Deep Thoughts, With DD: Wealth Redistribution - No Honor Amongst Thieves

[rue]

There's a widespread myth about economics that seems to make sense when we're talking about kindergarten snack distribution instead of global markets.  It's a myth that was intellectualized by Marx and glorified by early and modern progressives.  It's the notion (myth) that wealth and standard of living are limited resources which can be doled out; that both can be represented on a pie chart where rich people have larger slices than poor people.  The disproportionate sizes of the pie slices is true in an abstract sense, but what really makes such a notion blurry is the mature realization that no such pie chart can be made because there is no "sum total of wealth".  However, if you are a subscriber to the myth then like any good-natured human being brought up in a culture that emphasizes equality for all, you will come to the conclusion that the path to equality is paved with dollar signs; specifically that the rich must become poorer so that the poor may become richer. 

But I'm getting ahead of myself.  First let me smash this idea that right now there exists a number that is the sum of all the money everyone in the nation or even the world owns.  No doubt this would be a phenomenal and uncountable number through human means to start, but what I mean to convey is that this number isn't even countable period.  We often think of money too concretely.  At a young age we know that money produces goods.  If we want something, we know that Mom and/or Dad has to procure money that then allows us to obtain said good.  In our minds, we actually begin to think of the transaction as a kind of material for material trade.  "Here, take this valuable paper so that I may legally leave the store with your, now my, matchbox car."  What we ignore of course, even though we are well aware of it if asked, is that money is a representation of something abstract; not a valuable article.  But what is this abstract thing money represents?  In the end, it boils down to needs and wants.  Money represents our needs and wants.  When we work at our job, we are providing something someone else needs or wants.  In exchange, our employer provides us with the goods (money) we need to fulfill our needs and wants.  The very price of goods and the value of money fluctuates in an extremely unpredictable sense as 5 billion people on planet Earth change what we need and what we want.  What further dilutes our kindergarten thoughts of snack distribution as applied to global markets is the dimension of time (what???).  Yes, time.   Interest is a good example.  Here money is given to someone else in advance with the assurance that said money, and some more, will be paid back over time.   How can we represent this "slice" in our pie chart of the lump sum of wealth?  The economy is many things, but linear is not one of them.  You cannot say that by giving money to the poor they will become richer.  You have only corrected half the problem (and by doing so, you've made it worse as we shall see). 

Let's return to ways people try to balance the scale by making the rich poorer and the poor richer.  By far the most useful accessory is the government.  At some point along the road of our great nation, it occurred to  someone or someones that the government ought to do more for its people than was outlined in the Constitution.  Most of the revisions were made, understandably, in a time when our country was in most need of economic assistance:  the 1930s.  Government program after government program was rolled out, sometimes in duplicates, for an entire decade with the primary goal being the government saving the poor by putting them to artificial work. ........


....and more later.  Work time.  Feel free to comment on what I have so far, but understand it's a work in progress.  Tomorrow:  How the minimum wage taxes the poor.

[Mnementh]

Your own point, that there is no "sum" of wealth that can be truly measured or counted is a perfect argument as to why the rich should be compelled to give to the poor.  If there is no limit, if the economy is always expanding and there is always more money to be made or wealth to be accumulated, then the rich can just keep on getting richer while they are helping the poor.

I would also like you to prove that at any one time there is not "a number that is the sum of all the money everyone in the nation or even the world owns."  The very nature of money, which is based in numbers, gives it the ability for it to be measured.  Wealth is a very traceable concept, it is concrete, it is represented by the amount of property, money, assets, etc., etc. that a person is currently in control of.  I do believe that it is possible to put the idea of money into a more philosophical construct where it can lose a lot of its tangibility, but it is very concrete, it is extremely palpable, and frankly I think that any attempt to try and deny the very real nature of money is a bit disingenuous and overly lofty.  Money simply represents an exchange of values, it puts a numerical sense to something that is intangible, in an effort to make it easier to manipulate and exchange.

Now, I am obviously NO economist.  So I'm just relaying my perceptions and thoughts.

