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Author Topic: Economic Discussion of Minimum Wage Laws  (Read 3897 times)

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Offline Ephiral

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Re: Economic Discussion of Minimum Wage Laws
« Reply #75 on: June 05, 2013, 09:49:53 AM »
Going back to the core argument in the OP, I see some major flaws that don't seem to have been addressed. First, there's the myth that a worker can simply choose to work for less instead of being unemployed. Problem is, there's an effective floor to the wages a worker can ask, set by what they need to live sustainably. Valthazar, you asked early on whether it was better to be entirely unemployed and getting government assistance, or making a minimal income and using assistance sparingly. I ask: Which one lets me have a full belly and a place to sleep? There's also the assumption in this that lower wages equal more jobs. This is demonstrably untrue - overworked employees doing what would previously have been considered the workload of several employees are a hallmark of minimum-wage fields. Higher wages might mean less jobs, because the profit margin is sacrosanct, but the inverse is not true because the profit margin is sacrosanct.

I'd say what we need to look at abolishing is the legal requirement to earn maximum profit, not minimum wage laws.

Second... we know what the unrestricted free labour market trends toward. It is far from a worker's paradise where everybody can find a job - it's a ridiculously abusive situation that leads to sixteen-hour days in dangerous conditions for shit pay, until your mine explodes or your factory burns down with you inside. We tried this once, and people fought and died to change it because it was that horrifying. Today, a large part of the reason for the outsourcing of manufacturing is so that companies can continue these hideously abusive practices and pad the profit margin. Why exactly do you think less restriction will lead to better outcomes for employees, in the face of the evidence?

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #76 on: June 05, 2013, 01:37:41 PM »
Right now companies with stockholder are required by law to make the best decisions to meet the demands of stockholders to make a profit and they elect the Board of Directors who pick the CEO. The simple solution to me is to add as a duty and obligation on par not superior or inferior the good of the community and nation in such business decisions under law.

This would then bring in one issue if you close a plant here or outsource a new operation or use outside the nation production the government can then act for example keep the plant from closing or demand they build their new plants in the US as long as they can make a fair profit as the government determines fair. And if they MUST move the plant outside the US they would likely need to make some provision for the community the business is in job retraining or paying for people to move or work at finding a replacement employer.

I can't think of another option to bring blue-collar jobs back the kind a High School graduate could get and it pays decent wages.

Let's see..

1. Best interests is determined how? Long term or short term? Today if you push long term thinking like 'building a market' or 'developing', you're on the way out. Period. Short term gain has become the mainstay thought of too many businessmen. It is easier to sell off assets than to work them.

2. How is it NOT a good idea to build an education system that puts folks in well paying jobs like plumbing, electrical work, refrigeration and such? Why is vocational schooling suddenly a bad thing. I went to school with some great friends who, pardon me for saying, weren't wired for academics

3. Why can't we use the system that MADE outsourcing profitable to make bringing jobs back? There are more breaks for multinats to hide their cash and manufacturing OUTSIDE the us. Example: GE made RECORD profits in 2010 but due to the tax laws they helped put in place they had ZERO tax bill. As they have done for many years. They pay taxes, just so little compared to their profit to be negligible compared to their profits. At the same time they are reducing their manpower inside the US, the government REWARDS them with tax breaks that smaller national companies can't utilize.

Simply put, why can't we use the economic power to reward companies to look into innovative solutions that BUILD our economy rather than Bangladesh, India, Mexico and other outsourcing capitals? Why should we allow Multinationals to game the system to hide their cash overseas while empowering this stupid self-destructive trend. There are other options.


Offline ValthazarTopic starter

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Re: Economic Discussion of Minimum Wage Laws
« Reply #77 on: June 05, 2013, 03:07:47 PM »
I think it is clear that there are some very contrasting views when it comes to the minimum wage policies in the US – and many other related issues have arisen from this discussion.  I think we can agree to disagree, especially since there are a lot of economic justifications from both perspectives, and I doubt we will ever reach a conclusive answer.  I just want to emphasize that this is not a compassion vs. lacking compassion issue.  I would say that everyone who has posted so far in this thread holds their views (whether in agreement or not) because they feel that it is ultimately what will maximize opportunities for the poor – albeit in different ways.

I think we can all agree that there are a lot of problems with society – whether that is in the private sector or in government.  Whether it is outsourcing, corporate greed, or administrative government waste, the reality is that a lot of these issues are beyond the average people’s control.  Whether we want to acknowledge it or not, regardless of the political party in power, corporate lobbyists will always get their way.  While bringing light to these issues is certainly important, it is important to remind ourselves that the entity most in control of our personal well-being and prosperity is ultimately ourselves.

