- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: In 100 words or less how can raising the min. wage help the middle class?**
Posted on 1/30/14 at 10:47 am to bigblake
Posted on 1/30/14 at 10:47 am to bigblake
quote:
Supposedly it goes like this:
Increase in MW give Mary 500 bucks a year more to spend.
Mary has a thing about shoes, so she buys 500 bucks worth of shoes at Pay Less.
The jump in sales motivates the owner of Pay Less to hire an extra worker.
Thus, a middle class job is created.
I know a lot of people will jump on you so but your argument is very common. $500 more in shoes, or food, or whatever.
$500 is really only revenue, the contribution margin is what retailer is really concerned about.
Let's just assume there is a 50% COGS.
Now we have $250. Let's leave out all Cost Accounting because it could get confusing and just say all of that all $250 goes to the profit line. After the 35% tax, $162.50 is actual earnings after tax.
In summary:
$500 in revenue where:
$250 to China & shipping company
$87.50 to government
$162.50 in profit
I'm illustrating the leakage where you cannot simply increase someone's wage, and then they spend 100% of the increase to balance it out.
Why even go that far into it? If an increase in minimum wage gives Mary $500 extra, then $500 is missing somewhere else in the economy. There is no net increase of wealth, only a transfer. Since Mary wasn't worth that $500 on her own, we've just wasted some economic potential by giving it to her.
Posted on 1/30/14 at 10:58 am to Jack Bauers HnK
(no message)
This post was edited on 1/30/14 at 6:38 pm
Posted on 1/30/14 at 4:25 pm to Jack Bauers HnK
quote:
If an increase in minimum wage gives Mary $500 extra, then $500 is missing somewhere else in the economy.
500 is being spent instead of where its more likely to be sitting in someone savings.
and spare me the BS line: "but the business owner will have it to invest in his business or buy a porshe..."
Bottom line is the top 1% save. The other 99% spend.
So the spenders spend, and the savers save profits from the spenders spending, and thats how wealth continues to accumulate to the top 1% and we end up with the massive wealth gap that exists which is a legit threat to the economy.
Yeah im sure ive oversimplified a very complex equation, but i find it disturbing that 1% own 99% of the worlds wealth, and the trend is only worsening.
BTW - im not pro-government handouts and giving shite to people who contribute nothing to society. But I would like to see a more reasonable cost and standard of living for hard working Americans.
did i go over 100 words?
frick.
This post was edited on 1/30/14 at 4:26 pm
Popular
Back to top
![logo](https://images.tigerdroppings.com/images/layout/TDIcon.jpg)