Angery people.

frenchyd said:

Well said  except you missed one very critical point.  This nation has never paid for it’s wars with taxes.  We have always inflated our way out of debt.  

.  

One thing I"d like to warn people about.  What you say is true. it's worked up until now.  In fact it worked so well after WWII that I've heard many people make the statement 'War is good for the economy' as a result, but it ignores a couple of of critical points.  A huge part of what helped the US economy were the loans they made to the UK to fight the war.  Second, by entering the war so late America had time to really invest and build up it's infrastructure to cope, that infrastructure not only helped the American War effort directly, but also indirectly by selling equipment to the Allies.  Remember that while WWII was a boon to the US, it and WWI all but bankrupted the UK.  The loans the UK took from the US for WWII weren't paid back until 2006, 61 years after the end of the conflict.  You think that's bad, the loans we needed to fight WWI weren't paid back until 2015 a mere 97 years after the cessation of hostilities.  The monitory cost of war, let alone the appalling human cost, nearly destroyed the UK.  The current conflicts are dragging on an on an on, and while I;m sure there is some net positive to the overall economy from the manufacture and sale of goods, overall it's a tiny % contribution to the GDP and needs to be treated differently to priior conflicts otherwise it just keeps adding to the debt with no upside.

To those people saying that the minimum wage shouldn't be enough for a family to live on.  No, in an ideal world it shouldn't.  But you visit a lot of smaller communities and the corporate welfare afforded to companies like Walmart being allowed to pay so little that people need government help to live has driven so many small companies out of business that there just aren't the opportunities there used to be to find a better paying job.  How many small to medium communities have you visited where there is a big shinny mega mart of some kind on the outskirts of town and a deserted main street as all the mom and pop shops have been driven out of business.  Also as others have pointed out, an increase in the minimum wage helps the bottom 20% of all wage earners with knock on increases.  For a very few an increase in minimum wage will mean they loose their current jobs.  While that is terribly unfortunate, it also means that other opportunities will open up as there is now more spending power at the bottom.

Adrian_Thompson said:

To those people saying that the minimum wage shouldn't be enough for a family to live on.  No, in an ideal world it shouldn't.  But you visit a lot of smaller communities and the corporate welfare afforded to companies like Walmart being allowed to pay so little that people need government help to live has driven so many small companies out of business that there just aren't the opportunities there used to be to find a better paying job.  How many small to medium communities have you visited where there is a big shinny mega mart of some kind on the outskirts of town and a deserted main street as all the mom and pop shops have been driven out of business.  Also as others have pointed out, an increase in the minimum wage helps the bottom 20% of all wage earners with knock on increases.  For a very few an increase in minimum wage will mean they loose their current jobs.  While that is terribly unfortunate, it also means that other opportunities will open up as there is now more spending power at the bottom.

So, we need an increase in minimum wage because "there just aren't the opportunities there used to be to find a better paying job."

But then you say, "for a few an increase in minimum wage will mean they lose their current jobs. While that is terribly unfortunate, it also means that other opportunities will open up..."

So are there opportunities or not? If there are opportunities, then what's to stop people currently making minimum wage from pursuing them right now? If there aren't opportunities, then how did the minimum wage increase help those who lose their jobs? I'm not trying to be daft here. I'm genuinely interested in hearing some clarification on your view as it seems to contradict itself in places.

Yes and yes. It will create many more opportunities and reduce the burden on government programs while (unfortunately) displacing a small number of people.  The good news is that there will be more opportunities for those displaced in the long run.  Overall it would be a significant plus, but with a small short term down side for a very small minority.  

In reply to Adrian_Thompson :

Can you hypothesize about the type of opportunities? I understand that it's just guesswork at this point, but what kind of minimum wage jobs would you guess will be created by automation? My admittedly pessimistic view is limiting me in that regard.

I usually hear that somebody will be needed to design, install, and service kiosks/robots/etc but it seems like repairing electronics are already career options for those with the appropriate aptitude. And those with the aptitude probably aren't working minimum wage jobs where they'd be displaced by automation unless they're working through school and already on their way to something bigger/better.

frenchyd said:

1.

Do you honestly think the latest tax cut is fair?  Or prudent?  

Nearly everybody agreed that corporate taxes needed to meet world markets.  But properly dealing with taxes doesn’t mean you slide it to the working class and make things more unequal. 

Tax code needs to be fair and simple. 

2. 

Sin tax shouldn’t have any place in taxes. It assumes things that haven’t been put to the people.  

Tax code  should be about taxes 

3. 

Let’s not parse words.  Someone who makes 100 million dollars will need to pay more taxes than someone who makes $100,000 

it should be simple. You want something here’s the price that includes the 2% tax.  

