Thoughts????

[rabbitcaebannog]

Regardless of who has those jobs, raising the minimum wage above a fair market rate, will still reduce the overall number of US jobs.

That is not what the article said though. It specifically talked about how teen jobs were reduced which is true but not because of minimum wage going up.

 

[Captain Adverse]

Those policy makers who assume you'd rather buy cheap stuff are basing their decisions on consumer demand. Whenever you buy cheap stuff, you are, in effect, casting a vote for more cheap stuff. Buy quality, and you're casting your vote for quality. Buy made in America (good luck with that any more), and you're casting your vote for made in America.

Retail business has to follow consumer demands or go out of business. Wholesale business has to provide retail business what it can sell, or they'll go out of business. Manufacturers have to provide wholesale business what they can sell, or go out of business. It all boils down to consumer demand.

But we come back to the "chicken/egg" issue. Say I need a new shirt right now and my wages after basic expenses only allow me $5.00 to spend. I have a choice between a high quality shirt that will last me several years but costs $10, or a cheap shirt that will tear at the first opportunity but costs only $4.99 (after taxes). Am I really "voting" when I buy the only shirt I can afford?

 

[rabbitcaebannog]

No I justify it by the fact we are a free country, we offer the rights of people to assemble and do as they like in many cases. If a group of people want to buy stocks, create a big company, and pay the head honcho a 1000x more than the line worker I believe they should be free to do so. I don't believe government should have an ounce of say over that - if they do - then they will have an ounce of say over what you or I am paid too in the future. Maybe you'd like to live in a communist state, but I don't.

So, let me get this straight, having an "ounce" of say suddenly turns us into a full blown centralized government? Ah, the slippery slope argument. You can relax. Nobody said that government should have a say in what that CEO makes anyway. The point is let's look at business trends. That is, worker wages and profit/productivity trends. By doing so, we can figure out that business does not care what workers make or the standard of living they will lead for lack of "empathy" have you. Yes, you can argue business job is not to have empathy but to make profits. So, in effect we need to have some protections in place to protect workers. Minimum wage laws and/or laws set up to protect workers aren't going to make us a communist country but when used properly can help our economy to function more like a wealthy industrialized one rather than a primitive dog eat dog one.

 

[Neomalthusian]

Fair enough.

Base salary seems to play somewhat of a role here more than stock options when we look at Costco and Walmart and how CEOs get compensated. They both get around the same stock compensation but the CEO of Costco makes half of what Walmart's CEO makes in salary. Anyway, looking at both these models, I've come to the conclusion that paying your help better wages and benefits can be a good thing for the company and the CEO will still get a nice pay out. Everyone wins.

There's nothing wrong with that theory per se, but it needs to be tested against more than Walmart v. Costco because I'm not sure you have an apples to apples comparison here. Walmart has less than 5x the revenue of Walmart but employs more than 12x the number of people. If you'd taken Walmart CEO's salary last year and spread it out evenly to his employees, they'd each get... an extra $8.00 last year.

Yes, people can say that the CEO of Costco makes half of what the CEO of Walmart makes in salary

One-eighth, actually.

but is that really a problem especially since most of their salary is based on stocks in the millions? Walmart's CEO also gets millions in bonus pay and Costco doesn't. The point is CEOs can get handsome compensations without taking nearly all the piece of the pie.

But they aren't though. Not even close.

The trend in business seems to be looking at short term profits and not the long term health of the company and therefore it can actually do direct damage to a company.

A lot of the other things you've said about this topic miss the mark. This statement, on the other hand, is possibly right on, and it's pretty much exactly what some of the economic papers I've read have to say about the long-term viability of the equity-based compensation model.

I'm glad places like Costco take the long term health of the company into consideration.

Depending on what outcome you're wanting to see, don't get too eager to praise Costco. They move bulk amounts of inventory, most of the consumer goods Made In China, and yes they pay their employees better and their CEO more modestly, but their business model is successful because it out-competes smaller retailers, which is the trend that has really been challenging the middle class over the last 20-30 years. Gotta take the bad with the good.

 

[ttwtt78640]

That is not what the article said though. It specifically talked about how teen jobs were reduced which is true but not because of minimum wage going up.

You said before that displaced older workers were taking these "teen" (minimum wage) jobs. Where do displaced workers come from other than from losing jobs?

