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Why is US Economic Growth Slowing? No problem since slow and steady wins the race

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If the economy grows by 3% a year, that becomes a larger $ number each year. At this point, 2% is already a yuuuge $ number IMHO.

One thing that could help is to raise the minimum wage for those employed by companies/businesses that have revenues of $5 million/year or more to $15. The main problem with the minimum wage being universal is that many of the smaller employers have difficulties making ends meet already. The costs inherent in running a small company are a much larger % of their revenue. They need a break.

I also think that a “flat” corporate income tax of 30% could be lowered a bit by giving U.S companies and multinational companies a “personnel deduction”, equal to the amount of 1/2 the minimum wage for each full-time United States employee. (note: only full-time and only working in the USA) The economy depends on customers and this way we could get more of them with full wallets to be used on necessities instead of public funding for low-income families.

Why do we have “low-income families” anyway? They have income, jobs, and work but are not paid enough!

“The pace at which we can reach our destination of economic bliss will be governed by four things–our power to control population, our determination to avoid wars and civil dissensions, our willingness to entrust to science the direction of those matters which are properly the concern of science, and the rate of accumulation as fixed by the margin between our production and our consumption; of which the last will easily look after itself, given the first three.” Keyes See John Maynard Keynes, Economic Possibilities for our Grandchildren https://www.econ.yale.edu/smith/econ116a/keynes1.pdf

“The margin between our production and our consumption” is messed up IMHO and we appear to be going backward on the first three items cited by Keyes.

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Posted by Dennis
Posted on 07/06/2017 7:10 PM
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Sorry, it should be “Keynes”

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    Posted by Dennis
    Answered on 07/06/2017 7:18 PM
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      A higher minimum wage would just result in higher prices because something will have to give for unqualified employees to be worth the $15 that they currently are not. Labor is just too sticky to have huge unemployment en masse as a result.

      Anyway, back on topic, how is increased productivity being masked by decreased productivity as Roche hypothesizes when it is accounted for???

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        Posted by MachineGhost
        Answered on 07/07/2017 4:39 AM
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          Also, Denis, we’re not going backwards on Keynes’ first two. Breeding has dramatically declined globally with no end in sight and wars are very uncommon relative to bloody history, both which are legacies of the global spread of free market capitalism. This may be bad for economic growth and bloated government relying on tax revenues, but not humanity per se.

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          Posted by MachineGhost
          Answered on 07/07/2017 4:48 AM
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            Also, we have “low income” familiies because they’re relatively uneducated and to add insult to injury, they breed. The cycle is then perpetuated. Government does very little right, so is it no surprise it also sucks at job [re]training or crowds out free market competition that would address the problem? In the USA, path to economic success is left up to the individual. You’re on your own to figure things out if you weren’t born with a silver spoon in your mouth with the money and elite social connections that implies.

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            Posted by MachineGhost
            Answered on 07/07/2017 4:56 AM
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              Thanks for this article, it’s an interesting and original view. You mention that one counter-argument is the lack of rising wages, however you do not speak to how this fact (lack of rising wages) is not an argument against your view. My thoughts so far have been that indeed, lack of rising wages is a big factor in the lack of growth. So I am curious to hear more on your thoughts on this.

              Also, while I agree that productivity has increased in many regards, I have some differing opinions for instance when it comes to patents. Most patents in technology are now defensive and in my views and experience, hinder innovation. Someone 20 years ago patented the EPG guide, which is nothing else than a cartesian table. But now everyone that wants to show data using an EPG guide has to pay a patent fee to that person, who really invented nothing and this process adds no value. We now have patent portfolio holders that only seek to monetize the patents, not the inventions. A true invention should be monetized, but not the patents. After all, it’s not because someone has an idea today that I won’t have it tomorrow as well, without having learned of it from the other person.
              Finally, patents are extremely expensive, so the only inventors that are actually protected are large corporations, that can afford to patent as much as they can. A small business will not patent, and is at the mercy of larger corporations.
              I fully agree with you that paying a living wage to a full-time employment is the way forward, and anything but that is not capitalism. The only reason wages are not increasing is that we allow people to work more than full-time and they take several jobs. So they can live, but that extra job is someone else’s job. Therefor the labor force has grown, the job market has grown, but wages stay flat.

