FEDERAL PAY FREEZE TO BE ANNOUNCED SOON

[wawaweewa]

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).



Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

 

[Betonblck]

Originally Posted by Theta

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

 

[Betonblck]

Originally Posted by Theta

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

 

[theta]

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).



Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.

cguy610: Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

Um, no thats not the case - but this is one of the best objections in this thread. How it works is that:  Lower wage means lower marginal cost. Lower marginal cost means lower final price. Lower final price means demand will increase. Increased demand requires more labor, so hiring will increase (and thus, unemployment decreases). Let me know if that's not clear enough and I'll type up something better. Also, thanks for being civilized and attempting to legitimately further discussion.

 

[theta]

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).



Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.

cguy610: Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

Um, no thats not the case - but this is one of the best objections in this thread. How it works is that:  Lower wage means lower marginal cost. Lower marginal cost means lower final price. Lower final price means demand will increase. Increased demand requires more labor, so hiring will increase (and thus, unemployment decreases). Let me know if that's not clear enough and I'll type up something better. Also, thanks for being civilized and attempting to legitimately further discussion.

 

[donttalkitlivit]

Originally Posted by rashi

Can we permantly fire these people and get rid of the military? People need to get a real job.

cue the Joker "not sure if serious" gif

 

[donttalkitlivit]

Originally Posted by rashi

Can we permantly fire these people and get rid of the military? People need to get a real job.

cue the Joker "not sure if serious" gif

 

[georgehimself]

Originally Posted by juggy4805

Originally Posted by georgehimself

A pay freeze was done in order to avoid layoffs. I think its better to have more people with jobs on a pay freeze, then to cut some jobs altogether.

Not really, they is still going to be a reduction of 10% of federal employees.

Please show me a reliable source that states this.

 

[georgehimself]

Originally Posted by juggy4805

Originally Posted by georgehimself

A pay freeze was done in order to avoid layoffs. I think its better to have more people with jobs on a pay freeze, then to cut some jobs altogether.

Not really, they is still going to be a reduction of 10% of federal employees.

Please show me a reliable source that states this.

 

[jking0821]

Originally Posted by Theta

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.

cguy610: Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

Um, no thats not the case - but this is one of the best objections in this thread. How it works is that:  Lower wage means lower marginal cost. Lower marginal cost means lower final price. Lower final price means demand will increase. Increased demand requires more labor, so hiring will increase (and thus, unemployment decreases). Let me know if that's not clear enough and I'll type up something better. Also, thanks for being civilized and attempting to legitimately further discussion.

I think this is a big assumption.  Not every company will lower the price because their costs decrease.  But if demand is extremely low that is a way to combat it.  But in today's economy you are correct.  Lower the wages which may lower the quality of work but that is a chance you need to take to lower the price of a product/service in an attempt to trigger demand increases.  But if a company can help it they would like to (obviously) keep as much money as they can for themselves and not pass the cost savings on to the customer ie lower prices. 

Good discussion though good to hear some quality info for once on NT lol.

 

[jking0821]

Originally Posted by Theta

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.

cguy610: Those were some good points.  However, this is one of the major flaws.  In simplified terms, if demand is 10 units and it only takes 5 workers to produce 10 units, a company isn't going to hire a 6th worker because wages are lower.  The company will just have higher profit margins. 

See my example above, the excerpt about corporate profits.  Do you think if profits are 2 trillion instead of 1.6 trillion, hiring will pickup? 

Um, no thats not the case - but this is one of the best objections in this thread. How it works is that:  Lower wage means lower marginal cost. Lower marginal cost means lower final price. Lower final price means demand will increase. Increased demand requires more labor, so hiring will increase (and thus, unemployment decreases). Let me know if that's not clear enough and I'll type up something better. Also, thanks for being civilized and attempting to legitimately further discussion.

