ââ¦the prices of products and services are established by supply and demand, not by the cost of production and cost of laborâ¦.â Really? And the cost of production and those involved in making services available simply evaporates into thin air and are not reflected in the purchasing price of goods and services. *********************** Interesting point. Which is correct? As I recall, classical economics teaches that a competitive market will reach an equilibirum price where suply and demand intersect. But what determines supply and demand? Demand reflects the utility of the product and the availability of substitutes. The supply curve is a function of the profitablility of production. Producers will increase production and hence supply so long as they can make more money by doing so. At the equilibrium price the marginal cost of production will equal the marginal revenue, ie the cost of producing the last widget equals what it can be sold for. Accordingly, the cost of production is a component of the equilibrium price level. Increase costs and, all other things being equal, producers will cut back production and the equilibrium price will increase.
What's kind of ironic is that the same people who keep claiming that despite doubling and tripling of the cost of oil inflation is still very low even though the cost of oil affects every phase of production, distribution and delivery of goods and services, those same people turn around and claim that a modest increase in the cost of labor will most certainly be passed on to the consumers. BTW I don't disagree with your post which is theoretically correct, the problem is that it is premised on highly competitive industries and therefore relatively low profit margins. Yes under those circumstances the cost of production directly affects prices but this is not what's going on in this country today. It has been widely reported and documented that during the last 5-6 years profits of most industries have gone through the roof, they (profits) are insanely unrealistically huge and growing. In this situtation a small decrease in profitability to better compensate workers will not make a dent in the level of production, producers would have to be insane to cut back production if their profit margins shrink from a whopping 200% to a meager 180% (given that 6 years ago they were ecstatic with 40%).
This issue really does highlight the differences in thinking... Left: Everyone deserves a living wage. Right: Everyone should earn what they deserve. Now which sentitment will keep this country strong, and a leader in the world? Hand-outs, or Chin-Up? A low minimum wage provides an incentive to progress. If the minimum was higher, people might choose to sit on their hands. Take a look at "Old Europe" for examples. Ok, let the "evil,greedy,nazi" accusations fly ... Remember, I once made the minimum, and rather than bitch about it, I improved myself.
Okay, you are an evil greedy nazi.... Following that evil greedy nazi thought process, wouldn't we actually be better off if we just killed the weak, the poor, the indigent, the retarded, the old, the sick, the terminally ill, the sub standard human beings who are non productive to society? We are not really a civilized society, we are just a jungle where the fittest survive, right? Technology and the excess it affords should only be used to enhance the fortunate, laws need to be written to give the wealthy and powerful the best chance of success and maintenance of their position, and those who seek to have a balance of wealth and power in society are mad.... Since a chain is only as strong as its weakest link, we need to terminate all weak links....
I'm a better smart ass than a serious debater but here's a serious question for you. Do you think the minimum wage should be eliminated all toghther. Do you believe it should be as low or as high as a free market will bear?
That is the problem. People would rather bitch and moan about how they have it so hard and the government should take care of them and they are entitled to a decent wage regardless of education, skills, productivity, experience, and without work ethic. Instead of busting their ass and making the sacrifices it takes to get any or all of the above-mentioned characteristics, they want the government to take from those who have and give it to those who choose not to. Fucking pathetic. Where is their dignity and pride? What happened to being responsible for yourself and taking care of your business? I guess that doesn't mean shit. Instead we want to make sure that everyone, regardless of what they do or do not do, is entitled to a pay raise. If I don't produce I get fired at worst and at best I do not get a raise. If you want a better wage then you better damn well do something about it. To rely on the government to provide you a living is bullshit. Like pattersb I also started working for minimum wage. Ten years and two college degrees later I no longer make minimum wage. I did not bitch about how unfair it was that I was low paid until just recently. What I did have to do was make sacrifices that most wouldnât make to ensure a better opportunity for my family and me. If you want a better life then you better be willing to make the sacrifices it takes to get it. If not then you have no reason to bitch about it and will get no sympathy from me.
I agree ZZZzzzz. I've hired lower end workers for years and years but I could never pay minimum wage. And many times I could of gotten the workers to take it because thats what the competition is paying. I can't understand how an employer could pay that low a wage and still be able to look in the mirror with out feeling ashamed.
I bet you did not whine about minimum wage then, did you? I bet you did not tell your employer that minimum wage was unfair to him, that it was bad for capitalism and that you were willing to work for half of your [minimum] wage. Instead you enjoyed the benefits of goverment mandated minimum wage which at that time did provide you with a living wage and an opportunity to get better education and better jobs. But now that you personally have no more use for the minimum wage it should certainly be eliminated/frozen cause the lazy bums who are starting out now don't deserve the opportunities hard-working you deserved 15-20 years ago.