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              Posted by Pete Leuenberger
              Answered on 07/07/2017 6:40 AM
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                When we consider raising the “minimum wage” we are speaking only of the poor. A very small percentage of folks actually get the minimum (or less if part time), and these are very same folks that are a drain the public’s moolah since they require public to pay for what their own wages should cover.

                It’s so easy to blame the homeless until you got out and meet them. Some folks are just plain worthless as an employee. I’m not gonna hire them–because they will ruin the moral at my business. I want the best, so the worst become burdens of the public in many many ways.

                When it comes to “low-income” families, by definition they are getting “low incomes”, not enough to sustain the family, so everyone (the public), does their best to help out a bit. I don’t want somebody dying on my doorstep every week!

                Companies that have profits of $5 million or more per year can clearly afford a few bucks for the lowest of the low paid employees, those at the minimum wage — or forced to take part time. If the multinational corporations do that, e.g. go to the very bottom possible with pay, then I’m mad! Why should I have to make up for that shortage? But we do!

                Somebody, not their employer, is keeping these folks alive. That “somebody” is you and me providing everything from buses to trash collection of dumped stuff. I don’t want this, do you? Get them a living wage and we (the local public) will not have to bear the expense.

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                Posted by Dennis
                Answered on 07/07/2017 3:32 PM
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                  I’m not surprised that economic growth and productivity growth is slow. It’s a phenomenon globally in OECD. Key reasons driving this (in no particular order):
                  1. Current methods being unable to correct for shifts in tech, which means we overstate inflation
                  2. Excess income is being used to service assets in a global asset bloat
                  3. Unwinding excess capacity and extraction getting killed (globally)
                  4. World in depression means no global demand
                  5. Asset bubbles and excess capacity (again, high asset prices being serviced on liability side via income)

                  These are largely global issues. I don’t see a fix going forward (other than (1), so ignore that) in the near-term. I think inflation is overstated a decent bit, so real growth is understated. I think having thriving new industries and institutional flexibility is more important than GDP growth per se.

                  How this resolves itself? I have no clue. Politically, we see gridlock from generational divides (especially in the Anglo-sphere IMO).

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                  Posted by Suvy Boyina
                  Answered on 07/08/2017 1:00 AM
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                    Suvy: “I think having thriving new industries and institutional flexibility is more important than GDP growth per se. How this resolves itself? I have no clue.” I agree and submit that innovative companies, with the resources to make their ideas happen, are the best at growing the US economy vs the others in the world. This is a slow and hopefully steady process. I have my doubts when considering the priorities of the current “Uncle Sam”.

                    That typed, the dual idea of a higher minimum wage to make those at the bottom of the wage scale become real consumers (not beggars), and companies being rewarded for having USA employees on their payroll would increase the number of consumers in the USA. That IMHO WILL increase the GDP.

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                    Posted by Dennis
                    Answered on 07/08/2017 1:52 AM
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                      The easiest way to guarantee high wages is to let slight deflation occur rather than the Fed having an inflation target. If you have ~1-2% deflation, you don’t ever need to raise the minimum wage. Inflation helps minimum wage employers.

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                      Posted by Suvy Boyina
                      Answered on 07/08/2017 2:21 PM
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                        Suvy: “Inflation helps minimum wage employers”. NO. I don’t think so. It kills the buying power of minimum wage earners, e.g. it’s employees, and thus it’s own customers base. It does help folks that are in debt and hurts folks that have lots of cash. If you have a lot of moolah, don’t hold it in cash, buy stuff that goes up in value in tune with inflation. If you have debts, pray for a raise (even though He’s not listening), and tell your boss that he needs to step up.

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                        Posted by Dennis
                        Answered on 07/08/2017 5:32 PM
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                          Since our economy is more or less controlled by consumption, if all employers made sure that their employees were paid fairly, then there would be more consumption. The CEO has no need for more than $5,000,000 per year taken from the company’s revenues. That is the definition of “unfair”. Trying to live in any city in the USA requires more than the minimum wage these days. Getting only the minimum wage, that is the definition of “unfair”.

                          If the boss/CEO nearly makes no money, then he can’t even pay the minimum wage. Here the situation is different. If the company has profits of $5 million or more per year, they should pay fair wages then EVERYONE would benefit. There is no reason why the CEO should take all the money, especially if he is a so-called “hired gun”. If you started the company, and are still the CEO when the moolah comes in, then we have a different situation IMHO.

