Minimum wage: how much is too much?

[temporal1]

RZ:
Elizabeth Warren said last week that Bezos needs targeted, and needs to pay more in taxes.

Unfortunately, EW and career politicians (originally labeled “public servants”) live and conspire for votes.
This is evident now in response to the recent pandemic, these weasels can’t let their personal interests take a back seat even for world wide public health. Public servants?

Long before the pandemic or DJT were on the radar, appleman was warning about DAMAGING IRRESPONSIBLE politics, pointing out, economic accountability is NOT popular, is unlikely to get votes. [This, BEFORE Congress began writing checks in MULTIPLE TRILLIONS - to buy votes.]

i hope to read appleman’s view on all these TRILLIONS, understanding, he may have “no words.”

From what i’ve read about what 1 TRILLION DOLLARS represents, i have no faith U.S. Congress people have a clue about what they’re doing, AND THEY DON’T CARE. “Anything for a vote” / “The end (they desire) justifies the means.”

It’s all so far away from Jesus Christ.

EW has no credibility in my mind. Just another career politician on the take.

Level playing fields?
Gov is in the unique position to fund that which is otherwise unsustainable. For infrastructure, a necessity.
Today, “everyone” from individuals to small business to big business, seeks gov funding AND legal protections. The golden egg.
i’ve read, Planned Parenthood was about to go out of business when gov stepped in.
PP is one example to reflect what now must be taught as SOP in business colleges, it’s so common.

There is no way to know if anything at all remains of the free market that once existed in the U.S.

[RZehr]

There is always the question of how much minimum wage is too much. Almost never the question of how much maximum wage is too much.

The premise is different. The question of how much minimum is to much, is because at some point it has the risk of bankrupting a company if they don’t have the margin, nor the ability to raise prices. Which a lot of small companies can’t do. This is true for both the bottom of the pay scale and the top of the pay scale. A company cannot pay unlimited amounts. The question of minimum and maximum cannot be separated.

There is plenty there is plenty of question about how much is too much. Both at the bottom and top of the scale. Both from a balance sheet perspective and from a national political perspective. Elizabeth Warren said last week that Bezos needs targeted, and needs to pay more in taxes.

You don't think too much accumulation of wealth at the top risks bankrupting companies/economies/consumers?

Absolutely. I think it is bad right now, at today’s reality. What I don’t know is how much worse we can stand in this country, or what the end result will exactly look like.

[temporal1]

The world has always had elites, in history, dramatically so; in Jesus’ time, dramatically so.
Possibly only in post-industrial era times, when developed countries experienced the ANOMALY of a wealthy, free, and influential middle class, has academia had flights-of-fantasies about forced wealth redistribution - largely based on simple population statistics.

The world has never run on such a simple/simpleton premise.
More typically, the greater the populations, the poorer the average bloke, the wealthier the elite. Vast economic divides.
Throughout history, and true, today. Academia hates this, they don’t even admit it.

Most complaining today have NO sincere interest in working the hard, long hours required in the industrial age.
Hot, dirty jobs workers gave thanks to do.
Nope.
Today, it’s all about free stuff, luxuries, even including gov funded minimum incomes, work hours are not required.
Entitlements for breathing.

The folks who built the huge middle class WORKED HARD. They did not live in mini-mansions, many lived in humble housing that would not pass today’s building codes. No AC. No techy devices.

There is a lot of comparing apples to .. gold bricks. No questions asked.

Covetnous is a grave sin. Even secular definitions acknowledge the failure:

Covetnous
noun.
eager or excessive desire, especially for wealth or possessions:
Social media so often encourages us to compare ourselves to others, inspiring covetousness and insecurity.
https://www.dictionary.com/browse/covetousness

Not of Jesus Christ.

