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Raising Floor for Minimum Wage Pushes Economy into the Unknown

nytimes.com

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Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#61

Post by rhino369 »

crdoconnor wrote: post #47
rhino369 wrote: post #15

Earlier quoted context omitted.

Passing costs on the client isn't something you can just do. Many products and services have elastic demand. Fast food, for example, has been has found it very hard to raise away from their dollar menu pricing. Businesses don't have to cut jobs either. They just have to move them. Edit2: Costumers can also shift to lower cost alternatives. Online retailers have less overhead and lower labor costs. If you make Walmart…

>15 dollars will put people in most of the country out of work. Like it did in Australia?

But you also have to compare PPP, cost of living, and unemployment rates.

Australia's PPP adjusted minimum wage is 10.50 USD.

It's very possible that Australia's min doesn't hurt employment and it would in the USA.

It's also plausible that Australia's recent increase in employment (while US is hitting post 2008 lows) is partially caused by too high of a minimum wage.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#62

Post by dang »

grecy wrote: post #13

This is absurd. The results of raising the minimum wage are perfectly known. Learn from the other countries that have done it in the last 10-15-25 years. Australia, Scandinavian countries, etc. etc. Why can't America look outside it's own borders and learn from what other countries have done and are doing? i.e. watch this John Oliver video on gun control [1] where it's stated Australia is not on this planet and Ameri…

Please don't bring generic ideological tangents into already-controversial topics. Any vector that runs through the points "minimum wage studies", "American self-centeredness", and "gun control" is guaranteed not to lead to substantive discussion.

The OP may be wrong, but it's hardly absurd. Let's stick to the substance.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#63

Post by yummyfajitas »

crdoconnor wrote: post #48
JonFish85 wrote: post #24

Earlier quoted context omitted.

"Make more than a million dollars a year? 95% marginal tax rate." Great. Then what? Everyone currently making over $1m a year will cut their salary to $1m. Then you gotta start taxing the upper middle class -- what rate do you want to tax people making over $500k? $250k? $100k? Those are the ones that will pay for this program. As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay…

>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.

This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation.

Note that an increase in the speculative value of real estate is NOT inflation - inflation incorporates the cost of housing (rent or owner-equivalent rent), not the speculative value of land. Similarly, it's not inflation if FB or MS goes up.

By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession?

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#64

Post by rhino369 »

toomuchtodo wrote: post #22
rhino369 wrote: post #15

Earlier quoted context omitted.

Passing costs on the client isn't something you can just do. Many products and services have elastic demand. Fast food, for example, has been has found it very hard to raise away from their dollar menu pricing. Businesses don't have to cut jobs either. They just have to move them. Edit2: Costumers can also shift to lower cost alternatives. Online retailers have less overhead and lower labor costs. If you make Walmart…

>15 dollars will put people in most of the country out of work. So be it. Can't find a job that offers a living wage? We provide a social safety net and increase taxes on the wealthy to pay for it. Make more than a million dollars a year? 95% marginal tax rate. Tax rates are the lowest they've been in the history of the US, and all we've seen is a disgusting level of income equality.

>Make more than a million dollars a year? 95% marginal tax rate.

That is just a bad plan. You are essentially outlawing income over a million.

If you didn't apply it to capital gains, you are just fucking over lawyers, bankers, consultants, and CEOs. It would actually lower tax revenue. Because all that money that is getting taxed over a million a year would disappear. And the truly mega rich would actually be better off. No more having to pay high priced lawyers, bankers, and CEOs.

If you tried to place that restriction on capital gains, everyone ounce of capital in the this country would flee.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#65

Post by toomuchtodo »

yummyfajitas wrote: post #63
crdoconnor wrote: post #48

Earlier quoted context omitted.

>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.

This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation. Note that an increase in the speculative value of real esta…

> By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession?

In a recession, you want to stoke demand. Inflation isn't a worry, deflation is. You therefore give tax cuts to the people who are going to spend (ie not the wealthy).

"Overall, tax cuts for the bottom 90% tend to result in more output, employment, consumption, and investment growth than equivalently sized tax cuts for the top 10% over a business cycle frequency."

http://www.forbes.com/sites/taxanalysts/2015/04/24/tax-cuts-...

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#66

Post by toomuchtodo »

rhino369 wrote: post #64
toomuchtodo wrote: post #22

Earlier quoted context omitted.

>15 dollars will put people in most of the country out of work. So be it. Can't find a job that offers a living wage? We provide a social safety net and increase taxes on the wealthy to pay for it. Make more than a million dollars a year? 95% marginal tax rate. Tax rates are the lowest they've been in the history of the US, and all we've seen is a disgusting level of income equality.