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                          Posted by Dennis
                          Answered on 07/08/2017 5:57 PM
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                            In summary, the solution to the problem with our slow growth USA economy is that we have too low of wages for the ones at the bottom of the pyramid, and the wages at the top are way too high. We need much higher wages for the folks at the very bottom of the wage scale.

                            The only thing “the top” can do with all that excess moolah is to push up asset prices. It’s not being spent into the economy, it’s being saved by gambling, e.g. “invested” in the stock market and other schemes. These schemes inherently do not produce products but are bets on the ups and downs of the underlying asset prices. Inflation is caused by too much borrowed money chasing overpriced assets.

                            This situation is about to get way worse with our present Uncle Sam. There is no question about it. I was thinking, after understanding a bit about MR, that there is no real reason why we have so-called “business cycles” of ups and downs that hurt millions of folks and enrich a few others. We know how our economy actually works. So reasonable folks can fix this. NOT ANYMORE!

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                            Posted by Dennis
                            Answered on 07/08/2017 6:42 PM
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                              “Inflation is caused by too much borrowed money chasing overpriced assets.” That is what would also occur with a higher minimum wage as well if the economy was not naturally allowed to offset the disequilibrium. I think you may have a skewed perspective of who is for higher minimum wages. It’s not a super small minority of poor, it’s “Fight for 15” types aka the colored. They are using the issue as a way to deal with the legacy of institutional and cultural racism.

                              So basically you have people that are not worth $15 an hour demanding to be paid that wage unjustly, unfairly and not via a competitive bidding process. So general prices will inflate to make sure that they stay where they are in socio-economic terms unless they get educated to become a high income earner by having an actual worth to employers. The are millions of of middle and upper class blacks living in and around Atlanta, so don’t give me any excuses that it can’t be done.

                              Capitalism doesn’t work in improving society’s living standards by giving jobs or transfer payments to a subset of people that aren’t worth the value. That’s typically the domain of government, e.g. B.S. false news emotionalism narratives aka politics.

                              There is no easy single answer to the problems of the colored and raising the minimum wage is not going to fix it anymore than any other government program did. Just watch.

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                              Posted by MachineGhost
                              Answered on 07/08/2017 10:19 PM
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                                P.S. Business cycles are natural and not due to man, but I agree that we could do a heck of a lot better job with automatic stabilizers and the like. Just not with the present nature of representative government… too corrupt, crony and ideological. It has to crash and burn first.

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                                Posted by MachineGhost
                                Answered on 07/08/2017 10:26 PM
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                                  MachineGhost, I must deduct that the only reason slavery existed is because these “people” were not worth more. Flawed logic. Consider for a moment separating your ideals from reality. There are in fact many people that work several jobs, bring more value to society than me (and probably you), and yet barely make a living wage. In my opinion, someone that serves me at a restaurant provides me with more value than an advertiser brings. An advertiser simply shortcuts the need for quality and networking that any good product should be based on. A server makes sure you are fed.
                                  And perhaps we should stop pretending that we “know” what capitalism’s aim should or should not be, and stop thinking that there is only one clear answer to everything. What I know is that paying anyone less than a living wage for a full time job is a form of slavery, not a result of capitalism.

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                                  Posted by Pete Leuenberger
                                  Answered on 07/09/2017 3:09 AM
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                                    MachineGhost, you wrote:
                                    “So general prices will inflate to make sure that they stay where they are in socio-economic terms unless they get educated to become a high income earner by having an actual worth to employers. The are millions of of middle and upper class blacks living in and around Atlanta, so don’t give me any excuses that it can’t be done.”

                                    THANK YOU FOR SAYING THIS!! It is unbelievably racist to say minorities aren’t capable of being in the upper-classes so they need government help. On top of that, it’s verifiably false.

                                    With respect to deflation, deflation discourages debt. It encourages real savings and encourages prudence when investing. If you’re in debt, there’s another option to paying off your debt: bankruptcy or default. If you can’t pay, tell your creditor to, “fuck off” (so to speak). If your economy has a deflationary bias, there is no need to every raise the minimum wage. Real wages are basically almost always guaranteed to rise and keep pace with productivity.

