07-01-2003 23:02									#151
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well duh, that's the whole point: Ned, DD and Dan... but again I don't hold your greedy lack of morals against you...

and that's why I'm posting here, so people can educate me, and I can offer my opinions... but then again, if I were doing something grossly immoral and generally fleecing the people, I wouldn't want to educate them either

	07-01-2003 23:31									#152
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quote: Originally posted by DanS "I'm suprised even Dan takes him seriously." Socrates was a great man.

That "whooshing" sound you just heard was the joke passing over my head. Can I get an explanation? (you can PM me if you like).

	07-01-2003 23:53									#153
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Only that one sentence questions and other posts are very useful. Let the other person demonstrate whether they know what they're talking about or not. Most often the other person will contradict himself mercilessly.

Dino is an expert at this.

	07-01-2003 23:55									#154
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quote: Originally posted by Adam Smith That is exactly the point. Increasing the minimum wage crowds workers out of the labor market.

That's the theory anyway. In reality, job growth always follows a min. wage increase, because despite employees being "crowded out of the market" min wage employees have more money to spend, demand goes up, and more employees are needed to deal with the uptick in demand.

Right now, however, an increase in the min. wage would send a lot of franchises out of business. I think a payroll tax cut is the best way to stimulate demand right now without killing supply. Bush's tax cut doesn't help.

	08-01-2003 00:13									#155
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quote: Originally posted by Adam Smith That is exactly the point. Increasing the minimum wage crowds workers out of the labor market. Increasing the earned income tax credit is in effect a subsidy for working, which draws workers into the labor market.

We agree.

quote: Depreciation is an expense, which reduces profits. Accelerated depreciation decreases profits and hence taxes now, and increases them in the future. The total amount of tax paid remains the same, but until the future taxes are due, the company has the money in hand to do with as it pleases. For example, it could invest the money, instead of paying it to the government. This amounts to a subsidy for capital investment.

We also agree, but:

Depreciation should be tied to the actual life of the capital asset. This is to reflect an accurate picture of how the company is performing overall, and spread the "cost" of equipment maintenance/failure over a number of years to even out the effect of the bottom line.

Shortening the depreciation cycle makes that cost much more payable up front, since profits will be lower sooner, and is likely to raise prices now, as already struggling companies attempt to maintain margins.

Which may be good, since businesses are not borrowing even though interest rates are so low. Rising prices on equipment may intice them to purchase now rather than later, stimulating growth, etc. If this is part of Bush's plan, I have to give him credit here.

However, since depreciation costs may be payed in future years, there is an incentive to move the cost further down the line in an attempt to falsely bolster current revenues. This is greatly magnified by the fact that the percentage to be depreciated is even larger.

Therefore, unhealthy companies can extend their life and still attract investment by showing a larger profit than what would otherwise be expected, while the real bill remains to be paid. Those was being done by many companies in the last several years who are now in bankruptcy. Given the accounting problems we have now, breaking the math further from reality just adds fuel to the fire, IMO.

Also, there is less of an incentive to purchase new equipment, since the cost of depreciation in terms of lower profitability will be realized either more "up front" or in higher percentages, there is more short term profitability to be seen by not purchasing equipment at all, since such purchasing will result in greater variance in the bottom line. Extending the life of this equipment will result in lowered productivity.

	08-01-2003 00:38									#156
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Chegitz:

quote: In reality, job growth always follows a min. wage increase, because despite employees being "crowded out of the market" min wage employees have more money to spend, demand goes up, and more employees are needed to deal with the uptick in demand.

I think we have been through this before. The money has to come from somebody else's pocket, so the demand effect is a wash. We are left with the reduced demand for higher cost labor, which is what the statistical studies show.

quote: Right now, however, an increase in the min. wage would send a lot of franchises out of business.

So never mind for now what the statistical studies show. This is the reality check you are getting from your father's BK business in Indianapolis, correct?

quote: I think a payroll tax cut is the best way to stimulate demand right now without killing supply. Bush's tax cut doesn't help.

I wont object to changing payroll or lower income tax rates.

Static:

quote: Depreciation should be tied to the actual life of the capital asset.

