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TheJunkyardGod
Sep 19, 2004

Do not taunt the Octopus
How many in-office and/or campaigning politicians have come out in favor of $15/hour?

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icantfindaname
Jul 1, 2008


TheJunkyardGod posted:

How many in-office and/or campaigning politicians have come out in favor of $15/hour?

How many posters ITT have come out in favor of $15/hour?

Ghost of Reagan Past
Oct 7, 2003

rock and roll fun

JeffersonClay posted:

I'm not advocating for accelerationism. If we're examining the minimum wage in the context of political reality, there's a real political cost in tying anti poverty efforts to the conservative paradigm that poor people can just work their way out of poverty. That's why the minimum wage is popular among republicans, you realize?
In Nebraska, we passed via a referendum a minimum wage hike. Most Republican politicians here oppose the minimum wage hike and are working to chip away at it already. I don't think a minimum wage increase is all that popular among Republican politicians (voters are a completely different story, because voters loving love minimum wage increases...probably because they look at their paychecks).

You also have to realize that doing anything else to alleviate poverty is pretty much politically impossible. Increasing anything that falls under the purview of welfare is politically dead before it's even proposed. Meanwhile, here's something that can improve people's quality of life right now, and is politically feasible. Again, when leftists make the perfect the enemy of the good, people complain. Now, when leftists aren't making the perfect the enemy of the good and advocate for policies that can be done now and don't rely on unicorn tears, people complain.

Ardennes
May 12, 2002

JeffersonClay posted:

Did you guys know that the minimum wage isn't very effective at transferring money from the rich to the poor?

If a fifteen dollar minimum wage is implemented, what happens? It's likely that any reduction in poverty would be small. And now when we advocate for policies that might make more significant impacts on income inequality -- taxes and transfer payments and expanded social services -- conservatives will say: smug: "just get a cushy min wage job, liberailures".

It was already addressed the politics of comparable public subsidies is simply off the table in comparison to a higher minimum wage, and a minimum wage is one of the few tools felt to us to conduct any redistribution period. Ultimately, from the numbers I have seen given above, I don't think it is going to be enough of a disincentive compared to its benefits when the alternative is quite literally nothing.

Income needs go to up as does spending, and the status quo is unacceptable.

JeffersonClay
Jun 17, 2003

by R. Guyovich
https://nelp.org/content/uploads/2015/03/Minimum-Wage-Poll-Memo-Jan-2015.pdf

Republican voters favor a 12.50 minimum wage 53 to 47.

Social security is actually a good analogue. The shittiest parts of social security are the parts Republicans support the most --regressive taxes, weak means testing, work requirement to be vested. They like it because it resembles an individual retirement account and because it fits into their work hard=escape poverty paradigm. I certainly think social security was a positive for the poor but we've been locked in a dialogue about helping hard working middle class families ever since, and it ignores much of the impact of poverty.

Ghost of Reagan Past
Oct 7, 2003

rock and roll fun

JeffersonClay posted:

https://nelp.org/content/uploads/2015/03/Minimum-Wage-Poll-Memo-Jan-2015.pdf

Republican voters favor a 12.50 minimum wage 53 to 47.

Social security is actually a good analogue. The shittiest parts of social security are the parts Republicans support the most --regressive taxes, weak means testing, work requirement to be vested. They like it because it resembles an individual retirement account and because it fits into their work hard=escape poverty paradigm. I certainly think social security was a positive for the poor but we've been locked in a dialogue about helping hard working middle class families ever since, and it ignores much of the impact of poverty.
Voters are different than politicians.

You're also ignoring the political realities: it is nigh impossible to get an agreement to increase taxes marginally, let alone increase entitlement programs.

Series DD Funding
Nov 25, 2014

by exmarx

Ghost of Reagan Past posted:

Voters are different than politicians.

You're also ignoring the political realities: it is nigh impossible to get an agreement to increase taxes marginally, let alone increase entitlement programs.

Up until enough people talk about and fight for it, and it becomes Serious Reasonable Policy.

