Vents: Random Acts of Venting!

[Henry Hawk]

Hell, let's make it $50 a hour and we would no longer have any poor people!!!

Common Sense dictates just as to why raising the min wage is BAD for a struggling economy.

nuff said.

[libby]

HH, I don't mean to be mean, but it's obvious you haven't been poor enough to have to count every penny to be sure you have enough to buy food AND pay the bills, and live in fear of bouncing a check. I can remember a time when I was just starting out -- was working as a medical secretary, and decided to get a loan (for what I don't remember), but when I went to the bank (the one which handled my office's account) I was refused a loan of a few hundred dollars because I didn't make enough money. I don't know who was more embarrassed, me or the woman I knew as a friend who had to convey that message to me. 

[Exterminator]

Ex seems to be a classic example of how liberals handle things in the video I posted the link to.

How about you STFU, too?

[Exterminator]

Common Sense dictates just as to why raising the min wage is BAD for a struggling economy.

Wrong!  People on minimum wage spend everything they make just trying to survive.  Any money that is part of an increase in the minimum wage will get pumped right back into the economy which helps it.

Like I said before, you haven't a freakin' clue what you're talking about.

[Exterminator]

HH, I don't mean to be mean, but it's obvious you haven't been poor enough to have to count every penny to be sure you have enough to buy food AND pay the bills...

Hopefully he will be someday...call it karma.

[Henry Hawk]

HH, I don't mean to be mean, but it's obvious you haven't been poor enough to have to count every penny to be sure you have enough to buy food AND pay the bills, and live in fear of bouncing a check. I can remember a time when I was just starting out -- was working as a medical secretary, and decided to get a loan (for what I don't remember), but when I went to the bank (the one which handled my office's account) I was refused a loan of a few hundred dollars because I didn't make enough money. I don't know who was more embarrassed, me or the woman I knew as a friend who had to convey that message to me. 

Libby, I too, certainly have NO intentions of sounding mean on this. I am passing on an anology I read....( the names has been modified for humor) I think this best explains as to why I believe it hurts more than it helps.

Let's say Troll owns a Widget Shop. Troll it the owner and has 15 employees to make his widgets. There is some turnover among the employees since all of them are always looking to better themselves so at any given time, Troll has about one-third of his workforce at the entry or training level and receiving minimum wage pay for their efforts. Troll's widgets are part of a sub-assembly of parts used to make larger machines. Troll has to bid contracts with those he supplies his widgets to annually. The competition is heavy and the margins are thin. On average, Troll is recovering about $10 per widget unit in sales revenue. The Widget Shop turns out and ships 100,000 widgets per year yielding sales revenue of $1 million dollars annually.

From that annual revenue Troll must pay his capital improvement costs, his material/inventory costs, his operating and labor costs, taxes and fees, and a living income for himself with the hope that there is a little left over as retained earnings in the coffer for a rainy day. Troll pays himself $5,000 per month or $60,000 a year....just slightly more than the national average household income. Troll's business runs 50 weeks per year logging 40 hours per week per employee. All employees are paid on an hourly rate. At present, 5 of the 15 employees are being paid at the current minimum wage of $7.50 per hour. Another 5 are at $10 per hour, and the remaining 5 of the 15, his longer term employees, earn $15 per hour.

Troll just received notification that the Minimum Wage Limit has now changes to $9.00 per hour for each employee effective the 1st day of the next month. This change will not only affect the wages of Troll's five employees making the minimum wage rate but will cause Troll to have to adjust his pay grade up and down the scale in order to maintain morale in the shop. Obviously all the employees will be aware that those earning the lowest wage in shop just received a $1.50 per hour raise. They too will expect something extra in their pay envelopes.

The increase in costs at the minimum wage level appears to be 20% but Troll realizes that the figure is much greater. With the mandated increases also comes the expected increases of other shop employees paid at the higher levels. In addition, the employer's share of Social Security and Medicare Withholdings will increase as well. Troll sets about the task of calculating his new labor overhead knowing full well that there is no promise of increased sales revenues or new contracts in this operating year. His projected cash flow of $1 million dollars in revenue is what it is and that is all.

The increase in minimum wage will add an additional $3000 per employee for a total of $15,000 to the hourly payroll plus another $1150 in annual SSI/Medicare Employer payment for a total of $16,150 annually over previous costs. If Troll gives his mid-range employees a .75 cent per hour raise and his top employees a $1.00 per hour raise to sustain morale, the move will cost an additional $18,839 annually. Total cost driven by this shift in minimum wage will be $34,989 annually. In round numbers, Troll's annual payroll outlay just went from $350,000 per year to $385,000 annually or the equivalent of giving each of his employees a 10% raise in pay. Who gets a 10% pay increase in these times in one year?

The Widget Shop has historical had a net profit bottom line of 3.5% on average in the last five years of operation. This is the money held in the liquidity by the company for a rainy day and the rainy days always come sooner or later. With no increase in annual revenue, and assuming all other expenses remain at historic levels, the change in annual wages will take just about every dime of the reserve leaving no safety net for the company at all in terms of unexpected cash flow requirements. While Troll could operate under those conditions for a short time, eventually there will be problems.

