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

[dwigle]

To your comment: "Productivity of the human labor increased roughly by 200 times in the last 100 years. That fact alone should dismiss all questions about inability of the businesses to pay a living wage."

There are thousands of inputs to a current day business P&L that offset the increase in human labor productivity. The first and likely the most impactful are restrictive regulations and certainly taxes.

Here is an illustration of why the public is generally misinformed about business and the reason they can so easily be manipulated into unknowingly voting against their own interests: Many polls show that the American public believes corporations make huge profits and distribute to the shareholders resulting is low wages to the working class. AOC even said that "everyone knows they all have a black box full of money that could be given to workers". Idiot.

These polls show that Americans believe corps make between 31-37% after tax profit. The reality is that approximately 35% of publicly traded corps don't make profits at all and those that do average 7% after tax profit. Walmart makes 2.9%. Oil companies average about 5% NOI over time but they go from losing money for years to making profits in other years - the press only reports the profitable years, again, misinforming a gullible public.

I’m curious about the future as well, so I'll take a stab at it:

• Higher taxes
• higher energy costs
• less new starts (homes and businesses)
• less home ownership
• higher unemployment - good start with killing the wall and the pipeline
• complete failure of creating meaningful green sector jobs, similar to Obama's record of massive paybacks to DNC bundlers in the form of green sector grants (think Solyndra)
• Transfers of wealth from earners to unions and bankrupt blue cities,
• realignment of federal and state contracts (just happened in CA) to exclude approximately half of the population
• open borders - allowing massive immigration of potential democrat voters and overloading of government programs (cloward-piven plan)
• Stagnation of middle class wages, again, due to increase in unemployment and the attack on business ownership via executive orders
• crackdown on conservative protestors,
• censorship of conservative thought by the govt and private sector media monopolies
• free reign for liberal protestors (blue cities)
• Job killing executive orders, rule changes, and department level definitions changes (circumventing legislative process)
• Continued spike in looting, arson, violent crime and murder due to de-masculinization and defunding of the police, no-bail releases, revolving door justice
• Lower # of Americans working, more Americans using the systems to avoid working (incentives not to work, work)

The death nail will be the continuing execution of the plan to increase the number of dependents (democrat voters) in the country. The point of no return as described by Margaret Thatcher is approaching. "The trouble with socialism is eventually running out of other people's money.

The reality is that given the demographic changes to the country, the move to open boarders, the inevitable citizenship of 10-20 million undocumented residents and the shift from workers to dependency, I don't see a path for a conservative in the presidency again. You've won, congrats and good luck.

[r-carpenter]

dwigle, the dilemma here is if they are private companies, they can decide to do whatever they pleased. In order for society to counter these companies, (for example prohibit censoring conservatives) we have to trample on their rights. We can't have it both ways.
BTW quite a few left wingers got censored too. Red Scare pod comes to mind.

[LIDAR]

I used your quote ("conservative thought") because it was in context - i.e. you just written it. Had I brought up "liberal thought" that would have had nothing to do with what you just said. If you read what I wrote carefully you'll note that I do not mention anywhere what my political preferences are. I am discussing this strictly from an economics point of view. Please do not assume you know my political leanings from this post.

Regarding the rest of your response: I think we are too focused on how what government does can help/hurt the economy. Government policies can move things a little, but most of the economy is out of their hands. Some examples: Bill Clinton had a roaring economy (he was the last president to balance the budget)! Why? The internet and the dot com boom. His government had nothing to do with it, he just got lucky and stayed out of the way. Donald Trump had a great economy that he inherited from Barak Obama. Then he juiced it by passing a massive tax cut (rather than balance the budget - something conservatives used to hold dear and an act Trump pledged to do) and today we are in recession. Why? A pandemic. Nothing government can do on the economic policy front is really going to help until the underlying problem (pandemic) is fixed. Everything they do will merely temporarily tape up a few holes in a very leaky boat.

[dwigle]

agree that they are private companies and difficult to control, even if you decided it was a good idea. But these tech giants that control a massive amount of information have picked a side to support, the liberal side.

Unbiased media outlets are afforded section 230 protection. Tweeter, amazon, and facebook, are not unbiased and should be stripped of the protection. They continue to admit it, apologize and say we're working on it. Not good enough.

