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Economics
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>Many of the countries listed in this map have things like universal health care, universal access to education, don't have our ridiculous student loan crisis and have programs to help the elderly where needed.
The US has some of the highest rates of tertiary education in the world, and spends more money on the elderly than any country in the world on a per capita basis. If you're going to make shit up, you should go for plausible fantasies, not things that are easily disproven.
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Economics
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The problem isn't that people can't go to school, the problem is that it costs too damn much and the roi is now so low. I didn't make that up. Most everyone I know has defaulted on their student loans because they can't afford the payments, and these aren't humanities people, they are scientists.
As for "spending more on the elderly than any country in the world on a per capita basis" have your ever thought that it might be not because we are concerned about quality of life but rather that medical care is just so absurdly expensive here?
Guess not.
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Economics
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>The problem isn't that people can't go to school, the problem is that it costs too damn much and the roi is now so low.
my how quickly the goalposts shift! how seamlessly we move from "universal access to education" to "sufficiently high ROI on education."
>I didn't make that up. Most everyone I know has defaulted on their student loans because they can't afford the payments, and these aren't humanities people, they are scientists.
Starting a conversation about data with "most everyone I know" is making things up. Here are the [actual numbers](https://www.ed.gov/category/keyword/student-loan-default-rates)
>As for "spending more on the elderly than any country in the world on a per capita basis" have your ever thought that it might be not because we are concerned about quality of life but rather that medical care is just so absurdly expensive here?
my how quickly the goalposts shift! seamlessly we move from "We squander our riches with a bloated military, tax benefits for people who don't need them, and absurd levels of debt service" to "healthcare is too expensive.
Moving goal posts is a sure sign one is losing an argument.
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Economics
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I live in this world.
It's eminently possible. I'm reporting from my own kids' experience, one from 10 years ago and one from now.
The university I graduated from advertises tuition at $5k per year. They don't say how many credit hours that is, but it'd be 30 hours for two semesters for 120 hours in four years. The local community college is $100 per credit hour - so for the first 60 hours, that's $6k.
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Economics
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You may find the $200 paper above interesting. He uses a similar methodology in section 4.
>I estimate an average SCC that corresponds to the scenario in which CO2 emissions growth is reduced sufficiently to truncate the outcome distribution so as to eliminate the possibility of a GDP reduction that is 20% or greater.12 The required inputs are obtained from a survey of economists and climate scientists with established expertise in climate change impacts and policy. These inputs are used to calculate the benefit (B0) from truncating the impact distribution, and the reduction in CO2 emissions growth (from m0 to m1, yielding a total reduction ∆E) needed to achieve this truncation. Calculating the benefit in turn requires a distribution for the climate impact 50 years from now, as well as an expected impact at a longer horizon (the year 2150), ¯z2, from which the parameter β is calculated using eqn. (3). Calculating the total emissions reduction requires the BAU emissions growth rate m0 and reduced growth rate m1, and both calculations require a discount rate R.
>
>The impact distribution is derived from experts’ responses regarding impact probabilities. Each expert is asked for the probability that the impact, i.e., reduction in GDP, will be 2% (5%, 10%, 20%, and 50%) or greater (and I impose a probability of 1 that the impact will be 0% or greater). As explained below, I fit four different probability distributions to these six probabilities for each expert, and to sets of probabilities across groups of experts.
His estimate still varies widely by methodology. If he uses his full sample data, he calculates a $200/ton SCC. If he truncates the data set to only those answers where respondents expressed high confidence and the outcome was in the range of 0% to 20% GDP loss, he calculates a $100/ton SCC.
I think it very hard for any policy maker to have confidence that any number is right when relatively small changes in methodology, e.g. altering the discount rate by 1% or adjusting for self-reported confidence in the result, results in 2x or greater variation in result.
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Economics
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To be sure, I support a carbon tax. In my view, it's obviously a bad, and most (all?) nations on Earth have objectively bad taxes on the books that we could reduce or remove.
At the same time, I completely understand the frustrations of policy makers here. They have enough trouble with political opposition as it is. The wildly varying estimates for the SCC make it seem like economists have no clue how to price carbon. Which, in fairness, is true.
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Economics
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And what's strangely ironic this time is people are calling for it, and have been calling for it, for nearly a year now. Not just bears and conspiracy theorists, but mainstream economists have been saying that the market is at the brink of correction/crashing, whichever term is better suited. They all mean massive selling anyway.
Leading up to the subprime mortgage crisis was a different story, however. Almost everyone was stuffing cotton in their ear and singing "this time is different" just before it crashed.
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Economics
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It's not complicated. If you work for someone else for your main source of income, you are not middle class.
Edit: ok folks, it's a free country and you can insist you're middle class all you want. But next time you complain about wage stagnation, inflation, or rising rents and property values, remember that the actual middle class benefits from all those things. When politicians harp on about helping the middle class, they're not talking about you.
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Economics
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Except that they don't. People willingly choose to use them but there is zero barrier to entry to a competitor starting up. Scale may give them more visibility and some other advantages, but unlike an actual monopoly (versus the misuse that Sanders, European politicians, and the people here use), there is a huge difference in that any monopoly is self imposed by the consumers **choosing** to continue using them. Same with Google, same with Facebook, same with every other supposed "monopoly" tech company. They aren't a monopoly, they're just popular.
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Economics
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For a second I thought I was on /r/news when I read your comment. Why are you in /r/Economics if you think there is no barrier to entry to make another FAANG company? It is so insanely stupid that I even wonder if you are a shill. You only have to use your brain for a fraction of a second to realize that there is a massive barrier to entry to have a FAANG company. If there wasn't, we wouldn't be talking about FAANG, but the hundreds of a companies that own a reasonable portion of the search market, social media market, computer market, etc.
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Economics
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I'm not talking about a company being another FAANG company, or even directly competing on their level. I'm talking about monopolies, which are related but not the same thing as competing with the FAANG companies.
A monopoly should not and cannot be predicated on being able to immediately compete with the top players, since that is impossible solely due to size.
What you and the rest of the pseudo-Bolshevists here seem to want, is to punish companies solely for growing too big, which, while gaining some support in Europe, is absolutely ridiculous and totally antithetical to anything involving economics. A company being large does mean that it is more difficult for others to compete with them, but it is absolutely untrue to equate that with monopolism, which is stopping a competitor from existing/competing at all, or being able to entry the marketplace.
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Economics
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Question: What is your opinion on Amazon running their retail segment at a loss? Doesn’t that seem a bit like unfair pricing to force out other competitors? Genuine question.
I work at a mall-based retailer and while I admit I have not pored over Amazon’s books, but from a slightly-educated-perspective, it seems to me that Amazon is operating their retail segment at an intentional loss, propped up by their dominance in AWS. So, I suppose my question is two-fold: Do you agree with that assessment? And, hypothetically speaking, if that WERE a correct assessment, do you feel that would be a problem big enough to warrant government intervention to the marketplace?
It’s hard for me to tell whether I’m biased, given that I work for a company that Amazon is destroying, or if my understanding of the situation is correct. Thanks!
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Economics
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I tend to think it is abusive, since they are very clearly trying to gain an advantage on their competitors by underpricing their goods versus cost in a way that can't reasonably be competed against. I'm not sure how rules could be created or enforced against it though, since a company can very easily say that it is growing into a new market or funding growth of its business in a market indefinitely, as long as they are making profit elsewhere. There are many legitimate reasons a company might do this when expanding, so it's a subjective judgment as to where the line is for abuse.