 

[CalGun]

Minimum wage laws are the same problem to me; we are not a free nation if I can't work for $6 an hour when I'm willing too then I'm penalized by a centralized government. Government should not be in the business of limiting what free and honest people decide to pay another for their services - period.

So, let me get this straight, having an "ounce" of say suddenly turns us into a full blown centralized government? Ah, the slippery slope argument. You can relax. Nobody said that government should have a say in what that CEO makes anyway. The point is let's look at business trends. That is, worker wages and profit/productivity trends. By doing so, we can figure out that business does not care what workers make or the standard of living they will lead for lack of "empathy" have you. Yes, you can argue business job is not to have empathy but to make profits. So, in effect we need to have some protections in place to protect workers. Minimum wage laws and/or laws set up to protect workers aren't going to make us a communist country but when used properly can help our economy to function more like a wealthy industrialized one rather than a primitive dog eat dog one.

 

[Occam's Razor]

Should we be more concerned with policies that surround cheap prices for consumers or better wages for workers? Since most of us are both what do you think?


Snip: Is this disparity between productivity and pay a result of U.S. economic policy? The report contends so. Rather than supporting jobs, EPI says, economic policies have focused on the consumer. Policies deregulating the economy, weakening unions, and promoting globalization have succeeded in lowering prices. They’ve failed in providing workers with compensation worthy of their efforts. U.S. Wages Aren't Keeping Up With U.S. Productivity, EPI Says

I'm thinking I'd rather have the freedom to decide what to do with my wages whether that be to use them to buy stuff or use it on savings, investment etc....instead of having that decision made for me by policy makers that assume that i'd rather buy cheap stuff.

We should be concerned with being a producer economy and not a consumer economy.

 

[rabbitcaebannog]

You said before that displaced older workers were taking these "teen" (minimum wage) jobs. Where do displaced workers come from other than from losing jobs?

The displaced workers came from middle income jobs that went south when the economic storm hit.

 

[rabbitcaebannog]

Minimum wage laws are the same problem to me; we are not a free nation if I can't work for $6 an hour when I'm willing too then I'm penalized by a centralized government. Government should not be in the business of limiting what free and honest people decide to pay another for their services - period.

Well get back to me when things are decided on honesty rather than profit motivation only. Also, name me a country without minimum wage laws unless you believe all these countries with them are centrally controlled.

 

[rabbitcaebannog]

We should be concerned with being a producer economy and not a consumer economy.

Or, at least not a financial economy.

The Real Versus the Financial Economy: A Global Tale of Stability Versus Volatility — Economics E-Journal

 

[ttwtt78640]

The displaced workers came from middle income jobs that went south when the economic storm hit.

So it was all written off as timing, unrelated to changes in the minimum wage level?

 

[rabbitcaebannog]

So it was all written off as timing, unrelated to changes in the minimum wage level?

The authors of the piece don't dare make that claim.

 

[Dittohead not!]

But we come back to the "chicken/egg" issue. Say I need a new shirt right now and my wages after basic expenses only allow me $5.00 to spend. I have a choice between a high quality shirt that will last me several years but costs $10, or a cheap shirt that will tear at the first opportunity but costs only $4.99 (after taxes). Am I really "voting" when I buy the only shirt I can afford?

Absolutely.
You can buy a shirt for $1.99 at the second hand store,then save the $8.01 until you can add yet another $1.99 and buy that $10 new shirt.
Or, you can continue to wear the $1.99 shirts at the second hand store, and save your money for something else. It's more a matter of thinking ahead than it is necessity.

 

[Occam's Razor]

Minimum wage laws are the same problem to me; we are not a free nation if I can't work for $6 an hour when I'm willing too then I'm penalized by a centralized government. Government should not be in the business of limiting what free and honest people decide to pay another for their services - period.

No one ever promised you absolute freedom. You are not free to kill. You are not free to enslave. You are not free to create your own money. You are not allowed to harm others to advance your own self interests.

BTW... if you were making $6/hour, you wouldn't have the computer or internet access to freely voice your myopic opinion.

 

[Captain Adverse]

Absolutely.
You can buy a shirt for $1.99 at the second hand store,then save the $8.01 until you can add yet another $1.99 and buy that $10 new shirt.
Or, you can continue to wear the $1.99 shirts at the second hand store, and save your money for something else. It's more a matter of thinking ahead than it is necessity.