[r-carpenter]

Sure, there are thousands of inputs and regulations. But the fact that one man does not dig for crude oil with the shovel and does not fill 50 gallon drum with the bucket to roll it to refinery remains the same. As a mater of fact, productivity in the energy sector probably increased by thousands. Hence the the factual cost of energy decreased a great deal.
Margaret Thatcher was an excellent propagandist. The phrase makes very little sense as the "business" and private ownership of the means of production are only specific to capitalism. The universal factor of commodity production remains the same in feudal, capitalist or socialist society. Milk and bread and made with the only difference of who owns what and with what rights. Thatcher BTW destroyed a good deal of British economy and a few Brits I know, hate her. But that's anecdotal, I understand.
Do you think "they came and took our jobs" or is it the capitalist that's shopping for lowest wage labor and buying it at a lowest market price?

[dlr]

Do you think "they came and took our jobs" or is it the capitalist that's shopping for lowest wage labor and buying it at a lowest market price? [/FONT]

If China were to somehow become a true democracy overnight and allow the average Chinese citizen to have a say in running the country, then instituted (via elected representatives) an equivalent minimum wage to that in democratic countries, do you think any companies would continue to outsource to China?

Putting blame on management of companies in a country (US or any other) for the all the problems of employment in that country is a bit myopic. Outsourcing, as problematic as it is, may only increase. There's no easy answer. Why do we no longer manufacture so many products in the US or European countries? Should we place huge tariffs on countries that don't pay their citizens an equivalent wage to ours? Or ban their products entirely if they don't? That would surely increase employment and wages here, wouldn't it?

dlr

[dwigle]

Your question: "Do you think "they came and took our jobs" or is it the capitalist that's shopping for lowest wage labor and buying it at a lowest market price?"

Both are happening; illegal immigrants have taken a lot of low paying jobs from Americans. That is undeniable, vegetables and fruit didn't pick themselves 70 years ago, but is that a bad thing or good thing? The jury is still out I suppose.

Immigration policy should allow for legal immigration and lots of it, we clearly need it, but if you come, you stay and contribute. You don't come, make money, pay no taxes, use our infrastructure and free stuff and then protest about how unfair and immoral we are as a country. The Cubans came to Florida in the 60's, learned the language, have been incredibly productive and provided wealth and culture to our country. There's a lesson there somewhere.

And yes, capitalists look for the lowest price for filling every need including labor. The question becomes, should there be a penalty for companies moving offshore? How would we implement such a policy, tariffs? They already pay federal income tax of goods sold here. I really don't know.

I think the better solution started during the last administration: create an environment that will incent the job and wealth producers to keep operations here and not offshore the labor. IE, lower taxes and regulation.

[r-carpenter]

If China were to somehow become a true democracy overnight and allow the average Chinese citizen to have a say in running the country, then instituted (via elected representatives) an equivalent minimum wage to that in democratic countries, do you think any companies would continue to outsource to China?

Putting blame on management of companies in a country (US or any other) for the all the problems of employment in that country is a bit myopic. Outsourcing, as problematic as it is, may only increase. There's no easy answer. Why do we no longer manufacture so many products in the US or European countries? Should we place huge tariffs on countries that don't pay their citizens an equivalent wage to ours? Or ban their products entirely if they don't? That would surely increase employment and wages here, wouldn't it?

dlr

True democracy? Closest thing to true democracy is a direct democracy and not even representative bourgeoisie democratic duopoly that we have. We elect representatives who in most cases disregard our wishes 5 minutes after they are elected.
The cost of labor would be decisive factor in outsourcing labor to China. Democracy or not, if the cost of labor increases and there's a cheaper alternative on the market, that alternative would be chosen be that democracy, communist or fascist state. There's a good old story of companies from Western Germany purchasing labor from East German prisons.
I suspect that the hint is directed at authoritarian Statism of China and I don't disagree.
I am not at all putting the blame on the management of the companies. It is indeed myopic. I am saying, the system itself drives towards a cliff. Management is there for a ride.
What I find interesting is we striving to pay wages to our workers that are becoming compatible with wages in the countries where labor is outsourced. And who are "We"? We, the bourgeois petite? We the wage laborers? We the Bankers?
Who does the State represents? Is The State going to restrict the Capital? I really don't know.

[r-carpenter]

Both are happening; illegal immigrants have taken a lot of low paying jobs from Americans. That is undeniable, vegetables and fruit didn't pick themselves 70 years ago, but is that a bad thing or good thing? The jury is still out I suppose.