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Economics
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All entry requires the purchase of capital, but if it requires an extremely large initial capital investment with low depreciation and marginal costs, then it's qualitatively distinct from a mere "early bird advantage". Hell, that's literally the perfect environment for a natural monopoly, and Amazon famously runs many efforts at a loss in an effort to use their market dominance to price out competitors.
You're not actually engaging with sufficient detail to even establish the point you're arguing.
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Economics
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Nobody is going to make an argument that Amazon isn't dominating e-commerce currently, but I think the case is clear that they aren't even close to a monopoly and are likely going to see declining market share, even as the ecommerce pot grows.
To the point that we're not seeing a monopoly- Amazon's 4% of US retail still falls short of Walmart's roughly 10%. WMT is investing heavily to grow their share of online retail. Part of their growth is simply making more things available for purchase online. Compare the # of skus available in 2015 to 2017. You mentioned Jet and Hayneedle but don't forget Flipkart which is arguably a bigger deal.
THD is another company with 100B in US retail that is making huge investments to grow their online business. They currently have 2 day delivery penetration in 95% of markets, and just as important, they sell things that Amazon doesn't.
Grocery chains exist in a space that Amazon barely touches from a revenue perspective.
The point isn't to say that Amazon isn't highly competitive or that they don't do what they do well. But a large part of their dominance of the ecommerece sector is just being first. Now that other mega caps are seeing a growing portion of their sales come from online they're investing in that space as well. We're talking billions and billions being spent and a long road to catch up, but the total US retail pot is around $5T so there's plenty to be had.
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Economics
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What numbers are you quoting? It's my understanding that AWS had just under 20B in sales in 2017 which compares to their 180B total revenue. I thought AWS represents ~11% of Amazon's revenue.
I'll find the source and edit this comment.
To be clear, this wouldn't negate your point at all. On the contrary, it demonstrates your point even more.
EDIT: [Check out page 25 of the 2017 Annual Report found here.](http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual)
Also added a line to original comment.
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Economics
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> why is this really bad?
I didn't said its bad.
The possible abuse of market position its the only thing bad in this. You won't know if they are throttling the opponents and you will have to trust their word.
> (like IBM, google and Microsoft) all have service comparable to AWS.
Google App Engine exists and it is nowhere near AWS. Same applies for Microsoft Azure. From my experience people usually don't like current AWS alternatives and if they do usually they never tried AWS.
IBM cloud is 100% irrelevant.
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Economics
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It's because Amazon uses service-oriented architecture for their systems. If Amazon makes a good service for their own use that they can monetize (i.e. AWS), then they can open it up to the public as a product.
So, Amazon benefits from being able to use AWS and being able to sell AWS to customers. If they didn't build their systems this way, then they couldn't also sell it as a service.
It's similar to their warehouses. Initially built to house Amazon products, they now house and ship products bought through Amazon and owned by other companies or people.
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Economics
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Construction is seeing it. I was given a $3/hr raise then moved up the chain to salary making a fair bit more money in a job directly in my degree field. They gave us those raises because the industry is booming and we're being offered jobs at other companies constantly. None of us would leave even though we could get another dollar or two an hour over our raise simply because the company is really good to work with.
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Economics
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Pretty standard. Recruiters will spam resumes without even checking to see if it fits the candidate. I'm in IT, but because one of my job titles was "IT Technican", I'll get recruiters contacting me about roles like "Automotive technician". The idea is reach out to hundreds of people, maybe 10% will express interest, and you will hopefully get paid for filling a role.
I also get contacted about exciting roles like cybersecurity, QA engineering, and systems administration too. You just gotta get used to ignoring the bad jobs and focus on the good ones :)
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Economics
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That's not what he said, though. He made false accusation of name calling. I never invoked any name.
Kinda weird that so many folks in an economics subreddit downvote and try hard to demean people who offer sound criticism of poor financial thinking. If y'all are in such a pissy, vindictive mood, just save it for the Monday morning appointment with a licensed therapist instead of taking it out on myself.
Can't be *that* hard to comprehend, right? Same applies to you, /u/DollarSignsGoFirst and /u/superjimmyplus
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Economics
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I took a 20% pay cut to exit a boss that was toxic but now have better insurance & and 2:1 match on my retirement fund instead of being sub 1:1.
I also have a boss that isn't an asshole now and love the work I do.
I'm willing to make that "sacrifice" in the paycheck if it means I come home at night a nicer guy and happy with my day.
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Economics
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What are you talking about? The mortgage payment is based on the value of the loan and and the interest rate. 125k at 3.9% is a 591 dollar payment on a 30 year loan. In the county my last house was in, if I go to a random real estate website and set the max asking price at 125k, there are 623 houses for sale under that price.
So there you go, I must be lucky... I found 600 houses with less than an 800 dollar mortgage payment in about 45 seconds.
**edit - 169k gives you a 799 mortgage payment. There are 798 homes for sale under 169,000 in that county.
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Economics
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In phx it is a livable wage.
And lol @ people thinking rent has to be 30% of your income. It doesn’t.
Here in AZ, unless you want a lux apartment, landlords don’t go by that. They go by security deposit plus 1st month’s rent. And if you don’t make enough but the landlord is really iffy on letting you rent, despite you telling them it’s affordable, then they’ll ask for 6 month’s rent in your bank account before letting you sign a 1 year lease.
So here, everything is great as long as you can save up 6 months rent (just incase) with your minimum wage job. Which, if you live with mom and dad, will take you 3/4 months.
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Economics
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That's a long time to hold a job, it must be a good one. I can't remember where I read it but it was saying that employees actually need to change their job every few years nowadays in order to ensure that they get fair wages. The ones that don't are getting the glass ceiling and end up stagnating. Unless of course, it's a job that you love. Then no money in the world is worth that position.
Although the mere suggestion that you are starting to look for another job might make your boss want to give you a raise. If they're decent people to work with and appreciate having you around, they'll do their best to keep you.
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Economics
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The big question is exactly where the ideal minimum wage should be for the most social benefit? $20 $100 per hour? Where?
I suspect the number is higher than you would think. For any given business the number is not as simple as it would appear. For instance, in some clothing store I suspect that as minimum wage increased they would cut back on those annoying people who run around trying to "help" you, but not cut back on staff who sold you the clothes. They would also probably try to increase employee training so that they were more effective.
Other businesses are simply making so much profit per employee that they could survive at $40 per hour (but the boss would no longer buy airplanes for a hobby).
Automation would enter into the equation, which would seem to be bad, but with more money flowing in the economy there would be more jobs in other areas.
So I suspect that the answer is so complex that literally only experiments can truly answer the exact number.
But I will also suggest that when you increase the minimum wage that you increase the economy enough that it prepares the economy for another increase (ignoring inflationary pressure) as a huge amount of an area's economy is determined by the amount of disposable income people have. At $7 per hour there is no disposable income. At $20 there is far more. And this is where I think the calculations for minimum wage should be set. It should be a number that leaves a typical household with x% disposable income as opposed to the classic where they are balancing things like medicine against food.
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Economics
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Can you provide an example where a business is “making so much money per employee” that is anywhere near the minimum wage? I’d imagine Google’s profit per employee isn’t some astronomical number either in relation to an engineers salary.
Looking at FB’s numbers it appears they profit $180k per employee which probably gets paid $150k on the low end. This is for highly technical and specialized labor.
I can only imagine how miserable it would be if your selling burgers/bottom-retail what their margins are.
* employee cost: $12/hr
* additional revenue per low skilled worker : $15/hr
But do enlighten me with some company examples
sources: First links on the google search for “google earnings per employee “
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Economics
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Quick question, only really related to your first paragraph, but say minimum wage doubles, would wages that are *already* above the new minimum wage stay the same? If so, what impact would that have? Say you raise minimum wage to $50/hour and there’s an engineer making $100k per year salary, you now have an engineer making the same money as a fast food worker, or would the engineer’s wage have to go up too? And in that case, wouldn’t that just be inflation on a massive scale?