With that being said, without a doubt, I absolutely do believe that the United States is still a country of opportunity.  While the rules for achieving a stable life may have changed, and things may no longer be as simple and linear as they once were in America’s past, opportunities still exist.  Unfortunately, the changing of many laws such as the repeal of the Glass-Steagall Act during the Clinton administration, and corporate deregulation during the Bush administration, along with a myriad of other societal factors related to business have created a lot of traps that unfortunately cause many people to stray away from a simple middle-class life.  Whether these traps manifest themselves as credit card debt, an unaffordable mortgage, or very large student loans, it wreaks havoc on the American Dream.

I work at a college, and we always tell students that the pathway to a stable career is not in the degree itself, but in how one manifests the knowledge and skills they have acquired as a result of that degree.  As a result, I would say that rather than hard work in and of itself yielding a stable career (although very essential), I would say that creativity and proactivity are the main factors.  For example, I would confidently say that based on some of the conversations I’ve had with people on Elliquiy, people here are extremely intelligent and articulate.  The ability to write well is an extremely valued skill in the workplace – and something that many people lack, and wish they had.

Often times, all it takes is taking the initiative to write an article about a passionate issue for the newspaper – and over time, systematically developing a rapport with the journalist, and becoming more exposed in the community through one’s writing.  Or perhaps one could take the initiative to write a review article for a publication on a topic of interest, summarizing other published articles – an extremely valued asset on a resume.  Sometimes simply getting involved in the community through volunteer or self-manufactured unpaid internships is the stepping stone to a finding one’s niche and future career trajectory. 

But at the same time – and I worry that this may be construed negatively – I feel that contemporary America’s definition of a strong work ethic is changing.  I often wonder if an individual needing to utilize public assistance is truly maximizing their capacity and skills, if they are engaging in roleplaying and video games for hours at a time, and not using that time in other free, career-enhancing activities.  I personally know many people (college graduates) on public assistance who are unfortunately stuck in this trap who desperately need a career to make their loan payments.  The reality is that they are unhappy and desperately want a job.  I realize that in this day and age, this assertion may not be deemed politically correct – but it is important to remember how many sacrifices past generations have made in order to even secure the basic semblance of American middle class life.    While we can all readily identify factors in society that led us down that path, we, as ordinary citizens should examine the things we can actually control for ourselves.

Offline Avis habilis

Re: Economic Discussion of Minimum Wage Laws
« Reply #78 on: June 05, 2013, 03:45:16 PM »
While we can all readily identify factors in society that led us down that path, we, as ordinary citizens should examine the things we can actually control for ourselves.

Which doesn't include the cost of living where you live, the cost of moving to where you could afford to live on what you make, the demand for any particular skill or trade, or the demand for workers at all. The idea that all, most, or even a lot of people who rely on social programs don't have jobs because they're too busy hanging out playing Halo all day isn't politically incorrect, it's dishonest.

Offline Cthonig

Re: Economic Discussion of Minimum Wage Laws
« Reply #79 on: June 05, 2013, 04:57:59 PM »
Sorry to have brought it up.  It is true, though, that there needs to be worker protection.  That or a major moral overhaul of the captains of industry.  Because you can pretty much go to any CEO today and they'll all tell you that their responsibility is to their shareholders, not their workers (unless somehow your workers are your shareholders).
    Indeed. Today's corporations have forgotten what a business is supposed to be.
    At its most basic a business is an entity which employees people to manufacture one or more items and/or provide one or more services. So the required people for a business are the employees and the customers. Anyone else is optional and probably a parasite on the business. Like the shareholders, most executives, and the union leaders. Unions can be useful just like management but both can often be a problem for the workers.
    We need a law that prohibits anyone not involved in the day-to-day activity of the business from having any say in the running of the business. And a law limiting the pay range from the lowest paid employee to the highest paid executive. There is no good reason for executives to be paid more than 10 times what the lowest paid worker gets. Executives are just as replaceable as anyone else.


But at the same time – and I worry that this may be construed negatively – I feel that contemporary America’s definition of a strong work ethic is changing.
    That already happened. For the past two decades or so a strong work ethic gets you overworked for no extra pay. While the lazy charismatic suck-up gets the raises and promotions.
    Today to get a job you need to sell yourself to prospective employers. And if you aren't good at that then a good work history doesn't matter.
    These changes have already happened. The stupid schmuck who is toxic for the business but is charismatic can rise to a position to kill a business. And once they have been a high-paid CEO they can get another high-pay CEO position. People make the false claim it was the union and the employees who killed Hostess but look at the string of bad CEOs Hostess had before it failed.
    These changes are a part of why we have a problem today and why far too many people depend upon the minimum wage laws remaining in effect.