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                                    Posted by Suvy Boyina
                                    Answered on 07/09/2017 11:32 AM
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                                      Fascinating. We have a real live example of a minimum wage first being instituted in a modern first world country. Germany put it on only back in Jan 2015 and they are raising it again this year (end every two years thereafter). None of the dire unemployment predictions have come to pass but since labor is very sticky, we will have to see the effects on new hires over the long-term. And since they have a huge refugee crisis who can’t read or speak the language and are not assimilating (they’re on the taxpayer dole), this will be a very fertile testing ground indeed.

                                      https://www.dw.com/en/germans-enjoy-highest-real-wage-rise-in-decades/a-19026620

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                                      Posted by MachineGhost
                                      Answered on 07/10/2017 5:52 PM
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                                        @Pete No disagreement. But undervaluing working class labor isn’t endemic to capitalism but more along the lines of social and cultural cronyism/elitism. My primary concern is that if “feel good” political “solutions” make the overall economic situation worse in factual terms (which exists whether or not you believe in it), then it is not the way to go. We don’t have an unequivocal plurality of factual evidence that a higher minimum wage improves outcomes of those at the bottom of the economic ladder. It is marginal evidence on both sides, slightly in favor of against it.

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                                        Posted by MachineGhost
                                        Answered on 07/10/2017 6:00 PM
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                                          Part of the problem in appealing to all socio-economic classes as a business is profit margin shrinks if you can’t make it up by increased volume. That’s a real problem for location-anchored businesses like retail and fast casual (which should also be job training grounds and NOT permanent long-term employment for Hispanics or broke retirees). These kind of businesses can’t absorb higher labor costs under coercion of minimum wage laws without raising prices which will shrink overall revenue and need for labor unless they’re located in a socio-economic area that can tolerate it (but then those people aren’t exactly buying junk food at McDonald’s). So who loses? Well, just imagine all those low income communities that don’t have grocery stores selling fresh food and meat, but convenience stores selling junk food on every block, like around Detroit. Something always gives to maintain economic equilibrium and it would be best for society it was not profit margins (Amazon has only a 1%-2% profit margin and look how they are ripping literally everyone a new a-hole which is only going to further exacerbate the labor problem so that in the end everyone will be working for Amazon).

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                                          Posted by MachineGhost
                                          Answered on 07/10/2017 6:12 PM
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                                            And BTW, anecdotally, I definitely eat food out of the house a lot less since the minimum wage and sales tax were increased earlier this year. The inconsistent food quality, the incompetent cooks always messing up orders, etc. just does not warrant the price anymore. In other words, the price is now higher than the value. Even with coupons. So what is going to give?

                                            I’m also short shopping malls.

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                                            Posted by MachineGhost
                                            Answered on 07/10/2017 6:21 PM
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                                              Ghost: “So basically you have people that are not worth $15 an hour demanding to be paid that wage unjustly, unfairly and not via a competitive bidding process.” This is more than ridiculous. First of all the minimum wage is $7.50. $15 will make a yuuuge difference! If working full time for not even enough moolah to buy dinner and rent a roof is “unjust”, then you have no idea what “justice for all” means. These folks are being cheated. There is no such thing as a competitive wage bidding process at the bottom, you take it or leave it. That’s what you would call “freedom” and I would call slavery. If a company has $5 million in profits a year then they have no honest reason to pay the minimum and make the public fill-in the difference. Why do we have to support the “low-income” families with public housing, food stamps etc.? By definition “low-income” families have an INCOME that sucks big time.

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                                              Posted by Dennis
                                              Answered on 07/10/2017 8:11 PM
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                                                If a company that has profits of $5 million per year then make them pay a fair wage and not a slave wage. You will NEVER convince me that this is a bad idea.

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                                                Posted by Dennis
                                                Answered on 07/10/2017 8:13 PM
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                                                  The reason this needs to be a national minimum wage is that states and counties may choose to offer companies deals to come to their low minimum wage state. If this makes sense, then the honest capitalist working for his shareholders MUST go to that location. If they rely on unskilled workers or workers that can be trained for repetitive difficult jobs, then this makes perfect sense. It needs to be a national law. NO SLAVE LABOR — slavery is not allowed in the USA anymore!

                                                  Since full-time employment is expensive, I think a flat tax of 30% on profits and a personnel deduction for each full-time USA employee (of 1/2 of the minimum wage), would encourage full-time in the USA low wage labor. Instead of farming low-wage jobs in other countries, we could be a haven for fair paid but inherently low-wage jobs.