>Make more than a million dollars a year? 95% marginal tax rate. That is just a bad plan. You are essentially outlawing income over a million. If you didn't apply it to capital gains, you are just fucking over lawyers, bankers, consultants, and CEOs. It would actually lower tax revenue. Because all that money that is getting taxed over a million a year would disappear. And the truly mega rich would actually be better…

I intend to tax capital gains just as high as well, unless its in a retirement account.

> If you tried to place that restriction on capital gains, everyone ounce of capital in the this country would flee.

Feel free to take your capital out of the country. It'll be taxed with an expatriation tax. Attempting to evade the tax will allow the IRS to confiscate assets anywhere in the world the US has a tax treaty with (ie everywhere).

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#67

Post by rhino369 »

toomuchtodo wrote: post #66
rhino369 wrote: post #64

Earlier quoted context omitted.

>Make more than a million dollars a year? 95% marginal tax rate. That is just a bad plan. You are essentially outlawing income over a million. If you didn't apply it to capital gains, you are just fucking over lawyers, bankers, consultants, and CEOs. It would actually lower tax revenue. Because all that money that is getting taxed over a million a year would disappear. And the truly mega rich would actually be better…

I intend to tax capital gains just as high as well, unless its in a retirement account. > If you tried to place that restriction on capital gains, everyone ounce of capital in the this country would flee. Feel free to take your capital out of the country. It'll be taxed with an expatriation tax. Attempting to evade the tax will allow the IRS to confiscate assets anywhere in the world the US has a tax treaty with (ie…

You realize what would happen right? The rich would divest from all their investments permanently. They'd sell all their assets foreigners[1] who aren't subject to the tax. There is no point risking losing your investment if taxes will take any gain. It fucks the expected value of investment.

Would you take a bet on a coin flip, if when you lost you paid a dollar, but when you won you'd get a nickle.

Banks would implode. The credit market would stop. Any business survive on a line of credit would just fail immediately.

Best case scenario, you'd just replace American rich for foreign rich.

[1] if you tried to tax foreign capital gains on American assets, you'd just destroy the entire economy. There would be huge lack of capital.

Your plan is insanity.

Edit: And some country would be creative and end tax treaties with the US just to get a couple trillion of capital flowing through their economy.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#68

Post by yummyfajitas »

toomuchtodo wrote: post #65
yummyfajitas wrote: post #63

Earlier quoted context omitted.

This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation. Note that an increase in the speculative value of real esta…

> By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession? In a recession, you want to stoke demand. Inflation isn't a worry, deflation is. You therefore give tax cuts to the people who are going to spend (ie not the wealthy). "Overall…

Yes, that's the point I'm making - I'm disagreeing with this: "The point of taxing them is to mute the inflationary effect of letting them keep their money."

But if crdoconnor disagrees and also is logically consistent, he should also disagree with you. Somehow I suspect he won't.

Also, your understanding of Keynesian economics is slightly confused; the goal is to cause inflation in order to reduce real wages.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#69

Post by erikpukinskis »

bko wrote: post #36

> Their evidence rests largely on comparisons between neighboring areas with different minimum wages. The seminal study in this vein examined fast-food restaurants on both sides of the Pennsylvania-New Jersey border before and after New Jersey raised its minimum wage in the early 1990s. It found no evidence that employment there fell as a result. This is often cited in publications that generally support a higher min…

Your assertion may or may not be true, but there's no way I am willing to accept that as "logic". Your assumption is that the profit margin on labor is 0% which logic would suggest is pretty universally false.

Here's my logic, maybe you can help me find the flaws in it: businesses are trying to maximize sales and minimize costs, which means they have the smallest possible workforce required to support their current sales. Less staff means less sales. They are also making some profit. As long as the wage increases are less than their profit margin, they have no reason to fire anyone. They lose revenue if they fire anyone, or they would've already done it.

So to me he relevant question is: what is the ratio between profit and minimum wages at most companies? I looked at Wal-Mart as an example and they make way more in profit than they spend on wages.

Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown

#70

Post by littletimmy »

bko wrote: post #50
toomuchtodo wrote: post #22

Earlier quoted context omitted.

>15 dollars will put people in most of the country out of work. So be it. Can't find a job that offers a living wage? We provide a social safety net and increase taxes on the wealthy to pay for it. Make more than a million dollars a year? 95% marginal tax rate. Tax rates are the lowest they've been in the history of the US, and all we've seen is a disgusting level of income equality.

A job is not just a job to most people. It's their livelihood and purpose in life. It's very cruel to deny someone their an opportunity to be independent of the state

That is American/Japanese nonsense. You don't have to be defined by your work.
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