I think this is a big assumption.  Not every company will lower the price because their costs decrease.  But if demand is extremely low that is a way to combat it.  But in today's economy you are correct.  Lower the wages which may lower the quality of work but that is a chance you need to take to lower the price of a product/service in an attempt to trigger demand increases.  But if a company can help it they would like to (obviously) keep as much money as they can for themselves and not pass the cost savings on to the customer ie lower prices. 

Good discussion though good to hear some quality info for once on NT lol.

 

[juggy4805]

Originally Posted by georgehimself

Originally Posted by juggy4805

Originally Posted by georgehimself

A pay freeze was done in order to avoid layoffs. I think its better to have more people with jobs on a pay freeze, then to cut some jobs altogether.

Not really, they is still going to be a reduction of 10% of federal employees.

Please show me a reliable source that states this.

It was in Obama's bipartisan fiscal commision's proposal. I don't think it has been fully approved yet.
http://www.govexec.com/dailyfed/1110/111510l1.htm

Federal pay raise still up in the airBy Emily Long [email protected] November 15, 2010 http://www.govexec.com/dailyfed/1110/111510l1.htm property="lingo:canonical_url">
Uncertainty remains in the debate over whether federal employees will receive a 2011 pay raise as Congress begins its lame-duck session this week.

On the heels of recent Republican proposals to freeze federal pay and hiring came detailed plans to slash government spending released on Nov. 10 by the chairmen of President Obama's bipartisan fiscal commission. Their plan would cut the federal workforce by 10 percent, freeze civilian pay and compensation for three years, and cap noncombat pay for military personnel at 2011 levels for three years.

"The federal workforce has some challenges in terms of the pay freeze," said Paul Rowson, managing director at the human resources association WorldatWork. "It is contemplating freezing pay when the private sector is considering increasing it. Our salary budget survey is telling us that the private sector this year is targeting anywhere from a 2.6 [percent] to 3 percent merit increase across-the-board. That's what they're budgeting for their entire workforce, double what the president had on the table."

  

 

[juggy4805]

Originally Posted by georgehimself

Originally Posted by juggy4805

Originally Posted by georgehimself

A pay freeze was done in order to avoid layoffs. I think its better to have more people with jobs on a pay freeze, then to cut some jobs altogether.

Not really, they is still going to be a reduction of 10% of federal employees.

Please show me a reliable source that states this.

It was in Obama's bipartisan fiscal commision's proposal. I don't think it has been fully approved yet.
http://www.govexec.com/dailyfed/1110/111510l1.htm

Federal pay raise still up in the airBy Emily Long [email protected] November 15, 2010 http://www.govexec.com/dailyfed/1110/111510l1.htm property="lingo:canonical_url">
Uncertainty remains in the debate over whether federal employees will receive a 2011 pay raise as Congress begins its lame-duck session this week.

On the heels of recent Republican proposals to freeze federal pay and hiring came detailed plans to slash government spending released on Nov. 10 by the chairmen of President Obama's bipartisan fiscal commission. Their plan would cut the federal workforce by 10 percent, freeze civilian pay and compensation for three years, and cap noncombat pay for military personnel at 2011 levels for three years.

"The federal workforce has some challenges in terms of the pay freeze," said Paul Rowson, managing director at the human resources association WorldatWork. "It is contemplating freezing pay when the private sector is considering increasing it. Our salary budget survey is telling us that the private sector this year is targeting anywhere from a 2.6 [percent] to 3 percent merit increase across-the-board. That's what they're budgeting for their entire workforce, double what the president had on the table."

  

 

[chickhien]

Originally Posted by Theta

Originally Posted by cguy610

Originally Posted by Theta

Originally Posted by usainboltisfast

Originally Posted by AquaGrape2345

The U.S. needs to stop adding to its deficit as well as outsourcing jobs so that our economy can get back up and running.

Realistically very little the government can do for outsourcing. It's the burden of consumers to stop outsourcing. Instead of buying the cheap made in China product spend extra for the made in USA product.

