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Thread: Why the minimum wage is essential

  1. #101  
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    Quote Originally Posted by Harold14370 View Post
    For the first few years of my life, we lived in a house with an outhouse. We didn't have a TV until I was about 7 years old, and it was a black and white TV that got 3 fuzzy channels. I remember the old party line phones, where you picked up the receiver and told the operator what number you were calling. In my grade school, we had two grades that shared a teacher and classroom. There was no cafeteria- we packed brown bag lunches. I shared a bed with one of my brothers for quite a few years. We didn't have air conditioning. And, I'd say we were a middle class family. So, I've seen the changes with my own eyes. Don't try to tell me the median hasn't gone up.
    And we had to walk ten miles to school. Uphill. Both ways.

    Your experience was far below average even if you grew up in the 1960's. My grandparents came here in the 1920's from Ireland with zero money, and they worked civil service and/or food service jobs most of their lives; they did a lot better than the scenario you describe above, and they were still below average for the time.
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    Quote Originally Posted by Harold14370 View Post
    I'm not even going to look up the statistics on this. For the first few years of my life, we lived in a house with an outhouse. We didn't have a TV until I was about 7 years old, and it was a black and white TV that got 3 fuzzy channels. I remember the old party line phones, where you picked up the receiver and told the operator what number you were calling. In my grade school, we had two grades that shared a teacher and classroom. There was no cafeteria- we packed brown bag lunches. I shared a bed with one of my brothers for quite a few years. We didn't have air conditioning. And, I'd say we were a middle class family. So, I've seen the changes with my own eyes. Don't try to tell me the median hasn't gone up.
    You should have looked up the statistics.

    I'm probably older than you (grew up in the 50s ) and I had more amenities than you did. And, I would rate my life with my parents (the first 20 years) as lower middle class. When I went away to the state college, I found that most people I met had grown up with more than what I had.
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    Quote Originally Posted by Harold14370 View Post
    I'm not even going to look up the statistics on this. For the first few years of my life, we lived in a house with an outhouse. We didn't have a TV until I was about 7 years old, and it was a black and white TV that got 3 fuzzy channels. I remember the old party line phones, where you picked up the receiver and told the operator what number you were calling. In my grade school, we had two grades that shared a teacher and classroom. There was no cafeteria- we packed brown bag lunches. I shared a bed with one of my brothers for quite a few years. We didn't have air conditioning. And, I'd say we were a middle class family. So, I've seen the changes with my own eyes. Don't try to tell me the median hasn't gone up.

    You're not Canadian by any chance?

    Anyway, the things you describe were part of middle class existence in many rural areas, but were often made up for in other ways. As my husband says, his family was cash poor but land rich, and no one who stopped by left without eating something.

    I agree that in many ways the poor today are probably not as miserable today as the poor in Charles Dicken's time, but some of the advancements have actually made it harder to be poor or even frugal. A lot of services, like electricity, phone service, auto insurance, etc. have a high base rate and conservative or careful use doesn't change that. You can't drive an old car if it doesn't pass the emissions test. My sister in law, a single retired teacher, was tired of living in an apartment and wanted a house, but didn't need or want a big one. It was challenging finding a newer, small house, and when she found one, the bank wouldn't give her a mortgage on a house with less than 3 bedrooms, but would on a bigger one.
    I'd also argue that while small luxuries are more affordable, (eg a pair of shoes, a watch) big ticket items are becoming much more out of reach - cars, houses, education, and land - compared to what they were 50, 75 years ago.

