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OT anyone have any idea if the $15/hour minimum wage will impact our DIY hobby?

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  • #16
    IMNSHO a better indicator of how things are going is wages in general. Pretty scary seeing what 40+ years of Reagonomics has done to the working class. Minimum wage level is a red herring (much like the majority of the dialogue involving income tax) designed to refocus attention away from the big picture and the political party responsible for the current state.

    An immediate spike in minimum wage is absolutely beneficial to the economy as a whole - people will spend, and that is a fact. When people spend - the upper class makes a ton of money. Not a long term solution however.

    Long term? This country never did better than when we had a seriously high top tax bracket. The correlation between reducing progressive tax rates and the absolute stagnation of wages is hard to ignore.

    Penalize heavily any dollar earned from overseas labor, make it illegal for Americans to store capitol overseas whether in bank accounts or in investments of any kind, get rid of tariffs, regulate healthcare costs, reverse the trend of education being a debt generating scheme and the minimum wage conversation becomes moot. Deregulation, union busting, and lower taxes brought us here. The next four years we have a chance to correct some of this - if they have the ba!!s to address it.
    Don't listen to me - I have not sold any $150,000 speakers.

    Comment


    • kenny_k
      kenny_k commented
      Editing a comment
      Two years, remember there are elections in '22.

  • #17
    Well stated Johnny. Spot on.

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    • #18
      Similar to Geoff I'm in OZ as well and maybe what it will do is make some industries leave the states and go to places cheaper to do the job....happened here with a few things, but not sure if lifting the minimum wage caused that or the cost to produce due to higher wages in general

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      • #19
        I remember when in the UK they put the minimum wage up from zero to UKP 3.60, it didn't seem to affect anything much, so I don't see how merely doubling it change anything! I'm kidding, but it all depends where you start from. Since people on minimum wage are most likely to be in low skilled rolls I would hazard a guess that the place you may be more likely to see any impact on component prices is in the price of bits of dead trees from the hardware store. As others have alluded to, if you are paying someone minimum wage in the US, it is almost certainly a job that can't be outsourced overseas, or it already would have been. I think it is fairly well proven that minimum wage increases do not increase unemployment. I would struggle to see this as a bad thing, certainly in terms of net benefits.

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        • #20
          Originally posted by zx82net View Post
          if you are paying someone minimum wage in the US, it is almost certainly a job that can't be outsourced overseas.
          Quite right. What you outsource is skilled labor, which isn't minimum wage. The most common minimum wage jobs are:
          1. Hotel housekeeper
          2. Food preparation worker
          3. Personal care assistant
          4. Restaurant server
          5. Childcare provider
          6. Bartender
          7. Home health aide
          8. Retail sales
          9. Janitor
          10. Nursing assistant

          These can't be outsourced nor for the most part automated.

          www.billfitzmaurice.com
          www.billfitzmaurice.info/forum

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          • #21
            So where does the money come from to pay in some cases a 50% increase in pay? Do many just assume all business owners are flush with cash and are just purposely not paying their employees?

            I believe an increase in the wage will have a negative overall impact on the economy. Minimum wage jobs are not for people who are raising families. They are intended for college students, high schoolers or low skill competency individuals.

            Most businesses run on pretty thin margins, mainly those businesses hiring minimum wage workers. I think you will find businesses adapt by having fewer employees overall to counter and making other parts of their business more efficient.

            a move in this direction will see a massive tip towards further automation in many business sectors.

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            • #22
              Originally posted by anunnaki View Post
              So where does the money come from to pay in some cases a 50% increase in pay? Do many just assume all business owners are flush with cash and are just purposely not paying their employees?

              I believe an increase in the wage will have a negative overall impact on the economy. Minimum wage jobs are not for people who are raising families. They are intended for college students, high schoolers or low skill competency individuals.

              Most businesses run on pretty thin margins, mainly those businesses hiring minimum wage workers. I think you will find businesses adapt by having fewer employees overall to counter and making other parts of their business more efficient.

              a move in this direction will see a massive tip towards further automation in many business sectors.
              agreed and I've run businesses with wages ranging from minimum to mid six figure incomes. If you move an entry level employee to $15, his supervisor goes from $15 to $20 or more. That means layoffs, especially for the employees most vulnerable.

              As far as the comment about our economy doing the best with 70% tax rates - that was early 60's before Kennedy reduced them (a dem). You can't compare today to then. We now live in a global economy.

              If you push the top tax rate to 90% as Pelosi, AOC have suggested - those earners will simply move offshore or quit. Trillions have come back to the US capital markets in the last four years. Just a fact.

