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

[LIDAR]

Well, you know the old joke - right? If "pro" is the opposite of "con", then what's the opposite of "progress"?

[Steve Lee]

Just "BUY" the con-gress and you control everything. Very much like what we are currently experiencing.
There is no security in human systems because everything becomes corrupted.

[LIDAR]

Years ago I had an idea about how to improve (not fix, there'll always be problems to fix) our economy. Everyone I shared it with thought it was a good idea and, like me, had not heard it elsewhere (but I'm not an economist, so maybe it's an old idea that I came up with independently).

As we now live in a global marketplace, and there are good reasons to preserve that, we have to guard against other nations gaming the system. Historically this is done with trade tariffs, but as we know they work very poorly. However we can't just capitulate and let large trading partners (think China or Saudi Arabia) just take advantage of us. If we continue to allow them to sell to us without buying from us (or more realistically sell lots to us and buy little from us) eventually we will have no money left to buy their stuff and they will have no market to sell their stuff. Bad outcomes all around. So here's the plan - we (congress) pick a number X. It can be 1, 2, 3 , 4, whatever we think is right. Once a nation sells us X times as much as they buy from us our ports are closed to their goods. No tariffs, no nothing. Gas up the container ship and turn it around without unloading it. I don't particularly care what you sell us or what you buy from us. The market will figure out what Chinese goods we want and what American goods they want. (BTW - I'm picking on China here, but really there are a lot of nations that sell us a lot of stuff and buy almost nothing from us)

This will cause some short term inflation due to fewer cheap foreign goods being available, but American jobs will be created to fill that need. In my perfect world government will help out those who are negatively effected by the short term inflation and aid businesses who are starting, or expanding, to fill the voids created. Again, only for a short time (a few years). Over time our economy should grow and the market will teach us what the world really wants to buy from us.

I don't really see a way for foreign nations to game such a system, but if there is I'd like to hear it.

[dwigle]

That's not what socialism is. I lived in socialist society for 25 years and in the capitalist one for the same. You continue to repeat cliches. In any event, many capitalist countries have nationalized energy reserves and remain perfectly capitalist. Norway for example.

I'm quite familiar with socialism and understand that nationalizing major industries is just the start. Collective or govt ownership and control of the means of production. Once you've got energy, healthcare and education, the rest are easy.

You can't compare Norway, demark, sweden to the US. While they have some nationalized services, they have a different work ethic and they don't provide incentives not to work like we do here. They historically have had the lowest unemployment and highest participation rates worldwide. And until very recently, very strict immigration policies. Have you tried to get a job in Norway?

[r-carpenter]

Wow, socialism and resulting equality of misery.

That's not what socialism is. I lived in socialist society for 25 years and in the capitalist one for the same. You continue to repeat cliches. In any event, many capitalist countries have nationalized energy reserves and remain perfectly capitalist. Norway for example.

[dwigle]

I would also nationalize energy producing and data transfer industries and eliminate obvious parasites like health care insurers.

Wow, socialism and resulting equality of misery.

[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]

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

It depends on where one tries to save capitalism or let it all crash. If we want to keep present system going than there's a necessity for protectionism, some sort of UBI, heavy taxation on imported products that directly compete with US producers. Having computing power that we do now days, it shouldn't be hard to calculate.
US economy been a consumer based economy, can't survive without consumers, so rebuilding programs have to be started immediately. I would also nationalize energy producing and data transfer industries and eliminate obvious parasites like health care insurers.

[dwigle]

[QUOTE=dwigle;n1463383]

This might be a good idea in theory, but politically would be harder to implement. Is the maximum for ALL CEOs $1k an hour, e.g., McDonalds and Apple as well as a smaller company?
The minimum wage can be based on a level of poverty or some calculation of a "living wage" and receive general support. 67% of the US population supports a national $15 minimum wage.

Also..."At McDonald's, fear of a rising minimum wage disappears"[/QU
You can't believe this right? Do you feel similarly for ball players and musicians?

For me, you get what you pay for at executive levels. If you incent them via stock value increases and they succeed, I have no problem with monstrous pay levels, conversely, they should not be paid when the company and shareholder value declines under their watch.

Lidar: completely agree, in fact, this was my post earlier in this thread:

"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."

[LIDAR]

The problem with pay liked to stock value is that it heavily encourages short term decision making which is often bad for the long term health of the company. Unfortunately I know of no good way to fix this problem...

[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.

[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.

[dwigle]

My list is based on relevancy to today, post election. Your take on comparing taxes, unemployment and energy costs to 30 years ago, while mildly interesting from an academic standpoint, has no relevancy to today. As a business owner, how do those historical facts help me run a business today?

My point is that Biden wants to raise taxes during a recession (he promised to do so). He wants to raise energy costs. Sheer stupidity or following the far left agenda, take your pick (or both). Raising taxes to get the country out of recession is like trying to lift a bucket by it's handle while standing in it.

Raising energy costs will impact the recovery and are disproportionately impactful to the lowest wage earners. Does Biden care or even know?

Green energy jobs - didn't happen under Obama, I'll believe it when I see it. But why destroy the energy sector before the green jobs are available?

Censorship: while I agree that private companies should have a level of autonomy, these tech giants have become monopolies of information. When they shut down conservative speech deemed inappropriate but not liberal speech, it's censorship - they're taking a political position and as such should lose section 230 protection. Face it, they're not for free speech, just speech they agree with. They shut down the only major alternative to the liberal outlets - Parler.

Your comment "Forcing them to carry the so called "conservative thought" would be unconstitutional and truly anti-democratic" is especially telling. What about the "liberal thought" they carry? Unconstitutional or acceptable because you agree with it?

[dwigle]

[QUOTE=a4eaudio;n1463371]

This might be a good idea in theory, but politically would be harder to implement. Is the maximum for ALL CEOs $1k an hour, e.g., McDonalds and Apple as well as a smaller company?
The minimum wage can be based on a level of poverty or some calculation of a "living wage" and receive general support. 67% of the US population supports a national $15 minimum wage.

Also..."At McDonald's, fear of a rising minimum wage disappears"[/QU
You can't believe this right? Do you feel similarly for ball players and musicians?

For me, you get what you pay for at executive levels. If you incent them via stock value increases and they succeed, I have no problem with monstrous pay levels, conversely, they should not be paid when the company and shareholder value declines under their watch.

[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