    Coincidentally, my husband was telling my daughter about party lines and people listening in, last night at dinner. He said, "It was almost like Facebook. And if it rang after 11:00 pm, you knew someone was dead."
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    What I think is worth considering imo are that 1- technology is in development/changing , so living standards ought to improve by default in industrialized nations. And 2- generally speaking it now takes 2 income for most people to make ends meet, where as one income used to be enough to care for a family with a house education a car etc. So Im better off than people in the 50s the same way Im better off than people in the stone age (technology) but a lot of middle class families got by on one income in the 50s, thats significant , imo these two factors contribute to underestimating/concealing the middle classes decline (from one perspective in anycase)
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    Quote Originally Posted by RedPanda View Post
    Quote Originally Posted by Harold14370 View Post
    Let's start out with you assertions about necessities versus luxury goods. What is on your list of necessities?
    That question has nothing to do with any assertions about necessities versus luxury goods.
    You are simply asking for a definition.
    You could always look up the definition on Google - it shouldn't be difficult to find.

    Which assertions do you want backing for?
    I don't need a dictionary definition I need Kojax's definition because he claims that when workers fall below some arbitrary subsistence level, then we are risking a crash, and we can prevent the crash by propping up their wages.
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    Quote Originally Posted by icewendigo View Post
    What I think is worth considering imo are that 1- technology is in development/changing , so living standards ought to improve by default in industrialized nations. And 2- generally speaking it now takes 2 income for most people to make ends meet, where as one income used to be enough to care for a family with a house education a car etc. So Im better off than people in the 50s the same way Im better off than people in the stone age (technology) but a lot of middle class families got by on one income in the 50s, thats significant , imo these two factors contribute to underestimating/concealing the middle classes decline (from one perspective in anycase)
    Do you think the women were sitting at home doing nothing, or do you think they were working pretty hard?
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    Quote Originally Posted by Harold14370 View Post
    I don't need a dictionary definition I need Kojax's definition
    Exactly as I said: you are simply asking for a definition.
    What makes you think Kojax's definition is not the dictionary definition?

    Quote Originally Posted by Harold14370 View Post
    because he claims that when workers fall below some arbitrary subsistence level, then we are risking a crash, and we can prevent the crash by propping up their wages.
    Then why not ask that?
    Why beat around the bush asking for definitions that are easily available on Google?
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    Quote Originally Posted by Harold14370 View Post
    Quote Originally Posted by icewendigo View Post
    And 2- generally speaking it now takes 2 income for most people to make ends meet, where as one income used to be enough to care for a family with a house education a car etc.
    Do you think the women were sitting at home doing nothing, or do you think they were working pretty hard?
    Do you think the women were generating an income?
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    Do you think the women were generating an income?
    What they did was bolster the "income" of the family. Families were able to present themselves as being much better off financially than they would be nowadays with an equivalent income. Generally the wage-earner gave an allowance for housekeeping and another allowance for clothing expenses. A woman who knew how to sew and how to cook would make a much better life for the family than the dollars alone could do. Quite often a wage earner would have no idea, literally no idea, how much things cost - because the housewife's work created a lot more value than the allowance received, sometimes meagre beyond all reason.

    They made their own and their children's clothes. They made curtains and slip covers and cushions and bedspreads. They repaired or remade all these items to get more use out of them. They also maintained and repaired things that had been bought in the first place - hence darning socks as an evening activity. They did the laundry and the window-washing. They cooked all the meals. Many of them also made preserves, jams, jellies, pickles rather than purchase these things ready-made.
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    Quote Originally Posted by adelady View Post
    They made their own and their children's clothes. They made curtains and slip covers and cushions and bedspreads. They repaired or remade all these items to get more use out of them. They also maintained and repaired things that had been bought in the first place - hence darning socks as an evening activity. They did the laundry and the window-washing. They cooked all the meals. Many of them also made preserves, jams, jellies, pickles rather than purchase these things ready-made.
    And how much different is that to today?
    With the possible exception of darning socks, all of those things are still done - but both partners now have to work as well.
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    With the possible exception of darning socks, all of those things are still done - but both partners now have to work as well.
    How many women do you know who make their kids' school clothes?

    Or refashion them so that they don't look like hand-me-downs?
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    Quote Originally Posted by adelady View Post
    With the possible exception of darning socks, all of those things are still done - but both partners now have to work as well.
    How many women do you know who make their kids' school clothes?

