Raising the minimum wage is good for the economy.

There's a separate "liberal arts" department on these campuses for a reason, where the most liberal curricula is usually taught.

Such a poorly rationalized hypothetical. Another great example on why Economics should be taught to liberal arts people.

Where do I start with a mess like this? First off, we start with the $100 price point. That should be the point at which revenue is maximized. Any more than that, less people buy it, and revenue goes down, even with a higher price attached. Any less than that, and you're selling below what people are willing to pay, which results in less revenue than ideal. Starting with 1 employee, labor costs are $70.00. That's just labor. The 30% remaining is comprised of other costs like materials and overhead, with some percentage of profit (uh oh! Cover your ears!). What people like you and yours are advocating for is a significant increase to the largest cost this employer will have. Let's say that the increase is enough to put the labor cost at 95 dollars out of the possible 100 that he/she is selling it for. So there's only 5% left to cover material costs and overhead, and profit is no longer possible. The only recourse the owner has at this point is to raise the costs of his goods and services, above the $100.00 price point, which is what we already decided is what people are willing to pay and where revenue is maximized. Now he has to sell his product at $130.00 in order to be where he was before this huge increase to his labor cost. The problem, though, is that those consumers aren't necessarily willing to spend $130.00. They wanted to spend $100. So, predictably, less people start buying his product, and his revenue goes down. That's bad for his business. Far from the ridiculous premise you threw out, where demand suddenly skyrockets and he's able to hire 10 additional employees (somehow), he is now not able to hire any more workers, and is thinking about laying off the one he has. His labor costs are just too high to stay profitable.

Here's a very basic graph of what is happening here. They teach this in every elementary Economics course.

No, they didn't do all the work. They didn't pay for the material, the owner did. They didn't rent/buy the building and all the equipment that was used to make the product, the owner did. They aren't under any threat of litigation if one of those products happens to hurt someone or fails in some way, the owner is. They didn't build the business from the ground up and market it, the owner did. If the business should fail, their personal assets and credit are not on the line, the owner's is. Those workers simply showed up, punched a clock, did what they were told to do, and then clocked out when their shift was over. I know in your Marxist worldview it is completely "unfair" that they make less than the owner, but that's not how the world operates, thankfully. Aren't you a musician? Why are you trying to contribute to topics you know absolutely nothing about? Do you run a business? Do you have any experience with how businesses operate?

 

The greatest importance of Adam Smith was the division of labor. Something that wasn't much capitalized on until Henry Ford came along. One of the goals of manufacturing design is to break each step down to where anyone, even persons of low abilities, could perform them. The ones I like are the ones who will ask, "You keep saying, a quarter inch, when on the drawing it says .25". Some steps can be so broken down that a robot could do their job. I worked on this one project, designing a machine that performed blood tests. We broke down each step the chemist/lab technicians were doing and designed a machine that put a room full of people out of work.

An even more impressive project was a Western Electric electronic assembly plant that went from 10,000 mostly women, sitting in long lines, inserting their part, soldering, or doing their test or whatever to a single machine with about a dozen people feeding it parts, and taking the finished boards away.

We are at the stage in our development where, through computerization and automation, we can greatly reduce the need for human labor. Even many white collar workers are becoming obsolete. If things continue as they are, I can see nothing but a worsening situation, especially for those at the bottom.

The solution is to reduce the work week. Reduce the standard work week to 32 hours and fewer people will have an excuse for not working. The ultimate goal is to reduce it down to around 16 or so, like on the Jetsons.

 

Good explanation. But I'm sure you know you are wasting your time. Somehow Marx's labor theory of value has taken over the worldview of the left in this country. But they won't even admit they are Marxists!

 

You are just like all Marxist Democrats. You can *NOT* determine total jobs created by subtracting two points on a line. You have to integrate the curve to find the area under it!

Do you even know what integration is?

Bush created enough jobs, enough GOOD jobs, to turn around the long term decline in the labor force participation rate while also driving unemployment to 4% for a record length of time.

What happened because of the blowout of the Marxist housing bubble has nothing to do with how many jobs were created under Bush!

 

Obviously we've established your educational level. Just so you know I have a degree in physics and have had a career in product design of high-tech microprocessor based devices and what not. The design effort always included the design of the manufacturing process, selecting venders, cost conciderations.... There is not a company that .I worked for that I did not intimately discover their inner workings. At some point I got tired of designing products that made corporations tens of millions of dollars and then still having to come in Monday morning to face another jerk wad manager type tryingu to prove he's in charge.