Offline crabmouse003

Re: Economic Discussion of Minimum Wage Laws
« Reply #80 on: June 05, 2013, 07:24:38 PM »
I think it is clear that there are some very contrasting views when it comes to the minimum wage policies in the US – and many other related issues have arisen from this discussion.  I think we can agree to disagree, especially since there are a lot of economic justifications from both perspectives, and I doubt we will ever reach a conclusive answer.  I just want to emphasize that this is not a compassion vs. lacking compassion issue.  I would say that everyone who has posted so far in this thread holds their views (whether in agreement or not) because they feel that it is ultimately what will maximize opportunities for the poor – albeit

No. You have not been using economics in your arguments. Your arguments have been based on hypothetical examples, and speculation. The economic models show that raising the minimum wage makes good economic sense. This is why most economists believe this is a good idea.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2249040

Offline crabmouse003

Re: Economic Discussion of Minimum Wage Laws
« Reply #81 on: June 05, 2013, 07:35:48 PM »
I agree with the points that have been made about how to bring back and keep jobs in the US.  I think we can all agree that outsourcing hurts the average American.  However, I think that even if more blue-collar jobs came back, that the era of being able to get a decent salary job as a high school graduate are long gone.  Even if more traditional factory jobs returned where a person used to be able to work their way up the hierarchy will probably require some form of higher education - simply because of the easily availability of college grads.

This is definitely contrary to the economic consensus. Outsourcing lowers prices, and increases profits for business, enabling them to create jobs much better than the jobs being outsourced. There are losers in this deal, and it effects unskilled workers the most, which is why it's a very good idea to create social programs that eliminate poverty with the extra profit that comes from free trade.

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #82 on: June 05, 2013, 09:24:00 PM »
This is definitely contrary to the economic consensus. Outsourcing lowers prices, and increases profits for business, enabling them to create jobs much better than the jobs being outsourced. There are losers in this deal, and it effects unskilled workers the most, which is why it's a very good idea to create social programs that eliminate poverty with the extra profit that comes from free trade.


I disagree. If that was the case.. when GE phased out 10,000 jobs in 08, we'd have seen a surge of new jobs. The only division in GE that has grown at all in the US is their accounting division.. with possibly their lobbyists on K street. Outsourcing improves the bottom line and that's about it. There is little or no growth coming out of outsourcing.

I watched my folk's home town all but dry up when the textile jobs at the mills were 'outsourced' to Mexico. The biggest single day layoff in NC history. The company grew.. in Mexico, they even relocated their accounting and pay divisions.

Offline Cyrano Johnson

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Re: Economic Discussion of Minimum Wage Laws
« Reply #83 on: June 06, 2013, 08:13:46 PM »
I disagree. If that was the case.. when GE phased out 10,000 jobs in 08, we'd have seen a surge of new jobs. The only division in GE that has grown at all in the US is their accounting division.. with possibly their lobbyists on K street.

In the world of economists, that's what "creating jobs much better than the jobs being outsourced" means. It creates jobs for their kind of people: the financial services and lobbying sectors.

Offline Orval Wintermute

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Re: Economic Discussion of Minimum Wage Laws
« Reply #84 on: June 14, 2013, 03:58:58 AM »
All this talk about economics and nothing about human capital, my economics tutors would be so disappointed.
Lets say that someone starting at a company is only worth wages of $5 an hour but after working there for 3 years they would be worth $12 an hour to the company.
The government then sets a minimum wage of $10 an hour, so the company is paying twice as much for new hires than it wants to so they have 3 options :
1 - Do nothing and take the financial hit.
2 - Don't take on any new workers, which might be effective in the short term but when any of the current workforce leave there isn't anyone suitable in house to replace them. Either the company eventually folds as it's workforce disappears or it's forced to pay higher wages to attract trained workers from other companies.
3 - It takes 3 years of experience to be worth at least the minimum wage, but with training a new hire can become that as efficient as someone with 3 years training in 6 months. So you train them to be worth $12 an hour but only pay them $10 an hour until you've recovered the training costs.

The third option makes the most financial sense, you have a company that has a long term plan for it's workforce and in companies where there is a good training program morale is usually higher so you have a better trained better motivated workforce than your competitors that took one of the first two options, guess which companies profits are going to be greater?