[DragonMage]

This is pretty interesting, but I'm not sure you've given ample evidence that there is no total sum of wealth. For example, if we were to look at some frozen instant in time (let's bust out a little calculus and call it dt), you could certainly come up with an instantaneous sum of wealth even if you include the abstract notion of needs and wants. Each individual would have a set of needs and wants which would translate directly into some kind of monetary value, thereby contributing to a total sum.

Now, I agree that these needs and wants fluctuate, but I don't think this detracts from the fact that at any given point in time, there is a concrete value of wealth in society.

I see what you're getting at, but I don't know if you've presented it clearly enough.

However I still think it's a bad idea to give copious handouts to people regardless of their fiscal status, but that seems (at this point) like a completely different discussion so I don't really want to sidetrack anything.

[Zeradul]

I also will refrain from comment about where I believe DD is going with this, as he isn't finished, but I do have a comment on one of the very first things he said.

I believe the high tide lifts all boats.  I believe that any individual's own financial success can directly benefit all of that person's neighbors, their community, and even state, nation, and the world.  I think that taxes, while necessary, hurt the financially successful, by limiting what they can do with their business, their investments, etc.  I am also a believer that the government is the most inefficient method of organizing a human work force in all of history.  See, the government has a monopoly, and therefore they are very anti-competitive, because, unlike their private sector competitors, they cannot go out of business, at least in not in the typical method that businesses fail in the real world.

So not only is the government the worst option for procuring goods and services, but they also are often chosen to subsidize projects and social systems that the American people wouldn't be willing to pay for otherwise.  So if we aren't willing to pay (for example) an additional "anti-terrorism" fee to airports with beefed up "TSA" agents, then why on earth should the government be the one footing the bill.  (Read: Government's foot the bill in one way, they take money by FORCE from it's citizens, aka theft)

So I am a big believer that if everyone was taxed half as much, and we got rid of half of the crappy government programs we have now, not only would we have far more money to "increase our quality of life" but we'd also have superior services being provided, that before were crappy government run services. 

I went into the DMV last month and waited 45 minutes for a fucking registration renewal sticker, a transaction that not only cost me $88, but took literally 30 seconds to deal with.  I then went to a Taco Bell and was served instantly with no line, and no wait.  That's the difference between government and private sector.

Back to my TSA example.  Maybe on airline things that stealing people's shampoo to stop hi-jacking is a STUPID idea.  THAT airline may chose a different method, like for example building a partition between the pilot's cabin, and the passenger cabin.  A partition which cannot be penetrated, and then give the pilots their own door.  This is what middle eastern airlines do, and planes fitted in this way have had ZERO GOD DAMN HI-JACKINGS.  The method is UN DEFEATED.  But no, here in the incompetently run U.S. we have the TSA, who when I last flew TOOK MY GOD DAMN SCREWDRIVER from my laptop bag.

So instead of blowing however many billions of dollars on the TSA who steal screwdrivers, maybe airlines could come up with their own, far more effective anti-highjacking techniques.

--------

I guess what I'm saying is this.  Ever dollar sent to the government comes back with maybe 10 cents of actual "value".  The rest is wasted by the inefficiency of the system.  You can say rich people are equally wasteful, BUT at least they are wasting their money in ways that employ other people and industries.  That money at least goes directly back into the economy through competitive means.  And I don't know about you, but I would WAY rather have Bill Gates still retain some of the 100 Billion or so that he has personally paid in taxes in the past 20 years.  I mean, look at what the Gates foundation has been able to do so far with 20-40 Billion, I can only imagine what they could do with 2-3 times that amount of money.

[Ruckus]

stop writing DD's college papers for him !!!!


so shameful !!!

[rue]

I wrote out something to hammer down my point about it being impossible to sum up all the wealth on Earth this afternoon, but sadly my login timed out and the post was zapped (thanks DUSTY).  I'll do my best to recreate it without skipping over things I covered the first time and believe I covered the second time.  What's funny is my post will ooze of what Zera posted.  That's not surprising.  Zera and I agree a lot on the economy, although he takes it further than I would.

I'm going to use a small village example.  Like most small village examples, the numbers used will be ridiculous but simple to manipulate; ensuring that the point isn't lost in complex arithmetic.

-Rich the rich guy is a business executive.  He brings home $50 a year.

-Matt the middle income guy is a high school teacher.  He brings home $25 a year.