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                                                  Posted by Dennis
                                                  Answered on 07/10/2017 8:28 PM
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                                                    @Dennis I guess the question is still how you’re defining those that “deserve” a $15 minimum wage. If paying low skilled people more will get them off the taxpayer dole that corporations like Walmart expect their employees to exploit, then I’m all for it. But that hasn’t yet happened historically because what usually happens is the situation gets overall worse as all “liberal” interventionisms seem wont to do. Maybe that isn’t a fair characterization because the “success” of a government program attracts even more freeloader wannabes whereas the previous freeloaders were able to move up to the middle class? That’s the optimistic take. The pessimistic take is that unskilled and low skilled labor is simply not worth $15 an hour and there’s no free lunch. You can’t change that fact of economic reality by political fiat unless you go Communist to patch up all the escape routes and Communism didn’t even survive.

                                                    Look, I really hope a higher minimum wage works because its more of a direct transfer payment than all of the cockamamie public welfare schemes put together that are nothing more than make work, full employment guarantees for low skilled government workers. But the fact is a minimum wage is a coercive act into a voluntary relationship that disrupts whatever equilibrium there is. It’s just question of who or what will get the axe… proponents are hoping that it is corporate profit margins and the salaries of the Top 10%. Those people are not going to just sit by like a frog in boiling water.

                                                    Pegging a minimum wage to revenues is a good start but it’s not going to work nationally. A minimum wage needs to be tailored to a region to deal with the huge disparity in COL. $15 is popular in rich white/asian enclaves like Seattle, Portland. Sacramento and Denver but it would be absolute murder to most of the MidWest and Deep South. People there would basically get a huge boost in living standards overnight with no increase in real productivity from being high skilled. If that happens, you get systemic inflation because the actual high skilled will not stand for the competition. Remember the contractual wage increases of the 70’s and the resulting inflation spiral?

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                                                    Posted by MachineGhost
                                                    Answered on 07/10/2017 9:51 PM
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                                                      Although Cullen hasn’t answered about it yet, TFP which measures productivity has been steadily declining for decades and we still want the lowest [non]skilled to get $15 an hour? How is that even justifiable economically? We can’t just pay people what we want without there being negative consequences to the way a meritocracy and self-initiatve works as that employer in Washington State found out the hard way (the one that paid every employee $70K).

                                                      Farmers aren’t going to pay illegal alien workers $15 an hour, believe me. They don’t have the profit margins. All I see higher minimum wage doing is speeding up technological unemployment. Then what are we going to about the ever growing underclass that can’t get jobs even illegally under the minimum wage because robots do the job faster, better and cheaper for only $2-$3 an hour?

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                                                      Posted by MachineGhost
                                                      Answered on 07/10/2017 10:01 PM
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                                                        Ghost: “If paying low skilled people more will get them off the taxpayer dole that corporations like Walmart expect their employees to exploit, then I’m all for it.” That is my whole point. If you have a job you should get paid fairly.

                                                        Ghost: “a higher minimum wage works because it’s more of a direct transfer payment than all of the cockamamie public welfare schemes put together” ABSOLUTELY Why should the public be forced to help? We are “forced to help” actually unless we are assholes like you!

                                                        I don’t want to live next to fine downtrodden folks that have a job but only get slave labor pay. I can’t stand seeing these folks right here in paradise living a half life. The highest cost of living — MAUI HI. The lowest wages MAUI HI. Hundreds of fancy resorts owned by multinational corporations, and what do they pay their workers? MINIMUM — unbelievable! The patrons, all millionaires. The Maui public: “let’s build low-income housing because the workers can not afford the rent or to buy their home.” Other’s of Maui, “let them live in tents upcountry”!

                                                        Ghost: “Farmers aren’t going to pay illegal alien workers $15 an hour, believe me”. I know! That is why I said if the corporation has $5 million or more in profits, they have to pay fair wages.

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                                                        Posted by Dennis
                                                        Answered on 07/10/2017 11:37 PM
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                                                          Ghost, let us look at some data, because your math sucks! BTW, Rep Mr. Ing, is MY REP to the State of HI. His bill never had a chance. Obviously, Oh YES, the folks that fix up 20 rooms a day at the Four Seasons are only worth $7.75.