              8 years ago, on our company dashboard, you could order new stationary or business cards. They were shipped in two days from NYC. 5 years ago, the system worked the same way except we received them in two days, for the same price, from the same company - which had moved to Ireland to escape the world's highest corp tax rate. Expect to see more of that.

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              • kenny_k
                kenny_k commented
                Editing a comment
                Johnson admin got it passed. 91 to 70 % and helped increase the economy.

            • #23
              And about CEO pay. The largest jump in CEO pay occurred during the Clinton adm. From avg of $4m/yr to $21M/yr (fully realized). Or stated another way, from 60x avg worker pay to 360x avg worker pay. Why, you ask?

              In an effort to correct the "economic injustice" and solve the "obscene" 60x avg worker disparity, the adm couldn't just impose limits unilaterally, but they could change tax policy. The change (section 162(m) of the IRS Code, had unintended but predictable consequences. Businesses like people, do what you incentivize them to do (a lesson our leaders could learn).

              The code limited the amount of CEO salaries that could be deducted as an expense to $1m/year. So, the businesses needed a way to compensate the best and brightest. They did so by tying compensation to stock value. Sounds good so far, right? The CEO reports to the shareholders and his pay should reflect the value of the business while his in charge. So, CEOs received massive compensation when values increased. Hence the historic increase in total CEO compensation.

              There is another significant unintended consequence - the average tenure of CEOs is about five years. After the changes, CEOs were incented to quit thinking about the long term health of corps, they were focused (were incentivized to focus) on the next year, next quarter, next paycheck. Long term planning, out the window.

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              • kenny_k
                kenny_k commented
                Editing a comment
                The Republican Party controlled both houses of Congress.

            • #24
              Originally posted by tvrgeek View Post
              ...Real inflation is highly dependent on your situation. For instance, house sales prices are irrelevant if you already own your house...Food and utilities have gone up at a higher rate. Fuel prices do trickle down. but pump prices for gas do not effect my costs.
              These are RELATIVE price increases. Inflation is by definition an increase in the GENERAL price level. Relative price increases do have real impacts on different segments of the population. Most economic research suggest that inflation (increases in the general price level) less than 20 to 40% does not have real impacts, or at least much that can't be handled pretty easily.

              Originally posted by tvrgeek View Post
              A valid argument, but only if there is a path from entry to living. Unfortunately, a significant portion of our entire economy is minimum wage with no upward path.
              2.3% of workers earned minimum wage in 2017.

              Originally posted by tvrgeek View Post
              There is also no easy mapping for local COL.
              The published measures of inflation are not meant to be a COL. There are reliable measures of COL by metropolitan statistical areas. The fact that many contracts, pensions, retirement plans may rely on simple measures of inflation is a flaw with the administration of those plans, not a flaw with the measurements of inflation.

              Comment


              • #25
                Originally posted by anunnaki View Post
                I believe an increase in the wage will have a negative overall impact on the economy. Minimum wage jobs are not for people who are raising families. They are intended for college students, high schoolers or low skill competency individuals.

                Most businesses run on pretty thin margins, mainly those businesses hiring minimum wage workers. I think you will find businesses adapt by having fewer employees overall to counter and making other parts of their business more efficient.

                a move in this direction will see a massive tip towards further automation in many business sectors.
                But you don't have to rely on beliefs and thinking, you can rely on economic research (which is not conclusive). The INTENT of the minimum wage is to provide a minimal level of full time wages for low-skilled workers. The largest segment of workers who do see negative effects are high-school, college, and part-time workers, but those are NOT the key groups targeted by the minimum wage. "The Fair Labor Standards Act set the first U.S. minimum wage in 1938. President Franklin D. Roosevelt passed it as part of the New Deal to protect workers during the Great Depression. The Depression had caused wages for many to drop to pennies a day. Roosevelt set the minimum wage at $0.25/hour." (Source)


                Originally posted by dwigle View Post
                agreed and I've run businesses with wages ranging from minimum to mid six figure incomes. If you move an entry level employee to $15, his supervisor goes from $15 to $20 or more. That means layoffs, especially for the employees most vulnerable.
                But we don't have to rely on anecdotes of a single business we can rely on economic research which generally shows no large scale effects of an increase in the minimum wage on employment (with the most significant affects on high-school, college and part-time workers).

                Originally posted by dwigle View Post
                As far as the comment about our economy doing the best with 70% tax rates - that was early 60's before Kennedy reduced them (a dem). You can't compare today to then. We now live in a global economy.
                No. Reagan's tax reform in 1981 reduced the personal income tax brackets from 17 brackets to something like 4 and lowered the top marginal rate of 70% to 50%. Reagan's tax reform of 1986 further lowered the top marginal rate from 50% to 38.5% and further to 28%.