-Larry the low income guy is a construction worker who's been part of his union for 3 years.  He brings home $15 a year.

-Carl the car salesman owns a car dealership.  His dealership sells cars that fit the needs, wants and budgets of all 3 members of our case study.  Specifically he has high income vehicles (say a sports car or luxury vehicle) that's in Rich's budget.  He also has middle income vehicles (say a minivan or sedan) that fits into Matt's budget.  Finally, he has low income vehicles (say a used car) catered to Larry's budget.  (1)

The political power within our small village has shifted over to a party promising to hike taxes on the rich to bridge the disparity between rich and poor.  The citizens of the village want this change.  After an election cycle, legislation is passed increasing the taxes Rich has to pay.  He now has an income of $40.  Through government assisted programs recently produced, Larry now has Rich's extra $10 (2) and his income is now $25.

This situation continues with little change over a handful of years.  Then it just so happens to come to be that Rich, Matt and Larry all want to buy new cars at nearly the same time.  They each go to see Carl. 

Rich once could afford a pricey high income car.  However, now his income is falling a bit short of that goal.  Carl, not a foolish car salesman, has studied market trends and anticipated Rich's changed situation.  In response, he has lowered the price of the high income cars hoping to entice Carl into still making the pricier purchase.  Wisely, Carl has also made a plan B.  He has raised the price of the middle income vehicle hoping that if Rich passes on the high income vehicle, that he'll spend his cash on the middle income.  Carl does not believe that Rich is a fool, he knows that Rich will most likely note the increase in price of the middle income vehicle, however; he is assuming that the increased price of the vehicle will not be a deal buster for Rich who has plenty of cash to spare.  In any case, this is certain: Rich needs a car.  Whether Carl gets him to bite on the high income vehicle or the middle one, he wants to ensure that he gets the most off of Rich's need. 

This is a problem for Matt even though he had none of his money taxed away as Rich did.  Matt had wanted to purchase that middle income vehicle.  However, he now has to contend with the increased price.  He is actually in the same predicament Rich was placed in only one car class lower.  In that same fashion, Carl has adjusted the price of the lower income vehicle accordingly--i.e. he's increased the price knowing Matt has a need and has more than enough money to pay for a lower income vehicle plus a little extra.  Again in any case, Carl gets the most off of an undeniable fact:  Matt needs a car. 

It would seem that Larry is the big winner in our case study.  He has nowhere to go but up.  When once he could only afford the lower income car, he now has the same choice Matt does:  he can either pinch his budget and go for that middle income car or he can remain with the lower income choice he had before, just with extra cash this go around.  However, please note that Larry does not escape the detriments of wealth redistribution just because he is the object of the redistribution.  He is still paying more for either his middle income or lower income car. 

This model serves as a basis for my argument about wealth being impossible to sum.  What we see here is that Rich's $10 he had shaved off through taxation was worth something different to him than it is to Larry.  Rich's $10 originally was $10 worth of a high income vehicle.  When it was transferred to Larry, it became $10 worth of a middle income or low income car at an increased price.   The value of that $10 is not equivalent.  The best way I can summarize (pardon the pun) is to say that Rich's "last" $10 (of his $50) is not the same as Larry's "last" $10 (of his increased income of $25).  A similar analogy is trying to stop a speeding freight train:  the first 10 MPH is harder to stop than the last 10 MPH.  Since DM went straight for my heart by mentioning my beloved Calculus, I'll also speak Mathanese and explain it by saying that wealth does not follow the rules of linear arithmetic but rather the rules of higher order derivatives. 

It's important to note here that while the means were inefficient, the end goal was reached: Larry is now less poor and Rich is now less rich.  This is why I find it difficult to garner up enough vitriol towards liberals or Democrats over their means.  Their intent is nice.  However, nice is not noble, and artificially creating balance is by its nature disastrous.  Over time, there will be less need to create the better cars that would fit into Rich's price range.  We lose track of that horizon we as human beings want to sprint towards with the eagerness of discovering what's on the other side (Christ, it must be approaching midnight for me to write something like that.)