To be clear, not trying to argue with anyone, just wondering what effect raising the minimum wage would have on wages that are already higher.
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Economics
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When you hire someone, you're basically taking some of their work and keeping it for yourself, as profits. The higher the minimum wage, the less you can keep.
​
The economy is basically a big zero sum game, when you view the GDP graphs they'e basically completely linear if you remove productivity increases (steady 2.3% year over 70 years) and population.
​
So you can in theory raise the minim wage to about $27/hour, which will hit the average income in the US. At that point you have a communist country. No profits left over to keep to yourself, and no way to pay others more than $27/hour either, so everyone gets $27. Communism. You want something where there is sufficient money left on the table so rich can play their games of being rich and compete, but where poor can live a non-stressed life. If you don't want to play the capitalist game, so be it. Make minimum wage and enjoy life. If you want to play it, go for it. Work hard. As it stands we walk all over the poor and create a miserable life for those stuck at those levels, so we can have higher scores in our bank accounts. A better balance is definitely needed, where that balance is, is kind of hard to tell. Clearly not where it is.
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Economics
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You’re missing the general point here. You can’t dictate with a blanket law what a specific job “should be earning”. If your company only makes hot dogs for Sunday park ball games (the corner park not a stadium), then how can you realistically afford $15/hr? Let’s assume historically an average person can sell 5 hotdogs an hour, and brings $15 as revenue. What’s the point of even hiring someone at this level?
While that’s a super simple and silly example it illustrates how stupid even talking about wages is, much less even pretending to know what’s “fair”.
Some people do $9/hr worth of work and some do $250/hr. But even then, let’s pretend you could do $30/hr worth of revenue and are being paid $9..... well, maybe you should move/change jobs/ ask for a raise. A smart boss/manager knows that “Jimmy always does well and sales increase when he’s on shift”. They are fully aware of this, down to the dollar.
But why would you hire anyone or perform an activity that only has revenues of $12 and the minimum wage is $14? You wouldn’t. The same way you wouldn’t buy an iPhone from bestbuy for $100000 when you know next door you can buy it for $500.
Edit: English
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Economics
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Actually it's because investors continue to inject cash by the buying of stock, which keeps them afloat.
That doesn't mean they aren't living on the margins already. Profits are a function of revenue and expense. Cash you get from stocks are a separate balance sheet. If the cash investors are providing to keep the company afloat and allow for growth so they see a return on their investment go towards making some people feel good and not making the company more productive, they'll sell their stock and by extension that cash, which would lead to collapse.
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Economics
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I work for a car wash. Last I heard it costs ~20-30 cents USD to run a car through the wash, and I believe that was for the biggest wash we offer.
The cheapest wash we have is $6 and that's just a rinse and run type deal that involves no employee labor, and that's a sizable portion of our business. The most expensive wash you can buy is about $50 and it comes with armor all on the tires, on the inside, on the trim, and rain-x on the windows. We buy those chemicals in bulk and the price customers pay for those is $5, $8, $2, and $12 respectively (all rounded for even numbers.)
I do not know what those chemicals cost for us to buy but I do know they last quite a while. I would be very confident saying that they get more than their moneys worth for each barrel/bucket of chemical. It takes ~30 min to do the biggest package you can buy depending on how dirty the car is. So I make $9/hr and they have to pay me $4.50 if it takes me 30 min to do it.
I was working for them when fed min wage was raised in 2009 to $7.25 and our prices for all packages have increased close to $10 each, probably a hair less but I flat out can't remember what the prices were back then exactly. I worked there through my last two years of high school, my first bought of college, left for a different job after college. Decided to go back to school so went back to wash cars to get me by.
I make $9/hr atm and 6% on extra dollars I sale. So a base car wash I don't make anything on but if they buy tire shine, AA, etc I make 6 pennies on the dollar for extra services. Or if you detail you make some tips.
Back to the earlier paragraph. If it costs 30 cents to run it through the wash. We'll add two dollars to that being generous on estimating cost of extra chemicals (tire shine etc). $4.50 for my half hour of labor and I think there's about $25 dollars in extras in that package, maybe a bit more, but I know I might make 2$ in commission on that sale.
So that is $8.80 in overheard for a $50 package. I think they would be ok if min wage went up.
I know when I went back to school and work I was work 36-40 hrs a week, 6 days a week and honestly losing my mind. I was barely scraping by paycheck to paycheck. Luckily I was able to ditch all my financial obligations from my pre-back to school life eventually. I moved back in with my parents, I sold my truck to downgrade my payments, I ditched everything I could. I only work one day a week rn and that's just to cover my gas for commuting to school. I've been very fortunate to have help from my parents though. They're paying my car insurance for me (which has doubled in the past couple of years despite a clean driving record of 10 years) so I don't have to kill myself. I'm on mobile so I'm having a real hard time keeping my train of though but suffice it to say that I would work more if it had more value to me. I'm not gonna kill myself working 40 hours a week when its 100 degrees outside or freezing to make about $300 bucks a week when that honestly just doesn't stretch that far anymore. I'll work bare minimum and focus on school and then go from there. But I realize I'm one of the fortunate ones.
Sorry if this got rambly.
Edit: Just wanted to clarify that this is mostly estimation on my part. I know all the prices by heart but I'm not 100% sure on all the overhead.
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Economics
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You’re missing the larger things like rent, insurance, administrative costs, and I’m sure there’s a longer laundry list of costs you’re not looking at.
Then you didn’t quite describe the sale numbers either. How many washes are done, or better what’s the average revenue per wash and how many washes are done per month? What’s the total employee count and all their associated costs?
Then when you have a clearer picture, you will notice that something like a car wash is a grinding business to be in to make very very little money. Not to mention that any 10 year old with a bucket and a hose can compete against you. Add to that everyone else in the same “pro” business doing the same low labor detailing and cleaning that again a team of 5 teens could do.
If a 10 year old can do the job, you’re not exactly doing much of value. This is coming from a guy who used to be a bagging/cashier at a grocery store and some retail when I was younger. The sooner you realize it, the better. Decide what you can do to go up the value chain rather than competing against the local cheerleaders doing a Saturday car wash.
Lastly, if you’re extremely confident you can do a better job and you deserve more money then go prove it? Go start your own small thing. Best of luck, that’s the whole point of this. Get some skills and move up or out.
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Economics
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But you can and we do dictate a minimum amount a job has to pay to be livable. Businesses pay people less because they can, and rarely hire nearly proportionally after an influx of money. If you know you need two employees to cover the stadium to make $200, you might still pay them $5 because you know there are people in your town desperate for work, even if that's not livable. And, as a result, when minimum wage goes up, the struggling hot dog stand may actually find it has more customers. When many of a company's employees need further government assistance because their wages are so low, the government subsidizes an unsustainable business.
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Economics
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There is no objective standard for 'livable' that applies generally. It's the same problem that arises calling for 'fair' wages. There is no objective general standard for the fairness of a wage. The same goes with 'livable', everyone has different needs and financial obligations. So what is a livable wage for me may not be for you. And there isn't much sense in demanding, especially as a moral imperative, businesses to pay someone a 'living wage' when the wage it takes them to live is actually less than what has been stipulated.
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Economics
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While the exact details are obviously open to argument, it seems pretty obvious that the minimum wage should be at least high enough that government income-based aid is mostly going to people who are not currently working ([a $1.17 increase in minimum wage corresponds to a million people no longer receiving public aid and over $5 billion saved in government assistance](https://www.epi.org/publication/wages-and-transfers/#epi-toc-6)), because again, the alternative means we are subsidizing wages that are unlivable.