Effectronica
May 31, 2011
Fallen Rib

JeffersonClay posted:

https://nelp.org/content/uploads/2015/03/Minimum-Wage-Poll-Memo-Jan-2015.pdf

Republican voters favor a 12.50 minimum wage 53 to 47.

Social security is actually a good analogue. The shittiest parts of social security are the parts Republicans support the most --regressive taxes, weak means testing, work requirement to be vested. They like it because it resembles an individual retirement account and because it fits into their work hard=escape poverty paradigm. I certainly think social security was a positive for the poor but we've been locked in a dialogue about helping hard working middle class families ever since, and it ignores much of the impact of poverty.

Republican voters are distinct from the Republican political elite, and they don't support minimum wage increases because it validates conservatism.

JeffersonClay
Jun 17, 2003

by R. Guyovich

Ghost of Reagan Past posted:

You also have to realize that doing anything else to alleviate poverty is pretty much politically impossible. Increasing anything that falls under the purview of welfare is politically dead before it's even proposed. Meanwhile, here's something that can improve people's quality of life right now, and is politically feasible. Again, when leftists make the perfect the enemy of the good, people complain. Now, when leftists aren't making the perfect the enemy of the good and advocate for policies that can be done now and don't rely on unicorn tears, people complain.

I get that politics constrains our choices here. There's never going to be a perfect option and we need to make our best judgement as to how to help the poor. If passing the minimum wage makes other, more effective policies more difficult to achieve in the future, it might not be worth supporting if the benefits are small. "The poor can't afford to wait" can cut both ways.

Ardennes
May 12, 2002
The fact that there is even some consensus on both left, center and right is why a higher minimum wage is the best shot at the moment, especially in states with citizen initiated propositions. Ultimately, a minimum wage is also generally beneficial to revenue, which would at least help absorb the costs of more social benefits down the line.

JeffersonClay
Jun 17, 2003

by R. Guyovich

Effectronica posted:

Republican voters are distinct from the Republican political elite, and they don't support minimum wage increases because it validates conservatism.

http://www.salon.com/2013/05/18/the_conservative_case_for_raising_the_minimum_wage/

His points are:
Minimum wage will stop immigration (what?)
Minimum wage will allow us to stop giving out so much welfare

Effectronica
May 31, 2011
Fallen Rib

JeffersonClay posted:

http://www.salon.com/2013/05/18/the_conservative_case_for_raising_the_minimum_wage/

His points are:
Minimum wage will stop immigration (what?)
Minimum wage will allow us to stop giving out so much welfare

Thank you for proving my point by being unable to find statistical analysis of Republican political leadership on this question, and by ignoring that the motivations lay Republicans have for supporting a higher minimum wage are not "this validates conservatism".

Disinterested
Jun 29, 2011

You look like you're still raking it in. Still killing 'em?

JeffersonClay posted:

Minimum wage will stop immigration (what?)

There is some evidence that poor immigrants tend to gravitate towards US states with lower minimum wages because it is easier to compete in those labour markets.

But where the effect is nationwide that effect is less relevant.

archangelwar
Oct 28, 2004

Teaching Moments
So have we cycled back from the "poorly constructed economic argument against minimum wage" stage back to the "no true liberal would support minimum wage over X" stage? I would almost be sympathetic to the latter if it weren't the same cadre of posters who also argue against UBIs and other leftist programs in their respective threads.

asdf32
May 15, 2010

I lust for childrens' deaths. Ask me about how I don't care if my kids die.

archangelwar posted:

The absolute number is meaningless. It does not tell me how much more any specific item will cost, and it does not tell me overall impact on the economy without comparison to other numbers. That is the whole mathematic purpose behind ratios and proportions.

If you tell me that labor costs will increase by $100 million, what data can I extract from that without plugging it into a formula with other data?

You don't calculate it just to stare at it. The new wages (total dollars) delivered by the policy are what you compare to the size of the economy, existing labor costs or other policy like food stamps, min income or EITC.