But surely we cannot leave Larry in the cellar of always getting the scraps of life.  There must be a solution.  Zera stole my thunder here.  The solution is that productivity needs to be streamlined and bank accounts, everyone's, need to be left to flourish ad infinitum.  If Rich's money isn't touched, then he buys that high income vehicle for full price.  Carl makes a big sale and now has the funds to order more cars, of all types, from his manufacturer.  More cars brings supply up and drops the price of all 3 cars.  If production is left to flourish in this manner, Matt and Larry may even see their choices expand to the higher levels of cars, but what will most certainly happen is that the technology found within their standard class of cars will be more modern, and therefore increase their standard of living.  It's true, Larry cannot remain at his current job and ever hope to leap out of his economic class.  But, what can happen is the entire spectrum can be shifted upwards so his lower class 10 years from now may resemble the middle class of 10 years before (Zera touched on this in different words).  This is progress in its only form.  Artificially shuffling classes is both divisive and ineffective.  We must not let our contempt of people who have more wealth than we do cloud our judgment.  That's being prejudice.


(1) Carl's car dealership is representative of more than just cars in the bigger picture of our small village example.

(2) As my main topic will cover, and Zera's post reflects, Larry actually seeing all of that $10 is a pipe dream.  Someone has to process this money.  Those people work a job and expect to be paid.  Where they work needs paper, office supplies, air conditioning etc etc.  They are essentially a business.  They are in the business of wealth redistribution.  The taxpayers of the nation fund a business that directs where money goes.  I wish I was exaggerating or being sensational here, but this actually is allowed to happen.



(all done!  yay!)

[Zeradul]

Well said.

The taxpayers of the nation fund a business that directs where money goes.

Yep, an INEFFICIENT business.  This is just ONE way of employing thousands of people who are doing real work, but work that is UNNECESSARY under a different method of taxation.

So what will tens of thousands of H&R Block employees do if they are all of a sudden out of a job?  The answer is they will get other jobs.  Anytime you create a make work job that is unnecessary, yes that person takes home a paycheck and contributes it to the economy, but that paycheck came at the expense of industries actually accomplishing things that are needed.

And yes, the government did not directly create H&R Block jobs, BUT this is an example of where a private solution has sprung up to solve a Government created problem, the problem being the absurdly complex tax code.

[Stinger]

Good post man. There's one thing your scenario doesn't include, so I'ma throw it in here (Hope you don't mind).

Using your model;
Rich is the rich guy businessman
Matt is the middle income guy
Larry is the low income guy
Carl is the car salesman

And meet a new guy! We'll call him Vinnie, in honor of my favorite renegade republican businessman (A cookie if you guess who). Vinnie is another rich man. We'll actually call him "wealthy", because the two terms mean two vastly different things.

Vinnie OWNS the car dealership that Carl works at. What people don't consciously put together about the rich is that most of them (There are exceptions) got rich by being savvy businessmen (Or at least by employing them). If you tax Vinnie, and somehow think that Vinnie is the one who's going to be paying this tax, than you're probably in the poor or middle class group.

Carl doesn't make decisions about price hikes. Not his job, his job is to sell cars (I can tell you a bunch of fun car salesmen stories, but we'll save that for another day). Vinnie raised the prices, and while that may be in part because he understand there has just been a "wealth redistribution" (Which actually misuses the word "wealth", but again, later), it's mainly because Vinnie got hit with the same tax hike that Rich did.

When you make someone who's learned how to take money away from other people legally give away some of his money for no good reason (That part has been covered by the others, and well), they don't really get mad anymore. They're kind of used to it by now. Most of them move to Connecticut where the tax codes are less rich-guy unfriendly, and then they get to work raising their prices to make up for the lost income.

Rich and wealthy men stay rich and wealthy because they control commodities and services. If you control those things, then you can make more money per unit just by asking for it. Vinnie's not hit by the tax increase because he's taking all those $10 back directly from the people it was given to. He's the one benefiting from the car price hike, which was a direct result of the tax hike on multiple levels. No matter how much money you try to steal from the rich to give to the poor, they'll just steal it back.

