The Obama Presidency

[Diff-chan]

Look no further than CA - our state has some of the most business-punishing, welfare-entitling, wealth-spreading laws on the books and, is it utopia? Nope - some of the worst public education per capita spent per student, businesses fleeing to tax friendly(er) states OR, NV, and AZ, and one of the highest costs of living in the nation.

The reason why the schools in CA suck is because of Proposition 13, which lowered and capped property taxes. It deprived the system of revenue. Before Prop 13 passed they were some of the best in the nation.

Let's be clear here. California's big problem isn't taxation by itself. It's that the voters, in the form of propositions, have given themselves generous public services AND have voted for taxes which cannot pay for them. And they've also taken away the ability of the legislature to balance out the scale.

You can have a low-service/low-tax state, or a high-service/high-tax state, but you cannot have a high-service/low-tax state and that is what California is learning now. Yes sir the proposition system is a fucking disaster and California's problems will not be rectified until it is abolished.

So don't pretend like wages being 'stagnant' (which ironically, some economists say abolishing minimum wage laws would help this issue)

What economists? Are they on the staff of AEI? The main thing regarding the minimum wage is that "abolishing" it or lowering it will help unemployment. You can't convince me in a million years that letting employers pay people *less* will help incomes go up.

[Razor Ramon]

I would suck your dick.

[Joust Williams]

"You can have a low-service/low-tax state, or a high-service/high-tax state, but you cannot have a high-service/low-tax state and that is what California is learning now."

Sounds like those 'best schools in the country' didn't do much good ;p

[Gooch]

You can't convince me in a million years that letting employers pay people *less* will help incomes go up.

Gross incomes? Probably not, but net income, probably yes.

1) The cost increases will either get passed onto the customer in a favorable economic environment or have to be absorbed by the employer in an unfavorable economic environment. So now it costs more money to buy the same goods. That is in the immediate/near-term impact. The increase in costs, especially in what is seen as an unskilled, abundant in supply labor force, often is not accompanied by an increase in productivity. So with no added productivity, employers either have to charge their customer base more, which puts them at a competitive disadvantage, or absorb the costs, which reduces employer's profit margins and cash flow. Employers are the ones that pay employees, that create jobs.

3) If this persists, then job get shipped overseas where the labor costs are cheaper because really, anyone can do these jobs. That results in less jobs here domestically, meaning more unemployed, or at least a surplus in domestic labor supply which can create future downward pressure on wages.

4) The increase in wages is reflected in an increase in prices, which is a form of inflation, and can eventually lead to a rise in interest rates.

5) These interest rates result in a higher cost of capital, more interest you have to pay on floating rate mortgages, home equity lines, student loans, outstanding credit card balances, many of which impact people's cash flow on a monthly basis. They also impact the cost of financing for employers, which can mean less expansion, less job creation, capped compensation, less R&D, etc.

6) The sector that receives minimum wages isn't necessarily a high saving, high investing sector. Those wages are minimum for a reason. They aren't intended to allow you to comfortably raise a family of three, to own expensive real estate, to both consume and save at a high rate. That is why it is essential to develop and evolve a skill set and to not rely on unions, government subsidies, and inefficient reallocations of capital within society to allow you to consume and save at a rate that you find to be satisfactory.

Inefficient economic decisions may benefit certain segments of society in the short-run, but they will not benefit society in the mid-to-long-term. Making bad decisions, no matter how popular they may be, rarely brings prosperity.

[Fe 26]

The main thing regarding the minimum wage is that "abolishing" it or lowering it will help unemployment.

You can't convince me in a million years that letting employers pay people *less* will help incomes go up.

I don't know, if by your own admission that lowering the minimum wage would help unemployment, wouldn't going from noting to something, be an increase?

[Diff-chan]

Inefficient economic decisions may benefit certain segments of society in the short-run, but they will not benefit society in the mid-to-long-term. Making bad decisions, no matter how popular they may be, rarely brings prosperity.

Do you think having an underclass of society where millions of people are making $2 an hour is a benefit to society? This isn't Bangladesh.

[Gooch]

What citizen makes $2 an hour in this country?

[Drewbacca]

Depends on the cost of living and market, doesn't it?

[Fe 26]

Do you think having an underclass of society where millions of people are making $2 an hour is a benefit to society? This isn't Bangladesh.

You're not naive enough to think we don't already have this, right?

[Gooch]

Depends on the cost of living and market, doesn't it?

No, it doesn't. I asked what citizen is making $2 an hour, not what citizen is keeping $2 an hour. I know people who makes six to seven figures and end up keeping $2 an hour. Or less.