JeffersonClay
Jun 17, 2003

by R. Guyovich

Effectronica posted:

Thank you for proving my point by being unable to find statistical analysis of Republican political leadership on this question, and by ignoring that the motivations lay Republicans have for supporting a higher minimum wage are not "this validates conservatism".

Tell me more about what you think an absence of evidence proves. Why do you think the average republican supports the minimum wage? It can't be as simple as "it's in my best interest", or most republicans would support taxing the rich to support the poor. I imagine it's more like "I work hard and deserve not to be poor" which might not be a good paradigm to reinforce if our next argument needs to be "nobody deserves to be poor". The minimum wage could drive a wedge between the working poor and the nonworking poor.

Rodatose
Jul 8, 2008

corn, corn, corn

VitalSigns posted:

I would obviously support the Give Money To Random Black People Act of 2015, but somehow I suspect that's a lot less likely to get through this congress than the minimum wage. Just a hunch.
*a friendly ghost wanders into the room and bangs ghostfists on table*
Reparations!
*bangs fist on table*
REPARATIONS!
*bangs fist on table*
REPARATIONS!!!
*disappears into wisp of smoke*

euphronius
Feb 18, 2009

How would we ever even figure out a number for reparations.

archangelwar
Oct 28, 2004

Teaching Moments

asdf32 posted:

You don't calculate it just to stare at it. The new wages (total dollars) delivered by the policy are what you compare to the size of the economy, existing labor costs or other policy like food stamps, min income or EITC.

So basically what everyone else was explaining to you while you were throwing a fit about "exponential growth."

Disinterested
Jun 29, 2011

You look like you're still raking it in. Still killing 'em?

euphronius posted:

How would we ever even figure out a number for reparations.

there are some things where there are actually real receipts you could use

like we know how much it cost to build the public buildings in DC

Effectronica
May 31, 2011
Fallen Rib

JeffersonClay posted:

Tell me more about what you think an absence of evidence proves. Why do you think the average republican supports the minimum wage? It can't be as simple as "it's in my best interest", or most republicans would support taxing the rich to support the poor. I imagine it's more like "I work hard and deserve not to be poor" which might not be a good paradigm to reinforce if our next argument needs to be "nobody deserves to be poor". The minimum wage could drive a wedge between the working poor and the nonworking poor.

I'm guessing, not having a polling firm at my disposal, that the average lay Republican supports having a minimum wage because it already exists and they probably benefited from it or know someone who benefits from it. Why they would support a higher minimum wage would probably be because they know people who would benefit majorly from that sort of increase. At least, this is from the Republicans that I know personally.

asdf32
May 15, 2010

I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Disinterested posted:

There is some evidence that poor immigrants tend to gravitate towards US states with lower minimum wages because it is easier to compete in those labour markets.

But where the effect is nationwide that effect is less relevant.

Which is a pretty good clue for the potential employment impact to similarly vulnerable non-immigrant workers. Also something studies have already uncovered.


archangelwar posted:

So basically what everyone else was explaining to you while you were throwing a fit about "exponential growth."

No.

VitalSigns
Sep 3, 2011

JeffersonClay posted:

http://www.salon.com/2013/05/18/the_conservative_case_for_raising_the_minimum_wage/

His points are:
Minimum wage will stop immigration (what?)
Minimum wage will allow us to stop giving out so much welfare

If minimum wage actually did reduce welfare spending because fewer workers are poor enough to qualify, that would be a positive thing.

As long as we don't respond by cutting taxes on the rich.

Disinterested
Jun 29, 2011

You look like you're still raking it in. Still killing 'em?

asdf32 posted:

Which is a pretty good clue for the potential employment impact to similarly vulnerable non-immigrant workers. Also something studies have already uncovered.

All depends on how the wage is priced.

The ideology eater
Oct 20, 2010

IT'S GARBAGE DAY AT WENDY'S FUCK YEAH WE EATIN GOOD TONIGHT

Geriatric Pirate posted:

Yes lol, if you go ahead and redefine everyone as poor, then the minimum wage works. Households with incomes from $60k-$100k, i.e. the global 0.5%, are now poor by your definition. So the fact that the minimum wage helps them almost as much as it does the bottom 20% is all of a sudden ok because everyone is so poor.

