Parasite Economy Companies

[spanky4ever]

@evel

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gouda In my country- there would be a safety net, I would get my paycheck from the government - for one year at the longest, until i get up on my feet again. And the job would still be there. No sweat - no loss, and my company would still benefit from my good labour

[_H2O]

@H2O

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how about you do some research how much the big corp pay in taxes? Not on paper - but for real (when they have used all theyr exampt)
How about Walmart and Apple - how much compared to what they earn - and how much they profit)
Pls go and dig some of this yourself

I am pretty sure those effective tax rates involve realizing profits over seas in countries with less corporate taxes. It is true the current tax policies allow for money to be realized in other countries to avoid paying into US taxes. At the end of the day the people in that company need to get money. That money if it is realized as income in the US will get taxes. It is a big loss for America to have a policy that encourages companies to realize profits in other countries to pay less taxes.

[spanky4ever]

Evil chease said:

How about you don't break your leg, and your son/daughter will have to return from college

How about you get cancer, or some other deseace that would put you out of the labourmarked for good. What then??

[spanky4ever]

H2O said:

I am pretty sure those effective tax rates involve realizing profits over seas in countries with less corporate taxes. It is true the current tax policies allow for money to be realized in other countries to avoid paying into US taxes. At the end of the day the people in that company need to get money. That money if it is realized as income in the US will get taxes. It is a big loss for America to have a policy that encourages companies to realize profits in other countries to pay less taxes.

Well this tread is about the economy that pay minimal wages, and smurf of the good economy. USA, I guess has a lot of sustaninable eco, but the smurfs are eating the goodies

[evilcheadar]

Evil chease said:

How about you don't break your leg, and your son/daughter will have to return from college

How about you get cancer, or some other deseace that would put you out of the labourmarked for good. What then??

Payments

[spanky4ever]

It is a big loss for America to have a policy that encourages companies to realize profits in other countries to pay less taxes.

yes it is - and not only for USA. We all suffer from it

[Papist]

Wouldnt driving up the minimal wage increase unemployment?

Because thats what I see as the only reasonable reason for unemployment.

The right wing in the U.S. Has been claiming that for DECADES, but it never happens. This is because when people have more money, they spend more, offsetting any financial hit employers take.

It's incorrect to think that the hit would be offset so well. The financial hit to businesses is mandatory, the cure (people spending their money at businesses) however is not.

Name one point in U.S. history that a minimum wage hike resulted in higher unemployment rates. I'll wait.

I would also like to say this - if you can't afford to pay your full-time workers a living wage, your business model is flawed, and you shouldn't be in business.

[evilcheadar]

Show hidden quotes

Wouldnt driving up the minimal wage increase unemployment?

Because thats what I see as the only reasonable reason for unemployment.

The right wing in the U.S. Has been claiming that for DECADES, but it never happens. This is because when people have more money, they spend more, offsetting any financial hit employers take.

It's incorrect to think that the hit would be offset so well. The financial hit to businesses is mandatory, the cure (people spending their money at businesses) however is not.

Name one point in U.S. history that a minimum wage hike resulted in higher unemployment rates. I'll wait.

I would also like to say this - if you can't afford to pay your full-time workers a living wage, your business model is flawed, and you shouldn't be in business.

What kind of wage hike are you talking? 30 cents won't cause too many problems but to $15? That kind of shift hasn't been tested yet to my knowledge. It really doesn't have to be tested imo as there are more than enough reasons not to.

[spanky4ever]

the @evil

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brie think 15 dollar is to much. A lot of states in USA has already made it law. When Mc Donald made it in law (dont remember what state it was) they made more money, cos the ppl serving did a better job - and the custumers where more happy --- everybody did good: Mc Donald, the workers, and the customers

[Laurence Drake]

Show hidden quotes

Wouldnt driving up the minimal wage increase unemployment?

Because thats what I see as the only reasonable reason for unemployment.

The right wing in the U.S. Has been claiming that for DECADES, but it never happens. This is because when people have more money, they spend more, offsetting any financial hit employers take.