Troll has two choices to sustain his business and the income producer for his employees. He can cut his own salary by more than one-half but then with two kids in high school and one in college, he will not be able to even keep his head above water. In fact, he would be able to earn a better living by working for the other guy. The other alternative is to lay off two of the minimum wage workers and try to make the production numbers with less people. If everyone in the shop knows what is on the line that just might be possible.

Troll has found a solution but he is not happy because he must to let two good employees go thanks to the new Minimum Wage Law in order to sustain the status quo of the business. Those employees will not be happy either and certainly their families will not be any better off as a result. While lower level wages do not always provide enough, it does provide more than no wages at all which is what these employees will be faced with for the time being. No, Troll is not happy with the solution but these are the decisions that every businessman has to make when the government attempts to run the show. In the end, there are no winners.

[Exterminator]

According to numerous studies, your analogy is inconsistent with reality...probably because it ignores the obvious fact that when those minimum wage workers make more money, they buy more widgets so the number of widgets the owner is selling and must produce increases, keeping him profitable and making it nearly impossible to let those two employees go since he needs them to make those extra widgets.

People whose understanding of business is based on cutesy little stories rather than education and real world experience are more than a little annoying.   

[Henry Hawk]

According to numerous studies, your analogy is inconsistent with reality...probably because it ignores the obvious fact that when those minimum wage workers make more money, they buy more widgets so the number of widgets the owner is selling and must produce increases, keeping him profitable and making it nearly impossible to let those two employees go since he needs them to make those extra widgets.

People whose understanding of business is based on cutesy little stories rather than education and real world experience are more than a little annoying.   

The person who MADE that story IS a real person who HAD his own business, and told it based upon real life experience.  Far from a "cutesy" story.

But, Ex.  I appreciate that you are at least TRYING to defend why the min wage is good in your opinion.  All I wanted to hear from anybody on your side, to give me some valid reasons, and HOW it possibly helps the economy.  I still don't agree, but I see your logic.

[The Troll]

HH, I don't mean to be mean, but it's obvious you haven't been poor enough to have to count every penny to be sure you have enough to buy food AND pay the bills, and live in fear of bouncing a check. I can remember a time when I was just starting out -- was working as a medical secretary, and decided to get a loan (for what I don't remember), but when I went to the bank (the one which handled my office's account) I was refused a loan of a few hundred dollars because I didn't make enough money. I don't know who was more embarrassed, me or the woman I knew as a friend who had to convey that message to me.

  No Libby, Henry the Scab and was a child of General Motors and The UAW union.     When he was raised his dad made good money and had a good steady job.  He know what is Blue Cross Medical insurance is.  He knows what Blue Shield Medical Insurance is.  He knows what dental insurance, he know what eye glasses insurance is, because he got all of it.  Yes Libby he knows the good life and don't want anyone else to have the same breaks he had.  You want to know why? 

  He is a Republican, Far Right Christian Wing Nut and a SCAB.    You can't get any crazier that that.       

[Exterminator]

The person who MADE that story IS a real person who HAD his own business, and told it based upon real life experience.  Far from a "cutesy" story.

Considering the story discusses the hypothetical results of an event that has not yet occurred, I question how it is based on real life experience?  That notwithstanding, I welcome you to support the credentials you attribute to Mr. Brown and provide details about his "business".

But, Ex.  I appreciate that you are at least TRYING to defend why the min wage is good in your opinion.  All I wanted to hear from anybody on your side, to give me some valid reasons, and HOW it possibly helps the economy.  I still don't agree, but I see your logic.

You need to learn three simple words: demand drives production.  People do not build shopping malls in the wilderness in Montana expecting the availability of merchandise will encourage the genesis of a city.  They build shopping malls in and near cities where the demand for wares already exists.

[me]

Considering the story discusses the hypothetical results of an event that has not yet occurred, I question how it is based on real life experience?  That notwithstanding, I welcome you to support the credentials you attribute to Mr. Brown and provide details about his "business".

You need to learn three simple words: demand drives production.  People do not build shopping malls in the wilderness in Montana expecting the availability of merchandise will encourage the genesis of a city.  They build shopping malls in and near cities where the demand for wares already exists.

You seem to forget the minimum wage has been increased in the past and this very well could have happened and not be hypothetical at all. 

Why is it liberals always ignore the unintended consequences of things and only focus on what they percieve to be the "fix" to a problem?   

[Exterminator]

You seem to forget the minimum wage has been increased in the past and this very well could have happened and not be hypothetical at all. 

Why is it liberals always ignore the unintended consequences of things and only focus on what they percieve to be the "fix" to a problem?

Perhaps because when the minimum wage was increased in the past none of these things happened?

[Palehorse]

Perhaps because when the minimum wage was increased in the past none of these things happened?

There you go again, using those "validated fact" thingies. . .

[The Troll]

Why not make the wage $15.00 a hour? Is  that not better?

  What do you make an hour RC and are you worth it.    If the truth was known, your probably screwing the pooch. 

  You won't tell us what you do so I know you're not going to tell us how much an hour you make.     Just living a dream.   

[me]

Perhaps because when the minimum wage was increased in the past none of these things happened?

And you know that for a fact.  I'm certainly glad you know every businessman and all about every business in the US.  I think you had better go back and check out what happened the last two times it was raised again.