The decisive factor is always in the hands of the employer. In case of illegal immigrant, it's the restaurant owner who gives someone a boot and hires cheaper labor. In case of outsourcing, it's the company that buys wage labor in India or China. Nobody puts a gun to their head. This one I think is pretty clear.

And yes, capitalists look for the lowest price for filling every need including labor. The question becomes, should there be a penalty for companies moving offshore? How would we implement such a policy, tariffs? They already pay federal income tax of goods sold here. I really don't know.
I think the better solution started during the last administration: create an environment that will incent the job and wealth producers to keep operations here and not offshore the labor. IE, lower taxes and regulation.

And this is the dilemma that invites a creation of the strong State in the interests of limiting The Capital. It's not a dilemma for me as I am a lefty but it is one for Libertarians and Conservatives.
See, I also own a small business. Taxes and regulations mean very little to me as they are not limiting me in my productivity. But if I would start manufacturing small widgets, labor becomes a huge factor. I need to either automate (increased unemployment) or outsource and automate (increased unemployment).
What taxes and regulations are you referring to? China's air is so polluted that they wear masks by default. Should we do the same? Should I be allowed to poor toxic chemicals down the drain?
What exactly last administration do to keep "wealth producer" from outsourcing?
Give me an example. PE makes Dayton products in Malaysia. What would president Dwigle do to have them bring manufacturing to US?

[dlr]

True democracy? Closest thing to true democracy is a direct democracy and not even representative bourgeoisie democratic duopoly that we have. We elect representatives who in most cases disregard our wishes 5 minutes after they are elected.

That was meant to be democracy in the sense that they could vote anyone for any party, since, as you know, many a "democracy" does not allow but one political party. But you understood my intent. Any company, anywhere, goes for the lowest labor cost. Why would they not in a world market?

What I find interesting is we striving to pay wages to our workers that are becoming compatible with wages in the countries where labor is outsourced.

I'm not sure one can say that without some qualification. Minimum wage does not in general affect manufacturing, energy production, construction, etc., since those most often require workers with specific experience, innate abilities/aptitude or training and tend to be paid accordingly (see the news on the lost jobs ref. the Keystone XL pipeline as but one example). What it does most often affect is work that doesn't even require a high school diploma to accomplish. There's no Chinese competition in these areas. The bigger problem is the loss of the middle class jobs well above minimum wage pay. But part of that is that for many of those it's a world market. Is someone in any other country going to buy something made in the US if they can buy the same thing for much less from China? How is this problem solved? That's part of my intent on the question about China and their wages. Countries don't have to be "true" democracy in the sense of "pure" democracy. But authoritarian countries exemplified by China will continue to make any alternative to using their production an economic non-starter. By nature most people in the US won't pay more for "Made in America", either, if it costs more.

So what's the answer? What would you do to bring manufacturing to the US? Realistically?

dlr

[dwigle]

RE your comments: "Taxes and regulations mean very little to me as they are not limiting me in my productivity. What taxes and regulations are you referring to?"

You're fortunate. I'll give you one example of many. We own a farm. We had a rutted dirt road to access the length of the property. I found that if I moved the access road to the short side of the property, I could recapture approximately 4 acres to plant, increasing production. When Obama took office he changed the definition of regulated water in the "Waters of the United States" rule to include just about every form water could exist. Not a legislative change, just an internal rule change.

The result was that I couldn't plant over the puddles in my rutted road, really! The real stick in the eye was that by bringing attention to myself in the application, I had to pay for an environmental impact assessment for grading work I had done previously but after the rule change.

Trump eventually changed the WOTUS to provide a definition more in line with the original rule in 2019. But when he took office in 2016, the EPA was stopped from enforcing the expanded definition. I planted and many have benefited from the increased production. A friend with an almond farm in CA had the same experience - I'm sure there are others.

Executive Orders can have devastating consequences, just ask the pipeline workers.

[Steve Lee]

Just some perspective while we have an "acceptable" off topic thread going . . .

[a4eaudio]

Executive Orders can have devastating consequences, just ask the pipeline workers.