[RZehr]

The premise is different. The question of how much minimum is to much, is because at some point it has the risk of bankrupting a company if they don’t have the margin, nor the ability to raise prices. Which a lot of small companies can’t do. This is true for both the bottom of the pay scale and the top of the pay scale. A company cannot pay unlimited amounts. The question of minimum and maximum cannot be separated.

There is plenty there is plenty of question about how much is too much. Both at the bottom and top of the scale. Both from a balance sheet perspective and from a national political perspective. Elizabeth Warren said last week that Bezos needs targeted, and needs to pay more in taxes.

I’m curious what type of sustainable business models don’t have the margins for pay increases, or the ability to raise prices? I’m sure it exists, but how and why?

I have a small business and the business isn’t sustainable if I don’t have wages calculated into the price. Because if I’m not paying myself, I can’t grow because I won’t have the margins to be able to pay others when my business grows.

Is this a competition thing? Where a business can’t afford to pay workers adequately because others will undercut their prices? Is it poor business management? I can understand that there are times, especially in the beginning when the cash flow isn’t there, but to have a business operate continually like this raises all kinds of questions in my mind.

The problem is often when your competitors don't play by the same rules that you do.

For example, when we lived in Texas I knew building contractors who simply couldn't compete with firms that hired crews of undocumented workers and underbid them. There is simply no way to do it when your competitor can simply call his cousin and have 20 undocumented Guatemalan bricklayers show up the next day to work under the table for half the going wage. You can maybe get by doing big institutional and government jobs like schools which are much more closely monitored. But not ordinary subdivision developments where crews of lightly regulated subcontractors are the norm.

A lot of government regulation like minimum wage rules and safety regulations is really about providing a level playing field for all competitors. So that companies that want to do the right thing aren't driven out of business by those who don't in a race to the bottom.

Some rules make a level playing field, some simply protect the existing companies in that industry, making it nigh impossible for a new company to compete.

Regulation are much heavier burden for small businesses than large.
I had breakfast with someone this week who told me that after watching the finances of about 4 dozen small businesses over many industries, his opinion is if you are going to comply with everything and be profitable, you need to scale up. Companies with 1-8 employees just hardly have the margins to keep on top of everything. And after about 10 or so, there starts to be some breathing room, and some money to pay someone to keep everything in order. Of course there are exceptions.
And he sees this is continuing to slide, such that in time it will be about 20 employees to be at that turning point instead of 10.

Most businesses do have margins to increase wages. The sticking point is how much and how long will that be satisfactory.
The problem is that it is never enough. It wouldn’t matter if the minimum wage was $20, people would be asking the exact same question, “Surely the company could pay more”.

And then you have the fact that the US does compete with other countries with different regulations. And States also have vastly different regulations. To be a contractor in Oregon is going to be more complicated than a contractor in Texas. So Oregon will have more costly real estate and buildings. Which in turn makes it more costly to start a business in those buildings. Which makes the Oregon business carry a larger overhead than his Texas competitor. So he gets less business, less profit, and then to add insult to injury, the Oregon company owner has to pay 9% state income tax. So now he has even less money to put back in his business to scale up and become more efficient. And his Texan competition does.

[Josh]

There is always the question of how much minimum wage is too much. Almost never the question of how much maximum wage is too much.

The premise is different. The question of how much minimum is to much, is because at some point it has the risk of bankrupting a company if they don’t have the margin, nor the ability to raise prices. Which a lot of small companies can’t do. This is true for both the bottom of the pay scale and the top of the pay scale. A company cannot pay unlimited amounts. The question of minimum and maximum cannot be separated.

There is plenty there is plenty of question about how much is too much. Both at the bottom and top of the scale. Both from a balance sheet perspective and from a national political perspective. Elizabeth Warren said last week that Bezos needs targeted, and needs to pay more in taxes.

Employees can't afford to go into unlimited amounts of debt, either. By this same argument, employers could cut wages whenever they felt like if they "don't have the margin".