So I started my own company where I design and build mechanical devices, things with gears, pullys, and things that swing, which I sell as art. I also sell paintings and drawings. All of my mechanical devices, every little part is fabricated by use of an odd collection of machines that I have modified to work under the control of my computer. The setup was paid for by use of parts that I had collected as free samples from salesmen in my corporate days and through tax deductions.

That is to say, I own my means of production. Look that one up in your text book.

I know that you have been indoctrinated to think of people like me as Marxist, socialist, and all that silliness, but my response to your 70% argument was to show that, even if 70% of my costs went to labor, I could still bring in a sizable income for myself.

I just think that it is down right silly to insist that the business owner takes all the risks. As far as I can tell, it is the employee who is most at risk. His job only exist as long as I need for him to do something. When I no longer need him he is in the un-employment line while I'm onto the next project. I started my own company precisely for the freedom it affords me. If I want to sleep in late one day, or to take off early to hang out with my grandson, I don't have to worry about risking my job.

Do you honestly think that those workers that la Trump stiffed had more rights and protections than la Trump?

The music thing is just a side gig that I've kept going.

 

For a typical restaurant, the rule of thumb is about 30-35% in labor costs. Food costs will be similar, leaving there rest for overhead and profit. A decent profit will be about 3-6%. A ten percent increase in labor costs can wipe out those profits and make the store unprofitable for the owner and not worth owning.

 

Silly silly boy! Of the last 10 presidential terms, 5 have have been Republican, Reagan, Reagan, Bush, Bush, Bush. The Democratic ones, Carter, Clinton, Clinton, Obama, Obama. If you look up in the Department of Labor statistics you'll discover that under the Democrats, twice as many jobs were created than under Republicans. There were nearly as many jobs created under 4 years of Carter, as there were under 8 years of Reagan. Lil' Bush's second term saw a net job loss.

You can look it up yourself. Or, I suppose you could just babble on with your Marxist silliness.

There is a reason that all of the greater economic growth is happening in liberal oases. It has lot to do with Republican economic ideology being little more than the stuff that falls after a horse raises its tail.

 

Might it be that McDonalds are run better than most restaurants. In those states with higher minimum wages McDonalds has absorbed those wages without staff cuts or higher prices. It is only in high rent places where their prices are higher.

At manufacturing companies that I have worked for, labor cost were about 1/6th of the costs, not counting management and outside sales.

 

Again...History always seems to show that raising the minimum wage does NOT cause the kind of harm conservatives claim will occur..and here we have the same thing.

Conservative dogma never seems to actually play out in the real world

 

Here is a graph from the BLS showing the employment to population ratio from 1970 to today.



The employment to population ratio takes out problems with population size out of the equation. The employment to population ratio grew tremendously under Reagan. After a small recession in the early 90's Clinton grew the employment population ratio also but at a smaller pace than Reagan (look at the slope of the line). After the dot.com recession and 9/11 Bush then grew the ratio again. If the housing bubble had not blown out Bush was on track to reach the Clinton levels.

Obama? His recovery of jobs has a lower slope than Jimmy Carter.

So, again, Bush grew enough jobs to drive the labor force participation rate UP while driving unemployment down. His results as shown with the employment population ratio shows that he created a LOT of jobs in a short amount of time.

Obama, on the other hand, never got the labor force participation rate back up, meaning any jobs he created were purely population growth based and his employment population ratio never took off like it should have. He didn't create enough jobs to re-employ the idle, meaning his unemployment ratio was misleading to say the least!

Again, you can't determine jobs created based on subtracting two end points on a line. You have to integrate the curve!

 

Following is the labor force participation rate for the 16-19 year old cohort from 1970 to today. Also shown is the employment population ratio.





Both have been on the down trend since about 1978. 1978 was the timeframe the minimum wage was first raised significantly. There was another big increase in 1990 followed by 1996/1997 followed by 2007/2008/2009.

The 16-19 age cohort is a good one to look at for the impact of a minimum wage hike because this is the low-skilled cohort and the easiest to do without. It should be obvious that as the minimum wage has been driven up over time employment in this cohort has been driven down and by a lot.

