What wage is just?

[JimG]

Count me as one who prefers a 2% inflation buffer against the problems of deflation. The economists at the fed just might be a little smarter than you.

I’m not advocating for deflation; I’m advocating for a stable currency. According to the chart in a prior post, the decade of the 1930’s posted a deflation rate of 18%, followed by a decade with an inflation rate of 68%. For that one decade the value of money increased by 18%. In the decades following, the value of money has consistently declined, which means that costs, prices, wages, and minimum wage must constantly increase just to stay even.

 

[Ridgerunner]

I realize it isn’t very popular with many, but I favor a reasonable degree of inflation. It’s the friend of the person who borrows money to make investments. If the investments are any good at all, their value will grow faster than the interest and the principal deflates as the income with which one pays it inflates. Furthermore, if the investment is income-producing, which most are, that pays the interest or at least a good part of it, and perhaps the interest and principal both.

Deflation does help those whose incomes are stable no matter what; chiefly people who work at some level of government. Their income goes up, in effect, even if it doesn’t, because prices go down. I greatly dislike deflation because it encourages people to not spend even when they should.

I think of that as the “unpainted store phenomenon”. Store needs to be repainted. But then the owner thinks paint may be cheaper next year, so he doesn’t paint right now. Neighboring store owner sees the other guy letting his building go, so he doesn’t feel too compelled to paint his store either. Meanwhile, the paint factory doesn’t get many orders and lays people off. Rents fall and the landlords don’t paint their apartments either. Factory lets off more workers. On and on.

Give me inflation any time.

 

[Emeraldlady]

Emeraldlady:

I don’t know if this has been mentioned but I wonder whether the tipping system in the US works against fair minimum wage rates?

Some waitstaff have opposed any minimum wage increase, as well as including a fixed tip in the bill, because it reduces their pay. Customers tip less under eitbher case. In other words, they make more without a minimum wage increase.

The problem is the ‘some’. It is such a random way of recompense and it must be easy to exploit it especially with younger staff and the already disadvantaged who can’t afford to complain.

 

[Ridgerunner]

We want individuals to have large families and absolutely not have abortions. But so many people are unwilling to acknowledge that finances are a huge factor in family planning.

Quite a few years ago I read that if the child deduction was the same as it was in Truman’s time, adjusted for inflation, it would have been $20,000 per child. One of the problems with family formation is that the government takes so much of it. Instead of being able to spend income on your own child, you’re spending it on somebody else’s. Instead of educating your own child, you’re paying for somebody else’s kid’s education.

 

[tafan2]

The charts on the previous post are bogus, complete garbage. Yes inflation varied in the 40s, one year was 14%, other years were zero.

I already posted why the dollar value graph was garbage.

 

[tafan2]

Look, stable currency would be great, but if everything runs along at a 2 or 3 % rate without significant fluctuations, that is just as good. One could argue, from en economic standpoint, it is better.

Find a perfectly system that gives you stable currency, tell me about how it would work.

Overall we have been stable, going on almost 40 years, not bad. Those stupid fools at the fed are not one of our problems.

 

[JimG]

I shouldn’t complain. Inflation makes mortgages easier to pay off. But mine is already paid off. I would prefer 1% inflation, or less, but that’s probably too much to ask. I really hated it when banks were paying less than 1/4 of 1% on CD’s. But if the stock market doesn’t crash, it’s all good.

 

[Pattylt]

I remember when banks were paying 12% on CD’s! Of course interest on our car loan was over 14%…and we had great credit. Ahhh, the good old Regan years where trickle down was going to benefit us all! We never saw a trickle of it! And the car was junk…most of the cars were then…except the Japanese cars that were just entering the market! Oh, how I wished we would have bought one…except they hadn’t figured out that Americans are a lot bigger than the Japanese populace. They eventually figured it out and look what cars are respected for quality now?

Ok, rant over…

 

[ewohdrol]

Wouldn’t it make much more financial sense to have larger families and know their education, health costs and higher educational needs are covered?

It would take the stress off families in hard times and encourage more children knowing these essentials were covered.

 

[Socrates92]

Wouldn’t it make much more financial sense to have larger families and know their education, health costs and higher educational needs are covered?

It would take the stress off families in hard times and encourage more children knowing these essentials were covered.

This goes against the whole idea of the father being the breadwinner, as well as simply cheapening all those things (in terms of value, not in terms of price).

 

[ewohdrol]

Surely it has already been cheapened by the fact dad can’t earn enough through working? That mum also has to work? Or dad two jobs?

Pretty sure raising minimum wage will nagate those feelings?