4. 

The $50,000 cap was just a little nod to a progressive tax 

as far as the minimum wage? Why shouldn’t  they get a tiny bit of what the top 1% got in the past 40 years?  Don’t you believe in trickle down?  ( grin) 

1. <Political comment removed by moderator> I will say that I MOSTLY agree with the tax changes. It was a missed opportunity to do so much more with border adjustment taxes etc but all in, it makes sense to me. The decrease in tax revenues with an increase in spending is not a good idea.

2. Why? If there are certain things that harm the environment, the economy, jobs, workers, etc. Why not tax it to nudge people to make the right decision? Cigarette taxes, gas taxes, carbon taxes....all great IMO.

3. No one said they shouldn't. Should they pay more % wise or more $ wise? Or both (which is how it is for W2 income)? All things equal if people consume the same amount of goods, live in the same house in the same area and have the same exact assets. One guy makes $50k and one guy makes $500k. Person A would pay less than $10k in Fed tax while person B would owe $170k. Did person B really get that much more out of the system? Note they are paying more $ wise and % wise.

4. No, I don't believe in trickle down.

Boost_Crazy said:

I'd like to chime in on minimum wage. 

I believe that the argument that minimum wage should be a living wage is completely out of touch with the real world. It should not be expected that minimum wage could support an individual, let alone a family. 

Minimum wage is a training wage for people with no skills to offer. It's for kids summer jobs or part time jobs while in school. Or for a retired person to pass time and earn a bit of supplemental income. An adult cannot support themselves, much less a family. That is not a tragedy, that is how it is designed. If as an able bodied adult, you have not acquired work skills or experience to move beyond minimum wage, you need to work multiple jobs until you acquire such skills. It may suck for a bit, but it's the consequence of not finishing school, not working hard, or simply bring an shiny happy person that can't keep a job due to their attitude. 

If one with skills or experience can't get a job due to no jobs available, they need to move where the jobs are. It's kept people from starving throughout human existence. You need to follow the herd. 

I argue that raising the minimum wage does more harm to the people that it trying to help than good. Remember those teenagers that used to work the minimum wage jobs? Those training jobs where they could learn how not to screw up before it did any real harm. They were better prepared when they got their "real" jobs later. Minimum wage goes up, and now it's tougher to hire a kid with limited availability where you need to work around their school schedule. How about that guy trying to turn it about with the questionable work history. Maybe worth the gamble, but not at a higher wage. Definitely not this day and age where it takes an act of congress to fire an employee that doesn't work out. Safer to not hire them in the first place. 

Raising wages also raises prices. It becomes an exercise in chasing ones tail. 

The final blow to unskilled workers is automation. Self check outs and order taking kiosks are replacing workers. It's math, the cheaper automation gets and the more expensive unskilled labor gets, the more jobs will be cut. And minimum wage jobs are very important! Not to support families, but as an educational tool to new workforce participants. 

 

 

The way I see it we have a couple different arguments here. One, what minimum wage should be and two, the lack of jobs due to globalization and automation. Forget the latter for this conversation

Now let’s talk economics. Let’s say it costs 100 widgets to live and not be homeless. Hereafter this will be considered the living wage. Let’s say McDonalds pays their employees 50 widgets for providing minimum skills. Since this is not enough to survive, Uncle Sam throws in an extra 50 widgets in the form of welfare. They are still getting 100 widgets, but Uncle Sam is subsidizing McDs with 50 widgets.

Those of you that are arguing that 100 widgets are too much and they should get a real job are failing to get the point. They are still getting 100 widgets. It’s just coming directly out of your pocket instead of the pockets of shareholders.

Those of you arguing that McDs will just replace them with computers at the rate of 75 widgets and then they will be jobless…you’re exactly right! Only thing is, this is a GOOD THING! These are the jobs we want (designing, maintaining, fixing computers). These are more desirable jobs. You don’t see us going back to an abacus just to create millions of jobs that were taken away from computers.

The rest of you are just pissed off because you make less than $15 an hour and you’re a little jealous that Sam 6pack can make that at McDonalds pushing buttons on a computer. That’s the beauty of it. If you could get a unskilled job for $15 an hour other companies are going to have to bump their wages up to $20 in order to compete.