By your same logic:
Tax cuts for the rich are a policy that help the poor, because the rich are actually poor!


What's the point in focusing on the bottom 20% of the income distribution with all these anti-poverty policies anyway? Don't people know that families making $60k-$100k are just as needy as them?

Household who make from 60-100k actually are where the AVERAGE of over 200k in debt begins to get balanced out by your salaries. They're the group that starts to not be poor. This is not really very surprising. This is actually not surprising? You do realize that most people across the developed world aren't holding that sort of debt to income ratio right?

And you really didn't read the bit about poverty not being binary did you? If we must help one group only we should help those with the least, whose lack of security in necessities is most pressing and urgent, however helping groups other than them, including those better off but still not secure in their necessities. The majority of those it helps are households in this range. A marginal benefit for those who are not in the most dire poverty does not cancel out the large benefits for the worst off.

Looking at your example of tax cuts for the rich they give proportionally more money to the rich whereas a minimum wage increase gives proportionally less and virtually nothing to people who are making under $250k. Those people are not poor because they have food, housing, and health security. They also don't help people who are poorer and don't have those. Minimum income might help those people in a practically unnoticeable way due to 15k a year and 30k a year not being a big difference when compared to the $235k in other income they have. It also helps people who aren't secure in their food, housing, and health quite a bit more.

Since you're so worried about those making 60-100k being the global 0.5% since cost of living doesn't matter why are you worried about the US bottom 20%? The global median household income is 10k and ours is over 50k, clearly all those families making over 10k in our country don't have to worry about anything! You don't seem to believe that which would suggest that at some level you don't really believe that which means somehow you don't think these ratios are the big thing you're saying they are.

Security for life necessities is clearly the only meaningful measure of poverty imo because it is looking at what actually effects peoples' lives rather than their ratio to other people. Do you have an argument for why poverty just being people in the bottom 20% is a more meaningful measurement than their security in their access to the necessities of life? Do you have an argument for why we should ignore the global 0.5% which is the people who are barely not insecure in these things that doesn't apply to the global 1% that is the bottom quintile who are totally insecure in their access to necessities?

JeffersonClay
Jun 17, 2003

by R. Guyovich

Effectronica posted:

I'm guessing, not having a polling firm at my disposal, that the average lay Republican supports having a minimum wage because it already exists and they probably benefited from it or know someone who benefits from it. Why they would support a higher minimum wage would probably be because they know people who would benefit majorly from that sort of increase. At least, this is from the Republicans that I know personally.

Okay, but Republicans that would benefit from a minimum wage increase would also probably benefit from an expansion of welfare, which they don't support. There's got to be some qualitative difference between the minimum wage and welfare for them, and I think it's all about their Takers VS. Makers duality. Free money for the poor activates their disgust response, but more money for hard work fits neatly into their bootstraps archetype. A high minimum wage actually makes the bootstraps argument more plausible, which might make policies which expand the welfare state more difficult to achieve.

And it's not just republicans. The same mindset exists for many independents and conservative democrats.

JeffersonClay fucked around with this message at 18:17 on May 11, 2015

VitalSigns
Sep 3, 2011

euphronius posted:

How would we ever even figure out a number for reparations.

Take all white people's guns, then blacks get whatever they can steal in the next three hundred years, that should about even things up.

The ideology eater
Oct 20, 2010

IT'S GARBAGE DAY AT WENDY'S FUCK YEAH WE EATIN GOOD TONIGHT

Disinterested posted:

there are some things where there are actually real receipts you could use

like we know how much it cost to build the public buildings in DC

Do you know how much this is? I'm curious and a quick google search didn't turn it up.

euphronius
Feb 18, 2009

USA annual GDP is about 17 trillion. I would start reparations talk at like a significant chunk of that - equating them to punitive damages. So like maybe 4 trillion dollars? That does not sound like enough though.