It's incorrect to think that the hit would be offset so well. The financial hit to businesses is mandatory, the cure (people spending their money at businesses) however is not.

Name one point in U.S. history that a minimum wage hike resulted in higher unemployment rates. I'll wait.

https://ideas.repec.org/p/nbr/nberwo/5224.html

"In contrast, estimates based on the payroll data suggest that the New Jersey minimum wage increase led to a 4.6 percent decrease in employment in New Jersey relative to the Pennsylvania control group."

[evilcheadar]

Woow I'm a proud pennsylvainian

[Dolan]

When I first read the OP, I thought this is about the contrast between the real economy which produces added value and the paper economy which produces "assets".

But then I understood that what OP is really saying is a classic tenet of demand-side economics, that was best described by Keynes: it's not supply that drives the economy (such as in communism, where everyone has a job and everyone is kept busy and "productive" by forced employment), but demand, the fact that humans have needs so the market will make sure those needs are fulfilled (in a free market economics).

The problem with this tenet is that it assumes markets are naturally efficient. That demand, sooner or later, will create its supply, simply because it's human nature to take the opportunity to make a profit by meeting that demand. Unfortunately, reality doesn't work like in theory. It's a lot messier and subject to random or unpredictable factors, including human ones, such as: depletion of resources, irrational economic behaviour (fear, greed), natural catastrophes, changing demographic trends, etc.

Now, I'm going to get right to the point OP made about wages. This is a long debate whether having a minimum wage is beneficial or not to the economy in the short/medium/long term. I remember, because I worked for the government and we used to have negociations with trade unions and with bussineses on this subject, and one of the main issues surrounding the minimum wage debate was the chain reactions it could cause in the economy. First of all, imposing a minimum wage by law will have a significant impact both on a business' expenses and on the public sector jobs (because the state is also a major employer, especially in France...). Secondly, increasing minimum wage by law can also have negative macroeconomic effects (inflation). (Btw, I don't work for the government anymore and probably never will again, but with the benefit of hindsight I can say it was a useful experience to see things from the inside.)

From a free market perspective, imposing a minimum wage doesn't make much sense (right?). Demand-side economics says every demand will meet its supply (assuming markets are efficient), so if an employer is desperate to make a profit by meeting a need he identified in the market, he will equally be desperate enough to pay his staff well to make sure he can attract skilled people to work for him. But, wait, it gets more complicated, because this view also assumes that people can afford to stay jobless and so refuse to accept low-paid jobs. Reality shows that this is not always the case, or it's only sometimes the case. Most of the time people are equally desperate to get a job and if they can't get a high-paid job they have to settle for a lower wage. This is what what happens when we have a so-called monopsony in the labour market, meaning that in a certain area there is only one big employer and many workers seeking to gain employment. In such a setting, the employer has the market power in setting wages and choosing how many workers it wants to employ. So, if you increase the minimum wage in such a situation, what could happen is that this business may choose to employ fewer workers to keep its costs under control and try to keep its productivity at the same level using other means. So, in this case, your higher minimum wage policy may fall flat on the realities of the labour market and not achieve much except for driving up employment costs for the public sector and possibly increasing inflation.

Not to mention that it's very hard, if not impossible, to go back on a gained right, so once minimum wage reaches a certain level, you can be more than sure that it's not going to go down, only up. Again, future inflationary risks, the money supply has to increase to match this minimum wage raise, even though you're not sure this will get translated into economic growth.

If you give people extra income, they may or may not choose to consume more, but this is not a given, economic behaviour is not that predictable. Someone who suddenly gets more money may also choose to save up more and so, reduce the velocity of money in the economy. Or they may choose to spend the extra income on holidays or buy products online from other countries and help create economic growth in other economies than your own. Or they may invest abroad, it's another possible choice.