Take a look at the economics behind the last few hikes in the minimum wage. It’s been great for the economy. I’m not saying $15 is the right number but it does seem like a good starting point for negotiations. There will be winners and losers. Some people are going to lose their jobs but others will gain better jobs. The main difference is instead of Tommy Taxpayer paying for cheap labor for McDonalds, Suzie Shareholder will get slightly smaller dividends every year. It comes down to this, do you want to require companies to pay a living wage to employees or do you, as a kind and caring person willing to donate your hard earned money (taxes) to the government so THEY can decide how to prop up the economy. "

Signed - A McDonalds Shareholder

In reply to STM317 :

I think we're talking at cross purposes.  I was talking about increased opportunities due too an increase in the minimum wage nothing to do with automation.  My reasoning is this, which I feel is proved by past (actual, accounting for inflation) increases in lower end wages.  More money in the lower wage groups leads to more spending.  If you give someone at the bottom of the economy 10% extra they will probably put that 10% extra back into the economy as there are always unmet needs at that income level (no longer having to decide between food, cloths or shoes for the kids, now they can fulfill more of those needs at once).  Give an extra 10% to the wealthiest groups and despite the concept of trickle down economics (which people are back peddling on the name of all the time, let's call it 'supply side' instead) and they don't' tend to re-invest it, they tend to add to their savings and net worth.  This is not an absolute across all stages of all economies, but in our current totally skewed economy the rich don't 'need' more wealth, but I"d argue the poor do need more to sustain our economy and government burden.

If you want to talk automation, there are two ways too look at it.  In the past increased automation tends to be a short term disruptor for displaced people, but it also tends to be the creator for other newer types of jobs.  So in that case, in and of itself automation, like an increase in minimum wage is a net improvement in the economy, even if there are a few short term losses.  No this isn't an argument for supply side (trickle down) economics as we are not seeing increased investment from tax reduction.  If we were I"d be in favor of it.  The other way to look at it is to look at increased automation in other countries making cheap widgets as hurting jobs here.  Yes today that could be the case, but I put more of the blame of that on suppressing the earning capabilities of the working class with an artificially low minimum wage forcing more people into needing some form of additional welfare above their wages.  Increase the wages and it increases the bottom 20% which puts more money into the economy to either buy more imported crap and or more home grown products.  

BTW, we've kept clear of health car for a few pages, but that's the other huge disincentive to growth in this country.  It's a major risk to start your own business when health care is so expensive and the more affordable plans end up mainly as catastrophe insurance only as they barely cover (well, not at an affordable level)  preventative and maintenance care.  We can argue the merits or dangers of a single payer system all day long, but as a person who spent half their life in a single payer system and the second half here in a for profit system I can tell you which works better for most people, and it isn't the US system.  It's one thing to risk starting a business as a 20 something with no spouse or children,  You can possibly risk no, minimal or sub standard health insurance.  But if your a potential entrepreneur in your mid 40's with a spouse and two kids, it's really really hard to risk the security blanket of a big employers health system to branch out on your own.  And before someone says 'free health care isn't free' I never said it was.  The simple fact is that  we pay up too and in some cases over twice as much as other developed countries with a single payer system for far far lower quality of care.  I'm not saying single payer is perfect, it's not,  but int he real world it works better than what we have.  Also single payer doesn't mean no private health care, every developed country with a single payer system also has for profit private systems for those who want and can afford it.  That allows you to not need to wait as long for non critical procedures, more luxury in hospitals, more elective procedures etc.  

Enyar said:

Those of you arguing that McDs will just replace them with computers at the rate of 75 widgets and then they will be jobless…you’re exactly right! Only thing is, this is a GOOD THING! These are the jobs we want (designing, maintaining, fixing computers). These are more desirable jobs. You don’t see us going back to an abacus just to create millions of jobs that were taken away from computers.

I think saying that eliminating minimum wage jobs is good news because they'll be replaced with higher paying skilled jobs doesn't take into account the type of people actually working minimum wage jobs. If they have the ability to do more skilled work, then they're probably not content to do minimum wage jobs in the first place. The people working for minimum wage tend to be young, and just starting out in the workforce. Or they need a more flexible schedule for things like schooling. Or they're older people looking for supplemental income. The only other category is people without the skills to do anything else.  In other words, what percentage of minimum wage workers would be able to retrain and get one of those higher skilled, higher paying jobs that automation will create? IF they have the ability and aptitude to better themselves that easily, why aren't they already doing it?  It seems like it would only help those who are already able to help themselves.

As to your point about Suzy Shareholder, why would she get less? Modern corporations are slaves to share price and the wants of big time investors. Why would they cut profits or dividends when they can just raise prices to consumers, or make cutbacks to their workforce? Do you have any data that shows how minimum wage increases have improved recent economics? Everything that I'm finding shows that it only helps a few at the very bottom of the pay scale (see my post at the bottom of page 15).

In reply to EastCoastMojo :

 It really doesn’t take much of s profit to see what’s coming.  We haven’t had the inflation needed to deal with the Iraq Afghanistan war. When you add 1.5 trillion more dollars onto the debt from the latest tax cut  there is simply no way to pay for that with the incoming tax. Even if you  let the poor die. And turn the middle class into the poor which is apparently the goal.  