Fun fact based in statistics and human psychology (My loving bread and butter). If you've got a product that you can sell for $10, you can sell that same product to close enough to the same number of people at $19.99. If you can sell it at $20, then you can up it to $29.99 and not see a statistical important drop in your sales. What if your product sells for $30? I can write you a salesletter that'll sell the exact same product with nothing else added for $49.99. I'll charge you $45 an hour for doing it, but still, this is the kinda thing you can guarantee to clients if you know the "how" of it, and I assure you, Vinnie knows the "how" of it or he wouldn't be wealthy. If Rich is only rich, and not wealthy, then he could become wealthy if he just learned how to use his money the way Vinnie does.

You can try to gank money from the wealthy all you want, but you're only hurting the people they get their money from. A rich man doesn't pay tax hikes, he gets his money back with either price increases, or by just laying people off. You want to really fuck over Larry? Force his boss give him more money. Larry's boss will then just fire his ass and redistribute his job across the spectrum of the people he pays more like Matt as a cost saving measure.

There should be a flat tax. Name a percent, any percent, and stick with it across the board. Anything else, aside from being short-sided, is anti-capitalist. And anti-capitalism is un-American... And racist, but that's a point for later.

[stas]

There is a little problem with the conclusions from the car story i think.
I will jump straight to Vinnie, but the idea can be applied to Carl as well.

If Vinny is in a position where he knows his customers need cars and he has an option to vary the prices in any way he wants, Vinnie will undoubtly set individual car prices such as to derive as much income as possible out of his customers. He will charge everyone the most that they are willing to pay whether there is wealth redistribution or not. In this case Vinnie represents a monopoly that has an ability to perfectly discriminate (although different classes of cars are not exactly the same product). As Stinger pointed out correctly, Vinnie does not care if Larry gets Rich?s $10. Vinnie will get that money anyway with the only difference of getting it from Larry instead of Rich. As opposed to selling three different cars under no wealth redistribution (each guy will get a car of his own class), Vinnie will sell one high class and two lower class cars. However his overall income as a result of wealth redistribution will stay the same (at the unlikely extreme where all of income is spent on cars). Or it might even increase depending on how the prices are set and what people are willing to pay for different classes of cars.

What it all means?

1.   Vinnie?s income will stay the same or even increase. He will be able to manufacture (or order) more cars for future sales thereby increasing economic activity and potentially lowering his own costs.
2.   Rich will be a bit upset having potentially be driving a mid-class car (but he will probably go for lower priced high class car). Overall however, people in the village will not lose out on the value they get from the cars that they have since combined they spend the same amount of money on them.
3.   $10 taken away from Rich is the same exact $10 given to Larry from the point of view of Vinnie and all village people combined. Therefore it does not pose an additive problem in trying to sum all the wealth of the village.

[Zeradul]

Stinger, wow, I have to say I'm impressed with your post.  Except this sentence: 

No matter how much money you try to steal from the rich to give to the poor, they'll just steal it back.

I think I know what you meant with this, but I don't like the use of the word steal.  Steal IS appropriate the first time in that sentence, as the government takes all taxes from everyone at gunpoint, hence, "steal".  But, once it was taken from Vinnie, he has NO CHOICE but to increase his prices.  He still has operating expenses to pay, and so will all his competitors, and thus, to stay in business, he MUST raise his prices.  It's not stealing, it's staying in business.  And like stinger said, if that makes him less competitive than car dealerships in a neighboring state or nation, then that is going to hurt his business significantly.

That said, I'm not sure what tax system is best.  It's such a complex thing.

[Stinger]

Heh, thanks Zera. Yeah, I spend far too much time in business theory now... Kinda saturated with it, it keeps my ass fed.

I use the word "steal" because that's the way the opposition to the theory'll phrase it. Use the same words as your opposition and they have a harder time smashing you... Kinda ingrained. But yeah, you're right, it's fair practice. Didn't mean to imply that raising prices is theft by any stretch, I'm usually one of the guys talking others into doing it.

Economics is complicated. I see on an almost daily basis situations where giving people a price break would in fact be doing them a disservice. In many situations, a service isn't even a good one from the customers point of view until after you've raised the price by, oh, 400%. Money is a complicated thing, and the government wants people to stay ignorant in it. It's ridiculous that PE is taught in public schools, but finances aren't. Shows you how the government wants to keep it's people.