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Economics
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Why? Not everyone needs government assistance on less than a living wage. I've worked jobs for years that paid below a living wage (in high school, college, and recently a side job), but if businesses were only allowed to pay someone the amount necessary to live solely on that wage, then those jobs I worked wouldn't have been available to me. In fact, they would be made illegal. That, to me, is absurd.
On the other hand, the people who are working below the estimated living wage are, to me at least, the exact people I want to receive government assistance. They are working and benefiting society. Non-working, able-bodied people are the ones that seem like they deserve assistance the least.
It seems like a far better alternative, rather than demonizing businesses and stirring up the rabble over minimum wage, to abolish the minimum wage altogether (to increase the number of available jobs) and give assistance to anyone who works but remains in poverty.
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Economics
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Most people earning near minimum wage are [over 30] (http://www.pewresearch.org/fact-tank/2014/11/05/making-more-than-minimum-wage-but-less-than-10-10-an-hour/), and many programs that pay college students minimum wage do so mostly because they can, not because the extra couple hundred dollars over the course of a semester would make or break their business.
They would happily fill those same positions with college students if the minimum wage was less, and pay them less. Not to mention, if your primary concern is college students not needing spending money (though let's be real, most interns earn [far above minimum wage](https://www.indeed.com/salaries/Intern-Salaries)), there's always the age-tiered minimum wage system used in Australia.
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Economics
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Im not sure what this data is supposed to prove about the minimum (or living) wage. The largest single group is 21-30. Nearly half are under 30. And nearly 20% are 51 or older. So more than 2/3 are either young people or elderly. That sounds like a lot of young people starting out their working life and old retired people working low wage jobs like Walmart door greeter (the link doesn't provide many details about the elderly group, so its hard to draw any conclusions).
>many programs that pay college students minimum wage do so mostly because they can, not because the extra couple hundred dollars over the course of a semester would make or break their business.
I'm not sure what this is supposed to mean. My point is that more people could be hired if there were no minimum wage. For instance, a business owner could hire someone to check their emails or answer their phone. If that service isnt worth the minimum wage to the owner, that job never gets created. It shouldn't be illegal to hire someone to do these sorts of tasks for less than what some bureaucrat (or a body of ignorant voters) has decided is fair.
> if your primary concern is college students not needing spending money (though let's be real, most interns earn far above minimum wage),
The point is if there was no minimum they could hire more people to do jobs that dont, at this time, exist at all. Whatever the business owner decides they dont want to do themselves they could pay someone else to do.
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Economics
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I think questions like this are excellent. They also probably a so subtle and multi-variant that it allows people who are pro or anti this issue to find what they want.
I can add a second tier to your question. If you are in an industry that will benefit from the extra disposable income and normally earn 100k then I suspect you may end earning more. If you run one of those cash loan places you probably do worse (and good riddance)
Then there are the very long term benefits that would be brutal to measure; such as growing up in a household with a bit more disposable income probably results in better nourished kids turning into more productive adults. Kind of like crime falling 16 years after Row vs Wade.
But my inner Bolshevik doesn't like to see people trying to raise a family on slave wages while the owner of same business is sending his kids to university in shiny new BMWs.
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Economics
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Exactly, there are probably some businesses that literally can't afford to pay minimum wage. I doubt that there are many though.
Even for those burger places and whatnot that are just scraping by a minimum wage hike across the board is still a level playing field. If every burger joint in town has to raise prices at the same time then a minimum wage hike doesn't create a competitive disadvantage.
Years ago there was a $0.10 CDN (0.07) minimum wage hike in Nova Scotia Canada. I remember hearing the local radio station talking to various small business people and saying that it was going to be devastating. I knew two of them and they were leading gold plated lives; great cars, houses in the best neighbourhoods, travel all around the world. Boo hoo. The crazy part is that that 0.07 cent increase per hour would add up to 140USD per year which was enough to make a difference in their lives. The owners could spend 140USD without even noticing.
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Economics
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Yes and no. I suspect with a business that is pretty commodity such as fast food, then an across the board increase in minimum wage would potentially have an across the board increase in prices.
But often there are other options. For instance, if movies become too expensive, people will spend their entertainment money elsewhere.
And then there is automation. Enough wage hikes and automation becomes very attractive. But to me this last is not a loss in that once an industry undergoes an efficiency overhaul such as this that competition causes lower prices for all which is a societal good.
For instance, Henry Ford did two great experiments: One was to make cars way cheaper which had many huge positive effects on the economy (unless you were part of the horse and buggy economy) and he also notably raised wages. He had the advantage of being one of the biggest employers in the area so it was close to a minimum wage hike experiment. Many consider his wage hike to have been a resounding success. No doubt there are few who disagree but probably to support some theory of their own that his experiment disproved.
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Economics
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>Im not sure what this data is supposed to prove about the minimum (or living) wage. The largest single group is 21-30. Nearly half are under 30. And nearly 20% are 51 or older. So more than 2/3 are either young people or elderly. That sounds like a lot of young people starting out their working life and old retired people working low wage jobs like Walmart door greeter (the link doesn't provide many details about the elderly group, so its hard to draw any conclusions).
Are you seriously suggesting 51+ is elderly? Moreover, are you saying people working into retirement age don't deserve to earn enough to survive? Also, what, only 30? That's not an age when you should be just getting started with your career, unless you're a PhD or doctor and then you're not generally making minimum wage. If your claim is that minimum wage is for people who don't need the money anyway, then the fact that the substantial majority of people on minimum wage are adults well out of college contradicts that.
>I'm not sure what this is supposed to mean. My point is that more people could be hired if there were no minimum wage. For instance, a business owner could hire someone to check their emails or answer their phone. If that service isnt worth the minimum wage to the owner, that job never gets created. It shouldn't be illegal to hire someone to do these sorts of tasks for less than what some bureaucrat (or a body of ignorant voters) has decided is fair.
But that's not what happens. People don't create jobs because they feel like spending money, they do so because there's a need and they will pay as little as they can get away with. Businesses can absorb increases in minimum wage labor costs, and those that can't are replaced by businesses that thrive because of the additional people now able to afford to buy things on non-starvation wages. As indicated by the article you're commenting on, the empirical results are positive all around: higher wages and more jobs
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Economics
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It's notable that this does not say for whom the productivity happens or what it's used for.
3 guys produce 1000 automated warrior robots to kill anyone that gets uppity while everyone else works as slaves, or everyone is equal but only produce 700 automated space robots to colonize mars.
Productivity is nice, but it doesn't help most people a lot if the productivity only benefits the wealthiest 1 in 10 000.
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Economics
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I would not consider my argument moving the goal post.
"Minimum wage hikes are working as hoped" implies that we've reached a conclusion that minimum wages fulfill the intended effect of increasing pay without increasing unemployment.
I've presented an argument that even if the economy fares well initially after a minimum wage hike, it doesn't mean that it won't have an effect on the rate of unemployment during a recession.
In other words, I'm saying that the study does not prove that minimum wage does not increase unemployment. I'm saying they reached a conclusion too easily. No goal post has been moved.
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Economics
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Only 2.7% of hourly workers make the federal minimum wage or less. And people under 25 comprise 20% of that number.
So at the current level it’s a small issue. Most proposals want to gradually raise it to 10-15 an hour, which at worse would have a minor impact on employment.
A few economists believe the impact on employment will be positive, but nearly universally they believe the impac will be small (whether positive or negative), if done gradually.
