So The Way I see It... - Page 2

Ronin-Talgar · #11 (**permalink**) 07-26-2008, 01:08 AM

Sure Spare, but what about competition in the market? Shouldn't this open up more ground for someone to absorb those costs initially, if they can then get more of a market share?

jlukas823 · #12 (**permalink**) 07-26-2008, 01:10 AM

Quote:

Originally Posted by Makedde

Apparently people in the US are fat because they are poor, and poor people eat alot of cheap food, which is loaded with fat, and so they end up as big as houses.

The solution could be to raise the minimum wage, then people will be able to afford healthy food, and they won't get fat, and America will not be the worlds fattest nation anymore.

Even by as little as $10 a week could make all the difference and it wouldn't be that hard...

Makes sense to me, ya'll.

Funny because Australia just passed us up as the fattest nation.

Spare · #13 (**permalink**) 07-26-2008, 01:22 AM

Quote:

Originally Posted by Ronin-Talgar

Sure Spare, but what about competition in the market? Shouldn't this open up more ground for someone to absorb those costs initially, if they can then get more of a market share?

Doesn't work that way, my friend .... if you raise the cost of labor, the COST of the item goes up. The same thing happens when the cost of raw materials rises. The COST of the item goes up.

When the cost of an item rises, there are only two options -- raise prices to cover it or absorb it.

I'm not sure how a raise in labor costs can increase competition, as you seem to be stating. In fact, it's probably the other way around ... companies run on the edge. Increasing labor costs can cause a company to fold because they can't be cost competitive any more (a dollar in your paycheck costs the company much more -- up to $1.75 in increased taxes, etc.)

The idea that a company that absorbs those costs initially can get them greater market share is, on the surface, true. But, in reality, the company is supposed to make money. The company that initially absorbs the increased labor cost will eventually have to come into parity with the other companies. In fact, they will probably surpass the others because it has losses to recover (incurred while they delayed the price hike). And, there is not only the loss itself, but the cost of that loss, as well, in the form of interest on operating loans, loss of investors, etc.

Simply, there are NO free lunches.

jlukas823 · #14 (**permalink**) 07-26-2008, 01:27 AM

Quote:

Originally Posted by Spare

Doesn't work that way, my friend .... if you raise the cost of labor, the COST of the item goes up. The same thing happens when the cost of raw materials rises. The COST of the item goes up.

When the cost of an item rises, there are only two options -- raise prices to cover it or absorb it.

I'm not sure how a raise in labor costs can increase competition, as you seem to be stating. In fact, it's probably the other way around ... companies run on the edge. Increasing labor costs can cause a company to fold because they can't be cost competitive any more (a dollar in your paycheck costs the company much more -- up to $1.75 in increased taxes, etc.)

The idea that a company that absorbs those costs initially can get them greater market share is, on the surface, true. But, in reality, the company is supposed to make money. The company that initially absorbs the increased labor cost will eventually have to come into parity with the other companies. In fact, they will probably surpass the others because it has losses to recover (incurred while they delayed the price hike). And, there is not only the loss itself, but the cost of that loss, as well, in the form of interest on operating loans, loss of investors, etc.

Simply, there are NO free lunches.

I can never understand why it is so hard for people to understand this. Nobody runs a business just for fun, they do it for profit.

Ronin-Talgar · #15 (**permalink**) 07-26-2008, 02:06 AM

I get that it becomes more expensive to actually produce an item, but it can work either way- just depends what part of the chain absorbs the higher expense. I agree that your version of events are more lilkely and usual.

What annoys me though is that depending on where free-marketeers can improve their own lot, they'll use a different side of this same coin; to stop wage risers, they say that the profit motive will make it meaningless, and that competition won't do anything about it; when trying to privatise an industry, suddenly competition is going to improve standards for workers and/or lower prices- utterly ignoring the unifying nature of the profit motive.

Its a hypocracy that seems altogether too blatant, and while I don't know enough of your arguments to accuse you of it, I've certainly seen it plenty of times here and elsewhere.

Ronin-Talgar · #16 (**permalink**) 07-26-2008, 02:10 AM

Sorry 'bout the tangent Makkede- It'd help certainly, but theres probably more direct and quicker things they-and we- can do. Its a shame that no junk-food ads during children's shows seems to be faltering.

Makedde · #17 (**permalink**) 07-26-2008, 02:24 AM

Quote:

Originally Posted by Ronin-Talgar

Sorry 'bout the tangent Makkede- It'd help certainly, but theres probably more direct and quicker things they-and we- can do. Its a shame that no junk-food ads during children's shows seems to be faltering.

Do you think that junk food advertising should be banned during childrens shows?
I can see the point in that, but what about during TV programs not suitable for children? Seems the parents want to ban this, too!

Makedde · #18 (**permalink**) 07-26-2008, 02:25 AM

Quote:

Originally Posted by Spare

I guarantee it happens .... your producers don't just absorb those raises, they pass them on to the consumer via higher prices. The grocer doesn't absorb those increased labor costs. He passes it on to the consumer via higher prices.

Okay, so if it was such a huge problem, why doesn't anyone over here seem bothered by it? I mean, we don't complain about raising wages because the cost of living goes up, it doesn't seem an important issue from where I am - why is it such an important issue for the US?

Makedde · #19 (**permalink**) 07-26-2008, 02:26 AM

Quote:

Originally Posted by jlukas823

Funny because Australia just passed us up as the fattest nation.

Your population is ten times what ours is. I find it hard to believe that we are the fattest nation, no matter what anyone says.

rsay32 · #20 (**permalink**) 07-26-2008, 02:57 AM

a little off topic, sexist and kinda mean but after living in europe for a few years I have to say its much more accurate than not. Fast food will be the death of us all. muuwaahaahaa

difference_european_vs_american_girlssized.jpg

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