    Or refashion them so that they don't look like hand-me-downs?
    The stores all are selling sewing machines so somebody must still be doing sewing.
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    Quote Originally Posted by Harold14370 View Post
    Do you think the women were sitting at home doing nothing, or do you think they were working pretty hard?
    If you want to include the unpaid labour of women in the household income of premodern society then people today end up not being nearly as rich in comparison to their grandparents. You would be destroying your own argument if you do that.
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    Quote Originally Posted by dan hunter View Post
    The stores all are selling sewing machines so somebody must still be doing sewing.
    Well, we have five so we're messing with the averages . . .
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    Quote Originally Posted by dan hunter View Post
    If you want to include the unpaid labour of women in the household income of premodern society then people today end up not being nearly as rich in comparison to their grandparents. You would be destroying your own argument if you do that.
    Although to his point they get "paid" a lot more; their labor is a lot more valuable. With our machines, and access to Internet patterns, my wife can make clothing faster than someone could a century ago.
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    The stores all are selling sewing machines so somebody must still be doing sewing.
    My sister used to sell sewing machines so we know who buys them. There are people like her who can make their own clothes - but not many nowadays make every single thing they wear as some of my friends used to do.

    The most important factors in sewing machines according to her are

    1) strong enough
    to sew several thicknesses of denim. Nobody makes jeans at home, but many people need to shorten or alter new jeans to fit properly as well as repair them when they're damaged and still otherwise presentable.

    2) well made enough
    to tolerate intensive use for sewing all the curtains, blinds, cushion covers and bedspreads for someone redecorating a whole house. She had a great deal of trouble trying to talk people out of buying the $200 "special deals" if they told her that was what they wanted it for. Then dealing with the complaints about machines breaking down when they went ahead and bought the feeble things anyway was the next not-so-fun part of the job.

    3) maybe most important. Computerised embroidery patterns.
    A lot of people, lots of them, use these for decorating small children's clothes and for making personalised towels and other such items for gifts. It's really the modern version of all those hand-made doilies, tablecloths, tray cloths and pillow shams that I've inherited from a few previous generations of women. Some crocheted, some tatted, some embroidered - many of them absolutely beautiful - which must have taken hours and hours of skillful work. Nowadays, such things can be produced in minutes by machines.

    My own mother couldn't or wouldn't knit or sew clothes for us - her mother did that anyway. But our house was full of her beautifully embroidered doilies and tea/ supper cloths for guests. She didn't do any of that stuff once we arrived on the scene, but her "glory box" was well fitted out with her own and others' work.
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    Quote Originally Posted by dan hunter View Post
    Quote Originally Posted by Harold14370 View Post
    Do you think the women were sitting at home doing nothing, or do you think they were working pretty hard?
    If you want to include the unpaid labour of women in the household income of premodern society then people today end up not being nearly as rich in comparison to their grandparents. You would be destroying your own argument if you do that.
    Why do you think I would be destroying my argument? On what do you base your claim that people would not be as rich as their grandparents? Remember, I was there and know what it was like.

    The stores all are selling sewing machines so somebody must still be doing sewing.
    Sewing is a hobby, not an economic activity. My SIL does it, and she says the materials cost more than you can buy the finished product for. i also found this to be true with woodworking. I can't afford lumber to make hardwood furniture. It's cheaper to buy the finished product.
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    Quote Originally Posted by adelady View Post
    With the possible exception of darning socks, all of those things are still done - but both partners now have to work as well.
    How many women do you know who make their kids' school clothes?
    Or refashion them so that they don't look like hand-me-downs?
    Ok - let's look at your list:

    "They made their own and their children's clothes" - I know several people that made their young children's clothes. Not so much their older children. I only know a small handful of people skilled enough to make their own clothes.
    "They made curtains and slip covers and cushions and bedspreads" - I know quite a few people that have done that. It is also a great way to get a lot more use from sofas/cushions by making covers.
    "They did the laundry" - Everyone I know does that.
    "window-washing" - Most people I know do that.
    "They cooked all the meals" - Everyone I know does that - but they might eat out a couple of times a month.
    "Many of them also made preserves, jams, jellies, pickles" - many people I know do that (as well as make their own bread/cakes/biscuits).

