Author Topic: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles  (Read 6685 times)

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Online Oceander

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #25 on: August 05, 2013, 12:07:07 AM »
NUMMI proved otherwise.

Proved what "otherwise?"

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #26 on: August 05, 2013, 09:17:31 PM »
I thought the joint venture between Toyota and GM ended when GM pulled out and Toyota realized a unionized work force in California was not going to be successful--ie turn a profit.

Nope, the union had nothing to do with the plant closing.

Toyota is once again involved with NUMMI, this time collaborating with Tesla.

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #27 on: August 05, 2013, 09:32:42 PM »
Proved what "otherwise?"

That unions brought down the US auto industry and Detroit.

http://www.thisamericanlife.org/radio-archives/episode/403/nummi

Online Oceander

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #28 on: August 05, 2013, 11:31:58 PM »
That unions brought down the US auto industry and Detroit.

http://www.thisamericanlife.org/radio-archives/episode/403/nummi

So NUMMI proves that unions did not bring down the US auto industry and Detroit?

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #29 on: August 06, 2013, 09:28:32 AM »
So NUMMI proves that unions did not bring down the US auto industry and Detroit?

NUMMI was GM's most profitable US plant. Quality and profitability were accomplished not by getting rid of the union, but by changing management style.

Online Oceander

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #30 on: August 06, 2013, 10:05:28 PM »
NUMMI was GM's most profitable US plant. Quality and profitability were accomplished not by getting rid of the union, but by changing management style.

So it's still going strong, right?  If it's firing on all cylinders, why get rid of it?  Or maybe it was just the token, the hothouse orchid, set up to masquerade for a system that, overall, is too dysfunctional to survive.

Is management part of the problem?  Of course.  However, unions were given the driver's seat with the NLRA and the government's thumb on their side of the scales, so management adapted to unions, not the other way 'round, meaning that, contra your assertion, unions and unionization are, in fact, the primary cause of most failed industrial businesses.

Offline AbaraXas

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #31 on: August 06, 2013, 10:17:48 PM »
Plus.....doubling the minimum wage doesn't translate into ALL that increase going into the employee's pocket as additional discretionary spending.

The withholding taxes and FICA taxes and state taxes will grab 'their share'.

There is a big rub they aren't telling people. Someone making minimum wage is in an income bracket that not only isn't taxed, but usually also earns an earned income tax credit. Jumping to $15/hour without changing the tax tables suddenly into the 15% bracket and they don't get their usual refund(sic) due to the earned income credit.

Of course, this assumes these people will have a job. 

The reality of what will happen is.

1. Low skilled workers hours will be cut drastically to the bare minimum needed.
2. Managerial staff who are currently making in the $15/hour range will now have to take on increased responsibilities in addition to their current duties. They are now minimum wage employees instead of having worked up to their management position.
3. Efficiency experts such as Six Sigma or Kaizen professionals will come in and find more and more ways to increase productivity with fewer and fewer employees.
4. Automation and self-service will be adopted for more and more actives in these restaurants.

It has happened before and it will happen again. Many jobs have been priced out of the markets (when was the last time someone actually filled your fast food drink for you?)

Offline AbaraXas

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #32 on: August 06, 2013, 10:21:22 PM »
Nope, the union had nothing to do with the plant closing.

Toyota is once again involved with NUMMI, this time collaborating with Tesla.

Toyota came in with their own processes and automation so NUMMI worked with that as a starting point. For the old guard auto companies, the unions were still fighting to retain processes and technology decades out of date. They fought against production innovation and efficiency programs. Toyota had a foot up by starting with an efficient process system so they were less impacted.

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #33 on: August 07, 2013, 11:12:36 AM »
So it's still going strong, right?  If it's firing on all cylinders, why get rid of it?  Or maybe it was just the token, the hothouse orchid, set up to masquerade for a system that, overall, is too dysfunctional to survive.

Is management part of the problem?  Of course.  However, unions were given the driver's seat with the NLRA and the government's thumb on their side of the scales, so management adapted to unions, not the other way 'round, meaning that, contra your assertion, unions and unionization are, in fact, the primary cause of most failed industrial businesses.