Inflation will  make our national debt into a manageable debt in 10 years or so.  Just a 7-9% annual inflation should do it. 

That will kick adjustable rates up to about 12-14% 

go get a fixed rate and enjoy the ride. 

STM317 said:

Enyar said:

Those of you arguing that McDs will just replace them with computers at the rate of 75 widgets and then they will be jobless…you’re exactly right! Only thing is, this is a GOOD THING! These are the jobs we want (designing, maintaining, fixing computers). These are more desirable jobs. You don’t see us going back to an abacus just to create millions of jobs that were taken away from computers.

I think saying that eliminating minimum wage jobs is good news because they'll be replaced with higher paying skilled jobs doesn't take into account the type of people actually working minimum wage jobs. If they have the ability to do more skilled work, then they're probably not content to do minimum wage jobs in the first place. The people working for minimum wage tend to be young, and just starting out in the workforce. Or they need a more flexible schedule for things like schooling. Or they're older people looking for supplemental income. The only other category is people without the skills to do anything else.  In other words, what percentage of minimum wage workers would be able to retrain and get one of those higher skilled, higher paying jobs that automation will create? IF they have the ability and aptitude to better themselves that easily, why aren't they already doing it?  It seems like it would only help those who are already able to help themselves.

 

As to your point about Suzy Shareholder, why would she get less? Modern corporations are slaves to share price and the wants of big time investors. Why would they cut profits or dividends when they can just raise prices to consumers, or make cutbacks to their workforce? Do you have any data that shows how minimum wage increases have improved recent economics? Everything that I'm finding shows that it only helps a few at the very bottom of the pay scale (see my post at the bottom of page 15).

I’ve been through a couple of inflationary cycles.  One modest and the post Vietnam.  At the last I started out as a gas pump jockey and they kept me on when they went to self service. 

The gas pump jockey’s they let go went to other menial jobs but they needed somebody to not steal the gas and drive off.  

New low wage jobs were created or if not created became more common. Tree trimmers, landscapers, lawn mowers. Snow shovelers. Etc etc.  

Some of which will still be needed in the days of  cheap robots.  For example it costs me $600 in the spring and $600 in the fall to put my dock in and out.  Times the tens of thousands of docks on my lake alone times the 15,000 lakes in Minnesota. Plus all the rivers. We start the Mississippi, the Red river to the Hudson. As well as headwaters to the Great Lakes. 

In more arid areas I can imagine someone dressing rocks or some other sort of landscaping.  There will be solar panel washers and wind generator maintenance.  Topiary work will likely become a thing as will boat, canoe, kayak  maintenance.   

Hair dressing and fingernail ( hand and feet)  heck who knows how we will use people. But we will.  

That’s the big thing. Right now we have head hunters for most positions. Soon there will be an Amazon of people. Driving by their place to pick them up( or should I say sending out a self driving bus).  Moving people to where they are needed. 

Personal servants is likely to be a thing. Not just for the wealthy   But for busy technocrats, high demand workers,  busy management types.   Self driving cars will eliminate a lot of driver positions but not until they can figure out how to get things the last 20 feet.  From the car to the refrigerator or wherever.  Maybe  someone will go along for just that reason. 

Adrian_Thompson said:

In reply to STM317 :

I think we're talking at cross purposes.  I was talking about increased opportunities due too an increase in the minimum wage nothing to do with automation.  My reasoning is this, which I feel is proved by past (actual, accounting for inflation) increases in lower end wages.  More money in the lower wage groups leads to more spending.  If you give someone at the bottom of the economy 10% extra they will probably put that 10% extra back into the economy as there are always unmet needs at that income level (no longer having to decide between food, cloths or shoes for the kids, now they can fulfill more of those needs at once).  Give an extra 10% to the wealthiest groups and despite the concept of trickle down economics (which people are back peddling on the name of all the time, let's call it 'supply side' instead) and they don't' tend to re-invest it, they tend to add to their savings and net worth.  This is not an absolute across all stages of all economies, but in our current totally skewed economy the rich don't 'need' more wealth, but I"d argue the poor do need more to sustain our economy and government burden.

If you want to talk automation, there are two ways too look at it.  In the past increased automation tends to be a short term disruptor for displaced people, but it also tends to be the creator for other newer types of jobs.  So in that case, in and of itself automation, like an increase in minimum wage is a net improvement in the economy, even if there are a few short term losses.  No this isn't an argument for supply side (trickle down) economics as we are not seeing increased investment from tax reduction.  If we were I"d be in favor of it.  The other way to look at it is to look at increased automation in other countries making cheap widgets as hurting jobs here.  Yes today that could be the case, but I put more of the blame of that on suppressing the earning capabilities of the working class with an artificially low minimum wage forcing more people into needing some form of additional welfare above their wages.  Increase the wages and it increases the bottom 20% which puts more money into the economy to either buy more imported crap and or more home grown products.  