I think thats what I said back on p. 3. Is your background in economics?

edit: typos

	08-01-2003 00:42									#157
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Adam Smith:

Since the Minimal Wage has been raised several times, were would one find the data to prove that is has caused greater harm to the economy than good? Let's take the last raise, up to $5.45: can you recpommend any reports that cite a significant loss of jobs and a long-term detriment to both bussiness and workers? I am simply trying to see if your argument is model based an theoretical, or based on both models and evidence from times in which the minimum wage was raised.

	08-01-2003 00:55									#158
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Min wage is still $5.15.

	08-01-2003 01:00									#159
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quote: Originally posted by Adam Smith Chegitz:I think we have been through this before. The money has to come from somebody else's pocket, so the demand effect is a wash. We are left with the reduced demand for higher cost labor, which is what the statistical studies show.

Logically, I'd agree with you, but what always seems to happen is that as soon as the min wage is raised, demand goes up, and more jobs are created. Obviously that model is missing something.

quote: So never mind for now what the statistical studies show. This is the reality check you are getting from your father's BK business in Indianapolis, correct?

He's running in the red right now, and so are many franchises as I understand it. They are holding on as long as they can for the recovery that's "right around the corner," if indeed it is (one hopes).

	08-01-2003 01:30									#160
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quote: Originally posted by Adam Smith Static: I think thats what I said back on p. 3. Is your background in economics?

I've been waiting ten years for someone to ask me that!

Yes, my background is in economics. I have degrees in Politcal Science and Economics from the University of Missouri-Columbia. After a stint in the military, I wrote inventory control software and interfaces for IC and accounting systems for several years. Now, sadly, I am unemployed.

	08-01-2003 07:23									#161
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Oh thats too bad. I want to study development economics in university, and then maybe start my own consulting firm (or maybe work for IMF, or ERCB, or UN)

	08-01-2003 08:19									#162
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quote: In reality, job growth always follows a min. wage increase

The reasoning for this is that minimum wage increases are usually passed in economic boom times, when it is thought we can 'afford it'. People usually do not pass minimum wage increases in downturns in the economy, because the fear of the loss of jobs.

quote: He's running in the red right now, and so are many franchises as I understand it. They are holding on as long as they can for the recovery that's "right around the corner," if indeed it is (one hopes).

Actually fast food is an inferior good. It does better when economic conditions aren't that good (believe it or not). When people earn more money they would rather spend it on more expensive food items.

A recovery may not help your father, actually.

	08-01-2003 08:27									#163
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Cat food is also and inferior good.

	08-01-2003 08:32									#164
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Cat food is actually fairly static. Usually, the economy does not influence acquisition of pets that much. And you have to feed the cat .

	08-01-2003 08:43									#165
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Well, I actually meant cat food in the context of human consumption.

	08-01-2003 08:49									#166
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Which outside of urban legends, how many people eat?

	08-01-2003 08:57									#167
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:looks up:

:continues eating cat food:

	08-01-2003 09:07									#168
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People who do it because they think it tastes good don't count .

	08-01-2003 09:21									#169
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fancy feast comes in 40 flavours now

	08-01-2003 09:26									#170
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Well then, they offer more choice than Baskin' Robbins.

	08-01-2003 10:13									#171
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Gepap:

An entirely reasonable set of questions. My argument is based both on the theory and the empirical evidence.

There are two general types of studies on the effects of the minimum wage: cross section - time series studies, and case control studies.

Cross section - time series studies gather data on wages, output, and hours of labor (along with demographic data such as education, sex, and years of experience) from various states over a period of years. The Consumer Price Index or similar price index is used to remove the effect of inflation across states and over time. Regression analysis is then applied to the data. The variation in the wage, output, and hours variables allows economists to draw conclusions about the effect of wage increases by themselves and output increases by themselves. The proposed minimum wage increase is plugged into the regression equation to determine the effect of a minimum wage increas on unemployment.

There are some cases where individual states increased the minimum wage in their state. Recent cases include California (1988), Texas (year?) and New Jersey (1992). Conditions like this give rise to the obvious case control studies, comparing the effects in neighboring states.

The conclusions of both types of studies has been fairly uniform.

quote: On balance, a 10 percent increase in the minimum wage is estimated to result in about a 1-3 percent reduction in total teenage employment.