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Economics
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I don't think the overall policies of the multi party system, or public funding of parties (as opposed to bribe-funded parties) would be a negative in either of those countries. Nor do I think the differences make it unfeasible to support strong unions or employment rights.
Nor would it be unfeasible to have a governmental collection agency instead of entrusting debt collection to predatory companies.
I'm honestly having a hard time thinking of any particular Scandinavian policy that would be harder to implement because of geographical, cultural or diversity differences save possibly the gun regulations, but you can probably safely borrow those from Switzerland.
Which particular idea do you think wouldn't leave the countries a better place to live than they are now due to geographical, cultural or diversity differences?
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Economics
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Wage hikes have little to do with recessions, but people like more money than less money. When deflation or a decrease in the money supply occurs due to the easy money drying up and bankruptcy and default cases rising (the bust), prices of good and services decrease due to the purchasing power of money rising (less money going after the same amount of goods or capital). People are able to buy more things. If wages are increased during the boom phase, then, for an employee, it is psychologically difficult to accept a lower wage when the recession occurs though not impossible. Most people don't understand the difference between real and nominal wages, they only see the absolute (e.g. $15/hr) amount and that's what they care about.
In this since, it may be tougher to lower nominal wages in a recession which is where the term sticky wages comes from. However, as one factor in a quick recovery of a recession, wages need to be flexible and be able to adjust to the new conditions otherwise the recession will be prolonged more than it otherwise would be. Minimum wages in this scenario reduce this flexibility and if businesses can't or do not want to pay the higher real wage during the recession or after then those jobs will be lost and will likely be consumed by another employee (wearing many hats) or given up entirely.
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Economics
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I think the real question is why? What happened around 1997 when we see there too series diverge?
Blaming taxes or trade or whatever is too simplistic and probably wrong because they didn't abruptly change that year.
Did the way they are calculated change and this is an artifact of, methodology? Was three some big regulatory change? Is it just the the graph range and if you go further back does it diverge again, so this is a result of cherry picked data?
I don't know but I think that is the real question this brings up.
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Economics
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A few big things that have happened since 1999-2001:
1. The internet, and the explosion of e-commerce.
2. A federal budget that went from a $200B surplus in 2000 to over $1T deficits.
3. The explosion of global value chains, goods assembled from parts and materials coming from all over the globe.
4. The 2000-2001 bursting of the dot-com bubble and recession, and then the 2007-2008 financial crisis and larger recession.
5. Significant changes in tax laws, making them more favorable to corporate profits and higher income earners.
6. 9/11 and the resulting impacts on US political economy
I don't think it's necessarily one thing that changed at one moment in time. I think you had an economy that was transitioning more to service jobs. Some of those service jobs were in retail, a sector which has been massively disrupted in the last two decades. People and companies with highly specialized skills now have global opportunities. While those with more common skills are competing with others like them around the globe. There is very little fixed capital investment being done in the US, plants and such are built more overseas. Even government deficits help to drive trade deficits, possibly contributing to all of this.
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Economics
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Assuming the starting point isn't poorly chosen, that is a pretty drastic change in one year. It turns on a dime in 1997. It isn't like there was some meeting one morning and all business owners just agreed to start keeping all the money for themselves because they felt like it. For such a drastic change you would need to find something that would cause it - probably equally as drastic.
Or the starting year is badly chosen.
Everything you mentioned was gradual. It isn't like the supply chain all of the sudden shifted in 1997.
Tax regime didn't drastically change that year. That was 1993 with mixed tax cuts and raises, and 1997 was a small cap gains reduction with some small increases in other areas, nothing major and nothing we didn't have before.
The series is poorly presented the way it is based off an index year. One bad year and it throws everything after it off. We could be back on track and it would still look bad. I think a better way to present it would be YOY change.
Edit: his revised chart with per capital GDP and total comp doesn't really change the story. In 1997 (98?) things go sideways.
If you aren't trying to figure out what happened at that point in time, and instead are railing against you always perceived enemies like taxes that didn't really change at that time, your going to come up a wrong conclusion.
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Economics
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There's no big change in 1997. The first graph is set 1993=100, so if you set things equal in 1993, of course you are going to see some divergence shortly after. But that divergence isn't unusual.
There's more divergence when real median income peaks in 2000 and then falls in 2001-2002, but even that isn't *that* unusual, in fact it seems to happen with most recessions; median income usually peaks *before* the recession.
What is more unusual is the failure of median incomes to recover after the recession. And the big tax cuts of 2001 and 2003 may well play a role in that, especially if almost 25% of the benefits went to the top 1% and less than 10% of the benefits to the middle 20%.
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Economics
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>And the big tax cuts of 2001 and 2003 may well play a role in that, especially if almost 25% of the benefits went to the top 1% and less than 10% of the benefits to the middle 20%.
And this isn't what if said about every tax cut? Was there something uniquely bad about 2001 and 2003? that caused this uniquely different recovery?
It would be interesting to see the chart of previous recoveries, but when compared against that and the structure of the tax cuts not being much different than any other, I highly doubt it makes the story very compelling.
If the story is always "those tax cuts only went to the wealthy" then when something different come along, it is really difficult to apply the same narrative to it.
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Economics
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1. It's not true of every tax cut. The tax cuts in the 1990s, for example, were more broadly based.
2. It's not only that they went mostly to the rich, it's also that they were mosly unfunded, and increased deficits. Increased budget deficits increase the trade deficit, and reduce domestic investment:
https://fred.stlouisfed.org/graph/?g=l89N
I'm not saying the tax cuts are the only story here, but they certainly seem to be part of the story. Some of the other things I mentioned may be even more important.
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Economics
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> Now, instead of buying a focus made in China the US consumer will be spending those dollars buying one of the many cars made in the US
This would only be true if the Focus was the only car made in China in the entire car market, which it obviously isn't. At the price range of the Focus, foreign brands dominate US brands, it's trucks and heavier duty vehicles that American manufacturers are good at. In the end what happens is just less options for the consumer, and possibly less money in the American economy, if those consumers decide to substitute the missing product with a foreign brand.
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Economics
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Not necessarily. It depends if the increase in prices is greater than the increased economic activity caused by now having the manufacturing. It is a spectrum.
In addition, it is not guaranteed that prices will be raised or by what amount. Lastly, you do not account for long-term effects. Comparative advantage of mineral deposits, which is what existed when the theory was created, is fairly static. Comparative advantage of knowledge, infrastructure heavy, etc, driven activities is dynamic. So, you can build a comparative advantage via protecting an industry and then later reap economic rewards greater than the cost of protecting the industry originally. Why? Because the labor market changed, knowledge grew, capital was invested, network effects were created, etc.
It is much more complex than the comparative advantage theory based on mineral deposits. Some examples of said countries that gained network effects, changed labor markets, etc through such protection would be China itself which was the fastest growing economy in the last 30 years.
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Economics
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I am not sure you understand. Those foreign brands you talk about like toyota, nissan, etc. Those are all American made cars. American made cars with a foreign trademark on them. Some are also made in mexico. Which, that is a better alternative than sending that activity to China. Most cars americans will be buying are made in the US. Though, far too many are not too (probably 30%). With tariffs, far more will be american made as foreign brands will need to build factories in the US.
Protectionism of industries works. That is how china got a car industry in the first place. Industries that utilize lots of knowledge, capital, specialized labor, etc, are benefited from protectionism. It allows them to develop the labor market, capital investment, bulid network effects, etc.
Over time, a country can *build a comparative advantage*, which is what has happened in China and one reason why it has been the fastest growing economy in the last 30 years.
The tariffs can cause immediate pain, but long-term it ensures that rivals do not develop comparative advantages over the USA.