GM dumped its Pontiac line, and Toyota, having overbuilt, had excess production capacity and employees worldwide, and was losing money. Even so, NUMMI remained open 13 years longer than its intended 12.

It is too easy to blame unions, and not really relevant anymore. For years unions have been on the decline, losing membership, and engaging in "give-backs".

I already gave you a link to an audio story about NUMMI, here is a link to a transcript of the same story.

http://www.thisamericanlife.org/radio-archives/episode/403/transcript

A Frenchman, who had just bought a business in California, was telling me that he had signed a contract with a California manufacturer to produce products for him. Having believed in the popular wisdom that manufacturing in the US, and particularly in California, was a losing proposition, I was genuinely shocked. He said "of course he could manufacture in California and make a profit", that wasn't the question - how much profit was enough, was the question. He said "Americans can make anything", then launched into a rant about American's disloyalty to their fellow citizens, and to the country itself.


Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #34 on: August 07, 2013, 11:29:41 AM »

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #35 on: August 07, 2013, 11:46:12 AM »

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #36 on: August 07, 2013, 11:54:56 AM »
And this *MUST* be true, because TIME magazine says so.

I'm sure if you didn't agree, you would produce a credible source that proves otherwise.

Offline Rapunzel

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #37 on: August 07, 2013, 05:38:08 PM »


 
A Frenchman, who had just bought a business in California, was telling me that he had signed a contract with a California manufacturer to produce products for him. Having believed in the popular wisdom that manufacturing in the US, and particularly in California, was a losing proposition, I was genuinely shocked. He said "of course he could manufacture in California and make a profit", that wasn't the question - how much profit was enough, was the question. He said "Americans can make anything", then launched into a rant about American's disloyalty to their fellow citizens, and to the country itself.

The Frenchman is correct.  I am old enough to remember before NAFTA and outsourcing to Mexico or China or Indonesia.  When the CEO of the Fortune 500 companies were paid a salary with a year end bonus -- but those bonuses were not in the millions of dollars, they were within reason.  Most lived in nice homes, not lavish or extravagant homes.  Heck back then even Hollywood stars had what would be considered a shack today in Malibu for weekend vacations and nice, but not thousands of square feet homes in Bel Air or Beverly Hills...  then along came Jack Welch and GE and outsourcing to China and telling other companies  - you want to do business with GE you have to follow suit...  starting under Reagan late in his second term, placed on steroids by GHWB and then Clinton... and then there came the Hedge Funds, they originated at a smaller degree in the 20's, amped up a bit in the late 40's, then went quiet in the big recession of the late 60's - earl;y 70's (thank you Richard Nixon /s) and then in the 90's went full tilt.... the started including credit arbitrage, distressed debt, fixed income,  pension and endowment funds and more and more portfolios went into the Hedge Funds.......and... the Romney graduating class from Harvard was on the forefront of all of this... many people - like Romney became wildly rich while the middle class of this country has slowly, but surely, been eroding as a result of it....

Offline silverhair

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #38 on: August 08, 2013, 12:41:21 AM »
The Frenchman is correct.  I am old enough to remember before NAFTA and outsourcing to Mexico or China or Indonesia.  When the CEO of the Fortune 500 companies were paid a salary with a year end bonus -- but those bonuses were not in the millions of dollars, they were within reason.  Most lived in nice homes, not lavish or extravagant homes.  Heck back then even Hollywood stars had what would be considered a shack today in Malibu for weekend vacations and nice, but not thousands of square feet homes in Bel Air or Beverly Hills...  then along came Jack Welch and GE and outsourcing to China and telling other companies  - you want to do business with GE you have to follow suit...  starting under Reagan late in his second term, placed on steroids by GHWB and then Clinton... and then there came the Hedge Funds, they originated at a smaller degree in the 20's, amped up a bit in the late 40's, then went quiet in the big recession of the late 60's - earl;y 70's (thank you Richard Nixon /s) and then in the 90's went full tilt.... the started including credit arbitrage, distressed debt, fixed income,  pension and endowment funds and more and more portfolios went into the Hedge Funds.......and... the Romney graduating class from Harvard was on the forefront of all of this... many people - like Romney became wildly rich while the middle class of this country has slowly, but surely, been eroding as a result of it....