The higher you take the minimum wage the more impact it has on employment. There simply isn't any doubt of it.

 

I suspect that you have left a lot of costs out of your self-employment. Things like health insurance, 401k contributions, property taxes, rent, home owner insurance, liability umbrella policy, etc. The rule of thumb used to be that employees always cost double what their wages were. If your employee wages are 70% of your total cost then there isn't any way you could run a profitable business.

And the business owner *does* take all the risks. The employees don't help pay off debt if the business goes under. The employees don't pay for insurance costs for the plant equipment.

Labor is a *commodity*. That may sound heartless but it is the real world. As a commodity a laborer is free to sell himself to anyone he wants. If one buyer doesn't want what he has to sell then he can go somewhere else, just like if the commodity was a bushel of corn.

The laborer risks nothing when he takes a job. He sells his labor as a thing of value and in return gets something back of value. There simply isn't any guarantee that anyone specific wants what he has to sell.

 

Didn't Illizuela just raise their min wage to $15?

How's that workin out.

 

What's the name of the company.

 

Would you care to name the State or better yet, let's get a graph up. I do not believe for example that Seattle's prices are lower than say Wisconsin's. In fact, we saw that both in Seattle and LA, Consumer prices RISED relative to inflation within the last couple of years alone. It's cutting your nose to spite your face. I'd rather raise real wages, than an artificial one(the minimum wage.)

 

Lolz...
McDonald’s Shares Reach All-Time High Following Rollout of Automated Ordering Kiosks
http://www.breitbart.com/tech/2017/...llowing-rollout-of-automated-ordering-kiosks/

 

Your 95 million out of the labor force claim is abject nonsense. Someone has been pulling your chain.

 

Dems define success by the number of Americans poor and dependent.

Cause votes.

Yes, thats them.

 

Nothing you just said is correct. The study didn't say restaurants with higher and lower prices nor full service vs fast food but restaurants with higher and lower consumer ratings. Nobody is going to give The Codmother Fish and Chips with a $ price rating of food served in baskets a 5 in comparison to Boulevard with it's $$$$$ price rating and a reservation waiting list in the months. But it gets a 5 because the customers that go there are very happy.

The highest increase in closure rate was 0.4% and that amongst the lowest rated restaurants, 99.6% unaffected. That's a minimal impact if you ask me. The authors themselves point out that it is nearly impossible to attribute that small a number to just wages as there are other factors that could account for it but that they believe it's representative and it probably is. I'm sure restaurants near the brink, those less popular to begin with, that pay all their employees minimum wage, are more inclined to give up when minimum wages go up because their volume is such that they'd have to raise prices more than popular ones making them even more unpopular.

SF unemployment being lower than the national average has absolutely nothing to do with the unemployable or the "timed out". Why on earth would you think that means more in SF than the rest of the nation?

 

Au contraire.

The November 2016 BLS jobs report would contradict your "feelings" on that topic.

"...the number of workers counted not in the labor force surged by 446,000 to 95.06 million."

http://www.cnbc.com/2016/12/02/nonf...-175k-est-unemployment-rate-46-vs-49-est.html

 

There's a reason that number is not used except by conservatives. It includes people that have no intention of actually looking for work. Stay at home parents, high school and college students and retirees. Until such time as the number of boomers dying exceeds the numbers of boomers retiring that number will go up no matter the economy nor the job market.
Unless of course things become so dire that high school kids drop out in droves and nobody retires nor stays home for the kids. I hope to God that number still goes up for a few years.

 

The facts are nonpartisan. The reason that number is not used by liberals is because it does not support their narrative, and it is devastating to their arguments for raising the minimum wage.

 

Exactly this. The reason Washington democrats want to raise the MW is that it will drive those 95 million even farther into poverty and dependence, and it will grow that number. The diabolical thing is that they sell it to their constituents as a way to HELP poor folks hoping they will forget that the real minimum wage is and always will be $0/hr.

 

So your narrative is "NO, GRANDPA, YOU MAY NOT RETIRE!!!!!" and "JOHNNY, TWO YEARS OF HIGH SCHOOL IS PLENTY GET OUT THERE AND GET A JOB!!!!!" finally "NO YOU MAY NOT STAY HOME AND CARE FOR YOUR CHILDREN!!!!!"
Because those are the only ways that number is going down. The two fastest growing demographics are teenagers and retirees.

Very Republican of you.