NationStates Jolt Archive

http://start.earthlink.net/newsarticle?cat=4&aid=Lifestyles0200410120407

Tis quite sad, especially in that this number of people living in poverty in the US has actually increased over the last few years.

I just wanted to point something out that doesn't have a whole lot to do with the article...but it sort of ties in.

Raising minimum wage doesn't really solve anything. If you raise the minimum wage, you now have to pay out more money to the guys in the bread factory and the guys on the cattle farm and the guys in the corn fields. Because you have to pay more to all these people, the actual production of these food products costs you more (especially when you consider all the processing that most foods go through, that's a lot of raised wages). Now that the government has increased minimum wage and increased your cost of production, you have two options. You can settle for a smaller profit and continue selling your products at the same price, or you can increase your prices to maintain approximately the same profit. More often than not, prices are raised (this causes inflation) and the poor people are still poor and the rich people are still rich. Having a minimum wage ensures that workers don't get abused, but raising a minimum wage causes inflation.

I just wanted to point something out that doesn't have a whole lot to do with the article...but it sort of ties in.

Raising minimum wage doesn't really solve anything. If you raise the minimum wage, you now have to pay out more money to the guys in the bread factory and the guys on the cattle farm and the guys in the corn fields. Because you have to pay more to all these people, the actual production of these food products costs you more (especially when you consider all the processing that most foods go through, that's a lot of raised wages). Now that the government has increased minimum wage and increased your cost of production, you have two options. You can settle for a smaller profit and continue selling your products at the same price, or you can increase your prices to maintain approximately the same profit. More often than not, prices are raised (this causes inflation) and the poor people are still poor and the rich people are still rich. Having a minimum wage ensures that workers don't get abused, but raising a minimum wage causes inflation.

It's not quite that simple. Other things besides wages affect inflation, and a 10% wage increase does not automatically lead to a 10% rise in costs, since wage is only a percentage of the cost of building shipping and selling a product.

It's not quite that simple. Other things besides wages affect inflation, and a 10% wage increase does not automatically lead to a 10% rise in costs, since wage is only a percentage of the cost of building shipping and selling a product.
I didn't say a 10% wage increase leads to a 10% rise in product price, did I? No, but a wage increase does indeed lead to a product price increase...no matter how you slice it.

I didn't say a 10% wage increase leads to a 10% rise in product price, did I? No, but a wage increase does indeed lead to a product price increase...no matter how you slice it.

Henry Ford paid his workers enough so that they could buy his product, that's something of a novel concept now....

I didn't say a 10% wage increase leads to a 10% rise in product price, did I? No, but a wage increase does indeed lead to a product price increase...no matter how you slice it.

Yeah, but there scenarios that could lead to product price decrease. For example, with a minimum wage increase, the poorest workers are able to afford some items that were never available to them before. Increased demand leads to higher profits and higher prices. Simultaneously, though, the higher profits spark increased competition. Increased competition leads to increased supply, which leads to a general lowering of the price.

When companies have more consumers, they are able to lower their prices.

Also, the automatic raising of prices also assumes that everything is made by minimum wage workers. Only a fraction of workers are paid minimum wage, soo only a fraction of items will have higher production costs.

It is rather depressing, but it's honestly not that surprising. -_-``

I didn't say a 10% wage increase leads to a 10% rise in product price, did I? No, but a wage increase does indeed lead to a product price increase...no matter how you slice it.
well if a 10% wage increase (which wouldnt mean diddly at minimum wage) only leads to 6% price increase, we jsut made a 4% overall wage increase and thus have more moeny to spend and THUS can buy more crap. hey look at that, increasing wages while leaving product price at slightly icnreased or 0 increased levels leads to GREATER spending, and THUS greater profits. wow theres an idea. real capitalism for ya

No company today is going to raise wages without raising the price of their product.

No company today is going to raise wages without raising the price of their product.
which is why selfish greed outdoes intelligent capitalism

No company today is going to raise wages without raising the price of their product.

sure, the price of the product will increase, but only at a fraction of the amount the wage was increased. Cost to produce is not based 100% on labor, and no company's workforce is made up of 100% minimum wage earners.