Charles Brown, Curtis Gilroy, and Andrew Kohen, "The Effect of the Minimum Wage on Employment and Unemployment", Journal of Economic Literature, June, 1982, p. 505. See also John Kennan, "The Elusive Effects of Minimum Wages", Journal of Economic Literature, September, 1995, pp. 1949-1965 for a more detailed discussion of the case-control studies. The Journal of Economic Literature provides literature reviews by leading academic economists (Charles Brown is a professor at Michigan; John Kennan is a professor at Wisconsin), and is a standard reference in the economics profession.

edit: clairty

	09-01-2003 06:58									#172
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Adam Smith

How about for non - teenage population. What was the reduction?
My Econ teacher told me about this study which the U of Chicago had done about the minimum wage. He said that Chicago is avidely anti- minimum wage, but they still found that a minimum wage increase does not effect the market that much. (dont know specific data or have a link. sorry)

	09-01-2003 07:35									#173
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In a recession where there are millions of people in poverty, you'd think that if there was a government handout of money, it wouldn't go to people who already have too much

	09-01-2003 07:39									#174
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Most studies are for the teenage population, since something like 80 percent of those affected are teenagers.

The only U Chicago study I know of off the top of my head is Kevin Murphy (and Finnis Welch?), which compared nearby towns in New Jersey and Pennsylvania in 1992. IIRC, they found the 1-3 percent reduction similar to the existing studies. Does that equate to "not that much"? But back to the original point, why raise the minimum wage when you can use the earned income tax credit to get poor people into the labor market, instead of crowding them out?

	09-01-2003 07:42									#175
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The Democratic governor of Pennsylvania is explaining the new Democratic governor's tax cut program that will come out tomorrow. Apparantly the new program will contain the following:

Capital Gains Tax cuts focused in areas that are hard hit by the recession.

Low income tax rebate programs (subsidized housing, job creation programs)

Government infrastructure rebuilding plan (public passenger rail system, improving ports, roads, and public mass transit programs, construction, etc)

He also correctly stated that "Trickle down economics has never worked."

The governors' programs sound much better than the other Democratic plan, and the "let's give rich people $45,000 in tax cuts" program by Bush. I may not know a lot about how corporations and such are taxed, but everyone who is more informed than me seems to think that the Bush tax cut is bad and will only create a worse deficit.

	09-01-2003 08:02									#176
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How can anyone be against the minimum wage. Doesn't everyone have a right to make a living?

When the human race lived primarily in tribes, everyone was provided for and everyone had access to the medicine man. Sure there was a hierarchy, but again everyone was provided for and everyone had a function. There is archaelogical evidence that shows even Neanderthal man took care of the invalid members of the tribe. Now the rich ***** whenever the average people of the country want to make a living wage doing the bottom, but necessary jobs. If the job is necessary, it must necessary enough to be worth paying a minimum living wage.

Minimum wage means that this is the lowest wage the government will allow us to pay you, if we could we would pay you even less.
:/rant:

	09-01-2003 08:08									#177
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quote: Originally posted by MosesPresley How can anyone be against the minimum wage. Doesn't everyone have a right to make a living?

Because there are other, better, policy alternatives. Please read the thread.

	09-01-2003 08:10									#178
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[evil capitalist rant]
No mosesPresley! As a capitalist its unfair that I am forced by the evil government to pay people a decent wage in which they can survive on. I want it to be like the good old days, like in the early 20th century when a business tycoon could pay people pennies for back-breaking 16 hour day labor. My personal wealth is much more important than a poor persons' right to eat or provide health care and shelter to their children.
[/evil capitalist rant]

	09-01-2003 08:12									#179
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What I don't get is that if you use the EITC, and abolish the minimum wage, people like Janitors will get paid very little money (unless they are part of a union) In that case, even if they do get a EITC credit, they will be making so little money that they will not be able to live. (as in have a house, put food on the table, pay for electricity/water bills etc.)

	09-01-2003 08:14									#180
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quote: Originally posted by Sava The Democratic governor of Pennsylvania is explaining the new Democratic governor's tax cut program that will come out tomorrow. Apparantly the new program will contain the following:

The states are coming up with better plans because they can't go into deficit spending like the federal gov't can.

Democratic governors are coming out the tax cut plans and Republican governors like Kenny Guinn and Dirk Kempthorne are coming out with ideas to raise taxes.