 :amen: :amen:

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #39 on: August 08, 2013, 01:59:04 PM »
The Frenchman is correct.  I am old enough to remember before NAFTA and outsourcing to Mexico or China or Indonesia.  When the CEO of the Fortune 500 companies were paid a salary with a year end bonus -- but those bonuses were not in the millions of dollars, they were within reason.  Most lived in nice homes, not lavish or extravagant homes.  Heck back then even Hollywood stars had what would be considered a shack today in Malibu for weekend vacations and nice, but not thousands of square feet homes in Bel Air or Beverly Hills...  then along came Jack Welch and GE and outsourcing to China and telling other companies  - you want to do business with GE you have to follow suit...  starting under Reagan late in his second term, placed on steroids by GHWB and then Clinton... and then there came the Hedge Funds, they originated at a smaller degree in the 20's, amped up a bit in the late 40's, then went quiet in the big recession of the late 60's - earl;y 70's (thank you Richard Nixon /s) and then in the 90's went full tilt.... the started including credit arbitrage, distressed debt, fixed income,  pension and endowment funds and more and more portfolios went into the Hedge Funds.......and... the Romney graduating class from Harvard was on the forefront of all of this... many people - like Romney became wildly rich while the middle class of this country has slowly, but surely, been eroding as a result of it....

So now there's something fundamentally wrong/suspect about free market economics, eh?  Are you really going to let yourself be led down that rosy little path?

The erosion of the middle class has precious little to do with actual free market economics, BTW.

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #40 on: August 08, 2013, 03:26:01 PM »
The Frenchman is correct.  I am old enough to remember before NAFTA and outsourcing to Mexico or China or Indonesia.  When the CEO of the Fortune 500 companies were paid a salary with a year end bonus -- but those bonuses were not in the millions of dollars, they were within reason.  Most lived in nice homes, not lavish or extravagant homes.  Heck back then even Hollywood stars had what would be considered a shack today in Malibu for weekend vacations and nice, but not thousands of square feet homes in Bel Air or Beverly Hills...  then along came Jack Welch and GE and outsourcing to China and telling other companies  - you want to do business with GE you have to follow suit...  starting under Reagan late in his second term, placed on steroids by GHWB and then Clinton... and then there came the Hedge Funds, they originated at a smaller degree in the 20's, amped up a bit in the late 40's, then went quiet in the big recession of the late 60's - earl;y 70's (thank you Richard Nixon /s) and then in the 90's went full tilt.... the started including credit arbitrage, distressed debt, fixed income,  pension and endowment funds and more and more portfolios went into the Hedge Funds.......and... the Romney graduating class from Harvard was on the forefront of all of this... many people - like Romney became wildly rich while the middle class of this country has slowly, but surely, been eroding as a result of it....


So now we're going to start delving into the mythical fantasy world of price-gouging and wage-slavery, are we?

What's sorely lacking here is any real analysis of why this is the current state of affairs.  First off, let's dismiss any fantasies of price-gouging; the US is, at least for the time being, still a free market economy and - other than health insurance - we generally aren't forced to buy too many products and - with some notable exceptions - the governments (federal or state) don't generally engage in rampant price-setting.  It therefore necessarily follows that the revenues these companies earn - and it is, after all, from revenues whence floweth the compensation of CEOs - is a fair measure of the real market value of the goods or services these companies sell.  In other words, these companies haven't been "stealing" or price-gouging, they've simply been selling goods and services at prices people are voluntarily willing to pay.

Therefore, these companies' revenues are for the most part legitimately earned.

Now let's move on to the mythical land of wage-slavery.  Are these companies really abusing the people who choose to work for them, paying them subpar wages?  So far as I know, people in the US are still free to come and go as they please and to work, or not work, for whomever will hire them, which means that if the employees at these companies are dissatisfied with their pay they are free to find better paying jobs.  As such, the claim that these companies are abusing their employees by paying subpar wages is rather weak.  But still, let's string the argument along a little and throw in that fave bogie man, economic necessity:  the argument goes that people have to have some sort of work to pay their living expenses (true enough) and so these companies, knowing that, effectively indenture their employees to their service by paying them just enough to survive on, but not enough to do any better because the alternative is getting fired and having nothing.

