Income gap between rich and poor

Automation encourages itself. It's a compelling economic fact that can't be stopped without violence. You can slow it down by paying people wages they can't live on, and you can squeeze every turnip in sight to compete with bowl-of-rice-a-day imports, but it's coming at you anyway. 'Always has, always will.

Tawwwm's argument is one of the oldest, dumbest, and most self-serving in all of manufacturing. Luddites come in several flavors, but their arguments are always losers.

That's a good argument for universal health care. The fixed part of labor costs is a blight upon any economy. When almost all of the costs are variable, you have maximum labor flexibility. And it can benefit both labor and ownership, if handled thoughtfully.

They do. Now you can see why the arguments against debt are stupid, too. Debt is a burden on growth, but debt used well stimulates more growth than it burdens.

There are intelligent arguments against excessive debt. You just won't hear them from conservative pundits.

The weakness in Germany's economy is likely to come from an excessive mercantilism, in which they try to buy their way out of trouble with a strong balance of trade. This is something that doesn't often work well for very advanced economies, like theirs. They do have a healthy trade balance, but a negative one isn't necessarily unhealthy. And bending normal market forces to effect a better trade balance can do more harm than good.

The strength of Germany's economy is the more interesting part, and the article points out that it's the relative power of labor and ownership that's very different from out economy. There are deeper analyses around than that brief article. The telling point is that getting labor involved in decision-making at the highest levels hasn't seem to hurt their international competitiveness. It appears to have strengthened it, in fact, but I'm not knowledgable enough about Germany's economy to draw any conclusions -- except that labor involvement obviously has not held them back.

BTW, I think that John found a link to that article that isn't behind a paywall. If you can't get it and really want it, I'll download it and e-mail it to you.

Reply to
Ed Huntress
Loading thread data ...

That may be true (I didn't check), but the numbers don't work in terms of influencing inflation, Dan. Total construction costs run around 8% of our economy. Total excavation costs run from 7% (new residential) to 40% (shopping centers) of that. A typical minimum wage increase is on the order of 8% - 10%.

So, if you included all excavation in your theory about backhoe operators, you have something like 1.5% of the US economy. An increase of 10% of the minimum wage would add maybe 0.15% to inflation, by that means, at the most -- assuming your theory is correct, of which I'm skeptical.

You don't have enough there to have any measureable influence on the economy. It's lost in the low-level noise. Next theory?

If you can't hire someone at minimum wage, then the minimum wage has NO possible effect on inflation.

Next theory?

Then what is the net inflationary effect of a 10% increase in the minimum wage? Not knowing how you're separating states with high versus low labor costs, we could split the difference, and say that it maybe had a 0.075% effect.

But I doubt that very much.

I have no idea. I don't speak Spanish well enough to ask, and I do all of my own yard work. d8-)

$7.25. We're one of the low ones.

Reply to
Ed Huntress

I'm not a big fan of UHC, NHS but, I can see how the EIC and Medicaid blur things. Some talk about corporate welfare but our social support systems also allow someone running a party store to expoit workers and taxpayers.

Jobs worth doing should pay enough to allow a good worker to support themselves. That includes heathcare. The health care bit is a tough nut, in some cases health care costs more than wages.

There are real distortions in our economic system. We as a nation need to decide what a basic unit of work is worth.

Working 8 hours at a party store, requiring a kickback from the EIC and being on Medicare means that the owner of the party store is getting welfare that you and I am paying. Better the employee gets a wage that will sustain them and the business operate on honest terms.

Our costs at the check out counter will go up but a fair equation is the right path.

I know I'm rambling but I'm a bit low on sleep.

Okay, where are those excellent arguments?

Please do. I'm interested.

Wes

Reply to
Wes

Geez, I am not trying to say that excavation has anything to do with the discussion. Just pointing out that raising the minimum wage affects how valuable labor saving devices are. Those that benefit most from raising the minimum wage are those that make higher wages building equipment that can eliminate minimum wage jobs. Backhoes are just an example.

That is what I am saying. You will not find any correlation between minimum wage and inflation during any time that the minimum wage is below the level of pay for unskilled labor. So all your statements about minimum wages correlating with inflation or not correlating with inflation depend on what the current market wages are. If the minimum wage were to be raised say to $1000 per hour, it certainly would affect the inflation rate. If the minimum wage is below the market level for unskilled labor, it will have no affect.

Dan

Reply to
dcaster

I read somewhere that in France it is illegal to work overtime, and people who do are fined. The French reasoning is that overtime means that someone does extra work, and as a result the state will have to pay unemployment benefits to other people who didn't get the job.

If true it's a weird system, but at least it's internally consistent. It reminds me of the movie 'Brazil', describing a future dystopia in which labor is a precious resource that people have to 'steal'.

Reply to
Przemek Klosowski

It sounded pretty reasonable back in the '60s, even though it was never favored by many in the US. For what little it's worth, my own opinion is that it's too utopian/ideological to be successful for very long.