The ideology eater
Oct 20, 2010

IT'S GARBAGE DAY AT WENDY'S FUCK YEAH WE EATIN GOOD TONIGHT

VitalSigns posted:

Take all white people's guns, then blacks get whatever they can steal in the next three hundred years, that should about even things up.
This still wouldn't be enough because you don't have the benefit of outnumbering the white people several times over. If you also decimate the white population it should be more accurate.

Effectronica
May 31, 2011
Fallen Rib

JeffersonClay posted:

Okay, but Republicans that would benefit from a minimum wage increase would also probably benefit from an expansion of welfare, which they don't support. There's got to be some qualitative difference between the minimum wage and welfare for them, and I think it's all about their Takers VS. Makers duality. Free money for the poor activates their disgust response, but more money for hard work fits neatly into their bootstraps archetype. A high minimum wage actually makes the bootstraps argument more plausible, which might make policies which expand the welfare state more difficult to achieve.

And it's not just republicans. The same mindset exists for many independents and conservative democrats.

Hmm, I'm not saying that they benefit from it directly. I'm saying that they know people who do, mainly younger people who work low-wage jobs in college or high school, and that this perception forms their understanding of the minimum wage.

Geriatric Pirate
Apr 25, 2008

by Nyc_Tattoo

LorrdErnie posted:

Household who make from 60-100k actually are where the AVERAGE of over 200k in debt begins to get balanced out by your salaries. They're the group that starts to not be poor. This is not really very surprising. This is actually not surprising? You do realize that most people across the developed world aren't holding that sort of debt to income ratio right?

And you really didn't read the bit about poverty not being binary did you? If we must help one group only we should help those with the least, whose lack of security in necessities is most pressing and urgent, however helping groups other than them, including those better off but still not secure in their necessities. The majority of those it helps are households in this range. A marginal benefit for those who are not in the most dire poverty does not cancel out the large benefits for the worst off.

Looking at your example of tax cuts for the rich they give proportionally more money to the rich whereas a minimum wage increase gives proportionally less and virtually nothing to people who are making under $250k. Those people are not poor because they have food, housing, and health security. They also don't help people who are poorer and don't have those. Minimum income might help those people in a practically unnoticeable way due to 15k a year and 30k a year not being a big difference when compared to the $235k in other income they have. It also helps people who aren't secure in their food, housing, and health quite a bit more.

Since you're so worried about those making 60-100k being the global 0.5% since cost of living doesn't matter why are you worried about the US bottom 20%? The global median household income is 10k and ours is over 50k, clearly all those families making over 10k in our country don't have to worry about anything! You don't seem to believe that which would suggest that at some level you don't really believe that which means somehow you don't think these ratios are the big thing you're saying they are.

Security for life necessities is clearly the only meaningful measure of poverty imo because it is looking at what actually effects peoples' lives rather than their ratio to other people. Do you have an argument for why poverty just being people in the bottom 20% is a more meaningful measurement than their security in their access to the necessities of life? Do you have an argument for why we should ignore the global 0.5% which is the people who are barely not insecure in these things that doesn't apply to the global 1% that is the bottom quintile who are totally insecure in their access to necessities?

These poor poor upper middle class people, they have such big mortgages that they're actually poor :qq:

And to be perfectly honest, I'm not that concerned about the US bottom 20% either, but I'm a hell of a lot more concerned for them than I am for the US upper middle class. And since you're never going to convince the upper middle class white leftists on this thread (such as yourself) to do anything for poor people globally, it's better to try policies that mainly help the poorest in the US rather than the upper middle class.

Also, while poverty is not binary and in general economic growth helps, it's a bit stupid to frame the minimum wage as an economic growth measure because you're barely going to find anyone who frames it as that outside of some crazy people. It's a redistributive measure. It affects prices in a way that hurt the poor the most. It helps poor people at a slightly better than random rate, and helps upper middle class people at a slightly lower rate than that.

If you want to try to map minimum wage workers to "poorness" groups by security for life necessities, go ahead. Until you actually have some sort of real numbers and aren't just making up potential scenarios ("well this family making $100k could be living in Manhattan and have 15 kids"), I'm going to stick with looking at actual incomes. By the way, the 0.5% is a purchasing power parity adjusted ranking.