[rue]

Today's installment:  The Trouble with the Minimum Wage

We often think of Economics from the buyer's perspective.  We think about the price of things we buy.  Gas prices rise and fall eating more or less of our paychecks.  What we don't often consider is the seller's perspective.  Just like our buyer market, sellers pay close attention to supplies and demands.  One essential resource for sellers is labor.  While it's crude to think of human beings as commodities, it is true that labor has a certain amount of supply and demand.  The equilibrium of the supply of one laborer and how much he is in demand determines his wage---usually.  There are special cases were government legislation demands a certain wage.  No where is this more evident than with minimum wage. 

Let's switch back to the buyer's market for some perspective.  Imagine the government demands that bread not be sold more than a certain price, a price lower than supply and demand mandates.  Bread no longer becomes a profitable venture unless the cost to produce it is reduced or the supply is increased.  One might say: more bread cheaper! What's wrong with that?  The problem is again: we are viewing the situation with buyers' best interests at heart and not the sellers'.  As I mentioned, the company is going to have to cut costs.  That means employees have fewer raises, workers are laid off and the remaining workers are given more work for less pay.  Further, the businesses dealing in bread lose their ability to expand and create more jobs. (1) A once middle class business becomes a stagnant slum operation.  Stagnant, slummy companies pay poor wages and are far less innovative. 

Back to the sellers' market and the minimum wage.  We saw with bread how an artificial price can change a set wage.  What we'll see now is how an artificial (minimum) wage changes price.  When the government changes the required wage from the equilibrium of the supply and demand for labor to an artificial wage, the expense of creating a product is increased.  In turn, the price of the good goes up (see 1).  That extra price is absorbed by everyone, again, the people receiving minimum wage are also affected.

Here again we see our same moral dilemma.  Our goal has been achieved: the lower class is receiving a boost via legislation.  However, again, not meddling with the natural flow of the economy is actually the best way to progress and not doing so weighs an anchor on all of us.  If there is no minimum wage, businesses find it easier to expand and employ more.  When unemployment drops, more money is spent.  This is a positive cyclical effect with extreme momentum.  Buyers find more sellers.  Sellers find more buyers.  As technology advances and production increases, the cost of necessary products becomes trivial---even to those of us with less money than most. 

(1) Why don't the bread companies just stomach reduced profits? The survivability of companies demands they follow the golden rule of industrialism:  the most products possible at the highest quality possible paying the lowest wage possible.  Without the rhetoric that means that to have made it this far, the companies are already running at near maximum allowable expenses.

[m J o]

What we don't often consider is the seller's perspective.

not sure I agree, just today a natural gas retailer came by this morning and offered to give me a 'fixed' rate for the next 3 years due to inflation...sounds good right? at face value yes, but something didnt sit right with his offer...I know for a fact that they are the only retailer in our town so why would they give anyone a deal when they already have the monopoly in town?? doesnt make sense - unless they know that the gas prices are going down and then lock you in a deal so they do not lose any profits...just further proof to me that most people with something to sell will prey on our fears to make a buck.

min wage will always be much lower than we expect it to be to keep the rest of us down and to keep struggling to keep up with the cost of living...(min wage cannot keep up with the cost of living atm here btw)

[Zeradul]

One other important point to note is that a minimum wage also eliminates many jobs that cannot exist at a higher rate.  There are plenty of jobs worth less than minimum wage that people are willing to do.  Many of whom are high school kids, or even jr high kids, and working some very low level job at 3, 4 or 5 dollars an hour IS worth it to those kids, and most importantly, the kids that would be willing to do those jobs certainly aren't going to find other more worthwhile things to do if that job doesn't exist for them.

Also, especially now with this big-government induced inflation we've had lately, only a tiny fraction of the work force is actually being paid minimum wage, in 2004 it was only 520,000 people, which represents less than 0.2% of the population.  And that number has decreased with the devaluing of our currency.  Of that 0.2%, one fourth were 16-19, and another fourth were 20-25.  There are another 1.5 million people making "less" than minimum wage, but those are people who get a large portion of their income made up in tips, like waitresses and pizza delivery guys.  Source: http://www.bls.gov/cps/minwage2004.htm

While I was looking for the above stats, I found this graph which depicts exactly what DD was explaining: http://en.wikipedia.org/wiki/Minimum_wage#Effect_of_minimum_wage_on_supply_and_demand

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Minimum wage is just one more example of how federal government law making fails to be effective.  When you slap a nationwide "one size fits all" wage requirement, you get areas that are completely unaffected due to affluence, and then you get places that are harmed immensely by the people it puts out of work.  An extremely rural and poor area sees a $4 an hour wage as a living wage, whereas, in a wealthy city, that's only a few blocks in a cab.