Keeping in mind that this conveniently ignores minor details like unemployment compensation, it also flies in the face of reality because it implicitly assumes that there is a cabal or some sort of tacit agreement amongst most major companies in the US to keep their wages uniformly low and to avoid poaching other companies' employees.  Now, if this is true, then someone needs to call the anti-business liberals at the FTC and in the trial lawyers' bar associations because that would be the biggest antitrust conspiracy ever, bar none; that so far not even the worst of the strike-suit law firms has sued any of these companies for antitrust violations based on wage collusion is a pretty good indicator that no such collusion exists.  So much for low-wage conspiracy theories.

That leaves only non-intentional limitations on the ability of dissatisfied employees to find better-paying jobs, and most of those limitations have to do with the fact that the economy is still just limping along, barely getting by (the real economy, that is, not the false economy of the stock market), with the result that there isn't a lot of pressure from companies to hire employees away from other companies.  Now I don't know about you, but I think it's even more far-fetched - and a potentially bigger antitrust case - to assume that these companies are somehow - in a non-collusive way - limiting the overall activity of the economy in order to reduce hiring pressures so they can keep their employees locked into their subpar wages.

Consequently, it follows that, even though a lot of people are not happy with what they're getting paid - we'd all love to be paid a million bucks a year - most people have done their own economic calculus and have concluded that, all things considered, the wages they're getting paid are acceptable given the current economic conditions (and each individual's basket of risk/reward preferences).  As such, by and large these companies are not funding uneconomically lavish CEO compensation on the backs of employee wage-slaves.

Which brings us back to the original question, but with a lot of the underbrush and nonsense cleared away:  why do these companies pay their CEOs so lavishly?  Allied to that is this:  who is getting less because these CEOs are getting more?

As to the second question, we've already discounted consumers and the rank-and-file employees; however, there is another (huge) class of stakeholders that never gets properly mentioned, although it is beyond me why they don't.  That would be the owners of these companies, the shareholders.  That's right, the shareholders.  Under very, very basic economic theory, the shareholders, as the owners of a company, are entitled to receive all of that company's net profits after all expenses - including CEO compensation - has been paid.  Therefore, for any given year there is a zero-sum game for the net profits a company earns for that year:  the more of those profits that go to pay the CEO, the less there is for the shareholders to divide amongst themselves.

In other words, the people who are, if you will, "suffering" economically because of lavish CEO pay are the shareholders, who get a smaller cut of the company's net operating profits because of it.

But, but, but, ... you say: the shareholders are the bosses of the company so if they were really getting hurt they could stop it from happening by simply electing directors who would cut the CEO's pay; since they clearly haven't it must be that they aren't being hurt by it.

Now you're getting the hang of it.  You look to existing economic relationships and try to figure out why they are the way they are, particularly those that don't seem to make sense on the surface, because - as with my discussion of employees above - people generally won't continue an economic transaction/relationship unless they feel they're getting some net benefit out of it (and, more to the point, that the net benefit they do get is greater than the benefit they could get from any other available economic transaction/relationship).

So, why is it that the shareholders of all these companies are willing to sit still for this too-lavish CEO pay when the money for it is coming out of their pockets?

Simple:  because shareholders by and large do not actually want to get their share of a company's net operating profits - at least not paid out to them in cash at the end of each fiscal year once those net operating profits have been determined.  What?  How can that be?  Simple:  the only way that the net operating profits of a company get out to its shareholders is if the company declares a dividend, and dividends are the only species of income that is subject to a double tax, being taxed once when earned by the company and second when distributed to the shareholders.

No, shareholders by and large do not want dividends; instead, they want to reap the benefits of their investment through the appreciation in the value of their stock, which they can then reap as capital gains on their own time frame and which will be subject to a lower rate of tax than dividends (keep in mind, the concept of taxing so-called "qualified dividends" at capital gains rates is very new - it came in in 2003 - and that even so, the funds used to pay qualified dividends are still subject to the corporate income tax, meaning that the double tax problem has only been reduced, not done away with).