Assuming you are focusing on Keystone XL, they aren't really "pipeline workers" but were "potential pipeline workers" so can't really ask them. Those were 10,400 temporary workers but since many were working only 4 to 8 months on the project it was only 3,900 full time equivalent union jobs over a two year period. After that, Keystone estimates it will need 35 permanent and 17 temporary contractors to maintain the pipeline. (Source) Not much to get excited about. Given the potential costs of spills, maybe we should just pay those 3,900 positions the money to not build the pipeline.

We could also ask the citizens of Flint Michigan if they think more regulation of our water supply is a good thing or not.

[djg]

Source.

https://auduboncompanies.com/study-shows-pipelines-are-safest-way-to-transport-oil/

[a4eaudio]

So what's the answer? What would you do to bring manufacturing to the US? Realistically?

Nothing, why would I want to give up the gains from trade? I think it is great that we can get Satori speakers, which are a great value to performance driver, designed in Denmark and made in Indonesia. Or Dayton Audio drivers that are designed in the US and made...all over the world. The US is primarily a service economy and manufactures highly skill-intensive products. Our share of GDP from services is 76.9% which is pretty close to the OECD average of 69.6%. Why would we want to be more like Bangladesh, India or Vietnam where manufacturing is 50% of GDP and the standard of living is a fraction of what it is in the US?

But what we do manufacture, we are excellent at..."The largest manufacturing industries in the United States by revenue include petroleum, steel, automobiles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining. A large portion of U.S. industrial output, the United States leads the world in airplane manufacturing. American companies such as Boeing, Cessna, Lockheed Martin, and General Dynamics produce a vast majority of the world's civilian and military aircraft in factories stretching across the United States." (Source)

[dwigle]

temporary workers?? I've heard that talking point. it takes years to build the pipeline, I'm just trying to stay with the facts.

There is no impact on climate as a result of building the pipeline, zero. It would provide an extra 800k bbd to the US. If we don't buy the Canadian oil, someone, likely the Chinese will, either way it gets burned somewhere. Biden's goal is to just put us in the weak position of buying oil from our enemies.

[billfitzmaurice]

That's one viewpoint out of many. Another is that all of this Canadian oil is bound for China anyway. The only reason they want to build a pipeline through the US to bring it to Gulf ports for export is because it's too expensive to build a pipeline through the Rockies to bring the oil to Vancouver for export. But in any event it has nothing to do with raising the minimum wage.

[dlr]

The US is primarily a service economy and manufactures highly skill-intensive products

So you're happy with so many being in the service economy sector that is minimum wage? Rather than some of the manufacturing that is, say, somewhere between minimum wage and "highly skill-intensive products"? That is exactly my point about bringing back production, rather than maintain the outsourcing of it. Those in minimum wage jobs will almost never move to highly skilled jobs that either don't exist where they live or will never get trained for them if they do.

But what we do manufacture, we are excellent at...

And I'd prefer to see that expand into the areas that are above minimum wage, rather than just try to pay more for the existing low skill jobs.

Doing nothing is being resigned to no progress for those stuck at minimum wage.

dlr

[billfitzmaurice]

Rather than minimum wage we should be looking at the maximum wage. For instance, the CEO of McDonald's makes $8500...per hour! Do you think if he was paid a mere $1k per hour that it would bring down the cost of a Big Mac?

[LIDAR]

No. He'd just throw more stock options at himself.

[Geoff Millar]

The following is from the British Broadcasting Corporation (BBC) website:

"According to research from the High Pay Centre, an independent think tank based in London, FTSE 100 chief executives earn a median of £3.6m ($4.9m) a year – more than 100 times the £31,461 earned by full-time employees. At the top of the pile of those CEOs is Tim Steiner, chief executive of the online supermarket Ocado, who was paid £58.7m in 2019. That's 2,605 times the company's staff on average. In one day, he earned seven times their annual salary.

Analysis by the Economic Policy Institute, a Washington DC-based think tank, showed chief executives of the 350 largest US companies earned an average $21.3m (£16.9m) in 2019. This puts the CEO-to-worker pay ratio at 320 to 1 – more than five times the level in 1989."

I don't know what someone on the minimum wage would think of this, but I would be p+++.

I sort of understand why many CEOs earn a huge amount of money, but how much do they actually need? If I earned even $2m a year - never have, never will - I've no idea how I'd spend it.

There are all sorts of other questions, such as why a CEO is more valued than, say, a surgeon, but that's another topic.

Geoff