    So - not that much difference.
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    I think the main point is not that people no longer do those things, but even those that do, it's more of a hobby than a unending chore. We might can a few pints of tomatoes, where our grandparents would can a 50 quarts and 50 more of beans and another couple hundred mixed seemingly taking up the entire end of summer working in a non air conditioned kitchen just to have enough to reach the end of the next growing season.
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    Quote Originally Posted by Lynx_Fox View Post
    I think the main point is not that people no longer do those things, but even those that do, it's more of a hobby than a unending chore.
    So - the multitude of housekeeping jobs are hobbies?
    Doing the laundry; washing windows; covering furniture; cooking meals; repairing clothes; etc. - these are all hobbies?

    If that is the main point, then the main point is flat-out wrong.
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    So - not that much difference.
    Unless everyone you knew in the 50s and 60s had a push-button fully automatic washing machine, I don't think that's true. Laundry is really hard, heavy work if you don't have fancy equipment like we have now.

    I know several people that made their young children's clothes. Not so much their older children. I only know a small handful of people skilled enough to make their own clothes.
    When I was growing up, practically everybody made their own clothes, or if they were like my mum, they had someone else in the family who could do it for them. The only ready-made clothes we had routinely were the twice yearly purchases of pretty good quality "best" clothes for cold and warm seasons as well as coats/raincoats. Though once my sister learnt to sew, (envy now oozes from every pore, she was a natural) she made a lot of those more elaborate clothes - including woollen fabric overcoats.
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    Quote Originally Posted by adelady View Post
    So - not that much difference.
    Unless everyone you knew in the 50s and 60s had a push-button fully automatic washing machine, I don't think that's true. Laundry is really hard, heavy work if you don't have fancy equipment like we have now.
    I wasn't alive in the 1950's, so here's some info from Wiki:
    "By 1940, 60% of the 25,000,000 wired homes in the United States had an electric washing machine."
    "In the UK and in most of Europe, electric washing machines did not become popular until the 1950s."

    (And there were also laundromats.)

    I know several people that made their young children's clothes. Not so much their older children. I only know a small handful of people skilled enough to make their own clothes.
    When I was growing up, practically everybody made their own clothes, or if they were like my mum, they had someone else in the family who could do it for them. The only ready-made clothes we had routinely were the twice yearly purchases of pretty good quality "best" clothes for cold and warm seasons as well as coats/raincoats. Though once my sister learnt to sew, (envy now oozes from every pore, she was a natural) she made a lot of those more elaborate clothes - including woollen fabric overcoats.[/QUOTE]
    Ok - since I have already acknowledged (see the part you quoted) that people don't make many of their own clothes, how about the other items on your list?
    Do you think that people no longer cook their own food?

    Are you still claiming that housework is a hobby?
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    Quote Originally Posted by Harold14370 View Post
    Sewing is a hobby, not an economic activity.
    In most cases I'd call it an economic activity, although for some people it is ALSO a hobby. (As examples, I would not call solar power generation, cooking, laundry, caring for a child, running a business from home, home repairs etc "hobbies" either although some people do them for fun.)

    My SIL does it, and she says the materials cost more than you can buy the finished product for.
    Where is she buying fabric?

    also found this to be true with woodworking. I can't afford lumber to make hardwood furniture. It's cheaper to buy the finished product.
    I find it much cheaper to get a sheet of cheap plywood and build shelves for the garage than to buy those shelves in a store.