[Stinger]

What we don't often consider is the seller's perspective.

not sure I agree, just today a natural gas retailer came by this morning and offered to give me a 'fixed' rate for the next 3 years due to inflation...sounds good right? at face value yes, but something didnt sit right with his offer...I know for a fact that they are the only retailer in our town so why would they give anyone a deal when they already have the monopoly in town?? doesnt make sense - unless they know that the gas prices are going down and then lock you in a deal so they do not lose any profits...just further proof to me that most people with something to sell will prey on our fears to make a buck.

min wage will always be much lower than we expect it to be to keep the rest of us down and to keep struggling to keep up with the cost of living...(min wage cannot keep up with the cost of living atm here btw)

Because there are alternatives to natural gas available, and all of the people who sell those alternatives will have ads running over the next 3 years explaining how easy and affordable it truly is to "Make the switch".

You're right, no salesman is ever going to offer you a "Great deal" that isn't at the very least a good deal for them. But natural gas is waaaaaay from a good monopoly. It's like being the only person in a 50 mile radius who sells work boots. Yes, if you really need strong durable boots, you need to go to that guy. But if you're just looking for a way to keep your feet warm, you can go somewhere else and find someone who can convince you that a pair of sneakers will do everything you need, plus some, and look at our deal for first time customers!

Yes, that is WAY over simplifying. But the concept is the same.

As for minimum wage, the point of the matter is that the whole idea of having one hurts the people at the bottom more than it hurts the people at the top. The price of it is distributed throughout the cost of the product, making everyone pay more, which will suck more for the people at the bottom. And that's the BEST case scenario for the people in the bottom in this example... So you don't want the minimum wage higher. You want it abolished. As uncomfortable as it may be, if you're working in an industry where your boss would have no qualms (or even, quite frankly, if he could just get away) with paying you less than the current minimum wage, then you need to find yourself another job, because the product your employer is selling can't support you, and eventually your job is under serious risk of being downsized.

Minimum wage causes lots of businesses to die because they literally can't afford the labor needed to create a new business from scratch legally. This is why illegal labor is such a "big issue." It kinda solves the problem, from the business owners perspective. Not saying "right", not saying "wrong", not saying anything about it morally. This is just how it works.

[kai]

(1) Why don't the bread companies just stomach reduced profits? The survivability of companies demands they follow the golden rule of industrialism:  the most products possible at the highest quality possible paying the lowest wage possible.  Without the rhetoric that means that to have made it this far, the companies are already running at near maximum allowable expenses.

Fellow Civ 4 player making a slight correction brother:

?There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wage possible.?
- Henry Ford

[Stinger]

Right, but Ford would right now be arguing against minimum wage as well. The most some business owners can afford to pay for a job is not something simple to determine. What a job is worth should be directly proportionate to what the product you're making is worth to your employer, how much your efforts contribute to the end-product, AND how many other people want your job.

Ford paid people high wages for the time to buy their loyalty so that they'd work hard, bitch rarely, and almost never steal. And at the time, it was hard to find good laborers to build cars. Almost no one had experience, you had to train almost everyone, and once they were trained they'd stay with you for as long as they possibly could because job security was a bitch and a half. At the time, it was worth it to pay more.

Now there are far more people who know how to work the machines than there are machines to work. Plus you don't even have to try to earn their trust anymore; My girlfriend works for Fed-ex, and they've replaced "trusting employees" with routine pat-downs at the security checkpoints at every exit.

[rue]

There's no need for a rebuttal.  Ford and I said the same thing.  We're both talking about a medium. 

It's like if I said you must pass a radar gun at exactly 50 mph.  You would both have to be going the maximum speed possible and the minimum speed possible to meet the standard.