About minimum wage

[johan]

I think I see what you're saying. Right now you cannot build a car in this country without pretty much every single piece of that car riding in the back of at least a dozen trucks in the process of going from raw material to part of a car rolling off the assembly line. And if I'm reading your post correctly, you're saying that the cost of every single one of those truck rides for every single one of those car parts is going to go up significantly (because unlike whatever magical industry you work in, trucking works on microscopic margins) and yet the retail price of the car isn't going to change because.... marketing. Got it. Well I certainly feel better now. Thanks for the clarification.

[The Grand Nudger]

Not much magic in my industry.  I make food, the bottom floor of our entire economy.  You don't think that a car actually costs, to produce, what you pay for it...do you? Do you think that a sandwich, from subway, costs..to produce, what you pay for it? I actually spent a little while driving a truck, as an owner-op (don't judge, I thought it would be cool, plus I had the license, cant waste a license)...do you think it costs, what you pay for transport, to transport things?

Whenceforth cometh profit, then?

[Seraphina]

Can one of you smart people explain to me why raising the minimum wage wouldn't just increase the cost of living?

Does the cost of living stay the same or decrease over time when the minimum wage isn't raised?

[KUSA]

We need more higher paying jobs so less people will have to work minimum wage jobs.

This country needs more industry.

Again, it is more complicated than that.

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Why?

[KUSA]

We need more higher paying jobs so less people will have to work minimum wage jobs.

This country needs more industry.

"Industry".  My wife staffs for "industry"...right at the minimum wage. The reason we don't have more "industry" is because people wouldn't accept -less- than the minimum wage. You see..."industry", big consumer of sub minimum wage labor. She spends her days trying to help a toyota sub come to the realization that paying people as little as they do is why they have retention and labor problems, leading to profit loss.

It's like they've been programmed not to hear her, or see the piles and piles of stats she compiles....and it's funny, because they're paying her to do it...so that they can then ignore her. Before someone comes back with "so and so has high average wages"..yeah, they do..because paying people like my wife spikes the stats of their army of low wage earners. So now it's twice as funny.....right?

"Industry" is gone, it's never coming back, it was a blip specific to a time and place....and it's nothing to cry over.

It will come back, bigly.

[johan]

 You don't think that a car actually costs, to produce, what you pay for it...do you? 

Obviously it doesn't and I never suggested that it did.  What I said was that regardless of margin, when the costs to make a product go up, the prices generally goes up too. You seem to feel otherwise though. 

 

Do you think that a sandwich, from subway, costs..to produce, what you pay for it?

I don't believe I suggested that.

 

I actually spent a little while driving a truck, as an owner-op (don't judge, I thought it would be cool, plus I had the license, cant waste a license)...do you think it costs, what you pay for transport, to transport things?

I know exactly what it costs to run a truck. Actually scratch that, I know exactly what it costs to run a fleet of trucks. And I know exactly what we charge the customer to run trucks for them and I also have pretty good idea what our customers pay our competition for the same work so I know are prices are in line with current going market rates.

So as all the budding young accountants following along at home are now deducing, I therefore know how much of a profit margin we operate on.  So yeah, that means I'm pretty sure I know what I'm talking about when I say that if I suddenly have to pay my drivers $10 more per hour in order to keep them from leaving to go flip burgers or whatever, I am going to pass along as much of that extra $10 per hour to my customers as the market will allow. And if I know my competitors as well as I think I do, that means pretty much every bit of that extra $10 per hour goes right to our customers.

Every business operates on a profit margin so every business has the ability to absorb slight fluctuations in costs while keeping prices stable. But from where I'm sitting, I believe we'd be looking at double digit precent of increase in costs. So yeah I'm just not buying that any car company, or any other company is going to watch the cost to produce their product go up by 20% or more and just say well we'll keep prices the same and just be happy with making less profit.

[Foxaèr]

No...this isn't what happens and that's what I want to know, why doesn't it

You clearly misunderstood my response, because everyone else was saying the same thing after me.

I certainly word things differently than most, but I am certainly not unintelligible.

[vorlon13]

Low (well, lower) overhead is a possible answer here.

Does the 45 million a year CEO really need 15 VPs at 8 million a year ?? Maybe a 55 million a year CEO who only needs 5 VPs at 6 million a year would be a better deal ??

[Foxaèr]

Money well earned has to be regulated at a certain point, I know.

[pocaracas]

 You don't think that a car actually costs, to produce, what you pay for it...do you? 

Obviously it doesn't and I never suggested that it did.  What I said was that regardless of margin, when the costs to make a product go up, the prices generally goes up too. You seem to feel otherwise though. 

 

Do you think that a sandwich, from subway, costs..to produce, what you pay for it?

I don't believe I suggested that.

 

I actually spent a little while driving a truck, as an owner-op (don't judge, I thought it would be cool, plus I had the license, cant waste a license)...do you think it costs, what you pay for transport, to transport things?

I know exactly what it costs to run a truck. Actually scratch that, I know exactly what it costs to run a fleet of trucks. And I know exactly what we charge the customer to run trucks for them and I also have pretty good idea what our customers pay our competition for the same work so I know are prices are in line with current going market rates.

So as all the budding young accountants following along at home are now deducing, I therefore know how much of a profit margin we operate on.  So yeah, that means I'm pretty sure I know what I'm talking about when I say that if I suddenly have to pay my drivers $10 more per hour in order to keep them from leaving to go flip burgers or whatever, I am going to pass along as much of that extra $10 per hour to my customers as the market will allow. And if I know my competitors as well as I think I do, that means pretty much every bit of that extra $10 per hour goes right to our customers.

Every business operates on a profit margin so every business has the ability to absorb slight fluctuations in costs while keeping prices stable. But from where I'm sitting, I believe we'd be looking at double digit precent of increase in costs. So yeah I'm just not buying that any car company, or any other company is going to watch the cost to produce their product go up by 20% or more and just say well we'll keep prices the same and just be happy with making less profit.

The market can accommodate most increases.
If you add $10 to the customer bill, the customer either pays up, or takes his business elsewhere. If it's the same everywhere, the customer either pays up or shuts down the business.
Paying up means that they will then increase their own prices to the next customer... Even if that is their employer...but hey, they got an increased pay, too... It comes full circle... The value of money simply decreases, inflation goes up, the economy moves... Some old loans can be paid off more easily and eventually a new equilibrium is reached.

Also, do bear in mind that people can live with different standards for the price of some stuff.
For example, here in Portugal, where the minimum wage is one of Europe's lowest (500€/month), car and fuel prices are significantly higher than in the U.S. and most of Europe.
So people are willing to pay extra for somethings...it's just a matter of perspective.