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #85 on: June 17, 2013, 03:16:52 PM »
This is definitely contrary to the economic consensus. Outsourcing lowers prices, and increases profits for business, enabling them to create jobs much better than the jobs being outsourced. There are losers in this deal, and it effects unskilled workers the most, which is why it's a very good idea to create social programs that eliminate poverty with the extra profit that comes from free trade.

The only way we can reverse this trend is American consumers INSISTING good be made in the USA or not buy them. Dollar store items and the like perhaps not but Nike shoes or a TV could be made here it might just cost a bit more. But in the end its the consumers that affect this if companies would not make money and lose access to say the US market unless they moved jobs back they would have to move jobs back.

It might hurt some and deprive people but in the end it would force a shift in the trend and not by government action.

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #86 on: June 17, 2013, 05:19:26 PM »
The only way we can reverse this trend is American consumers INSISTING good be made in the USA or not buy them. Dollar store items and the like perhaps not but Nike shoes or a TV could be made here it might just cost a bit more. But in the end its the consumers that affect this if companies would not make money and lose access to say the US market unless they moved jobs back they would have to move jobs back.

It might hurt some and deprive people but in the end it would force a shift in the trend and not by government action.

Where are we going to find these American made goods? NAFTA killed a lot of manufacturing here in the US. care to point out a MAJOR textile company that makes more than underwear or novelty tshirt s here?  Hell they manufacture our military uniforms in CHINA. Lets go something simpler. how about a nationally available nail or lightbulb made in the US today?  oh right, they were shut down and the machinery shipped outside the US as well. In the 80's and 90's when it was more PROFTABLE to raid the smaller companies, buy them out and sell off assets for a quick profit.

You want to encourage folks to buy American? Encourage businesses to BUILD American.

Offline ValthazarTopic starter

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Re: Economic Discussion of Minimum Wage Laws
« Reply #87 on: June 17, 2013, 05:36:52 PM »
No one likes outsourcing, but it goes both ways.  We live in a globalized economy, and not only are American companies moving their manufacturing overseas, but foreign companies are bringing their manufacturing here to the US.  For example, Toyota builds Lexus cars in Kentucky now (Source).  Or another example of Mexican companies moving their production to the US (Source).

In addition, many of the jobs created in India that were outsourced from the US have created massive economic booms in certain regions of the their country.  As a result, many Indian based multinational companies are creating jobs here in the US, and as a result of strict immigration policies for issuing work visas, many of these Indian companies are actually hiring American workers and creating jobs here in the US (Source).

Whether good or bad, many countries around the world are creating a middle class - once only a privilege of the West.  While American companies going abroad is betraying the American people, other companies around the world are doing the same thing and helping in the process.

Offline Kythia

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Re: Economic Discussion of Minimum Wage Laws
« Reply #88 on: June 17, 2013, 07:07:44 PM »
Where are we going to find these American made goods? NAFTA killed a lot of manufacturing here in the US. care to point out a MAJOR textile company that makes more than underwear or novelty tshirt s here?  Hell they manufacture our military uniforms in CHINA. Lets go something simpler. how about a nationally available nail or lightbulb made in the US today?  oh right, they were shut down and the machinery shipped outside the US as well. In the 80's and 90's when it was more PROFTABLE to raid the smaller companies, buy them out and sell off assets for a quick profit.

You want to encourage folks to buy American? Encourage businesses to BUILD American.

Mmmm.  There's really nothing special about manufacturing.  The US can make military uniforms in two ways.  They can make them in a textile plant in, say, North Carolina or they can grow them in a field in the Midwest.  The way that works is oil seeds are grown in a field in Iowa then shipped to a magical factory called "China" where they are miraculously turned into military uniforms through complicated alchemy.

The reason the US as a whole uses the factories of China is that Chinese products are cheaper.  Encouraging businesses to build American means that the US ends up with lower quality and more expensive products.  Insisting that that stops via tariffs or other protectionist measures harms farmers, miners, etc who are shipping goods to China.  Vehicles as well, apparently.  Saying "build American" misunderstands that the US isn't homogenous.  The textile plant built in one place indirectly takes money away from another.  Now sure, you're totally free to not give a rat's ass about those places.  I come from a former industrial town in the UK and you'd struggle to sell me on the negatives of taking money from the South East and reinvesting it in the North East (our demographics wrt wealth are almost the geographic inverse of the US).  But there's nothing patriotic about that.  It helps your neck of the woods but gives no net change to the country.  A tax on imports is identical to a tax on exports.

The US (and the UK.  There's a similar dialogue here.  I only mention the US as that's your land)should be focusing on the areas in which it does excel and can make money internationally rather than penalising those industries because of some romanticised view of manufacturing. 