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                Originally posted by dwigle View Post
                And about CEO pay. The largest jump in CEO pay occurred during the Clinton adm. From avg of $4m/yr to $21M/yr (fully realized). Or stated another way, from 60x avg worker pay to 360x avg worker pay. Why, you ask?

                In an effort to correct the "economic injustice" and solve the "obscene" 60x avg worker disparity, the adm couldn't just impose limits unilaterally, but they could change tax policy. The change (section 162(m) of the IRS Code, had unintended but predictable consequences....
                I would suggest that it was "predictable" in hindsight. Many things seem pretty obvious after the fact (like that unwanted spike at 1800Hz that was visible in the spec sheets and now has to be notched out), but if it was indeed obvious at the time something different would have been done. There are clearly challenging issues of inequality in America and CEO pay is one of them but figuring out policies to remedy such problems are not clear. Note, that this is relatively unique to the US so it is not some "natural" or equilibrium result of a capitalist market economy in general.

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                • Geoff Millar
                  Geoff Millar commented
                  Editing a comment
                  I think there's inequality everywhere.

                  I remember visiting Beijing some years ago; on leaving the Airport I was struck by the sight of three new Ferraris waiting to pick up whoever, while on the freeway out of the place there were those funny three wheeled trucks with people and animals hanging off all over the place.

                  We visited a textile factory to see Australian wool being made into suits to export back to us and the conditions were appalling: extremely noisy, dusty, machines without protective equipment, etc. Very depressing.

                  Geoff

                • djg
                  djg commented
                  Editing a comment
                  https://duckduckgo.com/?q=dependence...=v187-1&ia=web

              • #26
                Small retail businesses can totally afford it right now, good idea.
                Copy of Lou C's speaker pages: http://www.rob-elder.com/LouC/speakers.html

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                • djg
                  djg commented
                  Editing a comment
                  $15/hr, zero hrs/week, no problem.

              • #27
                re: a4eaudio,

                Minimum wage: I'm not referring to anecdotes about a single company, my point was that I have worked through a non-traditional increase in two different industries. We don't have widespread data because there has never been a 50-70% increase proposed federally (that I'm aware). I have experienced the impact when a large increase in wage was passed by a city or county, recently. The trickle up impact is significant. It's not just the entry level wages that increase, nearly every one above them requires an increase. With no corresponding revenue increases, layoffs are enviable.

                Marginal tax rates: I'm familiar with Reagan's tax policy in '81, '86 and '87. And pretty much every other significant tax policy change since 1913. Kennedy proposed the reductions in 1963 and the tax reduction act of 1964 was passed reducing the top bracket by almost 30%. Detractors warned that federal tax revenue would plummet. In fact, tax revenue almost doubled during the next 8 years.

                CEO Pay: Your graph illustrates my point, CEO pay spiked after Clinton's efforts in 1993 to control CEO pay. It WAS predictable but the kneejerk reaction to inequity was too irresistible. I have a friend who was a CPA and worked for a publicly traded company at the time. His job for 4 months was to model the potential impact of the tax change and recommend strategy. I assure you he wasn't the only smart guy to figure out that stock options and resulting short term focus would result.

                Also, your point about this being somewhat unique to the US is correct. We're the only country to enact such irresponsible tax policy designed to placate a segment of the population at the expense of the rest.

                I spoke to my dry cleaner just today. On top of a 40% reduction in revenue this year, his prediction for life after a 45% increase in wage rates - he will have a 100% layoff.



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                • a4eaudio
                  a4eaudio commented
                  Editing a comment
                  Marginal tax rates data was to support JR's post where he brought up Reaganomics and Reagan's tax cuts. You stated that tax rates were 70% under Kennedy which implied they WEREN'T 70% under Reagan but they were until he cut them. CEO pay was just showing additional data - it supports your fact of when the increase happened and I was not disputing you.

              • #28
                https://duckduckgo.com/?q=working+fo...=v187-1&ia=web

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                • #29
                  Originally posted by AcidWash View Post
                  • $15/hour federal minimum wage — more than double the current minimum.
                  Saw this in the news, just wondering how much of an impact this will make on our little speaker building hobby?
                  You do know the EO was for FEDERAL employees only don't you?

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                  • #30
                    Originally posted by tvrgeek View Post

                    You do know the EO was for FEDERAL employees only don't you?
                    Doesn't matter. I'm still outraged
                    Francis

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