So what did you achieve with your "let's increase minimum wage so we encourage consumers to buy more and so create more demand" policy? In the short term, you surely get higher inflation, which will have to be managed somehow. Or if it's not managed well, increased wages won't translate into more buying power, since the market will increase prices too in order to chase the extra money that were made available to consumers. Also, businesses that had to bear the burden of increased employment costs may also have to increase the prices of their own products and services. This is what usually happens, actually, in the real economy. When you force businesses to bear the cost of increased wages, they will immediately try to funnel those costs to the consumers. Objectives achieved? None and now you also have extra inflation on your hands.

My impression from this complex picture is that, in general, big organisations (both public and private) have the potential to distort markets, either by having a strong position in deciding who gets employed and how much they get paid or by having the right to initiate laws.

[Dolan]

One more thing that I forgot to add --

There isn't one single conception about what the minimum wage should be.
There is one idea that the minimum wage should simply be a way for the government to make sure no company will abuse its position as an employer to pay very low wages. So a minimum wage would be set as a means to make sure that living standards in a country will not fall too low, by allowing companies to strong-arm workers into accepting as low as possible wages.

And there is another concept, which views a minimum wage as a way to gradually lift people's living standards by raising its level.

The first one is the "safety net" conception, the second one is the "driver" conception, because minimum wage is used as a tool to produce gradual changes in the economy.

[howlingwolfpaw]

Hi, great topic!

I am going to make a few points here that are missed and/or need to be revisited.

In what effect is a minimum wage effective without a maximum wage? Surely if one feels inclined to dictate one, then the other is also a legal possibility that should be looked at. I will regress later and explain how this is actually not a fix to the economy at all. But within proportions raising the minimum wage alone will mean nothing. Those now earning 15+ range (jobs held by non parasitic companies) will now feel undervalued and also want more. Also companies will simply cut hours and jobs in the current system. I saw this when Obama care rolled out and because after 30 hours employees had to be within the company health care system, half the employees were split to those in important rolls getting full hours and the rest moving to 30 hours, even spreading those hours over the same amount of days but less work in a day. (and by the way, why is health care an issue for employers anyway? this only clogs the system, it HAS to be a single payed govt backed system) Without a cap this really means nothing. (say 7-10 times minimum wage, then all company profit goes to the people via taxes and services) That might create a balanced economy... but there is still one main factor which will still create sustainability.

The hard truth we must face is that it is a failed and rigged system (evidence in failure with subsidies, bailouts, artificial control of interest rates). Since all money when created is actually brought into the world as debt (via the privately owned federal reserve) taxes must be created (income tax) to pay this interest back to the banks. In turn new loans must also be made to continually feed the beast that can only survive on perpetual and exponential growth, which is not possible or sustainable. Still with me? Good. So in our current system, roughly 30% of what the middle class makes goes directly to the banks for servicing us with this fake currency. This manipulation of numbers creates a real lack of money that then robs and manipulates people and materials into tangible wealth from nothing. This is also evident in fractional reserve lending, another practice that allows banks to legally (fraudulently, wait are you confused about this too?) lend up to nine times the money they have in reserves. Where does this money come from? That loan money is materialized as a note of debt in your name. Successful people in commerce are able to pay this but since the system is created as a lack and there is over ten times as much debt as there are dollars in existence the many will not ever be able to. So raising the minimum wage in this system again means nothing.

The fix (a fix, lets fix this together) is to create a relative fixed economy that builds wealth and not debt. All money is technically owned by the people, therefor I see it only as fair that all new money be issued directly to the people.... you might call this a living wage. Sort of like a dividend for a corporations stock holder. This puts the power and control of the economy in the hands of the people with their purchasing power. This also is a bottom to top economy that allows those who work hard and produce to obtain wealth. And creates an economy of people who will be able to spend. And possibly no need for a minimum or maximum wage.

The transition... create a new secure currency that is people (govt owned). That slowly takes over by cycling the money that once was going from income tax to the fed banks directly to the pockets of the people until all new currency is replaced. Also NO lending at interest can be allowed as that creates non-payable debt. There may be a few other things to consider (speculative wall street integration etc...) But in the end will have a currency that means something and does not disappear into a debt scheme.

This is the govt of the people, the money belongs to the people. not the banks.

