"Sorry, It's Not A 'Law Of Capitalism' That You Pay Your Employees As Little As Possi

Discussion in 'Too Hot for Swamp Gas' started by philnotfil, Aug 7, 2013.

  1. philnotfil
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    philnotfil Well-Known Member

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    Many things which are labelled as capitalism are not actually capitalism.

    businessinsider.com

  2. corpgator
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    corpgator Well-Known Member

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    Cue about 50 comments telling you how wrong you are and that companies "aren't an employment service."

    It's funny, though, that all these wannabee and actual business owners don't count themselves in their non-employment job house.
  3. MichiGator2002
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    What capitalism will tell you is that the price of labor -- like everything else! -- is where the willing buyer and willing seller agree. What the market will bear. And where the willing buyer of labor is willing to go pricewise depends entirely on the quality of labor they want to purchase.
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  4. MichiGator2002
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    MichiGator2002 VIP Member

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    Businesses don't exist to provide people jobs. I am still amazed how many people managed to reach adulthood confused on that point. Businesses only offer work because their circumstances dictate they can make more money overall if they invest in more able bodies to split the business' tasks amongst. But that makes hiring people a byproduct of the real purpose of the business -- to make its owner money.
  5. Gatorrick22
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    Gatorrick22 Well-Known Member

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    We need to repeal all federal laws about wages and ethnic quotas. The fed is not our ruler and master.
  6. GatorRade
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    GatorRade Well-Known Member

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    Indeed.

    And the goal isn't to pay as little as possible or as much as possible; it's whatever the employer wants the goal to be, with one stipulation: you must cover your costs. Any business that fails this requirement is no longer a business.
  7. gator10010
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    gator10010 VIP Member

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    If there is one single law that keeps poor people poor it is the minimum wage law.

    Yet people always want to raise the minimum wage as if it will create more wealth and opportunity when in reality it does the opposite.
  8. g8orbill
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    as an employee I always negotiated as high a salary as I could command

    as an owner I do my best to limit what I pay
  9. VAg8r1
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    VAg8r1 Well-Known Member

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    Really? Although theory suggests the opposite, increases in the minimum wage actually have very little negative impact on employment.

    UC Berkley
  10. QGator2414
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    Splendid response...
  11. QGator2414
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    QGator2414 VIP Member

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    Bingo...
  12. QGator2414
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    Did gator10010 mention anything about employment numbers?
  13. mdgator05
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    He argued that minimum wages keep poor people poor. The only theoretical mechanism by which this could occur would be to increase unemployment, as it is hard to argue that mandating paying people more will make them poorer unless the argument is that they won't get a job because they will cost too much.
  14. QGator2414
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    If labor costs rise so will the cost of the product or service the labor delivers...
  15. gator10010
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    You're talking about existing jobs and slight increases or decreases in minimum wage laws.

    I'm talking about increasing opportunity by abolishing minimum wage all together.

    The whole illegal immigration thing should show you the opportunity is there we just have to open that opportunity up to everyone.
  16. gator10010
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    gator10010 VIP Member

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    Uh no....minimum wage laws limit the opportunities for poor people to learn a trade or gain experience and better their situation.

    You have to ask yourself why are poor people poor to begin with?

    Obviously they don't have any money and the next obvious answer is poor education. So what does an individual with no capital and no education have to offer the employment market?

    His labor.
  17. mdgator05
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    The only way this would result in poor people getting poorer would be if there was a beyond 100% pass through of labor costs.

    Think of it this way:

    Product A and B are produced by 1 minimum wage employee and 1 non-minimum wage employee. For the sake of simplicity, lets say that the only products in this economy are A and B, minimum wage is equal to 1 and the non-minimum wage employees make 2.

    Product A and B cost 3.50 each. So to purchase 1 of each, it costs 7.

    Now we raise the minimum wage to 1.5. Let's say that we have exactly 100% pass through, meaning the price of both products becomes 4 due to the increase by 0.5.

    In the first period, with a 1 minimum wage, buying both A and B utilized 7 hours of labor for the minimum wage employees (ie. they had to work for 7 hours to pay for both A and B). In the second period, even with the increased price with 100% pass through, it would only cost 5.33 hours of labor for the minimum wage employees. And that is with 100% pass through.

    The person hurt by the price increase is the non minimum wage employee (ie. the non poor worker). The minimum wage worker ended up much better off even with 100% pass through. The pass through would have to be at 133% to actually have the minimum wage employee break even. That seems very unlikely.
  18. mdgator05
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    Okay, so a person is making minimum wage because he has no education. How would making less money get him more of an education?
  19. QGator2414
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    If it were only that simple...
  20. mdgator05
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    Turning the problem into a 750 dimension problem doesn't change the math behind the econ theory.

    I guess you could argue that increasing minimum wage increases product demand, but that would work against your point, as it would suggest that those on minimum wage can now consume more and are thus less poor.

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