Haw. 12% of Americans live below the poverty line, compared with 14% in socialist Europe. Get with the program.

Haw. 12% of Americans live below the poverty line, compared with 14% in socialist Europe. Get with the program.
10 bucks says you dont have a source. and even if you do i bet it takes in the WHOLE of europe, america is one country, not 50

Henry Ford paid his workers enough so that they could buy his product, that's something of a novel concept now....

Did Henry Ford make 320 times more then the average worker?

Did Henry Ford take loans out from the company to buy his options and never pay them back.

Did Henry Ford have policies of Golden Parachutes for his executives?

It's not all the workers fault.....

Haw. 12% of Americans live below the poverty line, compared with 14% in socialist Europe. Get with the program.


Would love to hear where you got that stat from because it's actually not true.

10 bucks says you dont have a source. and even if you do i bet it takes in the WHOLE of europe, america is one country, not 50

Apparently, Pepe did not read the article that started the thread either.

I don't find those statistics depressing, I find them quite inconceivable considering we're the richest country in the world... then again, that "richness" is only shared by like 10-11% of the population.

I don't find those statistics depressing, I find them quite inconceivable considering we're the richest country in the world... then again, that "richness" is only shared by like 10-11% of the population.
its caused by "trickle down" economics ironically. i think i figured out what it means. it means the richest of the rich live next to the dam that causes the poor to get the trickle

Yeah, but there scenarios that could lead to product price decrease. For example, with a minimum wage increase, the poorest workers are able to afford some items that were never available to them before. Increased demand leads to higher profits and higher prices. Simultaneously, though, the higher profits spark increased competition. Increased competition leads to increased supply, which leads to a general lowering of the price.

When companies have more consumers, they are able to lower their prices.

Also, the automatic raising of prices also assumes that everything is made by minimum wage workers. Only a fraction of workers are paid minimum wage, soo only a fraction of items will have higher production costs.

Now theres that big brain I was talking about. He's right. We learned that in Economics in 10th grade! Ahh high school......that was eons ago it seems. :(

10 bucks says you dont have a source. and even if you do i bet it takes in the WHOLE of europe, america is one country, not 50

Yup. EU member countries. It's somewhere like 17.8% in Britain, which is where I know a lot of Nationstates folks are. If I wasn't at work, I'd cite some recent texts, but the Factbook is reliable for an internet source.

http://www.cia.gov/cia/publications/factbook/geos/us.html

Here's us.. not 1 in 4 if you notice, and my more recent texts say the same. Feel free to add Western Europe and divide, but it'll tell you the same.

Yup. EU member countries. It's somewhere like 17.8% in Britain, which is where I know a lot of Nationstates folks are. If I wasn't at work, I'd cite some recent texts, but the Factbook is reliable for an internet source.

http://www.cia.gov/cia/publications/factbook/geos/us.html

Here's us.. not 1 in 4 if you notice, and my more recent texts say the same. Feel free to add Western Europe and divide, but it'll tell you the same.
which still doesnt explain where you got the european figure

which still doesnt explain where you got the european figure

Sure it does, add em up and average them out (adjust for population proportion).. some are better, and some are worse. (most are worse) The funny thing is, that in Europe, the lower the population in poverty is, the higher the unemployment. Gotta love the welfare state! France is the best off for poverty in Europe, at around 7%, with 10% unemployment.. ;) and that makes Europe look great, compared to the others.

its caused by "trickle down" economics ironically. i think i figured out what it means. it means the richest of the rich live next to the dam that causes the poor to get the trickle

Surprisingly, that's a very, very good analogy. :p

Sure it does, add em up and average them out (adjust for population proportion).. some are better, and some are worse. (most are worse) The funny thing is, that in Europe, the lower the population in poverty is, the higher the unemployment. Gotta love the welfare state! France is the best off for poverty in Europe, at around 7%, with 10% unemployment.. ;) and that makes Europe look great, compared to the others.
i dont think europe calculates this the same as america looking at all of this crap

im right, european poverty threshold is an arbitrary number where as american poverty threshold is random.