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Economics
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Not sure what you are talking about? Johnson amendment has no effect on cargo ships. Cargo ships likely lost competitiveness in the US because they utilize steel. The US ran out of good iron for making good steel a long time ago. In addition, it's energy costs (steel requires lots of energy) is too high due to EPA regulation. China developed advantage in ships because due to protectionist policy it developed a big manufacturing base and needed to construct cargo ships. It puts tariffs on foreign built cargo ships, so it creates no market for US builders and thus got to build its industry. It has little environmental protections, so it can create steel much cheaper than the US. Etc
Tariffs are raw goods such as steel, which is nearly a raw good are never good. This is the classic comparative advantage model made hundreds of years ago. When tariffs can be effective and it becomes more murky is on more complex products that are less based on raw good extraction and assembly and more based on know-how, capital investment, network effects of an entire manufacturing supply chain, and specialized labor.
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Economics
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> Industries that utilize lots of knowledge, capital, specialized labor, etc, are benefited from protectionism.
This is only true of a country's domestic firms are globally behind in their knowledge and specialized labor, because protectionist policies will make foreign goods artificially expensive in order for domestic makers to remain competitive.
On the supply side, all tariffs do is increase the barrier to entry and entrench existing firms, decreasing competition. On the consumer side, tariffs will inflate the price of goods and decrease selection. China wants these effects because their technology needs to catch up to us, which the US does not. Pursuing a trade policy designed for a developing country's problems in a developed country with a totally different set of problems is stupid.
> long-term it ensures that rivals do not develop comparative advantages over the USA.
Tariffs only help foreign manufacturers to *catch up* to the US, the US needs to do the opposite to remain competitive.
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Economics
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> This is only true of a country's domestic firms are globally behind in their knowledge and specialized labor, because protectionist policies will make foreign goods artificially expensive in order for domestic makers to remain competitive.
The result is that a domestic market always loses its competitive advantage. Case in point: China imposes a 25% tariff on all US made cars. US imposes 0% tariff on foreign made cars.
It makes sense to place the factory in China. It has full access to both china and the US. If it is placed in the US, then it cannot serve China.
Now, all the new factories go to China. It must be that way due to the inequal tariff policy. The transportation costs are way less than the 25% tariff and economies of scale benefits and capital expense do not justify two separate factories. So, the only logical choice is to build the factory in China to serve both markets. Keep in mind, it was NOT due to china having a comparative advantage. If china's ability to produce cars is within 25% of the US's ability and the markets are similar size, the there is no justification for a US factory even if the US is a more efficient producer (this is important because this tariff in China made US consumers poorer as the US may be 10% more efficient at car building, but the factory still must go to China because capital costs and economies of scale cannot justify two factories).
So, after 10 years, 20 years, 50 years, you get a situation where cars are no longer built in the no tariff country. They all get built in the tariff country. And, with it, so goes all the engineering and design jobs in time. And, because the cars are made there, so there goes all the manufacturing of all the sub-components (this is called network effects).
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Economics
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Ironically China had just cut foreign car import tariffs from 25% to 15% on July 1st, a futile attempt to defuse trade tensions with the US. Right after the cut, the White House announced plans for a 25% tariff hike on $200bn plus Chinese goods, so China hiked car tariffs specifically on US-made cars up to 40%.
The sharp tariff cut made July a new record high for monthly foreign car imports in China, which is still one of the largest growing auto markets in the world. The vast majority of those cars were exported from factories in Europe and Japan.
Meanwhile, US vehicle sales peaked in the early 2000s, and aren't expected to get substantially higher in the future - possibly forever. The US is already a very well-served, saturated auto market.
Of course it's debatable whether emerging markets should really aspire to the level of per capita vehicle ownership as the US, but from a for-profit perspective, US auto manufacturing needs to be export-oriented, and the recent tariffs aren't helping.
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Economics
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This only makes sense because the Chinese market of 1.7 billion people is huge, and US companies make a killing *despite* the increased costs of the tariffs, because Chinese carmakers just cannot compete. This is the big caveat you keep ignoring. If you flipped the scenario, where the US has a 25% tariff and China has 0%, keeping all other factors the same, all you'd do is make cars more expensive in the US. Carmakers would *still create factories overseas*, because US specialized labor is so much more expensive. If you then prolong this over 10, 20, 50 years, all you'd do is make the US car market super non-competitive and technologically behind, because the rest of the world would have had a long time to catch up and surpass our advantage by competing in a freer market.
I think you're conflating jobs with market competitiveness. More manufacturing jobs in a particular locale does not equal a competitive advantage in the market. Tariffs can increase domestic employment *if the demand is there*, or at least won't increase outsourcing. However, doing this will *definitely* increase the price of goods and decrease competition, which in the long term, harms the local economy and eventually causes it to lag behind in technology and innovation.
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Economics
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The US has never had a steel shortage of any grade, there's no shortage of ore, or the energy to smelt it. The two biggest changes to the ship building industry for the past century was the Johnson amendment, and the ending of subsidies by the Reagan administration. Both were destructive the the industry.
China isn't creating advantage by having tariffs. They're paying massive subsidies to their own builders. They also import large portions of their iron ore from the international market (and Utah), though they do have cheap coal and labor. The biggest difference with the US is the labor cost, which is about 20x higher in the US. Total costs otherwise are negligibly variant. And the EPA is not what makes the difference.
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Economics
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IDK about the car stuff, but China's growth in vessel production came in splitting the biggest ship construction company, deregulating the company/industry, allowing foreign direct investment, employing foreign experts, subsidizing their shipping industry, supplementjng their own steel industry, and supplementing commercial shipping operations. Steel may have played some part in America, but vessels are low tech monsters. Some systems like engine control, navigation, cargo control, and propulsion are still manufactured and designed in America, but the actual construction of ships have a fairly low bar to entry.
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Economics
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> US auto manufacturing needs to be export-oriented, and the recent tariffs aren't helping.
The US is not in a great spot regarding exports. The countries of western Europe and Japan are really good at making high end products and the US can for multiple reason not compete in this segment. These countries invest more money in their workforce, in their infrastructure, and in the end they have better ressources to work with.
The US way of doing business tries to keep costs down, and this is such an obsession that a lot of infrastructure remains unfunded, a lot of education remains unfunded, and so on. And in the end this leads to an inability to compete at the high end.
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Economics
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The US ranks third in the world after Germany and Japan in dollar value of cars exported, so I wouldn't say it's "not able to compete in this segment." Debates about education aside, worldwide car sales are monopolized by just a handful of countries, with the whole continent of Africa contributing a mere 1.2% of global car exports.
There are huge swathes of the world that are all-import auto markets, and incredibly under-served at that (if you consider one man, one car a goal-worthy standard). China is already laying the diplomatic and logistical groundwork to capitalize on those emerging consumer markets far more extensively than the US.
I agree the US government's spend and tax priorities are more often than not irrational, but to say US autos have nowhere to go and no means to export is already at-present untrue.
As for American businesses being exceptionally stingy when it comes to cutting costs at the expense of human capital, I'm not sure Japanese or European businesses are any less interested in keeping costs down, and it's tricky to mix particular business practices with how much a country values public spending.
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Economics
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Of course the US is not completely bad, it just isn't as good as it could be.
When looking at the US from the outside, it is very obvious how the political system is preventing important reforms. For example, the Obamacare reform.
Everyone is able to understand that a country needs universal health care in order to be amongst the top economies. But this is not the way US politics works, instead of finding solutions, US politics creates these crazy political ideologies.