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                                                            Posted by Dennis
                                                            Answered on 07/10/2017 11:53 PM
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                                                              In 2006, the Four Seasons was privatized for $3.83 billion, with Sharp (the founder) continuing to hold 5 percent as chairman and CEO. By the end of 2008, Four Seasons had 85 hotels in 36 countries and plans to double that number in 10 years.

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                                                              Posted by Dennis
                                                              Answered on 07/10/2017 11:59 PM
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                                                                @machineghost,
                                                                Your views on economics and how to make informed decisions are spot on. However, not paying someone a living wage for a full-time job is not about economics, it’s about right and wrong. Unfortunately, economics and capitalism is not the world we live in, it’s only a small part of it. So this is not an economics argument, this is about having integrity. It is wrong of me to ask someone to work for me and not pay him a minimum wage. As a business owner, I would feel shame to say that I need people to give me their time so that I can be financially successful. We’ve lost the pride of our honor, and replaced it with the pride of money accumulation. There is only shame to be owning or running a business that makes millions in profits but uses a form of slavery to achieve that. If I can’t make my business successful while paying a living wage, then there is no business. If MCD pays a living wage and can’t sell burgers any cheaper I can make them at home, then the only value they bring is the place and the service. And if that’s not enough, it means that MCD is a faulty business. That’s why I sold, because I think that it is, not just for their economics, but also because quality of food is not a factor for them, only appeal of taste.
                                                                So again, I am not having an economics argument with you here, only one on values and integrity. No economics argument will make me compromise my integrity.

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                                                                Posted by Pete Leuenberger
                                                                Answered on 07/11/2017 2:45 AM
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                                                                  Pete, good comment. A living wage creates a pretty thin risk management margin for capitalists though. This is why it doesn’t happen….

                                                                  MG, the key point in the productivity puzzle is that a huge amount of what we produce doesn’t even get counted. I mean, you can’t argue that counting beans is as productive as a free online site that counts beans for you. But that’s how GDP works. We count thing that have a value at the point of sale, but much of what we sell today is actually free….

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                                                                  Cullen Roche Posted by Cullen Roche
                                                                  Answered on 07/11/2017 2:55 AM
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                                                                    I feel more comfortable with a Citizen’s Dividend than forcing businesses to live with a “pretty thin risk management margin” via a higher minimum wage. Supporting others should come out of your own personal income, not a tax on collectives voluntarily giving others what they need/want. Better yet, it ought to be decentralized and P2P so all the careerist politicians no long have their hands in the cookie jar. There is no place for anarchronistic bureaucracy and their minions in the 21st century.

                                                                    @Denis Hawaii is an awfully terrible example to be using. Not only is it an extreme tourist trap with all the high prices that implies, it was an illegal colonialist annexation by the US to begin with. It’s also a corrupt Democrat shithole with crony protectionism galore which raises the cost of living for everyone, poor and rich alike. Adding even more of the same kind of disease is not how you fix that kind of living hell. It even costs more to live in Hawaii than in San Francisco! (except for housing which won’t last for long with all the rich increasingly fleeing to the islands) and there is no high growth Silicon Valley nearby that can be argued to be driving up the cost of living. No, it’s all purely political interference by economic numbskulls, protectionists and Uncle Tom’s. It is not much different from being a Banana Republic. Some day, I hope the natives finally vote for independence and claim back their stolen sovereignty.

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                                                                    Posted by MachineGhost
                                                                    Answered on 07/11/2017 8:12 PM
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                                                                      Ghost, so now you’re on my side. Multinational capitalistic companies have their VPs figuring out how to maximize profits sometimes on the backs of folks that have no “bargaining” power. They seem to be free to do what they want and this often leads to horrid problems that the public has to pay for. This is not unique to Hawaii. A fair wage would go a loooong way to making things right. But you’re not for that.

                                                                      Maui is no Banana Republic. The fancy resorts charge over $1,000 per night with the cleaning lady getting $7.75 per hour. The profits go far far away from Maui.

                                                                      Every single time the State and County pass law to raise funds it impacts the tourist’s hotel bill. Meanwhile, the giant Multinationals resort owner claim they have no profits (they lost moolah on their Bangladesh hotel), and can’t afford a revenue tax either.