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #89 on: June 17, 2013, 07:15:39 PM »
Where are we going to find these American made goods? NAFTA killed a lot of manufacturing here in the US. care to point out a MAJOR textile company that makes more than underwear or novelty tshirt s here?  Hell they manufacture our military uniforms in CHINA. Lets go something simpler. how about a nationally available nail or lightbulb made in the US today?  oh right, they were shut down and the machinery shipped outside the US as well. In the 80's and 90's when it was more PROFTABLE to raid the smaller companies, buy them out and sell off assets for a quick profit.

You want to encourage folks to buy American? Encourage businesses to BUILD American.

I'm not saying this would be easy or comfortable but when the British Anti-Slavery movement wanted to fight it they stopped using blood sugar, tea and other goods from slavery sources. The Colonists earlier boycotted non-colonial goods and worked to establish sources for goods in the nation or bought from the French and Spanish and yes it hurt.

If people stopped buying such goods unless made in the USA they would eventually give in returning production here.

If one has issues buy thrift and used goods, you may need to support small producers and home businesses who could at least make clothes from imported cloth and so forth. The computer I'm using now was made from a local small business the parts I'm sure are not made in the USA in all cases but the computer was built here and used local talent do that.

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #90 on: June 17, 2013, 07:57:18 PM »
Mmmm.  There's really nothing special about manufacturing.  The US can make military uniforms in two ways.  They can make them in a textile plant in, say, North Carolina or they can grow them in a field in the Midwest.  The way that works is oil seeds are grown in a field in Iowa then shipped to a magical factory called "China" where they are miraculously turned into military uniforms through complicated alchemy.

The reason the US as a whole uses the factories of China is that Chinese products are cheaper.  Encouraging businesses to build American means that the US ends up with lower quality and more expensive products.  Insisting that that stops via tariffs or other protectionist measures harms farmers, miners, etc who are shipping goods to China.  Vehicles as well, apparently.  Saying "build American" misunderstands that the US isn't homogenous.  The textile plant built in one place indirectly takes money away from another.  Now sure, you're totally free to not give a rat's ass about those places.  I come from a former industrial town in the UK and you'd struggle to sell me on the negatives of taking money from the South East and reinvesting it in the North East (our demographics wrt wealth are almost the geographic inverse of the US).  But there's nothing patriotic about that.  It helps your neck of the woods but gives no net change to the country.  A tax on imports is identical to a tax on exports.

The US (and the UK.  There's a similar dialogue here.  I only mention the US as that's your land)should be focusing on the areas in which it does excel and can make money internationally rather than penalising those industries because of some romanticised view of manufacturing.


Which mills in North Carolina are we talking about? Most of the mills that got shut down THERE had their machinery boxed up and shipped over seas. I know.. I saw the trucks leaving the plants in Concord and Kannapolis. In fact if you were to visit Kannapolis, and had visited it prior to 2005-2008, you wouldn't recognize it.  I don't. Don't recognize Concord or Erwin North Carolina compared to what they looked like when I was a kid either. Concord is gentrifying as the sprawl spreads out from Charlotte.. so they are adapting but last time I passed thru Erwin.. (which isn't conveniently located to a massive hightway leading to the biggest growing cities in North Carolina) it looked like a ghost town.

I find that if you take away the incentives to ignore your country as a possible spot to put up factories by stopping rewarding outsourcing and exporting jobs that the companies might actually turn back to investing in the US rather than paying dimes on the dollar to build new mills overseas. 

I have pointed out in past posts in other threads that there ARE companies within the US that manufacture material and profit. The whole reason I got to live in Ireland for 2 1/2 years was due to protective tarrifs measures within the EEC that were designed to build industry in their member countries. If you wanted to avoid the tarrifs, you set up businesses within the member nations.


That isnt' want I'm pushing for. I'm proposing simply making tax breaks that encourage US businesses to look overseas and look to investing in the US. It can be profitable. You might be surprised if you look at new methods of manufacturing, small scale plants that have a smaller delivery foot print. Automation is already used, for example in the car assembly plants mentioned in an earlier post.

The problem is.. unless you offer a discrete financial incentive to innovate and change it might not be profitable for them to change. Offering tax breaks to relocate to underdeveloped US cities would do a lot. Add in City, County and State concessions on taxes and support and you can do amazing things. A company with 200 jobs might not sound like much.. but in a town like.. say Erwin NC where unemployment went nuclear after the textile collapse that could do a LOT.