My experience around most businesses of medium to larger size is that there is plenty of money to pay six and seven figure bonuses at the top, but a slight increase of a dollar an hour in pay for the people at the bottom is a huge deal.

[Josh]

Most businesses do have margins to increase wages. The sticking point is how much and how long will that be satisfactory.
The problem is that it is never enough. It wouldn’t matter if the minimum wage was $20, people would be asking the exact same question, “Surely the company could pay more”.

What exactly do you expect employees at the bottom to do when they are experiencing price inflation of 10-50% for things like housing costs and groceries?

[Josh]

For example, when we lived in Texas I knew building contractors who simply couldn't compete with firms that hired crews of undocumented workers and underbid them. There is simply no way to do it when your competitor can simply call his cousin and have 20 undocumented Guatemalan bricklayers show up the next day to work under the table for half the going wage. You can maybe get by doing big institutional and government jobs like schools which are much more closely monitored. But not ordinary subdivision developments where crews of lightly regulated subcontractors are the norm.

A lot of government regulation like minimum wage rules and safety regulations is really about providing a level playing field for all competitors. So that companies that want to do the right thing aren't driven out of business by those who don't in a race to the bottom.

Which is why having floods of thousands of illegal immigrants coming in hurts the poor and lowers wages for everyone, including the illegal immigrants themselves. Yet the progressive left does all it can to prevent any enforcement at the border.

[Josh]

You don't think too much accumulation of wealth at the top risks bankrupting companies/economies/consumers?

And too much accumulation of wealth at the top is spiritually destructive as well - the New Testament simply never says anything positive about accumulation of wealth at all, other than the parable of the talents.

[Josh]

I’m curious what type of sustainable business models don’t have the margins for pay increases, or the ability to raise prices? I’m sure it exists, but how and why?

In an environment of rapid inflation, a lot of business models are suddenly unsustainable. Wal-Mart and Amazon are "sustainable", but not smaller, independent retailers. They don't have access to billions of dollars at near-zero interest, nor do they have the ability to lobby congress and local government to get favourable treatment.

I have a small business and the business isn’t sustainable if I don’t have wages calculated into the price. Because if I’m not paying myself, I can’t grow because I won’t have the margins to be able to pay others when my business grows.

Did you budget for wages going up 50% a year? Do you have the ability to raise your prices 50%+ plus a year including raising them enough to cover the higher cost of goods sold?

Is this a competition thing? Where a business can’t afford to pay workers adequately because others will undercut their prices? Is it poor business management? I can understand that there are times, especially in the beginning when the cash flow isn’t there, but to have a business operate continually like this raises all kinds of questions in my mind.

We are talking about the unique situation that has arisen in the last 15 months with wage and price inflation.

To give you an example, I haven't had a raise in the last 2 years. The price we pay at the grocery store is up about 50% for the exact same goods. Of course, we've adjusted by buying different things, buying less things, and cutting out certain luxuries like eating out a lot less if at all. The cost to eat out is up even higher, one example that springs to mind is Freddy's, where prices are over double what they were in 2019.

Likewise, the cost to acquire a car or truck is up 40%. I simply do not have the ability to give anyone working for us a 40% raise. Do you think that I somehow should? I cannot raise prices to our customers 40%, or somehow magically get 40% more business and try to make everyone work 40% harder.

[RZehr]

Most businesses do have margins to increase wages. The sticking point is how much and how long will that be satisfactory.
The problem is that it is never enough. It wouldn’t matter if the minimum wage was $20, people would be asking the exact same question, “Surely the company could pay more”.

What exactly do you expect employees at the bottom to do when they are experiencing price inflation of 10-50% for things like housing costs and groceries?

I don’t know. I suppose the same as the owner. Get squeezed, and hope for more income before getting squeezed to death. The employee has the option to quit and look for another job if he’s not making it. The business owner can quit and find something else to do too.
I’m not defending it or saying it’s great. I’m recognizing it is complicated and difficult.