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Message
re: Bank Of America - Minimum Wage to be $25 hr/50K yr
Posted on 9/21/23 at 6:35 am to Motownsix
Posted on 9/21/23 at 6:35 am to Motownsix
quote:Uhhhh...because the company passes the costs of those wage increases onto the consumer through higher prices. Do you think wage increases happen in a vacuum?
Otherwise who would care what they pay the girl at the GAP in DC or the burger guy in Boston?
0
Posted on 9/21/23 at 6:39 am to AwgustaDawg
quote:
There is no economic theory that suggests an increase in production costs drives a corresponding increase in market price. If there such a theory and it was actually a fundamental economic law there’d be no need to manage costs…management would have no function if production costs automatically or in any way impacted market price
It isn't the production cost that increases the price.
It is the consumer demand.
If everyone has $100, then no one has $100 (because prices reflect the money competing for limited resources).
This should be easy to comprehend with the free money just handed out to Americans during Covid.
Posted on 9/21/23 at 6:40 am to meansonny
quote:
It isn't the production cost that increases the price.
It is the consumer demand.
If everyone has $100, then no one has $100 (because prices reflect the money competing for limited resources).
This should be easy to comprehend with the free money just handed out to Americans during Covid.
I think that's partially his point.
Posted on 9/21/23 at 6:50 am to pankReb
So if a company suddenly loses a major revenue stream, that loss of revenue will have zero effect on its profitability, bottom line?
Also, was he addressing BOA specifically as you alleged?
Also, was he addressing BOA specifically as you alleged?
Posted on 9/21/23 at 6:51 am to meansonny
quote:
It isn't the production cost that increases the price.
It is the consumer demand.
If everyone has $100, then no one has $100 (because prices reflect the money competing for limited resources).
This should be easy to comprehend with the free money just handed out to Americans during Covid.
So the reality is that no matter what an employee is making they have a basic nut which they must make to live month to month and produce. They will make that nut in one of a couple of ways...they will earn it, they will steal it or they will be on the dole...or some combination of all three. The cost is the same no matter how they are making their nut FOR them....for the rest of us the most efficient way for them to make their nut is by earning it. The other two ways, crime and the dole, are not efficient in any manner...but that is what we decide to do. Reduce the dole and the amount of crime will go up...because people, like cock roaches, will do what is necessary to survive. The fact that there are no free lunches is missing from this debate...someone is paying for those employees to produce for that employer. It is either the consumers of the goods and services or them and the taxpayer...someone is paying. There are no free lunches. Therefore there is no increase in production costs as such...those costs exist, its just a matter of who is paying them. The market will only bear what the market bears. Everyone DOES have $100...they either have it through earnings, crime, the dole or some combination. The demand will remain constant, its merely a matter of the source of the $100 that everyone has.
Posted on 9/21/23 at 6:54 am to cyarrr
quote:
So if a company suddenly loses a major revenue stream, that loss of revenue will have zero effect on its profitability, bottom line?
An increase of labor cost has absolutely nothing to do with revenues or revenue streams.
How many times and how many different ways do you need this repeated?
quote:
Also, was he addressing BOA specifically as you alleged?
YES! What the frick do you think this entire thread is about?
Posted on 9/21/23 at 7:01 am to FLTech
quote:
BUT, if it's some dude who was making $16/hour and automatically gets bumped up to $25/hour while still providing shite garbage service... that's where I have a big fricking problem
Don’t worry, once the government gains full control over the private sector, wages will drop like a Chinese balloon in Red Square, and freedom will just be a word.
Posted on 9/21/23 at 7:09 am to Klark Kent
quote:
quote:
There is no economic theory that suggests an increase in production costs drives a corresponding increase in market price.
yeah, just common sense. stfu
Common sense is just that, common, and as such of almost no value. This is a perfect example...common sense says that if the cost of pepperoni goes up the cost of pepperoni pizza goes up. Of course it does not, but most people will argue it does. If it did there would be no requirement to manage costs, youd simply pass the increase onto customers without a care in the world.