I'm sorry, did you just modify MY scenario to make YOUR point? I believe I provided a situation where the least expensive shirt was selected. Where did I ever offer a third option?

I was making the point that where you start with a limited set of funds and you must still meet ALL of your obligations, buying cheap isn't really a vote as much as a requirement of financial survival.

 

[iguanaman]

Because typically only the higher-ups are compensated with equity. If we compensated employees in equity too, then in some cases their wages would rise by similar percentages in some cases, but in others would would really screw those employees over because they are more vulnerable to stock price fluctuations. Don't get me wrong, I do not necessarily like E or think it's a good business model long-term. But the idea that CEOs are taking all the revenue that would otherwise go to workers just isn't how it works.



It's not just my opinion, it's cold hard fact, that CEOs are not "taking money from the workers" as you and iguanaman have insinuated. It just does not work quite that way. What is my opinion that equity-based compensation is typically good for short-term stock price performance, but potentially or even likely hazardous for long-term business and economic health. I base this opinion on some pretty convincing papers I've read about the issue that helped me start to understand the issue a little better.

That's why I suggested Google Scholar searching equity based compensation, because there are some pretty well-stated arguments (better stated than I could do on my own) about what's really wrong with this compensation mechanism, and truthfully what's wrong with it doesn't really have to do with paying employees low wages. That's pretty much a different issue altogether. Companies don't have to pay employees crap just in order to pay their executives with equity. Unless you dig into the issue a little more deeply to understand how business finance works, you'll take one look at the CEO pay and then take one look at their lowest paid worker and become infuriated. But you'd be infuriated for the wrong reasons.

Start with this, there is no Santa Claus and wages are always a "power struggle" between management and labor. You can agree with that I bet. What has happened is that management has the upper hand now and has for most of 30 years. Isn't that what Reaganomics was all about? Add to that the fact that every GOP President elected has had a recession in his first term and you have a workforce who is happy to have a job and wouldn't dare ask for a raise. Was that Reaganomics in action again?
As far as the argument that high CEO salaries are not affected by high profit margins made possible by keeping a companies #1 expense as low as possible? That just does not make sense. The money has to come from somewhere.

 

[274ina]

slaves dont consume anything or take vacations. History proves this.

The middle Class (an extinct species) do.

 

[douglas]

You can't act like unemployment is due to the minimum wage.

Here's some math:
The GDP in 2011 was $15trillion and it's almost definitely more today, but lets use that.
The pre-tax minimum wage is $7.25/hr, but let's be "crazy" and make it $10/hr.
There are 320 million people in USA. (Let's just employ everybody, just to prove a point)
Let's give them all full-time jobs, because we're so nice.

320,000,000 people x 40 hours a week x 52 weeks a year x 10 bucks an hour = $ 6.656 Trillion (leaving $ 8.344 Trillion for "incentives" and reinvestment)

Even when I put every variable to the extreme against the minimum wage, we'd still have enough money to employ every single citizen, to pay every CEO in America around a $100 million, Every manager around a $1 million, and still be able to pay incremental raises at every level. That leaves $Trillions for capital investment, to buy/sell stock, and to pay dividends/interest. The government still gets their cut when it's all done, no problems.

The only reasons for a business to under-pay or under-staff are some combination of A)Bad investments (or over investment), B)High Executive pay, or C)Something Illegal. We need safety-nets, minimum wage, and regulations because the free market has no empathy; if high unemployment, low wages, and poverty lead to the economic prosperity of companies individually, the free market will support that trend. If you still don't get it, re-read that last paragraph and show me where a free-market would do better.

But, it's not even a matter to debate, raising the minimum wage doesn't raise unemployment; it's been empirically proven:

This graph is the effect of increasing the minimum wage vs the unemployment rate. The average effect is zero, no change at all to unemployment rates. This goes against all the supply/demand models and there are dozens of theories on why it works this way, but it really doesn't matter. When we look at what actually happens instead of what "should" happen, we find that an increase to the minimum wage has absolutely no effect on unemployment rates.

 

[Neomalthusian]

Start with this, there is no Santa Claus and wages are always a "power struggle" between management and labor. You can agree with that I bet. What has happened is that management has the upper hand now and has for most of 30 years.