So, what does that leave us with?  It leaves us with a situation where a profitable company has a pile of cash at the end of the year - that is, before final CEO bonus compensation is paid - that (a) the owners of the company, the shareholders, don't really want, and (b) that cannot really be profitably reinvested in the company's own business because the company has already plowed back into its business as much as it can economically reinvest.  The company also cannot just put the money into US Treasuries or some other passive investment and just let it sit there because there's another tax, the accumulated earnings and profits tax, that kicks in whenever a corporation holds on to too much idle cash.

So, what to do with this cash?  Well, it can't stay in the company's hands because it'll just go to Uncle Sam in the form of an accumulated profits tax and there aren't any more plausible reinvestments the company could make with that cash that would avoid this tax.  The company could push it out to the shareholders by declaring a dividend, but the shareholders aren't too enthusiastic about that because (a) it'll dampen the market price of their shares (shares ex-dividend are worth less than shares pre-dividend) and (b) it'll increase their taxes and, again, Uncle Sam will get a large part of it.  The company could sprinkle it all over the entire staff, but (a) that wouldn't do much if each employee got an equal share (e.g., in 2012 JC Penny paid its CEO $53.3M - assuming that was all cash comp, which it wasn't - if that amount had instead been divvied out in equal parts to all 159,000 of JC Penny's employees, each would have received about $335; if the CEO had been allowed to keep $20M of that compensation, then each employee would have received about $200), and it would be completely unnoticeable if that money had gone toward increasing wages during the course of the year instead of going out as a year-end bonus, and (b) giving every employee a little (additional) Christmas bonus isn't going to raise the stock price, even though it does somewhat reduce the overall amount that Uncle Sam gets since the money paid as comp isn't subject to the corporate income tax.

Finally, the company could instead spend the money to hire a splashy rock-star CEO (and other top echelon management types) who will wow the markets and help to lift the stock price to new heights.  Now that at least gives the shareholders something they want - an increase in the value of their investment without an immediate tax hit, and an increase that will be subject to only one level of tax, at the individual level not the corporate level, and even better at the low capital gains tax rate - and reduces the overall amount that Uncle Sam gets since money paid as compensation is not subject to the corporate income tax.

Mind you, this isn't a perfect system, it doesn't always work out that way, but at least at the time that it's proposed, it usually gets support because, in part, most investors are optimists and even if the rock-star CEO hired by someone else's company didn't rocket the share price to the stratosphere, the rock-star CEO hired by my company will.

Management, of course, is not about to look this gift horse too closely in the mouth, and shareholders are generally not that adverse to it because they have seen it happen in the past where a moribund company hired a turn-around artist who actually turned the company around and made its shareholders rich.

I hope you've been paying attention through this ordeal and have picked up on the salient, key issue buried in all this verbiage:  taxes.  What drives the lavish CEO pay you're complaining about is, by and large, the tax system and the way that it has distorted the investment market to disfavor dividends and to favor pie-in-the-sky hopes for future capital gains.  The result is made even worse by other aspects of the tax system I haven't even touched upon, such as the fact that a lot of the lavish CEO compensation is in the form of stock options that are not taxed as highly as is cash compensation.

Taxes - in particular the distortionary effects of our present tax code - and the wishful thinking of many shareholders/investors - is the principal driver behind these too-lavish rates of CEO compensation.  Price-gouging and wage-slavery are simply tepid little mythological illusions by comparison; and yet, that is what people tend to fixate on.


 

Offline EC

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #41 on: August 08, 2013, 04:31:19 PM »
Thank you for your (as always) extremely thought provoking response. One point:

Quote
But still, let's string the argument along a little and throw in that fave bogie man, economic necessity:  the argument goes that people have to have some sort of work to pay their living expenses (true enough) and so these companies, knowing that, effectively indenture their employees to their service by paying them just enough to survive on, but not enough to do any better because the alternative is getting fired and having nothing.