 

[Ridgerunner]

Wouldn’t it make much more financial sense to have larger families and know their education, health costs and higher educational needs are covered?

Except that those who would otherwise be the most likely to have larger families are exactly the ones who will be taxed the most to pay for the education of someone else’s children.

Why not simply allow those with larger families to keep more of what they earn?

 

[ewohdrol]

So your suggesting we tax people without families more? Doesn’t that counter your original argument?

Why would those families be taxed the most? Tax is dependent on wage not amount of children.

 

[Ridgerunner]

So your suggesting we tax people without families more? Doesn’t that counter your original argument?

Why would those families be taxed the most? Tax is dependent on wage not amount of children.

I don’t think that’s inconsistent, but if it is, it is. Countries adjust their tax policies to encourage that which they think important. This country has favored lesser earners in tax policy for decades, and very heavily since Reagan’s Earned Income Credit. But deductions for having children have not kept up, probably because a significant segment of legislators don’t think citizens having children is important. Some, indeed, don’t even like the current population and think (wrongly in my opinion) that Hispanic imports will give their party permanent power. So they really don’t want natives to have children.

But that might be changing.

 

[ewohdrol]

So let me get this right. You’re against minimum wage. Against any idea that taxes be used to cover educational costs or medical care.

But more than happy for people without large families to pay more to cover the cost of the families. So it is okay to have someone ‘pay for your lifestyle’ only when we are referring to your personal lifestyle?

 

[Busyfather]

I’ve poured over the posts and may have missed it but what happens when a trained and capable person worth $18/hr. is being paid $18/hr. and the untrained person sweeping is worth $7/hr. and being paid $9/hr. then suddenly gets a raise to $15/hr. with zero additional effort made to or benefit toward the company? Likely one of three things: 1)The person making $18/hr. won’t see a raise in a very long time. 2)The company will suck it up and loose profits or pass along the cost to whom ever they sell to. 3)The person sweeping will be replaced by an automated vacuum like a large industrial Roomba. Which is fair?

 

[Dracarys]

Because the business owner is in a position of relative power compared to the worker.

Unemployment is at an all time low. Emploees who have skills, good work history, have many job opportunities.

We want individuals to have large families and absolutely not have abortions

Not me. Is it actually Catholic doctrine to have many kids? If you can’t afford a lot of kids use common sense birth control. There are methods approved by the church.

 

[Dracarys]

Frankly I think most of them could pag a living wage and stay in business.

Oh really? That is what you think. What evidence do you have? Do you have access to small business private financial statements? Do you know the profit margins of small businesses? You have no idea what having to pay every worker $17 an hour or more would do to their financial situation. Here in the US it’s not just the hourly wage it’s also multiple payroll taxes, unemployment, benefits, matching to retirement accounts, etc.

To be honest I don’t even care if the company can afford steep raises. The business owner took great risks with his capital, spent time, effort, and energy to open his own shop. He or she is entitled to enjoy large financial fruits of his labor. Why do you all get to be persnicity and sit in judgement of a business owner? It’s up to the market to determine wages. If the owner pays more or less than market it’s his or her business. Who do you all think you are?

Jesus told soldiers to “stop grumbling about their pay”. Recall the story of the harvesters who complained their master paid the same sum to some who worked less hours? It was the master’s money to do with what he wanted. I am getting a little tired of hearing from these collective bee hive minded Europeans here. If you want entitlement socialized sheltered life great, but that is not how we do things in the USA. It’s worked well for those willing to work as we are the greatest economic and military power in the world.

 

[o_mlly]

The charts on the previous post are bogus, complete garbage. Yes inflation varied in the 40s, one year was 14%, other years were zero.

I already posted why the dollar value graph was garbage.

No, not buying that one. One may not reject data as “garbage” merely because one lacks the mathematical facility to view a graphical representation of that data. Do some research. Show the data to be in error. Good luck.

 

[o_mlly]

Yet the US Federal Reserve insists that a 2% inflation rate every year is not only reasonable but necessary to protect us from any hint of deflation. A stable value for the currency is never even considered. Thus spenders are always favored over savers, many of whom fail to realize that their savings are steadily losing value.

The Fed targets the money supply to achieve a full-employment economy while managing inflation.

Inflation simply put is an excess of money chasing the same amount of goods and services. If, and only if, GDP grows at 2% can the Fed grow the money supply at 2% without inducing inflation pressures.

The difficulty the Fed is often presented with is that in years of recession deficits increase: Tax revenues drop and transfer payments increase. To fund the deficits, the Treasury sells bonds and creates the money to do so either by notation or the printing press thereby offsetting the Fed’s policy.