Ghost of Reagan Past
Oct 7, 2003

rock and roll fun

JeffersonClay posted:

I get that politics constrains our choices here. There's never going to be a perfect option and we need to make our best judgement as to how to help the poor. If passing the minimum wage makes other, more effective policies more difficult to achieve in the future, it might not be worth supporting if the benefits are small. "The poor can't afford to wait" can cut both ways.
Unless you foresee a major change in American politics coming in the next decade, any reforms will be gradual and fought regardless of any minimum wage hike. I can't see any plausible policy that'd get implemented if we just hadn't raised that darn minimum wage!

If you see some plausible reforms that won't go through if the minimum wage is raised feel free to explain but otherwise I have no idea why your handwringing is anything other than concern trolling.

boner confessor
Apr 25, 2013

by R. Guyovich

Geriatric Pirate posted:

And since you're never going to convince the upper middle class white leftists on this thread (such as yourself) to do anything for poor people globally, it's better to try policies that mainly help the poorest in the US rather than the upper middle class.

you were funnier when you were accusing everyone who disagreed with you of being basement shutins, i'm not as amused by this accusing everyone of being too wealthy to sincerely care for the american poor as much as you do

JeffersonClay
Jun 17, 2003

by R. Guyovich
I do see a massive change in American politics on the horizon as demographic change is going to continue marginalizing the Republican Party. There's a real possibility that Democrats could have veto-proof majorities in the next few decades, and could pass the fundamental reforms that the poor desperately need. That will be harder if the bootstraps solve poverty ideology gains more traction in the Democratic Party, and the minimum wage makes the bootstraps argument more plausible.

The ideology eater
Oct 20, 2010

IT'S GARBAGE DAY AT WENDY'S FUCK YEAH WE EATIN GOOD TONIGHT

Geriatric Pirate posted:

These poor poor upper middle class people, they have such big mortgages that they're actually poor :qq:
If you exclude mortgages the average debt still exceeds 38k which is a significant thing up until you approach the 60-100k group which, again, is where you are starting to become financially secure, not the group that I'm most concerned about. What is currently being defined as the upper middle class is what used to be called "middle class" when you look at inflation and modern cost of living. Food prices have increased much more rapidly than inflation, gas prices have increased much more rapidly than inflation, medical prices have increased much more rapidly than inflation, college prices have increased much more rapidly than inflation and so on and so forth.

quote:

And to be perfectly honest, I'm not that concerned about the US bottom 20% either
lol duh

quote:

, but I'm a hell of a lot more concerned for them than I am for the US upper middle class.
as is everyone else, it helps the poor more than them duh

quote:

And since you're never going to convince the upper middle class white leftists on this thread (such as yourself) to do anything for poor people globally, it's better to try policies that mainly help the poorest in the US rather than the upper middle class.
Yeah, the reason we're not talking about the global poor for the most part is that this thread is about the US minimum wage and not about alleviating global politics. I'd be really surprised if any of the leftists in this thread think that global poverty is all fine and dandy. I also don't believe that you give a poo poo about the global poor.

quote:

Also, while poverty is not binary and in general economic growth helps, it's a bit stupid to frame the minimum wage as an economic growth measure because you're barely going to find anyone who frames it as that outside of some crazy people. It's a redistributive measure. It affects prices in a way that hurt the poor the most. It helps poor people at a slightly better than random rate, and helps upper middle class people at a slightly lower rate than that.

If you want to try to map minimum wage workers to "poorness" groups by security for life necessities, go ahead. Until you actually have some sort of real numbers and aren't just making up potential scenarios ("well this family making $100k could be living in Manhattan and have 15 kids"), I'm going to stick with looking at actual incomes. By the way, the 0.5% is a purchasing power parity adjusted ranking.
It really doesn't have a major effect on prices/inflation. It helps poor people far more than upper middle class people even if it effects them at only a somewhat higher rate due to the percentages of their incomes which are tied to the minimum wage btw. Somebody going from 15k-30k vs 100k-115k is a bigger difference for the first household even if they get the same amount more in dollar amounts. You've been ignoring it the whole time. Helping is also not a binary state where helping is either on or off that also has levels. I've been meaning to get around to that point but I really don't want to explain too many things in one post because you've been failing to grasp the poo poo that I've already been saying.