Thank you, I know I wrote a lot, but I hope you learned something from it and can help add to the creative process~!

GG

[iNcog]

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[Laurence Drake]

From reading your post, @Dolan

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, it seems to me that the actual good thing to do would be to have government policies which favor extremely high demand, thus fueling the economy.

I guess that you could argue that a higher minimum wage only artificially increases demand. So the question is, if you can't increase demand by increasing purchasing power for everyone across the board (which to me, still makes sense), then how would you do so?

If there were no poor people, you would have that increased demand. Obviously it's not hard or exact science, but basically a poor person doesn't really consume, thus is a burden to the economy.


Also, many people are conviently forgetting that higher minimal wages also means less welfare programs. Less bureaucratics to run those programs as well. Less taxes overall. For some reason, we can't afford to burden companies with higher wages, but we CAN afford to tax companies (and employees...) and run welfare programs. That doesn't quite add up, does it?

You increase demand by improving technology or investing in capital.

Come to think of it, a minimum wage might be a good idea. If wages increase, employers will want to develop new technologies to replace their workers, which is better for demand in the long-run.

Although this wouldn't have much impact on welfare. Most welfare goes to pensioners who don't earn wages anyway.

[iNcog]

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[deleted_user0]

Economics is so boring... Wheres da philosophy. Revolution backed by robots within 150 years boys, pack yo rich fanny and hightail it out to mars... I heard matt damon cooks a mean jacked potato there

[Veni_Vidi_Vici_W]

So you guys want to have cheap shopping at WalMart etc, have factories produce cheap cars, all so that you can get as many products as cheap as possible. Or you want to let other countries like China deal with low wages, extremely bad working environments, just so you can buy cheap clothing in the USA. You want the people who make cheap products possible to get paid more, which just means you will pay more for those products as well.

As has already been said, if you simply raise minimum wages, you dont solve the problem. The guy who earned less before, now earns similar to the one above him in the same company. That 2nd guy worked there longer and/or contributes more, now feels treated unfairly, and demands a higher wage as well, etc. Ironically, the increase of minimum wages would likely lead to more lay-offs over time, because of the forced increased costs in every layer of the company. This effect will only be strengthened by opportunity cost for machine vs human.

Also, many people are conviently forgetting that higher minimal wages also means less welfare programs. Less bureaucratics to run those programs as well. Less taxes overall. For some reason, we can't afford to burden companies with higher wages, but we CAN afford to tax companies (and employees...) and run welfare programs. That doesn't quite add up, does it?

Im not so sure about that, given the effect of increased minimum wages, as explained above. If products get more expensive, people can be on the same 'level of poorness' as before, its just that the absolute limit has moved, but relatively its the same. In fact, its likely that more people will have less purchasing power overall. Less bureaucrats is always good ofc

[Dolan]

...

Yeah, the US needs more fantasy economics, they don't have enough right now. They poured trillions into cheap credit in the last few years, only to barely manage to keep that growth illusion still going for a while.

It's good that they're desperate. They should keep being desperate and pouring more "credit expansion" into their economy.

[iNcog]

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[Veni_Vidi_Vici_W]

i created another topic why poverty in general is probably inevitable given current circumstances of how we live as a race.

poverty can be mitigated, as for example certain social government systems do like here in NL, Denmark, Germany, etc. I just stated above that if you are changing the minimum wage it likely has more unwanted consequences, and in the end those poor people are probably in worse shape.

[howlingwolfpaw]

Doesn't seem like anyone read my rant, I actually explained a very good possible solution to all this. But it will take a balancing of the current systems debt and create a new fair currency system for all. But you have to think outside the box of what it is we are currently under (institutionalized fraud) and its really no different in Euro and Asian countries as well.

[Dolan]

Doesn't seem like anyone read my rant, I actually explained a very good possible solution to all this. But it will take a balancing of the current systems debt and create a new fair currency system for all. But you have to think outside the box of what it is we are currently under (institutionalized fraud) and its really no different in Euro and Asian countries as well.

I read your post, but I don't know if abolishing credit completely would work.

[iNcog]

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