If your product or service is priced in a manner that would allow you to increase your prices based solely on an increase in production costs your pricing structure was significantly flawed to begin with...you were leaving money on the table. You do not price goods and services based on production costs, prices are based on supply and demand and you manage costs to produce at a cost that allows you some margins in pricing. Production costs across the board CAN impact demand...especially demand at a price point, but it is not a determining factor of price...the supply and demand determines price and costs are managed to fall within the market price determined by supply and demand. If cost increase meant automatic
rice increases there would be no need to manage costs.
Posted on 9/21/23 at 7:24 am to AwgustaDawg
If you aren't growing, then you are dieing.
You keep inflation in check by increasing GDP. Increase supply, and demand is kept in check.
This is why anti-business legislation is for the retarded.
Rising tides raise all boats.
I get it... the wealthy rise faster and higher than the non-wealthy. But everyone is better off in a hyper productive society. But people will bitch about the gap as if that is something that should ever matter.
In every economic graph, there will always be a $0. Whether we are charting productivity or the value of currency, there will always be a problem with $0.
It is an unsolvable problem, except that it isn't a problem. It is a fact of nature.
You keep inflation in check by increasing GDP. Increase supply, and demand is kept in check.
This is why anti-business legislation is for the retarded.
Rising tides raise all boats.
I get it... the wealthy rise faster and higher than the non-wealthy. But everyone is better off in a hyper productive society. But people will bitch about the gap as if that is something that should ever matter.
In every economic graph, there will always be a $0. Whether we are charting productivity or the value of currency, there will always be a problem with $0.
It is an unsolvable problem, except that it isn't a problem. It is a fact of nature.
Posted on 9/21/23 at 7:42 am to AwgustaDawg
quote:I would think it's both. You seem to be saying never based on production costs.
You do not price goods and services based on production costs, prices are based on supply and demand
If a sno-ball stand is paying 7 employees $10 an hour and is suddenly has to pay them $20 an hour, where is the owner finding those dollars to pay the employees? They're not going to raise the prices of the sno-balls amongst other maneuvers?
Production costs don't cause some price increases in gasoline?
This post was edited on 9/21/23 at 8:04 am
Posted on 9/21/23 at 7:44 am to meansonny
quote:
Rising tides raise all boats.
bingo. well said. /thread
Posted on 9/21/23 at 7:46 am to pankReb
quote:
An increase of labor cost has absolutely nothing to do with revenues
He said all labor costs are deducted from BOA's revenue. If so, do these additional "labor" costs reduce BOA's revenue? If revenue is reduced, will that affect the company's bottom line?
quote:
YES! What the frick do you think this entire thread is about?
Again, in the post I responded to, he stated-
“There is no economic theory that suggests an increase in production costs drives a corresponding increase in market price.”
He is not referencing BOA, but rather economic theories!
My response-
Cost-Push Inflation
An economic theory that higher costs of production can decrease the amount of total production in the economy. Since the demand for goods hasn't changed, the price increases from production are passed onto consumers creating cost-push inflation.
Posted on 9/21/23 at 7:49 am to sidewalkside
It’ll price out services and lead to reduced headcount.
I work in the chemical industry. The company I work for is already using AI to trial data collection and analysis. I’m the next 3-5 years there will be a few analysts reviewing AI’s work. Probably going to cut 75% of that trade. BoA is going to do the exact same.
I work in the chemical industry. The company I work for is already using AI to trial data collection and analysis. I’m the next 3-5 years there will be a few analysts reviewing AI’s work. Probably going to cut 75% of that trade. BoA is going to do the exact same.
Posted on 9/21/23 at 7:51 am to cyarrr
quote:
He said all labor costs are deducted from BOA's revenue. If so, do these additional "labor" costs reduce BOA's revenue?
I'm going to answer this question in the simplest way that I can possibly answer it.
No. Additional labor costs do not reduce BoA's revenue.
I hope this helps.