I know you partially addressed it in the next paragraph, but one thing you have not considered in your summation. It is many times harder to get a job once you are unemployed than it is while you are employed, and unemployment compensation will not cover that gap.
You are employed and wish move jobs - you are valuable and worth paying a bit more for. Unemployed, and your new employer is taking a risk that you are unemployed for a very good reason. Been downsized from a previous job? The alarm bells really start to go off.
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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #42 on: August 08, 2013, 04:44:42 PM »
Thank you for your (as always) extremely thought provoking response. One point:

I know you partially addressed it in the next paragraph, but one thing you have not considered in your summation. It is many times harder to get a job once you are unemployed than it is while you are employed, and unemployment compensation will not cover that gap.
You are employed and wish move jobs - you are valuable and worth paying a bit more for. Unemployed, and your new employer is taking a risk that you are unemployed for a very good reason. Been downsized from a previous job? The alarm bells really start to go off.

True enough, but in order to stick these companies with the blame for that state of affairs you would have to posit - and prove - that these companies are intentionally acting in order to keep the economy doing poorly in order to ensure that this remains a live threat.  In times when the economy is going gangbusters, the same fears and concerns do not apply; of course, everyone is also making a lot more money, too.

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #43 on: August 08, 2013, 05:14:27 PM »
Is is possible that the whole idea is historical and has just carried on? After all, the original factory / mine workers were not exactly treated well or paid well for their work.
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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #44 on: August 08, 2013, 05:15:15 PM »
Is is possible that the whole idea is historical and has just carried on? After all, the original factory / mine workers were not exactly treated well or paid well for their work.

Which idea?

It's quite true that factory/mine workers - most employees, in fact - were not treated well and were taken advantage of, but the disadvantage largely had to do with their lack of information - information asymmetry - and lack of bargaining power, both of which have been largely ameliorated today.  In fact, the union laws have taken things too far over to the other extreme in many ways.

But then again, the basic asymmetry between a large employer and each individual employee will always exist, and that's neither good nor bad but merely a fact of life, like gravity.  It's as normal, and innocuous, as the fact that some people will do better than I because they have skills that are more highly in demand than mine are.
« Last Edit: August 08, 2013, 05:23:07 PM by Oceander »

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #45 on: August 08, 2013, 05:21:15 PM »
The "Greedy bosses, downtrodden workers" idea that seems to be the core of this discussion.
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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #46 on: August 08, 2013, 05:28:19 PM »
The "Greedy bosses, downtrodden workers" idea that seems to be the core of this discussion.

I think that is a hold-over, an atavism from a bygone era.  The fact of the matter is, everyone is "greedy" - the lowly worker no less than the high and mighty boss - which is just a pejorative term for self-interested.  And as far as being down-trodden, the upper management of a large, flourishing company certainly has a rather large edge over each individual employee, but back in main street USA, there is frequently a lot more risk, and therefore a lot more willingness to be "down trodden," on the part of the business owners/managers than on the part of the employee.  As a very simple example, assume a sole proprietorship with one employee.  If that business goes under, the owner may be awash in a sea of debts s/he cannot afford to pay and will not even qualify for unemployment compensation; the employee, by comparison, simply walks away, files her/his unemployment comp. claim and, if prudent, starts perusing the want-ads and firing off resumes.

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #47 on: August 08, 2013, 05:41:31 PM »
 :beer:

My thanks, as always. There is something that seems not to have been addressed - but for the life of me I can't work out what it is in a coherent form, so slightly rambling and disjointed ahead!

I am sticking on the whole idea of fair. Who decides what a fair pay for a fair days work is? To stick with fast food - standing at a hot grill and having 90 seconds to produce a perfect and often customised burger is a painful thing. Yet in a fast food joint, no one is going to pay more than $5 for a burger and side. Even with the bulk purchasing power of a big chain, there isn't much profit margin.
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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #48 on: August 08, 2013, 05:43:14 PM »
:beer:

My thanks, as always. There is something that seems not to have been addressed - but for the life of me I can't work out what it is in a coherent form, so slightly rambling and disjointed ahead!

I am sticking on the whole idea of fair. Who decides what a fair pay for a fair days work is? To stick with fast food - standing at a hot grill and having 90 seconds to produce a perfect and often customised burger is a painful thing. Yet in a fast food joint, no one is going to pay more than $5 for a burger and side. Even with the bulk purchasing power of a big chain, there isn't much profit margin.

Ok.  What does it mean for something to be "fair?"

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Re: Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles
« Reply #49 on: August 08, 2013, 05:50:06 PM »
This is what is screwing me up. What, exactly, is fair?
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