    Perhaps that's the difference between a hobby and a simple task - a hobby is expensive fun, a task is something you do just to get it done, and because you want the result.
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    Quote Originally Posted by Harold14370 View Post
    Quote Originally Posted by kojax View Post
    Which assertions do you want backing for?
    Let's start out with you assertions about necessities versus luxury goods. What is on your list of necessities? Flush toilets? Cell phones? Televisions? I've managed to survive without those, and didn't feel poor at all. So where is your sharp dividing line?
    That is good question to ask. Although sometimes our disagreements can be intense, I think this is remaining a productive discussion.

    The line between necessity and luxury shifts. Just like how in a NBA basketball game the players get more and more exhausted, but find inner strength to push themselves past their limits. That's how all competition works. The one who is willing to push the line the furthest wins. The one who "wants it more".

    If workers are in a weak state of competition, they might go without fast food (eating out), and cook beans and rice at home. If it's a stronger competition they might sacrifice by using less and less toilet paper, turning out their lights when they're not in a room, turning off the air conditioner in summer.

    If the competition is very fierce, then the stopping point in their competition is whatever they find they cannot endure without. Just like how olympic runners compete for who can endure the most exhaustion. A worker drops out of the race if they reach a point where they can't show up at work rested, healthy, and showered.

    As for flush toilets, that's a building code issue nowadays. You're legally required to have them in most cities. It's a necessity because obeying the law is a necessity. Cell phones are cheaper than land lines, and a phone of some kind is necessary if you need to be able to receive calls from your boss at work (a work related expense), but I've met minimum wage workers who share one cell phone for a whole household. Television sets are so cheap now that they don't really figure into the budget unless you want a flat screen.
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    The other point to consider is that you don't actually have to reach the hard limit of absolute subsistence in order to collapse the economy. If you merely reduce luxury consumption by half you are still un-employing a lot of workers.
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    Quote Originally Posted by Harold14370 View Post
    Quote Originally Posted by RedPanda View Post
    Quote Originally Posted by Harold14370 View Post
    Let's start out with you assertions about necessities versus luxury goods. What is on your list of necessities?
    That question has nothing to do with any assertions about necessities versus luxury goods.
    You are simply asking for a definition.
    You could always look up the definition on Google - it shouldn't be difficult to find.

    Which assertions do you want backing for?
    I don't need a dictionary definition I need Kojax's definition because he claims that when workers fall below some arbitrary subsistence level, then we are risking a crash, and we can prevent the crash by propping up their wages.
    Nice point and a question that needs to be answered. Is there any macroeconomic law that determines the minimum spending limit for working class? I'd say that there is indeed but in terms of excessive riots, strikes, social cohesion, lawlessness, etc. Otherwise, from a pure economics perspective, I can't see a serious underconsumption crisis under these circumstances. You could reproduce working class by using very low personal incomes and still have stable compound growth. I think that this "arbitrary subsistence level" does exist but, outside of the economics sphere. In other words, the cost of labour reproduction might be (partly) independent from economics laws.
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    There are all sorts of estimates of political risk. Most of the political stability or instability calculations depend on weighing a range of indicators and evaluating them to give a single measurement.
    The result is there is no single arbritary number for any of the indicators. In a lot of cases the political risk factors depend more on the countries around the one you are studying than the conditions inside it.
    A poor country with a harsh dictatorship can sometimes be more stable than a wealthy country with an openly elected government. There are a lot of factors to balance and the analyst's decisions of how to weight the data often matters much more than it should.

    Here is a sample of a data list for USA
    USA - Society Data - Quandl

    Here is the chart it would generate.
    http://www.quandl.com/WORLDBANK/USA_...orism-Estimate

    Here is another type of analysis on political stability in the middle east
    https://csis.org/publication/causes-...nalytic-survey
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    Luxuries versus necessities are difficult to tell apart, but it doesn't seem quite fair to say that a low income person living in an apartment in the city should be able to live without flush toilets, electricity or telephone, to can their own vegetables, sew their own clothes, and build their own furniture because someone living on a hundred acre farm did it in 1938. That really is apples and oranges.