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #91 on: June 19, 2013, 06:14:41 AM »
That is why there are one  option pure Consumer Pressure the US is a major market if it has the buyers stop buying until goods are made in the US it will force many companies back and foreign companies to build plants here, and as a non-government action would avoid a trade war. But Americans would need to practice thrift, make their own clothing if needed, be willing to do without things and do that for a few years in enough numbers to matter say 50% of the population or more.

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Re: Economic Discussion of Minimum Wage Laws
« Reply #92 on: June 19, 2013, 06:30:51 AM »
I think you're misunderstanding my point a little, Callie.  Yes, NC has lost its textile industry but that's because it has moved.  Changing economic patterns have made it easier for the US to grow their uniforms in Nebraska, not to spin them in North Carolina.

Bringing that manufacturing back into the US is going to harm the US's exports to China, obviously.  It's a zero sum game in that sense.  Cutting all foreign imports of manufactured goods (which I realise is a step further than what you propose) is going to rescue former manufacturing towns, sure, but it will have the same effect on the primary producers that are shipping materials out of the US (not to mention dock workers, say, and the other related industries.  Won't someone think of the Excise Duty officers?)  All you'd be doing is shifting the geographic location of ghost towns, not removing their presence.  Sure, if that's the goal then that's groovy.  But if the goal is to help the US as a whole then fighting economic change isn't the way forwards.  Wealth distribution and transfer payments are a much better way of doing that then the blunt tool of protectionism.

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Re: Economic Discussion of Minimum Wage Laws
« Reply #93 on: June 19, 2013, 08:54:33 AM »
That is why there are one  option pure Consumer Pressure the US is a major market if it has the buyers stop buying until goods are made in the US it will force many companies back and foreign companies to build plants here, and as a non-government action would avoid a trade war. But Americans would need to practice thrift, make their own clothing if needed, be willing to do without things and do that for a few years in enough numbers to matter say 50% of the population or more.

You know what, Ruby?  I challenge you to do that.  Check every article of clothing that you have and don't use anything that doesn't say 'Made in the US.'  Everything you buy (even in the thrift stores - check those labels!), everything you eat (local produce only!) everything you make use of (because you've said that your parents foot your bills).

You keep telling everyone you have all the answers and honestly, I think you're blowing smoke.  You haven't got a clue about the real world and the world economy.  You'd happily use imported goods as long as someone else was paying for them.

Offline Zakharra

Re: Economic Discussion of Minimum Wage Laws
« Reply #94 on: June 19, 2013, 03:45:35 PM »
   We need a law that prohibits anyone not involved in the day-to-day activity of the business from having any say in the running of the business. And a law limiting the pay range from the lowest paid employee to the highest paid executive. There is no good reason for executives to be paid more than 10 times what the lowest paid worker gets. Executives are just as replaceable as anyone else

 I got a problem with this suggestion. It seems like it would cut out all of the share holders from being able to influence the company they have stock in and would put all of the power in the board of directors or mangers in the company. It's also disturbing to think that a law could be passed that would limit the pay structure of a private corporation.  That's a hell of a lot of power to be giving the government when they would be able to dictate who gets paid what in the corporate pay structure from the top on down (I cannot see Congress or the Dept of Labor not using a law like that to start dictating the companies entire pay structure.)

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #95 on: June 19, 2013, 04:04:32 PM »
I think you're misunderstanding my point a little, Callie.  Yes, NC has lost its textile industry but that's because it has moved.  Changing economic patterns have made it easier for the US to grow their uniforms in Nebraska, not to spin them in North Carolina.

Bringing that manufacturing back into the US is going to harm the US's exports to China, obviously.  It's a zero sum game in that sense.  Cutting all foreign imports of manufactured goods (which I realise is a step further than what you propose) is going to rescue former manufacturing towns, sure, but it will have the same effect on the primary producers that are shipping materials out of the US (not to mention dock workers, say, and the other related industries.  Won't someone think of the Excise Duty officers?)  All you'd be doing is shifting the geographic location of ghost towns, not removing their presence.  Sure, if that's the goal then that's groovy.  But if the goal is to help the US as a whole then fighting economic change isn't the way forwards.  Wealth distribution and transfer payments are a much better way of doing that then the blunt tool of protectionism.

Nowhere did I say that Tarrifs were the fix. If I did, or implied i did,I apologize. What I said was we need to stop giving companies breaks for moving off shore and start rewarding those tax breaks to companies willing to invest and innovate in the US. The corporate raiders of the 80's and 90 's came right out of deregulating industry and removing tax breaks for things like R&D and investing in your own infrastructure.  It became much more profitable to liquidate property than enjoy a tax break on it, particularly when you got someone on K street buying politicians to repeal even more regulations.