*US politics does not do what is necessary, instead US politics follows political ideas, and that is a grave mistake.*
All this believing in ideas prevents much needed reforms like healthcare from happening. All this believing in political ideas is in the end the reason why the US is economically inferior to countries like Germany.
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Economics
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Isn't crash insurance at all time highs right now? I thought I remembered reading a headline somewhere that people were paying through the teeth to protect against sudden drops.
The stock market has just been going sideways this year and is barely in the green. I don't know if this is what they call a "correction" and if things will fire back up again full force as buybacks continue, but I'm starting to get a feeling that it can't last much longer. Although on the bright side unemployment is at record lows...
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Economics
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Personally? I have thought Apple's tech has been overrated for the last 5 years.. But, here we are. I have since decided to let the average consumer tell me when Apple's tech is overrated...
Also, in general, it's hard to guess if smartphone and computer technology will become stagnant in the near term.. Did most people 20 years ago expect smartphones to be where they are today? I believe we'll hit some limits with silicon soon on the SoC level, but I don't think we'll hit limits on how we design things and how tech evolves anytime soon...
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Economics
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I was specifically referencing how much more we can shrink our transistors before we hit practical limits. I agree there's still lots of opportunity in how we use and design with Si, just not how much more we can shrink it.. And once we hit shrink limits, we might see more saturation at the design level since more people will be able to design and manufacture on an even playing field.
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Economics
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Comparing two seemingly unrelated metrics might be useful as a benchmark in some circumstances, but it has to be some sort of convention that is agreed upon to be useful. I guess you could imagine comparing GDP growth to unemployment to determine if the economy is doing well or not, for instance. But there is no such convention here (I've never seen any comparison between the GDP growth rate and unemployment in any context, ever). And to make matters worse, his statement isn't even true.
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Economics
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Yeah it can be quite easily hyperinflated by the rich to make it look like a country is doing better than it actually is. India posted a shockingly high GDP last quarter (I can't remember exactly what it was) but from what I hear on the ground, the government isn't allowing any of it to uh... "trickle down" or so the theory goes.
Now I know GDP isn't that big of an issue, but this isn't the first time I heard the statistics are being fudged. The other time it was a friend's account of several of her economics professors. Numbers are being manipulated.
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Economics
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The [monthly employment report](https://www.bls.gov/news.release/empsit.nr0.htm) is more detailed than the one number that the media picks up and pushes. It’s harder to force a partisan narrative and perspective if you have reams of quantitative and qualitative data to paint a nuanced picture.
I’ve got an unsupported theory that people at focus on the simplest indicator because it’s easy to feel. Tables with their columns and footnotes and tiny numbers are the leading cause of glazed eye.
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Economics
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Yes, it is true. Its two statements that can be compared. What is the annualized GDP growth and what is the unemployment rate? Is the annualized GDP growth higher or lower than unemployment?
I don't understand the mental gymnastics involved in stating that he is wrong. You may dislike the speaker, but the statement is accurate. Anything else is someone admitting that they allow their personal opinions to supersede logic and fact.
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Economics
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Where do most people live and work? I’m not being snarky, I’m just saying we need to adopt policies that benefit the greatest number of people with the greatest frequency.
This is part of the problem we have with national politics. Everyone wants us to remember it’s unfair when a city of millions dictates to a town of hundreds/thousands, but no one seems to mind that the opposite is often true and it’s a far greater injustice and does far more harm.
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Economics
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>This is part of the problem we have with national politics. Everyone wants us to remember it’s unfair when a city of millions dictates to a town of hundreds/thousands, but no one seems to mind that the opposite is often true and it’s a far greater injustice and does far more harm.
Except this isn't true at all in this example. High cost of living areas are free to set their own minimum wage at whatever they would like. I honestly don't see an upside to a federal minimum wage and the downside is enormous to people trying to start or staff businesses in extremely low cost of living areas.
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Economics
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Seems like there has to be a better way than federal or even statewide minimum wages.
As somebody in one of those lower (though not terribly low) COL areas, I've seen how this has affected organizations (I'm thinking non-profits in particular) who were already struggling to pay their employees competitively - not well. Who wants to be the boss when you can have a fraction of the responsibility for nearly all of the pay?
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Economics
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Cities and counties can generally set their own minimum wage, as for example was done in this study's data points. But if, for example, there were a national or statewide minimum wage, then rural areas *could not* adjust lower, but cities could go higher as needed.
The argument that cites rural and suburban areas with lower costs of living and prevailing wages isn't an argument against all minimum wages, it's an argument against overzealously applying blunt instruments where a more measured, tailored approach is better.
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Economics
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Fair enough. I think the argument is a $15 minimum wage might not make sense for the entire nation, but neither does the lower minimum wage we have now. That we can point to an area where this might not be true doesn’t really change the argument.
Another thing to think about is if you leave it up to individual cities/regions, will the pay be what’s best, or will it be the lowest the region can bear? It’s possible that we might see more predatory pay structures than “fair pay”. This might not be the case, but leaving the pay up to the area has issues as well.
I’m not actually advocating for this particular pay increase, just that one might make sense.
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Economics
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> ...the reason I don’t want to leave it up to the local areas is that they might not have the workers interests at heart.
Maybe not, but I personally don't see this as their responsibility. If somebody doesn't like the wages offered by a particular business, they should work elsewhere. If they believe that they can't work elsewhere, they should determine why that is. If they really cannot find work elsewhere and it's due to circumstances beyond their control, I have to wonder why businesses/organizations are punished for that.
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Economics
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The upside of a federal minimum wage (or most federal labor constraints) is to eliminate a "race to the bottom" where different states try to use lower labor costs to incentivises job creation, forcing neighboring jurisdictions to follow. That said, it is certainly clear that the federal minimum wage should be a floor not a common value. Any one arguing for a $15 federal minimum wage had better also think high cost jurisdictions like San Fransisco should have higher minimums, like $30. It should also be clear that a change that drastic should be implemented slowly.
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Economics
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Picking up and moving to another region isn’t easy when you are poor.
And it’s my personal belief that we value capitalism because it’s a system that benefits the population. If it doesn’t, and the population suffers, then we need to step in. Not lightly, and ever so carefully, but sometimes we should.
A really good example is one that everyone can agree with: child labor and safety laws. They technically “harm” business and cost companies money by implementing the laws. But they’re very clearly a benefit to a society.
Would a company make more without them? Of course. But should we get rid of these laws? Of course not.
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Economics
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> Picking up and moving to another region isn’t easy when you are poor...
I didn't say that it was.
As far as the "greater good" argument goes, I can see your point when the actions of a company actually infringe on the natural rights (definition required, I'll concede) of an individual. Personally, I don't see "a job with satisfactory pay" on the same side of the line as "don't force children to work in mines" or "don't dump sludge into our shared natural water sources". There's even a chance that I wouldn't agree with every child labor law or safety law, but I'm not really qualified to argue about those in detail, so I'll try not to.
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Economics
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i think that our COL definition needs updating. I have found that I can live much cheaper in a large city than in a rural community. In a city I may pay more for housing but save on transportation, food, insurance, medical, and energy. Where I live now I am considered rural and I pay through the nose for so much simply because there is no competition. There is no public transit, schools don't get enough funding, there are hardly any job opportunities that can lift one out of poverty, and if you want food after 6pm you are driving 90 miles round trip. Obviously there are examples that go against this, specifically places like San Fran, but I would argue that it is cheaper to live in cities than rural locations. No one is going to move out into the rural areas unless we end up with a second Homestead act.
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Economics
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> I think the argument is a $15 minimum wage might not make sense for the entire nation, but neither does the lower minimum wage we have now.