    The reasons most families have two incomes are both economic and social - urbanization, smaller families, the risk one partner incurs becoming financially dependent on the other, social isolation of the partner who doesn't work, the stress and risk of being the sole earner in an unpredictable economy, and yes, mass produced goods are often cheaper than what you can sew or build or grow yourself.

    I'll probably get heat for this, but I'd like to suggest that profit from the vast increases in productivity from technology and computers was not adequately shared with low income workers and was primarily funneled to investors, partially because there were so many baby boom workers competing for the same jobs. Moving manufacturing overseas further decreased the number of jobs and weakened collective bargaining, with an increasing percentage of the remaining jobs being in low wage, unskilled sales and services. Many of the middle class jobs - supervisors, managers, foremen - also disappeared or no longer paid as well. It's not often acknowledged by management workers, but they were often paid the high salaries they were, because they were bumped up by the higher wages paid to the unionized workers they were managing, not because their jobs involved a high degree of technical knowledge or skill.
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    Quote Originally Posted by DianeG View Post
    I'll probably get heat for this, but I'd like to suggest that profit from the vast increases in productivity from technology and computers was not adequately shared with low income workers and was primarily funneled to investors, partially because there were so many baby boom workers competing for the same jobs.
    I both agree and disagree. Yes, the workers who made it possible often did not receive an equal share in the company they made possible. On the other hand, given the rising standard of living in the US from the 1940's until today, everyone did see the benefits from the overall improvement to the economy.

    Moving manufacturing overseas further decreased the number of jobs and weakened collective bargaining, with an increasing percentage of the remaining jobs being in low wage, unskilled sales and services.
    Agreed. And unfortunately we are now seeing a vicious circle - the jobs remaining are low-skill low-pay jobs, and people feel this is unfair. Thus we raise the minimum wage to attempt to address this inequity, leading to more jobs being sent overseas, and even fewer low-skill low-pay jobs remain for people here. There's no easy answer to this problem.
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    the rising standard of living in the US from the 1940's until today
    The average standard of living might have risen until today, but that's driven in the last 20 or so years by large increases at the top income levels and minor-to-substantial decreases for middle class and lower income earners.

    the jobs remaining are low-skill low-pay jobs, and people feel this is unfair.
    There are lots of low paying jobs that used to be better paying or highly paid jobs. Pilots, teachers, nurses are all highly qualified people whose pay has declined - sharply for some, steadily for others.
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  31. #131  
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    Quote Originally Posted by Achilleas View Post
    Quote Originally Posted by Harold14370 View Post
    Quote Originally Posted by RedPanda View Post
    Quote Originally Posted by Harold14370 View Post
    Let's start out with you assertions about necessities versus luxury goods. What is on your list of necessities?
    That question has nothing to do with any assertions about necessities versus luxury goods.
    You are simply asking for a definition.
    You could always look up the definition on Google - it shouldn't be difficult to find.

    Which assertions do you want backing for?
    I don't need a dictionary definition I need Kojax's definition because he claims that when workers fall below some arbitrary subsistence level, then we are risking a crash, and we can prevent the crash by propping up their wages.
    Nice point and a question that needs to be answered. Is there any macroeconomic law that determines the minimum spending limit for working class?
    It's a simple law: In order to have production, you must have consumption.

    In order to have sufficient consumption to achieve full employment, people need to be spending money in excess of their subsistence needs. That is a structural fact. It just so happens that the way production is structured in a modern economy, you can't employ everyone without producing a lot of stuff you don't need.

    Saving is good up to a point, but it can become excessive. Too much savings will create a situation where production is happening without consumption. Another way to describe "production happening without consumption" is merchandise sitting on the shelves and nobody buying it. .... which is exactly what a recession is.