BTW, we've kept clear of health car for a few pages, but that's the other huge disincentive to growth in this country.  It's a major risk to start your own business when health care is so expensive and the more affordable plans end up mainly as catastrophe insurance only as they barely cover (well, not at an affordable level)  preventative and maintenance care.  We can argue the merits or dangers of a single payer system all day long, but as a person who spent half their life in a single payer system and the second half here in a for profit system I can tell you which works better for most people, and it isn't the US system.  It's one thing to risk starting a business as a 20 something with no spouse or children,  You can possibly risk no, minimal or sub standard health insurance.  But if your a potential entrepreneur in your mid 40's with a spouse and two kids, it's really really hard to risk the security blanket of a big employers health system to branch out on your own.  And before someone says 'free health care isn't free' I never said it was.  The simple fact is that  we pay up too and in some cases over twice as much as other developed countries with a single payer system for far far lower quality of care.  I'm not saying single payer is perfect, it's not,  but int he real world it works better than what we have.  Also single payer doesn't mean no private health care, every developed country with a single payer system also has for profit private systems for those who want and can afford it.  That allows you to not need to wait as long for non critical procedures, more luxury in hospitals, more elective procedures etc.  

Excellently put. Especially about Health care.  

Good logic about entrepreneurship.   Plus I can see your points about the needs and rewards of raising the minimum wage.  

Raise the minimum wage and many social costs to the government will be lowered. 

Enyar said:

Boost_Crazy said:

I'd like to chime in on minimum wage. 

I believe that the argument that minimum wage should be a living wage is completely out of touch with the real world. It should not be expected that minimum wage could support an individual, let alone a family. 

Minimum wage is a training wage for people with no skills to offer. It's for kids summer jobs or part time jobs while in school. Or for a retired person to pass time and earn a bit of supplemental income. An adult cannot support themselves, much less a family. That is not a tragedy, that is how it is designed. If as an able bodied adult, you have not acquired work skills or experience to move beyond minimum wage, you need to work multiple jobs until you acquire such skills. It may suck for a bit, but it's the consequence of not finishing school, not working hard, or simply bring an shiny happy person that can't keep a job due to their attitude. 

If one with skills or experience can't get a job due to no jobs available, they need to move where the jobs are. It's kept people from starving throughout human existence. You need to follow the herd. 

I argue that raising the minimum wage does more harm to the people that it trying to help than good. Remember those teenagers that used to work the minimum wage jobs? Those training jobs where they could learn how not to screw up before it did any real harm. They were better prepared when they got their "real" jobs later. Minimum wage goes up, and now it's tougher to hire a kid with limited availability where you need to work around their school schedule. How about that guy trying to turn it about with the questionable work history. Maybe worth the gamble, but not at a higher wage. Definitely not this day and age where it takes an act of congress to fire an employee that doesn't work out. Safer to not hire them in the first place. 

Raising wages also raises prices. It becomes an exercise in chasing ones tail. 

The final blow to unskilled workers is automation. Self check outs and order taking kiosks are replacing workers. It's math, the cheaper automation gets and the more expensive unskilled labor gets, the more jobs will be cut. And minimum wage jobs are very important! Not to support families, but as an educational tool to new workforce participants. 

 

 

The way I see it we have a couple different arguments here. One, what minimum wage should be and two, the lack of jobs due to globalization and automation. Forget the latter for this conversation

Now let’s talk economics. Let’s say it costs 100 widgets to live and not be homeless. Hereafter this will be considered the living wage. Let’s say McDonalds pays their employees 50 widgets for providing minimum skills. Since this is not enough to survive, Uncle Sam throws in an extra 50 widgets in the form of welfare. They are still getting 100 widgets, but Uncle Sam is subsidizing McDs with 50 widgets.

Those of you that are arguing that 100 widgets are too much and they should get a real job are failing to get the point. They are still getting 100 widgets. It’s just coming directly out of your pocket instead of the pockets of shareholders.

Those of you arguing that McDs will just replace them with computers at the rate of 75 widgets and then they will be jobless…you’re exactly right! Only thing is, this is a GOOD THING! These are the jobs we want (designing, maintaining, fixing computers). These are more desirable jobs. You don’t see us going back to an abacus just to create millions of jobs that were taken away from computers.