When you got big companies gaming our tax code to be rewarded for off shoring jobs and capital, wouldn't it be more prudent to reduce the overall tax rate (which they aren't paying anyway) and give tax credits for doing business HERE rather than there?  You are going to get companies like GE to invest in communities unless its in their interest and right now the law rewards out sourcing and tax havens.

Offline Kythia

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Re: Economic Discussion of Minimum Wage Laws
« Reply #96 on: June 19, 2013, 04:53:55 PM »
I had read you to support tariffs but rereading over your posts it does look like that was a position I was projecting on you somewhat.  So I deflect your apology and offer one of my own in its place.

It's an interesting position.  One I disagree with for reasons I've spoilered below.  I've spoilered because I'm only mentioning them in case you're interested not to continue the conversation per se, I think we've reached the point where we just have to shake hands and say we don't agree here.

Spoiler: Click to Show/Hide
My objection is that this is still a zero sum game.  lets take India as an outsourcing destination for US jobs.  That job needs doing - taking the world as a closed economy, there is no gain or loss of jobs possible, its just where that job sits.  And while conditions are shitty in factories and doubtless in call centres in India I would rather an Indian person had that job than an American because the social safety net in the US is better than an India - its less of a handicap in the US.  Not of course that Im saying its all sweetness and light in the US, just that starvation is less of a threat.

And this isn't anti-Americanism.  The same argument applies to the UK or any first world nation

Online Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #97 on: June 19, 2013, 05:13:09 PM »
I had read you to support tariffs but rereading over your posts it does look like that was a position I was projecting on you somewhat.  So I deflect your apology and offer one of my own in its place.

It's an interesting position.  One I disagree with for reasons I've spoilered below.  I've spoilered because I'm only mentioning them in case you're interested not to continue the conversation per se, I think we've reached the point where we just have to shake hands and say we don't agree here.

My objection is that this is still a zero sum game.  lets take India as an outsourcing destination for US jobs.  That job needs doing - taking the world as a closed economy, there is no gain or loss of jobs possible, its just where that job sits.  And while conditions are shitty in factories and doubtless in call centres in India I would rather an Indian person had that job than an American because the social safety net in the US is better than an India - its less of a handicap in the US.  Not of course that Im saying its all sweetness and light in the US, just that starvation is less of a threat.

And this isn't anti-Americanism.  The same argument applies to the UK or any first world nation

Thing is.. this arguement works if you're exporting jobs to new regions to develop new markets. More often than not.. the business outsourcing their manufacturing, accounting, manufacturing or whatever AREN'T, they are using them as a cheap means of production/labor pool and returning the goods and services to the first world nations.

The growth of their market to India, Bangladesh, China, whereever is SECONDARY to the fact that the country is providing a cheaper method of maufacture, service or labor pool than can be found in the US with the CURRENT business models and practices. You want to grow your primary market, you don't dimish the pool of potential buyers by diminishing it. If the government can find a way to incentifvise the re-development of the US Manufacturing/Labor sector with new models of production they will. You're not going to get a business giving up what works without a way to increase their bottom line.

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #98 on: June 22, 2013, 12:24:45 PM »
You know what, Ruby?  I challenge you to do that.  Check every article of clothing that you have and don't use anything that doesn't say 'Made in the US.'  Everything you buy (even in the thrift stores - check those labels!), everything you eat (local produce only!) everything you make use of (because you've said that your parents foot your bills).

You keep telling everyone you have all the answers and honestly, I think you're blowing smoke.  You haven't got a clue about the real world and the world economy.  You'd happily use imported goods as long as someone else was paying for them.

You know my clothes are made in the US my underclothes from a small US company made in the US, my clothes I wear I largely I make myself and my shoes are yes made in the US in fact moccasins made on a reservation by a leather crafter and flip flops from another local crafter. I use mass transit so can't help that but the buses are made in the US. I at least try to encourage American business as far as I can but to the level I suggested in needs to be far bigger to have the impact.

But my point is pretty clear if you want American manufacturing and bring those jobs back consumer pressure en masse will likely do it. You said there is no clothing and textile industry right now to meet the need but if manufacturers lost all sales in the USA unless those clothes are made HERE they would have two options lose all that money or reopen factories. As for the goods being poorer - prove it. But what other option is there any government action could start a trade dispute and not likely forthcoming.