And I showed some real numbers for actual cost of living in a few US cities for a family of four but oddly enough you ignored that.

JeffersonClay
Jun 17, 2003

by R. Guyovich

Popular Thug Drink posted:

you were funnier when you were accusing everyone who disagreed with you of being basement shutins, i'm not as amused by this accusing everyone of being too wealthy to sincerely care for the american poor as much as you do

When you're being falsely accused of concern trolling, "no you don't really care about ______" is a predictable response.

The ideology eater
Oct 20, 2010

IT'S GARBAGE DAY AT WENDY'S FUCK YEAH WE EATIN GOOD TONIGHT

JeffersonClay posted:

falsely accused of concern trolling

Geriatric Pirate posted:

And to be perfectly honest, I'm not that concerned about the US bottom 20% either

QuarkJets
Sep 8, 2008

asdf32 posted:

Quark where did you download the data?

I have an old spreadsheet of numbers gathered from the Bureau of Labor Statistics, if you dig around there you could probably find values newer than 2005 but I doubt that the overall shape is going to be any different

asdf32 posted:

If we want to know how much prices will go up across the economy "raw extra dollars" tells us that most directly.

This is not a cut and dry point like you're trying to make it seem.

When calculating the maximum potential price shift, you have to look at the ratio of old labor costs to new. Take the classic Big Mac example. If Big Macs are $4 and 25% of each Big Mac goes towards labor costs, then that means $1 of each Big Mac was going toward labor costs. The raw increase in wages does not tell us the maximum potential price increase of Big Macs; the ratio of (new labor cost - old labor cost) / (old labor cost) tells us that. If labor costs double, then you're looking at a price increase of no more than $1/BigMac, or a 25% increase in prices in exchange for a 100% increase in wages. But that's in the case where absolutely every last cent in the changed labor price is shifted to the consumer, which has never actually happened. In the simplest case a number of things could happen:

1) That $1/BigMac needs to become $2/BigMac (note that we doubled the wage to get here, and this is the maximum potential increase in prices)

2) I'll need to lay off employees in order to suppress labor costs (trying to make do with less, or trying to implement more automation of menial poo poo)

3) I'll need to use profits to pay employees (but not in a 1:1 ratio, because revenue spent on employee salaries is not taxed)

In reality, some combination of these 3 things could happen. You could get a $0.25/BigMac price increase, lay off one employee, and then make up the rest of the difference with profits. Let's look at each of these options individually:

1) Raising prices is untenable because the price of goods is not dominated by input costs. You can get away with a small increase, but you'll never be able to shift a large amount of the new input cost to consumers because they'll just go somewhere else. Some of this price increase is going to come naturally from higher consumer demand, so yeah, expect a small price increase (maybe Big Macs cost $4.50 instead of $4 now).

2) Laying off employees is untenable because hopefully you're a Captain of Industry, so you don't have extra hands sitting around and doing nothing. If you need 5 employees to produce an optimal amount of profit, then firing one only actually hurts your ability to deal with the higher labor costs, contrary to surface impressions.

3) This one is what has happened with the minimum wage increases that we've seen in our lifetime.


tl;dr Prices are not dominated by labor costs, staffing levels are not dominated by labor costs, labor costs are a large input in determining profitability, therefore prices and staffing levels will be negligibly effected and profitability will be primarily effected

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euphronius
Feb 18, 2009

QuarkJets posted:




tl;dr Prices are not dominated by labor costs, staffing levels are not dominated by labor costs, labor costs are a large input in determining profitability, therefore prices and staffing levels will be negligibly effected and profitability will be primarily effected

Yes. Obviously.

Also demand should increase.

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