The rest of you are just pissed off because you make less than $15 an hour and you’re a little jealous that Sam 6pack can make that at McDonalds pushing buttons on a computer. That’s the beauty of it. If you could get a unskilled job for $15 an hour other companies are going to have to bump their wages up to $20 in order to compete.

Take a look at the economics behind the last few hikes in the minimum wage. It’s been great for the economy. I’m not saying $15 is the right number but it does seem like a good starting point for negotiations. There will be winners and losers. Some people are going to lose their jobs but others will gain better jobs. The main difference is instead of Tommy Taxpayer paying for cheap labor for McDonalds, Suzie Shareholder will get slightly smaller dividends every year. It comes down to this, do you want to require companies to pay a living wage to employees or do you, as a kind and caring person willing to donate your hard earned money (taxes) to the government so THEY can decide how to prop up the economy. "

Signed - A McDonalds Shareholder

Well argued. Good logic. But I think your conclusion is a bit short sighted.  Increased minimum wage will drive up inflationary pressures. 

Spending 75 widgets May be a short term hit to MikeyD’s bottom line but long term it will increase not decrease profit.   Frankly I don’t like dealing with certain McD’s because of bad experiences I’ve had.  Robots eliminate that. Plus with a new inflationary cycle they can adjust  prices 

In reply to Adrian_Thompson :

You will never hear me say , war is good business because the second part of that is, invest your sons!

In reply to Enyar :

I have edited your post above. Please refrain from politically charged statements on the forum. 

In reply to STM317 :

My market is certainly different where it's not mostly young people or old people. They are just unskilled. But there is no denying that there are plenty of people in these jobs that need them to survive. And you shouldn't think that Wilson Wally World stocker is going to start coding automation robots. It would likely go more like this (extremely simplified):

*News News News* - Order your burger from a Robot! Seeking Robot builder, inquire with

Bobby at Boeing leaves is job for a higher paying job at Robo World 

Freddy the car mechanic leaves his job at Firestone to go work for Boeing

Davey the doo-dad maker quits for a higher paying job to replace water pumps at Firestone

Wilson leaves his job at Wally World to make more money making doo dads.

McDs could raise prices but let's not forget that prices are indicative of what the market will bare. They are already charging what they think is the highest price they can sell it for. If costs magically dropped 50% you think McDonalds is going to say here you go STM, have a burger half off. Hell no! Those shareholders are gonna be like I'll take that thank you very much. Now longer term the increased margins are going to create more competition and they will likely lower costs but that's another discussion.

If they did raise prices to keep profits up then the decision to get a McDouble now changes. Lets say it costs $2 for a burger at McD now and post automation it costs $3. Well for only a little bit more I can get a handcrafted burger from 5 guys. I think I will head there!

I'll have to look for the minimum wage data and how it's better for the economy. The key thing is we are ALREADY paying a living wage. It's just partially from Walmart's bank account and partially from the taxpayers bank account (in the form of subsidies, food stamps etc). I am arguing that if Walmart wants to be a part of our system, they can front their employees costs by themselves.

In reply to frenchyd :

I should clarify that 75 widgets is the annual costs for the maintenance, depreciation and updating of the computers. So long term it will still decrease profits/ increase cost compared to the Tommy Taxpayer subsidized unskillled labor.

In reply to EastCoastMojo :

My apologies, I was just saying that although I don't like the guy I can agree with his policy here. Trying to establish credibility by not sticking to one side,

Enyar said:

In reply to STM317 :

My market is certainly different where it's not mostly young people or old people. They are just unskilled. But there is no denying that there are plenty of people in these jobs that need them to survive. And you shouldn't think that Wilson Wally World stocker is going to start coding automation robots. It would likely go more like this (extremely simplified):

 

*News News News* - Order your burger from a Robot! Seeking Robot builder, inquire with

Bobby at Boeing leaves is job for a higher paying job at Robo World 

Freddy the car mechanic leaves his job at Firestone to go work for Boeing

Davey the doo-dad maker quits for a higher paying job to replace water pumps at Firestone

Wilson leaves his job at Wally World to make more money making doo dads.

 

 

 

McDs could raise prices but let's not forget that prices are indicative of what the market will bare. They are already charging what they think is the highest price they can sell it for. If costs magically dropped 50% you think McDonalds is going to say here you go STM, have a burger half off. Hell no! Those shareholders are gonna be like I'll take that thank you very much. Now longer term the increased margins are going to create more competition and they will likely lower costs but that's another discussion.

If they did raise prices to keep profits up then the decision to get a McDouble now changes. Lets say it costs $2 for a burger at McD now and post automation it costs $3. Well for only a little bit more I can get a handcrafted burger from 5 guys. I think I will head there!