May I ask do you think it was morale when British subjects didn't by slave made sugar and tea OR the colonists refused to buy British goods? Yes or no. If no then what is so bad with my idea all I'm saying is tap the American people to make up the loss you can make clothes, buy leather crafted goods, fine people able to build computers and restore them. The idea is to do as much economic harm to companies as possible so as to force more companies to come here to make goods if they don't they lose profits likely a good amount.

Offline Kythia

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Re: Economic Discussion of Minimum Wage Laws
« Reply #99 on: June 22, 2013, 02:25:41 PM »
You know my clothes are made in the US my underclothes from a small US company made in the US, my clothes I wear I largely I make myself and my shoes are yes made in the US in fact moccasins made on a reservation by a leather crafter and flip flops from another local crafter. I use mass transit so can't help that but the buses are made in the US. I at least try to encourage American business as far as I can but to the level I suggested in needs to be far bigger to have the impact.

But my point is pretty clear if you want American manufacturing and bring those jobs back consumer pressure en masse will likely do it. You said there is no clothing and textile industry right now to meet the need but if manufacturers lost all sales in the USA unless those clothes are made HERE they would have two options lose all that money or reopen factories. As for the goods being poorer - prove it. But what other option is there any government action could start a trade dispute and not likely forthcoming.

May I ask do you think it was morale when British subjects didn't by slave made sugar and tea OR the colonists refused to buy British goods? Yes or no. If no then what is so bad with my idea all I'm saying is tap the American people to make up the loss you can make clothes, buy leather crafted goods, fine people able to build computers and restore them. The idea is to do as much economic harm to companies as possible so as to force more companies to come here to make goods if they don't they lose profits likely a good amount.

*sigh*

OK, firstly a load of hi-tec goods literally cannot be made in the USA.  "Finding someone able to build computers and restore them" is.... is not how literally any part of that works.  There is a colossal difference between the guy you know who can replace your motherboard and large scale manufacturing.  So lets rule that out straight off the bat.  You can't have any more complicated electrical goods, at least not for a generation. 

Lets put aside the horrific economic catastrophe caused by every single US worker refusing to use their foreign made work computers, Wall Street resorting to the abacus could be quite funny and surely not every office uses a computer?

Clothes, though.  lets return to clothes.  You say to "prove it" that clothes will be poorer.  I can't tell if you're being facetious there or not.  I certainly hope so but just in case:

The cost of an item of clothing is [labour costs]+[raw materials costs]+[profits].  Obviously each of those could be broken down, but those are the main components.  Now, Callie has talked about how US textile plants have relocated to Mexico.  They didn't do that to practice their Spanish or because they love Tequila, they did it because labour costs are lower.  Meaning the total garment price is lower.  Manufacturing in the US has higher labour costs.  So to keep [labour costs]+[raw materials costs]+[profits] the same then either profits or raw materials need to be cheaper.  That decision - the decision of how much profits are made by the company directors - is made by the company directors.  Profits won't go down so ba da bing ba da boom.  Raw materials costs go down, garments or of lower quality.

Why can't price go up you ask?  Because thats a tax on the poorest people in society.  Increasing the cost of such necessities as clothing hits people who are already struggling hardest and so won't be allowed to happen.  Thrift stores sell clothes that are donated.  With clothes being shittier quality, fewer will last until donation for one and for two there simply isn't the infrastructure to clothe America solely through thrift shops.  So price remains the same, quality goes down.

A small to price to pay, you might think.  Sure, for you.  Bangladesh is literally one of the poorest countries in the world, so much so that when the US tried to cut down on clothes made in Bangladeshi sweatshops to protect workers their government intervened to tell them to shut up.  Taking that industry away will cause famine and human misery on an untold scale so that you can feel better about your clothes being made in a highly automated, low staffed factory in the US. 

So, eventually, other governments will step in and tell the US to just knock it off.  Change the rules about what can have a "Made in the US" sticker.  You seem to think that because this isn't a government initiative that foreign governments will not be able to do anything other than wring their hands in despair.  I would suggest you haven't really understood anything about the history of the last few hundred years.  Hell, you even mention the boycott of British goods by the Aerican colonists.  What happened next?  Remind me, did the British government say "welp, nothing we can do here?"  Only, I seem to remember reading about some sort of war.  When Archduke Ferdinand was assassinated in Sarajevo, did the world at large say "not a government action, nothing to see here" or did World War 1 start.  Governments are held responsible for the actions of their citizens all the time.  You're starting a trade war.  God, look at the Opium Wars in Hong Kong and China. 

Your idea is unworkable, would cripple the US unless enough exceptions were made to render the entire idea pointless, would spark a trade war and would destroy industrialising countries.  It's not a go, Ruby.