    I'd say that there is indeed but in terms of excessive riots, strikes, social cohesion, lawlessness, etc. Otherwise, from a pure economics perspective, I can't see a serious underconsumption crisis under these circumstances. You could reproduce working class by using very low personal incomes and still have stable compound growth. I think that this "arbitrary subsistence level" does exist but, outside of the economics sphere. In other words, the cost of labour reproduction might be (partly) independent from economics laws.
    The only way that growth would happen would be if you only look at one part of the economy. Suppose instead of acknowledging that China + The USA is one big economy, we pretend that China is its own economy, and the USA is another economy.

    China could pay its workers a pittance for their work, and still have huge growth. Why? Because American consumers will consume to make up for the inability of Chinese workers to do it. The USA can keep debt spending, injecting stimulus packages into its consumer base, and thereby consume all of China's production.

    It will last until the USA reaches its credit ceiling.

    If, in the process, wealth also concentrates into a few hands, those few won't want to spend it. They'll want to save it instead. Which causes excessive savings. Once excessive savings starts to get out of hand, we find ourselves perpetually in that situation where production exceeds consumption.
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  32. #132  
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    Quote Originally Posted by kojax View Post
    In order to have sufficient consumption to achieve full employment, people need to be spending money in excess of their subsistence needs. That is a structural fact..
    It's also a recipe for unsustainability that will be our undoing.
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    Quote Originally Posted by Lynx_Fox View Post
    Quote Originally Posted by kojax View Post
    In order to have sufficient consumption to achieve full employment, people need to be spending money in excess of their subsistence needs. That is a structural fact..
    It's also a recipe for unsustainability that will be our undoing.
    That looks like a pretty serious flaw in our system of doing business. I'm betting we could do better with the right kind of government regulation and enforcement. It to bad we don't have a government that inspires more confidence in it's ability to do the right thing and make it stick.
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    Quote Originally Posted by kojax View Post
    In a modern industrial economy, it only requires a small fraction of the work force to achieve subsistence. If too many workers are accepting a subsistence based wage, then the market for other goods, and services or "luxury" goods (since they are non-essential, like entertainment) will drop. It doesn't have to happen completely. Even if it happens partially, it will lead to unemployment. Sure there will always be a tiny sliver of the population who are wildly rich, but they're always too few in number to drive demand for the whole nation.
    You stopped right where it gets interesting. This means that they accumulate capital instead of spending or investing it. And accumulating capital is not working; and if the ratio of working to not working capital gets too low then the economy stalls. This is because the velocity of money drops when most money is in the hands of the rich and being accumulated, not spent.

    Simple: Low velocity of money == bad. See? Not complicated at all. Rich people spend your money, or else we'll tax it away and spend it for public works. Either way that fixes the economy.
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    I think the simple argument for the minimum wage is to ensure that no one starves while the ultra-rich are accumulating capital. If we don't raise the minimum wage fast enough then the ultra-rich will accumulate all the money and freeze the economy.

    I direct your attention to Exhibit A: The US Economy.

    Why do we need a Minimum Wage? Because we print money. Next question please?
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    Quote Originally Posted by billvon View Post
    You make some good points. The flip side of that (the problems with minimum wage) are significant though.

    1) Minimum wage laws push jobs to other countries. Multinational companies tend to employ labor where it is cheapest.

    2) Minimum wages tend to increase inflation, since capitalist companies set prices according to the ability of people to spend their money on goods. Higher guaranteed wage = more ability to spend money = higher prices.

    3) Minimum wages tend to drive unemployment up. A company that might employ 3 people at a lower wage will only be able to afford 2 at the higher minimum wage - and then put a lot more pressure on the two employees.

    That's not to say we should end minimum wage; it does a lot to help the lowest earning workers in our society. But it is important to maintain a balance between the good that minimum wages do and the harm they can do.
    I'm not sure I buy that minimum wages pushes jobs to other countries. I doubt those garment industry jobs would still be here if the minimum wage was a buck or two less. That's like expecting Niagara Falls to run backwards if it rains a little less in Cleveland. You'd have to re-create third world conditions here and scrap a lot of legislation.