so in other words, you are comparing apples and oranges

Henry Ford paid his workers enough so that they could buy his product, that's something of a novel concept now....
I'm reading Upton Sinclair's The Flivver King right now. Cost of living skyrocketed when Ford announced his plan for the $5/day minimum wage. Shop owners nearby figured they might as well get part of that cut, so if people are going to have more money to spend, they can spend it at their shop. Prices for groceries therefore rose, and not based on increase cost of production. Additionally, seeing how as workers would flock to Ford factories for better paying jobs, land owners near Ford factories jacked up the prices to buy and rent. There isn't even any production or labor involved in land, and you see that those prices increased based off the fact that the average American consumer had more to spend and therefore the average American supplier increased his income by gobbling up as much of that extra spending power as possible.

i dont think europe calculates this the same as america looking at all of this crap

im right, european poverty threshold is an arbitrary number where as american poverty threshold is random.


so in other words, you are comparing apples and oranges

Europe's an interesting animal.. parts of it will always be extremely blessed economically, and parts wont. You'll never have the same poverty in Monaco or Liechtenstein as in Spain or Britain. I wasn't trying to insult Europe though, that's not my point at all. I'm just saying that America's 12% below the poverty line (with 5.5% unemployment, which is key) is comparable to the socialist states of Europe, i.e. the UK with 17%, while keeping unemployment low.

Edit: as for the actual number, I'm using a fixed number, adjusted for inflation. That is, if the poverty line is 17k in America and 22k in Britain, which would make Britain look worse, you chain the inflation rate and basket index.

Europe's an interesting animal.. parts of it will always be extremely blessed economically, and parts wont. You'll never have the same poverty in Monaco or Liechtenstein as in Spain or Britain. I wasn't trying to insult Europe though, that's not my point at all. I'm just saying that America's 12% below the poverty line (with 5.5% unemployment, which is key) is comparable to the socialist states of Europe, i.e. the UK with 17%, while keeping unemployment low.

Edit: as for the actual number, I'm using a fixed number, adjusted for inflation. That is, if the poverty line is 17k in America and 22k in Britain, which would make Britain look worse, you chain the inflation rate and basket index.
like i said, the americans have a floating point system for judging poverty threshold and below poverty, the whole of EU has a static arbitrary number. thats why they have a higher rate of peopler under the level of poverty. im sure if we held america to the same standard people living in poverty would go up

like i said, the americans have a floating point system for judging poverty threshold and below poverty, the whole of EU has a static arbitrary number. thats why they have a higher rate of peopler under the level of poverty. im sure if we held america to the same standard people living in poverty would go up

The EU's definition is screwey altogether. That's why I'd add the national figures, adjusted for inflation and basket price, and average them. Also, the EU defines poverty as "material, cultural and social," meaning you could be considered poor by not having a museum within 50km... Here it's just straight income. so that's why I use national figures, as with France, Germany and the UK, which all publish national numbers.

You can't just conjure money from no where. Some one has to pay the increased wages. That means either lower profits, or less ability to employ the needed amount of workers. You are also allocating more money to people who do not create much wealth. Furthermore, why do real work when you can get by by flipping burgers?

As far as price increases go: Say the price has to go up by 6% with a 10% increase in min wage. Sounds great right? These people can now buy 4% more goods. But what about every one else? They have to pay more.

More importantly, if you want to use the "profits will go up" argument - the owners will end up making more wealth. Thus the discrepency will remain.

Wow that article described my current situation perfectly. Now I'm really sad. Yes the trickle down economic theory has slowed my income to little more than a trickle. Working in the service industry, my income has decreased drastically. I made about half this year so far as I did in previous years, but admittedly my take-home had been going down slightly overall in the last four years. Note: the decline started BEFORE Sept. 2001
Haw. 12% of Americans live below the poverty line, compared with 14% in socialist Europe. Get with the program.
That's great. So if conditions are crap in the US we can always just say that al least we're not as bad as Europe? That's a great rationalization. Let me ask you this, if our capitalist society is so much greater than socialists, then shouldn't there be a much greater difference in our poverty rates, perhaps more that two percent?