                                                                      BTW “I hope the natives finally vote for independence and claim back their stolen sovereignty.” They signed up with the USA after they helped win WW!! for us and them. They are a state, and you can’t get out of that. The Southerners in South Carolina thought that they volunteered to join the Union so they could get out if they wanted to. No dice. Today the strategic importance of Hawaii to the USA is yuuuuuuuge!

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                                                                      Posted by Dennis
                                                                      Answered on 07/12/2017 5:41 AM
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                                                                        Native Hawaiians are now only 12% of Hawai’i’s population.

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                                                                        Posted by Dennis
                                                                        Answered on 07/12/2017 5:52 AM
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                                                                          “It is estimated that between 400,000 and as many as one million Native Hawaiians were living on the major Hawaiian islands in the late 1700s when Cook landed in Hawai’i.

                                                                          Because Hawai’i is a group of islands isolated from other land masses and people, diseases known in the rest of the world were not known in Hawai’i. Within a century after Cook first landed, the Native Hawaiian population had dropped to about 40,000. Deaths were attributed to a number of “new” diseases including smallpox, measles, influenza, sexually-transmitted diseases, whooping cough and the common cold.”

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                                                                          Posted by Dennis
                                                                          Answered on 07/12/2017 5:56 AM
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                                                                            I think some are missing the obvious here about why we have a minimum wage in the first place. Without a minimum wage, due to finite resources and excess competition for jobs, wages would quickly collapse to zero i.e. straight back to slavery or some form of indentured servitude. There would also be a lack of incentive for businesses to innovate because they can just hire 1000 interns off the street for free knowing fully well they will be desperate for jobs. Furthermore, entire industries dependent in the hiring process of employees could very well disappear. The unknown unknowns…

                                                                            As to the minimum wage causing businesses to potentially raise their prices, that inflation is quite beneficial, probably even necessary in a stable-low growth economy otherwise profits would shrink, collapsing the economy.

                                                                            And as regards to MachineGhost’s rather derogatory remarks on the poor and that “they should stop breeding”: who do you expect to recycle your garbage every week, keep the streets and offices clean, serve you at the restaurant or store, treat your hair at the salon, and fuel the life force of credit card companies (who also happen to employ thousands of people) that base their entire profit models on people getting into debt? Robots? :^)

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                                                                            Posted by Incognito 7
                                                                            Answered on 07/12/2017 1:45 PM
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                                                                              @Denis I’ve always been on “your side”, I’m just skeptical the magical political solution B.S. that liberals always suck up like giving candy to a baby is going to work. At best, a higher minimum wage is nothing but a short-term palliative and not fundamental long-term change to the drivers of poverty or being low skilled. While I recognize it is better than nothing, I don’t choose to be continual purveyor of false hope, especially to the most vulnerable members of society. A large part of the reason why the black community, Native Americans, etc. are in arrested development is they still have not matured to the point where they stop listening to those false purveyors of hope and choose self-responsibility instead.

                                                                              @Incognito7 That’s got to be the most novel hypothesis I’ve ever heard of for why we have a minimum wage. Yet, why do you all refuse to see that raising the general price level will continue to punish the poor/low skilled that the minimum wage was touted to address? How does it do them any good if they’re paid $15 an hour and then the cost of living adjusts to negate the real gains? The cost of living will adjust because other people that are highly educated and productive that earn much more money will not tolerate their existing dollars being devalued by relative unproductivity. The real problem here is not that the poor/low skilled are paid too little, but that the cultural zeitgeist that drives our current version of socio-economics does not afford them any respect or power. Is passing higher minimum wage laws going to change that reality in any fundamental way? On the bright side, maybe a higher minimum wage will induce employers to stop complaining about the trash that funding of public schools outputs and start investing in training employees themselves or doing partnerships with public schools. Maybe it will also induce those poor/low skilled to burnish up their skills to a higher level to actually get employed. And if a minimum wage keeps increasing with inflation adjustments whereas public welfare benefits do not, there may be a sweet spot where getting a job — even if it is a useless make-work — is the new welfare.

                                                                              As for breeding, my comments were factual and not meant to be derogatory. Part of the deal in being poor & low skilled is not understanding the simple basics, especially math and the ginormous expenses of having children. It takes time for the negative feedback to trickle down. The birth rate has been steadily declining since 2000.