    Economists seem to have trouble proving to what extent minimum wage increases actually cause unemployment. NPR had a story about the discrepancy in studies the other day. Here is a link.

    Does Raising The Minimum Wage Kill Jobs? : Planet Money : NPR
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    Yeah. Dropping minimum wage would only help us if we drop it all the way down to the floor. When competing for price with a Chinese worker, we have to either undercut them completely, or they'll still be the cheaper option.

    Most of the minimum wage jobs that are still around are service type jobs, like flipping burgers, which won't go away unless we open the floodgates to immigration.

    Which... considering that Americans have been stupid enough to give up their protective tariffs..... might happen soon also. Economically, opening the flood gates to immigration and dropping protective tariffs are virtually identical decisions, supported by identical rhetoric (That protective tariffs cause other countries to protect against our exports............. or that immigration quotas motivate other countries to put up quotas so American's can't go work abroad.)





    Quote Originally Posted by Lynx_Fox View Post
    Quote Originally Posted by kojax View Post
    In order to have sufficient consumption to achieve full employment, people need to be spending money in excess of their subsistence needs. That is a structural fact..
    It's also a recipe for unsustainability that will be our undoing.
    Though we typically don't, it's possible to achieve both. The Luxury market doesn't have to be driven by cheap widgets. Those are simply the only luxuries we can import cheaply from China or other low wage countries.

    For example: copyrighted things like songs, movies, and video games (assuming they are downloaded so as not to use resources printing a DVD/CD/Blue Ray disk)

    Or backrubs. Back rubs are a luxury.
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    Quote Originally Posted by kojax View Post
    Most of the minimum wage jobs that are still around are service type jobs, like flipping burgers, which won't go away unless we open the floodgates to immigration.
    They will eventually be replaced by machines.

    We'll eventually only have jobs that the lower potential of society simply won't be able to get no matter how effective our education and healthcare system is. Then what? Hopefully we'll have plenty of resources, and a less greedy society that's willing to help and support these disadvantaged people.
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    Quote Originally Posted by DianeG View Post
    I'm not sure I buy that minimum wages pushes jobs to other countries. I doubt those garment industry jobs would still be here if the minimum wage was a buck or two less.
    No, but a lot of the car manufacturing jobs would likely be.

    That's like expecting Niagara Falls to run backwards if it doesn't rains a little less in Cleveland.
    More like expecting Niagra Falls to run a little faster if it rains more in Michigan. It's one of several contributors to the effect.

    Economists seem to have trouble proving to what extent minimum wage increases actually cause unemployment.
    Agreed. There are so many factors it's hard to constrain it to any one effect.
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    Quote Originally Posted by Lynx_Fox View Post
    Quote Originally Posted by kojax View Post
    Most of the minimum wage jobs that are still around are service type jobs, like flipping burgers, which won't go away unless we open the floodgates to immigration.
    They will eventually be replaced by machines.

    We'll eventually only have jobs that the lower potential of society simply won't be able to get no matter how effective our education and healthcare system is. Then what? Hopefully we'll have plenty of resources, and a less greedy society that's willing to help and support these disadvantaged people.
    There's always going to be a human element, because we're headed toward luxury. Once all the necessities are automated, society as a whole has more time, energy, and man power to devote to entertaining itself.

    The trick is to make sure the financial system reflects that. Otherwise we'll have all the ability in the world to produce it, and still fail to do it for arbitrary and silly reasons that have nothing to do with our reality, and everything to do with our imagination.

    It's easy to make the mistake of doggedly adhering to an idea just because it looks good on paper. The "free market" has tremendous power to achieve certain things, and ..... no power at all to achieve others. Would be nice if it were the "one size fits all" " answer to everything". Yeah. That would be nice....

    But if we allow things to be just little more complicated than that, and add a few tools to our toolbox, we can do better for ourselves. And doing better for ourselves is even nicer.
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