It is a "power struggle" the way all trade is a power struggle. I'm okay with calling it that I guess.

As far as the argument that high CEO salaries are not affected by high profit margins made possible by keeping a companies #1 expense as low as possible? That just does not make sense.

Well that's a bastardization of what I said. I said that companies do not have to pay their employees crap in order to pay their CEOs a lot of money. The reason is because cash compensation and equity compensation are fundamentally different things.

 

[LowDown]

My beef is other workers in the company are not seeing the rise in wages based on performance of stocks just the CEO. Why is that? If you would like to enlighten me please do. I don't mind researching things but I like to hear other's opinions otherwise I wouldn't bother to be on a debate board.

Terms of employment are negotiable.

Stock owners want company leadership well motivated to increase company value, and they have to compete for the best people.

Line workers, who are not in a position to determine the direction of a company, would probably find it unfair to have their income linked to company performance if that performance went South.

 

[Captain Adverse]

Terms of employment are negotiable.

Stock owners want company leadership well motivated to increase company value, and they have to compete for the best people.

Line workers, who are not in a position to determine the direction of a company, would probably find it unfair to have their income linked to company performance if that performance went South.

Hmmm, wow....I wonder how they explain all those bonuses and golden parachute provisions after screwing up the company's value.....

 

[LowDown]

Hmmm, wow....I wonder how they explain all those bonuses and golden parachute provisions after screwing up the company's value.....

You really don't know this?

They signed a contract that includes severance benefits when they took the job. The company is bound to honor the contract regardless of how the company is doing.

They were offered the contract in the first place to attract them to the job because they were thought to be top management material.

 

[Captain Adverse]

You really don't know this?

They signed a contract that includes severance benefits when they took the job. The company is bound to honor the contract regardless of how the company is doing.

They were offered the contract in the first place to attract them to the job because they were thought to be top management material.

LOL. Sorry, I do know this. I was being facetious. Your argument was in support of such contracts because corporations are trying to get the best person in the job ...which seems to backfire when the person hired eff's up and still gets all the bennies anyway.

 

[Papa bull]

Does that look at wages vs productivity take into account increasing automation and overtime?

The sleight of hand here apparently isn't obvious so I'll explain.

US wages aren't keeping up with US productivity.

Well, the fact is that US profits are keeping up with US productivity and that's the real measure. Individual productivity is something entirely different. A corporation can downsize it's employee staff and be even more productive, but that doesn't mean the wages have to go up since the nature of the job didn't necessarily change.

If I automate or farm out work or increase prices or cut costs, I am "more productive" as a corporation without any employee becoming 'more productive' in their job.

If people wanted to be very honest about it, not many would say that they're working harder now in their job than they were 10 years ago, but that doesn't keep them from feeling that they deserve a lot more than they did 10 years ago for doing the same work or even less.

The attempt to frame this as US workers being worked harder by their corporate task masters for less pay is not an honest portrayal of what's going on. What's actually going on is that there are fewer jobs and a struggling economy and corporations cutting back on costs and squeezing pennies for the sake of recovering some profit for shareholders that was lost during the leanest years of the Obama recession.

 

[Papa bull]

LOL. Sorry, I do know this. I was being facetious. Your argument was in support of such contracts because corporations are trying to get the best person in the job ...which seems to backfire when the person hired eff's up and still gets all the bennies anyway.

Corporations have every right to seek superstars and whatever a corporation agrees to in terms of a contract for compensation is their business. The corporation and it's shareholders are responsible for making deals that work for them. It's THEIR money. So they do what they feel they need to do to hire superstars, as is their right to do. And sometimes the superstars fail to perform. It happens in sports and it happens in business and it happens in entertainment. Whatever is in your contract is in your contract and if you could get a golden parachute clause in your contract before you sign, well, that's between you and the corporation. They felt it was worth the risk. And no one else has the right to cry when it doesn't work out.

What is all the sniveling about corporate CEO pay all about, anyway? Is there some misunderstanding that makes people feel they have some right to a piece of that corporate money and that if a corporation pisses money away on a CEO that screws them into the ground, it's somehow depriving them of money that's due to them? People talk like it's THEIR money the corporations are paying CEO's. Here's a newsflash for everyone. IT'S NOT YOUR MONEY.