 

I'll have to look for the minimum wage data and how it's better for the economy. The key thing is we are ALREADY paying a living wage. It's just partially from Walmart's bank account and partially from the taxpayers bank account (in the form of subsidies, food stamps etc). I am arguing that if Walmart wants to be a part of our system, they can front their employees costs by themselves.

So, Davey the Doo Dad maker is qualified to be in a higher paying job @ Firestone already, but he's not able to work there for some reason? Wilson the shelf stocker can just go right in and get a higher paying job making Doo Dads in Davey's old job? If these people are currently qualified to have better jobs, making more money then why are they settling for lower paying gigs? It's not like companies aren't routinely looking to add talent. If they were all capable of retraining and getting these better jobs then shouldn't they already be doing that?

What if the robot that Bobby builds @ Robo World is a shelf stocking robot that can do the same work as Wilson and his 2 buddies? Bobby got a better gig, and so did his replacement Freddy. But now you've got 3 low skilled workers (hopefully)  trying to retrain and fighting for 1 job making Doo Dads. But the Doo Dad factory is automating even more than they already are and is planning a 25% reduction in staffing. So now those 25% semi-skilled workers are also out of work and competing for jobs and training with Wilson and his unskilled buddies. Expecting a 1:1 ratio of job gains throughout the economy would basically defeat the prime driving force behind automation. These companies want to automate to remove humans from these jobs in order to save money.

As for McDs, If they have to increase their worker's wages, then so does 5 guys. And Burger King. And Wendys. And In-n-out. They might choose to respond to the changes differently I suppose but none of the changes are particularly good for low end workers. Perhaps instead of raising prices they reduce staffing, or they keep staffing levels the same but cutback hours and make everybody part-time. How are the workers actually benefiting?

In reply to Enyar :

Your case? Raising McD’s burger cost a buck.  Post racing the minimum wage 5 Guys will also need to raise their burger prices.  Relative market positions will remain the same, all that will happen is numbers will change. 

In fact prices will go up across the board.  That is good.  It doesn’t matter if it’s cause or effect inflation will happen and managed properly it can be good for the country. 

Adrian_Thompson said:

In reply to STM317 :

I think we're talking at cross purposes.  I was talking about increased opportunities due too an increase in the minimum wage nothing to do with automation.  My reasoning is this, which I feel is proved by past (actual, accounting for inflation) increases in lower end wages.  More money in the lower wage groups leads to more spending.  If you give someone at the bottom of the economy 10% extra they will probably put that 10% extra back into the economy as there are always unmet needs at that income level (no longer having to decide between food, cloths or shoes for the kids, now they can fulfill more of those needs at once).  Give an extra 10% to the wealthiest groups and despite the concept of trickle down economics (which people are back peddling on the name of all the time, let's call it 'supply side' instead) and they don't' tend to re-invest it, they tend to add to their savings and net worth.  This is not an absolute across all stages of all economies, but in our current totally skewed economy the rich don't 'need' more wealth, but I"d argue the poor do need more to sustain our economy and government burden.

If you simply mean that increasing the minimum wage can increase a person's spending opportunities then I can see that being true. At least for those that still have jobs. But goods are likely to cost more, and sales tax on their purchases will go up as a result so their spending power won't go up equal to the increased minimum wage. I can see it still being a net gain for the minimum wage workers (who represent around 3% of all hourly workers), with others essentially supplementing that cost through the reduction in their buying power.  I agree that the wealthy don't need any more advantage than they already have. I also would probably be willing to accept having my buying power eroded if I knew that it was going to keep shoes on a needy kid or something rather than being wasted on lotto tickets or buying an upgraded cable TV package or some other crap. But poor people tend to routinely make poor decisions that keep them poor, so I'm skeptical that they'd use their increased income wisely. I think this is an interesting article with some very good links that discusses some of the results of an increased minimum wage both good and bad. It's definitely not a clear cut issue, but big problems never have simple answers.

STM317 said:

Enyar said:

In reply to STM317 :

My market is certainly different where it's not mostly young people or old people. They are just unskilled. But there is no denying that there are plenty of people in these jobs that need them to survive. And you shouldn't think that Wilson Wally World stocker is going to start coding automation robots. It would likely go more like this (extremely simplified):

 

*News News News* - Order your burger from a Robot! Seeking Robot builder, inquire with

Bobby at Boeing leaves is job for a higher paying job at Robo World 

Freddy the car mechanic leaves his job at Firestone to go work for Boeing

Davey the doo-dad maker quits for a higher paying job to replace water pumps at Firestone

Wilson leaves his job at Wally World to make more money making doo dads.