A minimum is a minimum. It doesn't have to make sense for the entire nation. It has to make sense for the minimum of the nation. A national maximum wage established by rural america makes as little sense as a national minimum wage established by the largest cities.
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Economics
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\> This is part of the problem we have with national politics. Everyone wants us to remember it’s unfair when a city of millions dictates to a town of hundreds/thousands, but no one seems to mind that the opposite is often true and it’s a far greater injustice and does far more harm.
There's no harm because the city can just pass its own local minimum wage.
If they lack the political will to do that locally, then why should it be done in the first place?
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Economics
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A Federal policy ensures consistency. But there is plenty of room in a federal policy to accommodate local realities. Instituting a manner of curve to the wage levels that accommodates local cost of living as multiplier seems an immediate and easy way to make it work better.
That being said, it wasn’t too long ago that certain people were howling about how a minimum wage increase would destroy the economy.
Anyway. It’s always worth noting that the poor and middle class spend the majority of their wages. Thus, it should never be a mistake to adjust their wages to reflect the impact of inflation that has without a doubt reduced their spending ability.
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Economics
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Because it doesn't make sense, some people have no valuable skills to offer to the labor market, if a person has no skills and can only bring $4 an hour worth of value to a business they'll never get a job when theres a minimum wage higher than that.
What he's advocating for is raising the minimum wage further which will force more people out of the labor pool and make them 100% reliant on government assistance, instead of allowing those people to work for $4 an hour and only be 70% reliant on the government. With the current system those people will never gain marketable skills or a work ethic necessary for economic growth.
I guarantee if you drove through an economically blighted community with a pickup truck advertising $50 for 10 hours of work the truck will be filled up before you drive from one end of main street to the other.
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Economics
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Places with relatively depressed economies might require special consideration in terms of the application of minimum wage laws, but if we're talking about stores or restaurants associated with a large chain (e.g. McDonalds, WalMart, etc) then there is NOT much legitimate reason to fear that a wage bump for the lowest-paid employees is enough to threaten the financial viability of the firm. Fast food franchises and big department stores are not operating on the same margins as the stereotypical "mom & pop".
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Economics
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Why do you need a source? It's not a controversial claim to say a minimum wage study from San Francisco isn't informative of low-income areas. Asking people to cite this is just feeding a thicket of obstacles to casual conversation.
We've seen this scenario played out before in low-income areas subject to US law, like American Samoa, which saw large employment losses in the most recent minimum wage increase, which was far higher relative to local conditions than it was in the US.
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Economics
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The fight for $15 is here in California. I giggle when wealthy cities like San Francisco and Santa Monica (beach suburb of Los Angeles) implement their minimum wage laws.
I am quietly hoping that it won't completely cripple Central California, where there just isn't that much capability to spread the wealth around. I have the sinking feeling that those chain dollar stores and pharmacies are going to close every other location, while most of the small businesses are going to go underground.
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Economics
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>Hint, it was a banana republic
Are banana republics not subject to opportunity cost?
>no one can seem to show me the numbers demonstrating a mechanism of action
You are being deliberately obtuse.
["Since 2007, the minimum wage in American Samoa has increased three times across 18 individual work sectors, ranging from $4.18 to $5.59 per hour. The GAO reported that average earnings in American Samoa rose by 27 percent, but local prices increased by 34 percent. The employment rate in American Samoa declined by 11 percent from 2007 to 2012, and average inflation-adjusted earnings fell by 5 percent. In the tuna canning industry alone, the employment rate fell by 58 percent from 2007 to 2013."](https://www.gao.gov/assets/690/681370.pdf)
> Do you have an actual example of this being a problem?
I don't need one; It's just an "as X goes to infinity" thing. Would imposing a $100/hr wage minimum in SF be noticeably different? Probably. Would imposing a $10/hr wage in Kenya be different? Probably that as well.
You can play dumb about marginal cases but no citation is needed to say unadjusted nominal-dollar wage minimums will have different effects in different economies.
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Economics
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It's worth asking why those employers are there - often because of the low wages - because the expenses of doing business there are so cheap. When you take that away, you take away job opportunities there.
If the math is identical to starting their business in a more urban area, they'll do it there instead. If its too high anywhere, they'll leave the country or go out of business while a foreign competitor takes over.
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Economics
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Would it though? A $10 minimum wage? I'm not so sure. The evidence seems to suggest modest wage increases don't have much effect on employment. It's probably because the local labor market in much of the country is a monopsony for low-skilled workers, in part due to the weakness of unions and the subsequent lower negotiating ability of workers IMO, and a minimum wage increase merely transfers some of the surplus to the worker without affecting production.
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Economics
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Is it worse to benefit 100 at the expense of 10,000 or to benefit 10,000 at the expense of 100?
The problem was laid out as your articulate it by me. There is no “fair” system. There is only “more fair” and “less fair”. My point is to strive for the most fair system we can.
If you don’t “screw the minorities of ppl”, you’re screwing the majority of people. How is that better?
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Economics
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I feel like you didn't read his response at all. He said doing a blanket increase is probably damaging so tie it to an local area like cost of living per square foot. Then you're just like "let's raise it to 10-12 because it might not have too many negative effects."
But I do think your right unions are important. And it's a shame they are going away. But I dont want to destroy small rural communities economies by tying them to a "big city" minimum wage like 10 or maybe even 12. I think tying it to cost of living or something like that is both better for all communities across the board. And could even be beneficial in the long term. As it would give a clear reference point and there would be little dispute about if minimum wage should be increased or not.
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Economics
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It’s somewhat analogous (states failing to act in the best interest of their citizens in the absence of federal intervention).
And while I might not know precisely what’s best for the people of Alabama and Mississippi, history has shown that leaving them to their own devices hasn’t worked out very well either. Perhaps the states should be allowed to set their own minimum wage policies, but not without significant federal oversight.
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Economics
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It is a common theme among mid-size cities, particularly in the industrial midwest. In the mid 20th century, these cities were humming along with a few factories, often in a single industry. As the economy shifted in the last 20th century to a more white-collar service economy, the job growth was in larger cities, leaving mid sized cities in dire economic straights.
Personally, I grew up in NE Ohio, and witnessed this in cities like Canton, Stubenville and Erie. The younger generation moved to the larger cities like Cleveland, Pittsburgh, and Chicago, or to the coasts, where there were better opportunities.
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Economics
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I'd be curious to see the place where $7.25 is sufficient. The national floor might not be $15 but it sure is higher than $7.25. You can do it piecemeal if you like but places that don't hit local minimums ought to be ineligible for federal subsidies. I'm not interested in transferring my tax dollars to the places where an ideological dogma holds more sway than an economics textbook. We keep propping up ignorance and we're doing ourselves no favors.
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Economics
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Unions aren’t as weak as people think they are. They still have significant influence. They just also have no interest in representing easily replaced workers, because even a strong union there is powerless.
Minimum wage is an artificial lower bound on the price of labor; it has two potential effects. Either you increase it and nothing happens, which suggests that people weren’t getting paid less than it in the first place (and thus it is a superfluous waste of political capital), or it restricts the demand for labor.
Either one is bad - in the former case you’re wasting political capital on something that provides no benefit, and in the latter you’re creating unemployment.
Of 80.4 million people over 16 earning hourly wages in 2017, just 542,000 were earning the federal minimum of $7.25/hr or less, 2/3 of which are in the service sector where they are nominally earning the federal minimum, but are tipped employees and thus typically earn far more than the federal minimum, averaging out to about $12/hr.
So any proposed change in the minimum wage up to $10 wouldn’t really have any effect for more than about 130,000 people, less than 1/10 of 1% of the workforce. This points to it being a superfluous waste of political capital.
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