One of the best thing that can happen to this economy is having jobs outsourced. If you can answer phones and want $10/hour and a guy in India can answer phones for $2/hour, WHY ON EARTH would you say that you should get paid more? You dont deserve to get paid $10 because theres somebody else that can do your job just as well for less money. The implication that it has on the domestic economy is clear: cheaper things. Yes thats right, EVERYBODY gets cheaper goods. Why? because the marginal cost of production has decreased. A chinese factory worker makes ~$1/hour where as the GM factory workers that were part of the UAW were making $74/hr once you factor in all benefits. Almost EVERYBODY in society is better off when the market is more efficient, and outsourcing does exactly that. Simply because theyre american, it doesnt oblige Private Companies to hire them.

Also, that guy thats stirring the pot has a really good view (although presented it poorly): There is a LOT of bureaucracy in the government. A lot of people are getting paid way too much for doing absolutely nothing of value. This isnt to say that we need to eliminate our military (and this seems to be the main focus of NT), but again, the Govnt has no incentive to be efficient, to pay people what theyre worth (whether its more or less than what they have now). Theyre using OUR tax dollars to pay for jobs that we dont need.

So what should be done? Drastically reduce the size of the govnt. The govnt fails terribly at almost everything it does (ie: schools, healthcare, minimum wage laws, etc etc) and its taking money from hardworking Americans to do it.

Wow, let me get this foolishness you just typed straight. 

 

1.  Outsource all the jobs
2.  Eliminate minimum wage
3.  Drastically reduce the size of government

Now, who is going to buy goods and services when unemployment is 50% and the other 50% that are working make $2/hr. 

Given what you already said, you probably also want to cut unemployment and welfare too, right?  So basically, half of the people in the US starve and die, while the others work for $2/hr. 

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

i can appreciate your point with the example of lebron james. but realistically, you have to look at the other end of the spectrum. jobs that only pay minimum wage usually require little job experience, skills, or education. so what could this mean? we would find a true market value of a wage that people would be willing to accept, not necessarily employers competing for the best grocery store cashier. and you can't outsource all of these minimum wage low skill jobs. some people just don't have the capacity or resources to get a formal education to develop better job skills. i agree that cutting the minimum wage could possibly create more jobs, but at a higher wage? only if you could outsource those jobs, and let's face it, alot of these minimum wage jobs can't be outsourced, like anything with the service industry.

 

[chickhien]

Originally Posted by Theta

Originally Posted by cguy610

Originally Posted by Theta

Originally Posted by usainboltisfast

Originally Posted by AquaGrape2345

The U.S. needs to stop adding to its deficit as well as outsourcing jobs so that our economy can get back up and running.

Realistically very little the government can do for outsourcing. It's the burden of consumers to stop outsourcing. Instead of buying the cheap made in China product spend extra for the made in USA product.

One of the best thing that can happen to this economy is having jobs outsourced. If you can answer phones and want $10/hour and a guy in India can answer phones for $2/hour, WHY ON EARTH would you say that you should get paid more? You dont deserve to get paid $10 because theres somebody else that can do your job just as well for less money. The implication that it has on the domestic economy is clear: cheaper things. Yes thats right, EVERYBODY gets cheaper goods. Why? because the marginal cost of production has decreased. A chinese factory worker makes ~$1/hour where as the GM factory workers that were part of the UAW were making $74/hr once you factor in all benefits. Almost EVERYBODY in society is better off when the market is more efficient, and outsourcing does exactly that. Simply because theyre american, it doesnt oblige Private Companies to hire them.

Also, that guy thats stirring the pot has a really good view (although presented it poorly): There is a LOT of bureaucracy in the government. A lot of people are getting paid way too much for doing absolutely nothing of value. This isnt to say that we need to eliminate our military (and this seems to be the main focus of NT), but again, the Govnt has no incentive to be efficient, to pay people what theyre worth (whether its more or less than what they have now). Theyre using OUR tax dollars to pay for jobs that we dont need.