Posted on 9/21/23 at 8:03 am to pankReb
It's amazing how many of yall are sitting here arguing specifics like labor cost inputs, revenue, profit margins and total profits...when the real point is as more employers raise their minimum pay it will naturally force other employers to raise their base pay to the same or near level and as a result the price of everything will continue to increase.
Posted on 9/21/23 at 8:14 am to pankReb
quote:
Additional labor costs do not reduce BoA's revenue.
Again, he said the increase in hourly wages would come solely from BOA' revenue. Therefore net reduction of their revenue.
"A decrease in revenue is bad for a business. If revenue is decreasing, a business is at risk of not breaking even or having very low margins of safety and levels of profit. The only scenario where a decrease in revenue is not damaging to a business is when costs are also decreasing."
"Increasing costs usually have a negative impact on a business. They are likely to increase the BEP or reduce the business’ profit. With increasing costs, a business would have to sell more products in order to break even or make a profit. When costs increase, businesses often have to make the choice of absorbing increased costs or passing them on to customers by increasing prices. As a result, the business will be more likely to make a loss."
Changes in Revenue and Costs
I understand what you are saying. But my point is, whether it be costs or revenue, it's impactful.
I hope this helps.
This post was edited on 9/21/23 at 8:30 am
Posted on 9/21/23 at 8:33 am to AwgustaDawg
quote:
If your product or service is priced in a manner that would allow you to increase your prices based solely on an increase in production costs your pricing structure was significantly flawed to begin with...you were leaving money on the table. You do not price goods and services based on production costs, prices are based on supply and demand
I can't believe how many people in this thread and on this site do not understand this. Every time minimum wage comes up.
This post was edited on 9/21/23 at 8:34 am
Posted on 9/21/23 at 8:58 am to sidewalkside
quote:
Bank Of America - Minimum Wage to be $25 hr/50K yr
Posted on 9/21/23 at 9:44 am to cyarrr
quote:
Cost Push Inflation-
Higher costs of production can decrease the amount of total production in the economy. Since the demand for goods hasn't changed, the price increases from production are passed onto consumers creating cost-push inflation.
This is true if the production costs are across the board, it is not true is individual producers experience an increase in production costs, as is the case of BoA increasing their employees salaries.
But in fact that is no increase in production costs in BoA increasing their employees salaries. The cost of production is what it is...the employees cost of production, if it was not being met by their wages, was being met either by being on the dole, crime or a combination. There are no free lunches...so the production costs are what they are, what is increasing is the amount of those costs that BoA is shouldering as opposed to the taxpayer...which is what all businesses should be required by law to do. Instead we pretend human lives are a commodity like pork bellies which can be laid aside when not needed and picked up when needed.
And it may well be that BoA production costs decrease...every penny paid to an employee is tax deductible. I am certain BoA spends a LOT of money on tax planning....paying their employees is a great way to lower their tax burden.
Posted on 9/21/23 at 9:50 am to Jake88
quote:
I would think it's both. You seem to be saying never based on production costs.
If a sno-ball stand is paying 7 employees $10 an hour and is suddenly has to pay them $20 an hour, where is the owner finding those dollars to pay the employees? They're not going to raise the prices of the sno-balls amongst other maneuvers?
Production costs don't cause some price increases in gasoline?
Production cost increases for one producer of gasoline has almost no impact on the market price for gasoline. Gasoling is unique in that it there would be no increase because there is almost no competition in producing gasoline. Oil yes, gas, not so much.
If the sno-ball market price was such that the sno-ball producer could increase prices to recap the expense of increased labor costs, in a vacuum, then the sno ball producer was selling their product to low to begin with. No, if all of a sudden the labor costs to produce sno-balls doubled for one sno-ball producer there is no law of economics which says that the market price for sno-balls will increase. The owner may well raise the prices, and they may notice no impact to their business or their business may cease to be viable...but the laws of supply and demand do not have a production cost variable in the pricing formula...that is incumbent upon the individual management of the individual producer...it could be that the sno-ball manufacture automate and save money....
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