You gotta give Hoover credit. At least he appropriately titled his economic plan so the American people knew they were getting pissed on.

sadly most of you don't relize that 2/3 of those own a car, most have to rooms per person I could go on but I don't give a crap.

Europe is not socialist. Ever heard of the FT-SE, DAX?

sadly most of you don't relize that 2/3 of those own a car, most have to rooms per person I could go on but I don't give a crap.

Yes. Things in the US are hella cheap compared to Europe. I live in a four bedroom house with two roomates. Finished basement, garage, large back yard. I walk to work and the grocery store. I pay $300/month. How sweet is that?

sadly most of you don't relize that 2/3 of those own a car, most have to rooms per person I could go on but I don't give a crap.
Only because they subordinate education though.

I just wanted to point something out that doesn't have a whole lot to do with the article...but it sort of ties in.

Raising minimum wage doesn't really solve anything. If you raise the minimum wage, you now have to pay out more money to the guys in the bread factory and the guys on the cattle farm and the guys in the corn fields. Because you have to pay more to all these people, the actual production of these food products costs you more (especially when you consider all the processing that most foods go through, that's a lot of raised wages). Now that the government has increased minimum wage and increased your cost of production, you have two options. You can settle for a smaller profit and continue selling your products at the same price, or you can increase your prices to maintain approximately the same profit. More often than not, prices are raised (this causes inflation) and the poor people are still poor and the rich people are still rich. Having a minimum wage ensures that workers don't get abused, but raising a minimum wage causes inflation.
That's the line against minimum wage, but it's not exactly true. In many cases, there's a maximum level that a person will pay for certain goods, no matter what the cost of making those goods. There's a ceiling, in other words, and the companies that make those goods can either let themselves get stuck with inventory, or they can lower their prices, no matter what their labor costs are. But the fact is that you can have a higher minimum wage and still have a solid economy. Here in San Francisco, we took a hit from the dot-com bust, but we've been recovering, and the fact that our minimum wage in the city is now $7.50/hour hasn't stopped us one bit. The fact is that it's so expensive to live in the city that most places pay far more than that, even for part-time workers. I made ten bucks an hour as a car valet, and I'm making fifteen for grunt work in a brewery.

That's the line against minimum wage, but it's not exactly true. In many cases, there's a maximum level that a person will pay for certain goods, no matter what the cost of making those goods. There's a ceiling, in other words, and the companies that make those goods can either let themselves get stuck with inventory, or they can lower their prices, no matter what their labor costs are. But the fact is that you can have a higher minimum wage and still have a solid economy. Here in San Francisco, we took a hit from the dot-com bust, but we've been recovering, and the fact that our minimum wage in the city is now $7.50/hour hasn't stopped us one bit. The fact is that it's so expensive to live in the city that most places pay far more than that, even for part-time workers. I made ten bucks an hour as a car valet, and I'm making fifteen for grunt work in a brewery.


Well then the argument is irrelevant in your situation

Well then the argument is irrelvant in your situation
How so?

How so?

Because the natural min wage is already high in your area

That's the line against minimum wage, but it's not exactly true. In many cases, there's a maximum level that a person will pay for certain goods, no matter what the cost of making those goods. There's a ceiling, in other words, and the companies that make those goods can either let themselves get stuck with inventory, or they can lower their prices, no matter what their labor costs are. But the fact is that you can have a higher minimum wage and still have a solid economy. Here in San Francisco, we took a hit from the dot-com bust, but we've been recovering, and the fact that our minimum wage in the city is now $7.50/hour hasn't stopped us one bit. The fact is that it's so expensive to live in the city that most places pay far more than that, even for part-time workers. I made ten bucks an hour as a car valet, and I'm making fifteen for grunt work in a brewery.
Read the Flivver King by Upton Sinclair for a more in-depth look at the effect that minimum wage has on the cost of living.

i dont think europe calculates this the same as america looking at all of this crap

im right, european poverty threshold is an arbitrary number where as american poverty threshold is random.


so in other words, you are comparing apples and oranges

Ah yes, but we're all members of the same fruit.

It's not all the workers fault.....
where did I suggest that it was? my point is that corporations oppose the idea of paying their workers a fair wage -- that's the problem with explotive-capitalism