So what should be done? Drastically reduce the size of the govnt. The govnt fails terribly at almost everything it does (ie: schools, healthcare, minimum wage laws, etc etc) and its taking money from hardworking Americans to do it.

Wow, let me get this foolishness you just typed straight. 

 

1.  Outsource all the jobs
2.  Eliminate minimum wage
3.  Drastically reduce the size of government

Now, who is going to buy goods and services when unemployment is 50% and the other 50% that are working make $2/hr. 

Given what you already said, you probably also want to cut unemployment and welfare too, right?  So basically, half of the people in the US starve and die, while the others work for $2/hr. 

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

i can appreciate your point with the example of lebron james. but realistically, you have to look at the other end of the spectrum. jobs that only pay minimum wage usually require little job experience, skills, or education. so what could this mean? we would find a true market value of a wage that people would be willing to accept, not necessarily employers competing for the best grocery store cashier. and you can't outsource all of these minimum wage low skill jobs. some people just don't have the capacity or resources to get a formal education to develop better job skills. i agree that cutting the minimum wage could possibly create more jobs, but at a higher wage? only if you could outsource those jobs, and let's face it, alot of these minimum wage jobs can't be outsourced, like anything with the service industry.

 

[wawaweewa]

Originally Posted by Theta

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.


I took some grad classes just for kicks. I liked econ, was good at it, and had classes to burn. Had nothing to lose really. Does me taking grad now invalidate your point? 
The fact is, modern economics has been "mathematized" (if you will) to the point where it purports to provide an answer when in fact it's just a bunch of !+@%%+$$. If some of the !+@%%+$$ was obvious to an inexperienced 18yr old, I can only imagine how much !+@%%+$$ swirls at the top (PHD level; small circle--> self perpetuating--> they need to make themselves relevant , right?) from whence all it comes down. 

There's no argument to be had because people like you are akin to religious zealots. I can argue until I get a migraine but I'll always here the same old garbage. 

I work in an area of finance and have some friends who work in finance as well (although other fields). Not too many PhD types spouting inane garbage making tons of money like our superiors.  There have been a few who succeeded but most academics who try their hand at it fail. That should tell you something but it prob won't. 

 

[wawaweewa]

Originally Posted by Theta

Originally Posted by wawaweewa

Theta wrote:

Listen, I know it sounds counter intuitive, but minimum wage is the SINGLE WORST policy measure for the poor ever. If you want, I can explain it more thoroughly, but for now just consider this simple line of reasoning: "when the price of something goes up, you can afford less of it". It makes sense right? Its really intuitive. Now lets apply this to the labor market. When the price of labor goes up (ie, an increase in minimum wage), you can afford less of it (hence, unemployment increases). This is all in real dollar terms of course. Again, if this doesnt make sense to you, I can provide a more detailed explination.

What this means, however, is that a cut in minimum wage will effectively raise employment levels. Also, you have to keep in mind that the number of jobs in an economy is not fixed. Once one job is outsourced, it doesnt mean that person is unemployed forever. He can get a different job. It happens all the time once an industry collapses (think of all the people that worked in a typewriter factory when computers became popular...). I am not advocating ALL JOBS getting outsourced, only the ones that can be done for cheaper.

Now addressing what you said. 1) Unemployment will not increase due to outsourcing since the cut in minimum wage will create more jobs than there were before. 2) I have no idea how you think that 50% of america will starve and die without a minimum wage while the other 50% will make $2 an hour. Thats ridiculous. You understand that minimum wage didnt always exist right? People werent dying everywhere - they were doing reasonably well. What will happen is that people get paid what they are worth. If you do your job really well, youll get paid much much more than $2/hour. Why? Because if you dont get paid more, somebody else will pay you that amount. Consider the following example:

Lebron James is really, really, really good at basketball. You own an NBA team and one day show up on his high school court in Cleveland and are like: wow, that dude is really, really good at basketball - i bet that a lot of people are willing to pay to watch him play and he will ultimately increase my profits by $20million/year. But since there is no minimum wage, I can pay him $2 an hour. Ok so you pay him $2/hour. I come along and see that Lebron is really valuable to my NBA team as well and will increase my profits by $20million as well. I decide to own you and pay him $10,000/year. You come back and pay him $50,000 a year (after all, he is increasing your profits 20M, you can pay him more). I come back and pay him $2M a year, and you own my by paying him $20M a year. This is how the market works, theres a back and forth until equilibrium is reached. The same thing happens with people making $10/hour. You get paid what youre worth in a capitalist society. The govnt will only mess things up by imposing a price floor (which is what min wage is).

Dude, you're wrong when it comes to how things actually work. 
I know where you're getting this from. The world doesn't function like a textbook. 

My entire time through econ undergrad I sat there and had to listen to blatantly ridiculous theories based on equally ridiculous assumptions. 

Real world economies thrive on information asymmetry and closed/ non competitive markets. 

It irks me to no end having to listen to textbook %%!#$**! being spouted. 

Economics, as presented today, is so far removed from its original intention that it has become nothing more than a self perpetuating ++++ show. 

lmao ok the problem is that youre complaining about your econ UNDERGRAD. Once you get to graduate school, you remove most of those perfect market assumptions and assume market inefficiency, it moves to applied game theory. Regardless, this IS how things actually works. When minimum wage increases, unemployment increases. They go hand in hand from the day that it was first imposed. Now aside from your rant about how much you hate intro economics (the purpose of which is to prepare you for the good stuff), my points STILL stand. You didnt address any of them except write six lines about how things dont work this way. Tell me where I'm specifically wrong so we can have a legitimate discussion.


I took some grad classes just for kicks. I liked econ, was good at it, and had classes to burn. Had nothing to lose really. Does me taking grad now invalidate your point? 
The fact is, modern economics has been "mathematized" (if you will) to the point where it purports to provide an answer when in fact it's just a bunch of !+@%%+$$. If some of the !+@%%+$$ was obvious to an inexperienced 18yr old, I can only imagine how much !+@%%+$$ swirls at the top (PHD level; small circle--> self perpetuating--> they need to make themselves relevant , right?) from whence all it comes down. 

There's no argument to be had because people like you are akin to religious zealots. I can argue until I get a migraine but I'll always here the same old garbage. 

I work in an area of finance and have some friends who work in finance as well (although other fields). Not too many PhD types spouting inane garbage making tons of money like our superiors.  There have been a few who succeeded but most academics who try their hand at it fail. That should tell you something but it prob won't. 

 

[crazy dav0]

i'm going to get my evaluation next week ... top brass is telling everyone to discuss performance only and to stop telling people what they would make next year if they raise went thru ...

co workers are tight ... oh well ... i can't miss money i don't have yet ... i did plan on doing some things w/ that money though ... it could be worse

 

[crazy dav0]

i'm going to get my evaluation next week ... top brass is telling everyone to discuss performance only and to stop telling people what they would make next year if they raise went thru ...

co workers are tight ... oh well ... i can't miss money i don't have yet ... i did plan on doing some things w/ that money though ... it could be worse

 

[wawaweewa]

The freeze is something like 2bn/yr. It's more symbolic then anything. 

 

[wawaweewa]

The freeze is something like 2bn/yr. It's more symbolic then anything. 

 

[mangudai954]

Originally Posted by goukiteg

Originally Posted by Lizaker4Lizife

it's about time... my company did this a long time ago and they made us take 2 furlough days each month without pay

federal workers should suffer the same consequences of the recession as the rest of us

You sound bitter.

Very. Only feeds the ego.

 

[mangudai954]

Originally Posted by goukiteg

Originally Posted by Lizaker4Lizife

it's about time... my company did this a long time ago and they made us take 2 furlough days each month without pay

federal workers should suffer the same consequences of the recession as the rest of us

You sound bitter.

Very. Only feeds the ego.