAS to go up - how else can the banks mitigate their risk? People need to take responsibility for their own situation, good or bad and work to improve it.

I’m no fan of the “big banks” or the way the gov’t bailed them out and then let average Americans suffer - but that’s the assholes THEY elected. So how can they complain? The fact that politicians who do nothing and have a shitty track record keep getting elected points to my earlier point: people are stupid.

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[/quote]

This isn’t true. Almost anyone can put 10% of earnings away in a 401k or IRA.

[/quote]

Of course. But unfortunately most people don’t. QE has done great things for my investments but I’m also hedging my bets with metals.

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[quote]cwill1973 wrote:

Of course. But unfortunately most people don’t. QE has done great things for my investments but I’m also hedging my bets with metals.
[/quote]

Sure.

I’m in the same boat. The key is figuring out when to jump out of equities for awhile to beat the market correction (or total crash) that is coming.

Big picture, I’m only 34. I have time to absorb a couple more downturns. People 45+ are in a different boat entirely.

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How much would minimum wage be if indexed to inflation? What if wages were indexed to productivity?

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[quote]Zeppelin795 wrote:
What if wages were indexed to productivity?[/quote]

Productivity alone is not enough. There are too many other factors.

If you and I do a comparable job, but I produce $500 in gross receipts/per hour and you produce $400, all other things being equal, how could we earn the same amount?

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[quote]usmccds423 wrote:

[quote]Zeppelin795 wrote:
What if wages were indexed to productivity?[/quote]

Productivity alone is not enough. There are too many other factors.

If you and I do a comparable job, but I produce $500 in gross receipts/per hour and you produce $400, all other things being equal, how could we earn the same amount?

[/quote]
When my brother worked for GM they had a portion of wages called incentive pay. The more they produced the more they got paid. If someone isn’t pulling their weight then they should not be allowed to participate OR their incentive pay is tied to THEIR productivity.

What about minimum wage being tied to inflation? Why shouldn’t it be?

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[quote]Zeppelin795 wrote:

What about minimum wage being tied to inflation? Why shouldn’t it be?
[/quote]

Because MW drives inflation to an extent.

So that would mean continuous upward push on inflation, that compounds.

Sort of like interest rates.

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[quote]Zeppelin795 wrote:
If someone isn’t pulling their weight then they should not be allowed to participate OR their incentive pay is tied to THEIR productivity.

[/quote]

Well, this is in large part why wage for low skilled labor is so low.

You understand that you are both arguing against the MW in this post, and then asking why it can’t be tied to inflation correct?

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[quote]Zeppelin795 wrote:

[quote]usmccds423 wrote:

[quote]Zeppelin795 wrote:
What if wages were indexed to productivity?[/quote]

Productivity alone is not enough. There are too many other factors.

If you and I do a comparable job, but I produce $500 in gross receipts/per hour and you produce $400, all other things being equal, how could we earn the same amount?

[/quote]
When my brother worked for GM they had a portion of wages called incentive pay. The more they produced the more they got paid. If someone isn’t pulling their weight then they should not be allowed to participate OR their incentive pay is tied to THEIR productivity.

What about minimum wage being tied to inflation? Why shouldn’t it be?
[/quote]

For most companies an “incentive” program like you mentioned has to have a ceiling. At some point there won’t be a benefit to the increased cost of production, which means productivity is just one of many factors. I think you need to consider the implications of the union in your GM example as well.

I don’t have an argument for or against tying minimum to inflation, however, if minimum wage is tied to inflation it should also be tied to deflation.

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[quote]countingbeans wrote:

[quote]Zeppelin795 wrote:
If someone isn’t pulling their weight then they should not be allowed to participate OR their incentive pay is tied to THEIR productivity.

[/quote]

Well, this is in large part why wage for low skilled labor is so low.

You understand that you are both arguing against the MW in this post, and then asking why it can’t be tied to inflation correct?[/quote]
No, enlighten me.

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[quote]countingbeans wrote:

[quote]Zeppelin795 wrote:

What about minimum wage being tied to inflation? Why shouldn’t it be?
[/quote]

Because MW drives inflation to an extent.

So that would mean continuous upward push on inflation, that compounds.

Were the late 60’s a time of big inflation?

Sort of like interest rates. [/quote]

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[quote]usmccds423 wrote:
At some point there won’t be a benefit to the increased cost of production, which means productivity is just one of many factors. [/quote]

You know this, but this entire line of thought goes along the assumption, which is false, that the increase in production is due to human efforts.

Only happens in certain environments. Production increases are a combination of things. And if a manager tells an employee to use a new technique, it isn’t the employee that should get the production bonus, as his input is the same, the manager should get it, as it was her input that increased the production.

But examples like above give bad blood, bad blood means low moral and low moral means lower production and accuracy.

Pay rates should be negotiated between individual employee and employer, period. No other third party knows what the employee is worth, nor what the employer can (or is willing to) pay.