But at least they addressed an issue that most of us either ignored or daydreamed our way around. Welcome to reality running up against our daydreams.

Employment can level off at several different equilibrium states, and government labor policy is one thing that can set the equilibrium. But economic facts and economic history can crush any good ideological idea.

Reply to
Ed Huntress

Oh. The backhoes threw me. d8-)

Interesting thoughts, but I'm sure you realize that the economic effects of minimum wages have been debated and researched for years. There must be a library full of expert arguments on the subject.

I can't draw any conclusions except that it's still a "on the one hand, but on the other hand" kind of argument. It appears that a lot of people making minimum wage are not entry-level workers, but rather poorly qualified workers who are stuck there -- especially since unions and seniority agreements have gotten weaker.

It's a tough one.

Right.

Well, that's probably true. All I was saying is that minimum wage increases do not lead inflation rates. It's usually the other way around, although inflation keeps marching despite minimum wage levels. It's just that there doesn't appear to be a causative relationship.

All right. But economic effects of small policy changes, like raising the minimum wage by 8% or 10%, generally are weak, either way.

You can find anecdotal examples to support one side or the other. But correlating it with inflation or employment generally doesn't work. The numbers just don't provide clear support.

Reply to
Ed Huntress

First we need to decide what a basic human life is worth. The rest follows. Economic systems are not natural things. They're determined by human decisions, with all of the human failings involved.

Maybe. Then the corollary is that the party store may now be out of business -- which means that party stores are not viable in the marketplace, or that we have to pay more for party goods.

In the big picture, this is a key issue. My guess is that, in a truly free market, anyone making under $40,000 today is going to have a relatively short lifespan. That would be the new equilibrium. Free markets set social equilibria that few normal humans today would tolerate: Social Darwinism in its fullest glory.

Here's a historical example: Look into the lifespan of an iron puddler in the mid-19th century. They were paid twice as much as other ironworkers but they seldom lived beyond 45 years. They typically were crippled by age 40. It's an interesting story. (No, I can't direct you to a URL. I read about it when I was doing historical research at _AM_.) It's Strabo's idea of utopia. To me, it's a hell for people who have the human being inside of them beaten senseless.

Markets are engines, not religions. Remove the throttle and bad things happen. We just threw two or three rods over the past couple of years.

You're doing Ok. Playing with theories is good for helping you sleep. d8-)

This is turgid, leaden, and sleep-inducing, but it's one good (conservative's) view of the current economic orthodoxy on debt. The arguments include something called "burden of transfer," but it doesn't get into ratios of growth to debt service, which is the basis of the most cautious arguments in *favor* of govenment debt.

formatting link
2, The New Orthodoxy

It's worth reading. Then you can get into the full-blown conservative anti-debt position by looking at Buchanan's numerous other arguments. Keep in mind this is a learned *conservative* talking about it:

formatting link
If I find something that summarizes the arguments in readable terms, I'll post it. I don't have time to go looking now. But Buchanan, though biased toward the conservative view, is a good economic historian.

Meantime, all economists seem to have taken a shot at describing the cautions concerning excessive debt. Most also will explain that it ain't what it appears to be -- governments are not households, and debt can be very constructive for an economy, if it's handled well.

Sent.

Reply to
Ed Huntress

Interesting place to start...

I think mine is worth a lot more than other's may think it is.

How do we resolve that?

Richard Lamb

formatting link

Reply to
cavelamb

We adjust your thinking to realize that yours is worth just as much as anyone else's. d8-)

Reply to
Ed Huntress

"Ed Huntress" wrote in news:4bd66f4d$0$22510$ snipped-for-privacy@cv.net:

It's worth the cost of taking it.

Mine'll be bloody expensive and, I'd imagine, so would yours be.

A lot of others are very cheap.

Reply to
RAM³

If you're referring to how we go out, I'm planning on the cheapest route possible: Incineration, with an empty coffee can for an urn. Then my family is to throw one hell of a party with the savings. d8-)

Reply to
Ed Huntress

I have made plans to go to medical school upon my demise so others can learn from my mistakes.

Best Regards Tom.

Reply to
azotic

Nice try!

But no.

I'm more attached to mine than I am to yours.

Reply to
cavelamb

Your idea of "going out" seems kind of "after the fact".

Reply to
cavelamb

Good thinking! I offered my corpse to medical science, but they just laughed.

Reply to
Ed Huntress

I could have said "how we're disposed of," but that sounds like something you do with old apple cores.

Reply to
Ed Huntress

(...)

Besides, we get thrown away *long* before then.

:) :|

--Winston

Reply to
Winston

On Tue, 27 Apr 2010 00:56:27 -0700, the infamous "azotic" scrawled the following:

When I die, I'm donating my body to Science Fiction, not Med School.

-- Losing faith in humanity, one person at a time.

Reply to
Larry Jaques

I have a much younger brother in law that works in a dog/cat food factory :-)

Mark Rand RTFM

Reply to
Mark Rand

PolyTech Forum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.