                                                                              As for robots, I really do think we ought to just tax them and use that revenue stream for the Citizen’s Dividend. Otherwise, we’re looking at insurrection.

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                                                                              Posted by MachineGhost
                                                                              Answered on 07/13/2017 2:55 AM
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                                                                                And BTW, I see the difference between the minimum wage and a Citizen’s Dividend being that the latter is not favoring and pitting a minority subgroup against the majority as is typical of failed socialist/Communist political “solutions”. Literally everyone needs to have equal skin in the game to avoid resentment and subsequent inflation. That makes all the difference.

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                                                                                Posted by MachineGhost
                                                                                Answered on 07/13/2017 3:13 AM
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                                                                                  It seems that my intuition against higher minimum wages working may actually be the same argument against the Philip’s Curve which was made separately by Edmund Phelps and Milton Friedman. They argue that well-informed rational employers and workers pay attention only to real wages. Real wages will adjust to make the supply of labor equal to the demand for labor and the unemployment rate would stay at a level uniquely associated with the real wage rate, e.g. the “natural rate of unemployment”. So when the “natural rate of unemployment” prevails, the real wage is constant. Workers who expect a given rate of inflation will insist that [nominal] wages increase at the same rate to prevent the erosion of their purchasing power.

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                                                                                  Posted by MachineGhost
                                                                                  Answered on 07/13/2017 8:01 PM
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                                                                                    ” Part of the deal in being poor & low skilled is not understanding the simple basics, especially math and the ginormous expenses of having children. It takes time for the negative feedback to trickle down. The birth rate has been steadily declining since 2000.”

                                                                                    People are not generally irrational. The trend seen over and over again throughout the world is that as socioeconomic status improves, the birth rate decreases. A big reason is Because child mortality rates in the developing world are so high, parents will intentionally have large families because the grim reality is that sometimes children don’t survive. In Burkina Faso, a shocking 8.9 per cent of children will die before reaching their fifth birthday; in Haiti, it’s 6.9 per cent. For comparison, in Australia, the same figure is 0.4 per cent. Many of these same people need to depend on their grown children to care for them when they get old. If children have a good chance of dying before adulthood, parents need to have more children during child-bearing years to account fr the risk. In countries that are improving their mortality rates, it may take a coupe of generations before people see that they do not need so many children.

                                                                                    A major experiment of minimal wage increases took place in Seattle proper (not to be confused with the Greater Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA)) shows that it is working fine. https://www.washingtonpost.com/news/posteverything/wp/2017/06/27/seattles-higher-minimum-wage-is-actually-working-just-fine/?utm_term=.64ec31ad29e6

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                                                                                    Posted by Lucas
                                                                                    Answered on 07/15/2017 7:47 PM
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                                                                                      @Lucas That’s a fair point, but we’re talking about US citizens here not people in Africa. I hardly think that the poor/low-skilled here are even remotely comparable to the crushing poverty and government incompetence/corruption that prevails in Africa. My point was that economics determines birth rates and the shitty economy and two bubbles and bursts since 2000 has driven that point home, even down to the lowest classes. By your analogy, it should have gone up! It’s not like their lifestyle has improved significantly since 2000 other than mobile phones and the Internet. Next thing you know they will be losing their subprime cars just as they did their subprime houses.

                                                                                      Also, I’m now rather troubled by the “well-informed” and “rational” qualifications from Phelps and Friedman. That’s not what I would equate with the poor and low-skilled as employees. Hmmm!

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                                                                                      Posted by MachineGhost
                                                                                      Answered on 07/16/2017 3:21 AM
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                                                                                        Economics do influence (determine is probably not the right word) birthrate. Data shows the more prosperous, the lower the birthrate which is probably contrary to what you intuitively feel should be the case. It may have something to do with Maslow’s Hierarchy of Needs. The poor see children as necessary to future security. Several children can share the cost of supporting elderly parents, so there is no crushing burden on any one child. This is true in the US as well as Africa.

                                                                                        You are over-reaching. The fact is, in spite of all the complaining, our economic “crisis” was relatively mild, and very far from severe enough to affect the birth rate. Even if it were severe enough, the lag time means we wouldn’t see a birth rate increase yet anyway.

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                                                                                        Posted by Lucas
                                                                                        Answered on 07/16/2017 12:39 PM
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