 

 

 

McDs could raise prices but let's not forget that prices are indicative of what the market will bare. They are already charging what they think is the highest price they can sell it for. If costs magically dropped 50% you think McDonalds is going to say here you go STM, have a burger half off. Hell no! Those shareholders are gonna be like I'll take that thank you very much. Now longer term the increased margins are going to create more competition and they will likely lower costs but that's another discussion.

If they did raise prices to keep profits up then the decision to get a McDouble now changes. Lets say it costs $2 for a burger at McD now and post automation it costs $3. Well for only a little bit more I can get a handcrafted burger from 5 guys. I think I will head there!

 

I'll have to look for the minimum wage data and how it's better for the economy. The key thing is we are ALREADY paying a living wage. It's just partially from Walmart's bank account and partially from the taxpayers bank account (in the form of subsidies, food stamps etc). I am arguing that if Walmart wants to be a part of our system, they can front their employees costs by themselves.

So, Davey the Doo Dad maker is qualified to be in a higher paying job @ Firestone already, but he's not able to work there for some reason? Wilson the shelf stocker can just go right in and get a higher paying job making Doo Dads in Davey's old job? If these people are currently qualified to have better jobs, making more money then why are they settling for lower paying gigs? It's not like companies aren't routinely looking to add talent. If they were all capable of retraining and getting these better jobs then shouldn't they already be doing that?

What if the robot that Bobby builds @ Robo World is a shelf stocking robot that can do the same work as Wilson and his 2 buddies? Bobby got a better gig, and so did his replacement Freddy. But now you've got 3 low skilled workers (hopefully)  trying to retrain and fighting for 1 job making Doo Dads. But the Doo Dad factory is automating even more than they already are and is planning a 25% reduction in staffing, so now those 25% semi-skilled workers are also out of work and competing for jobs and training with Wilson and his unskilled buddies. Expecting a 1:1 ratio of job gains throughout the economy would basically defeat the prime driving force behind automation. These companies want to automate to save money.

 

As for McDs, If they have to increase their worker's wages, then so does 5 guys. And Burger King. And Wendys. And In-n-out. They might choose to respond to the changes differently I suppose but none of the changes are particularly good for low end workers. Perhaps instead of raising prices they reduce staffing, or they keep staffing levels the same but cutback hours and make everybody part-time. How are the workers actually benefiting?

5 guys doesn't pay minimum wage. Assuming minimum wage doesn't exceed what they currently pay  they shouldnt have to adjust other than it will be harder for them to recruit people. It was probably mostly a bad example on my part where I should have picked a higher end joint. Lets swap 5 guys with Great Red Macaroni (GRM). GRM makes delicious  handcrafted pasta for $10 a bowl.  You wouldn't normally consider it since you used to be able to get a burger for $2 but now that it's $3 you start subbing that in every Friday. Tasty goodness!

David and Wilson are either not currently qualified OR they are qualified but Freddy is more qualified so Firestone hires Freddy instead. If they can't afford Freddy anymore they go after David and provide the training or maybe he has the skills already.

In regards to automation I agree, a lot of people that can't adapt can and will be jobless. That's the different conversation I mention in the 2nd line of my Suzie Shareholder post. The optimistic version of me says that prices will adjust, new industries will develop (gotta create the GRM 2025 Yacht Championship for the owners of all the machines) and new jobs will created. The realistic me says it's going to be a rough ride until this all gets sorted out. There will be losers and major winners. But you're losing sight of an extremely important point. Tommy Taxpayer should NOT be subsidizing Suzie Shareholder. 

frenchyd said:

Well said  except you missed one very critical point.  This nation has never paid for it’s wars with taxes.  We have always inflated our way out of debt.  

   

That is not entirely true.  During the 50's the upper income tax rates were very high to help pay off the costs of WW2.

And I agree healthcare is definitely the 800 lb gorilla in the room holding back economic growth...  not sure any party has the political will to fix it.  Simply too many rich players involved.

In reply to STM317 :

I like that people are beginning to realize that an increase of the minimum wage is not a simple sound bite.  That costs are different in San Francisco  than Waco Texas  but a minimum wage level has to be the absolute floor nation wide.  

Yet if it’s below the actual cost of living  the government makes up the difference. 

 For that reason alone  people should  favor a solid increase.   The government must not underwrite a corporation’s profits. 

Enyar said:But you're losing sight of an extremely important point. Tommy Taxpayer should NOT be subsidizing Suzie Shareholder. 

I can agree with you in theory. I'm not sure the changes you're suggesting will have the impact you desire. If people are losing their jobs (due to automation, increased minimum wage, or both) but business is still good because RoBOTZ!, then Suzy Shareholder still wins, and Tom Taxpayer is now fully subsidizing the former minimum wage workers instead of McDs or WalMart sharing some of that burden.