Minimum wage & The cost of living

[hemicudas]

John Henderson Beats the $5 per Gal. Milk crisis.

Seems my friend, John Henderson has found a way to beat the high cost of milk. John looked out his window the other day and low and behold found this.

 

[jay helfert]

Seems my friend, John Henderson has found a way to beat the high cost of milk. John looked out his window the other day and low and behold found this.

Now you've met his whole family.

 

[nineballman]

Seems my friend, John Henderson has found a way to beat the high cost of milk. John looked out his window the other day and low and behold found this.

That's a great idea, but can afford the taxes for the land to raise them?

 

[ineedaspot]

Snip...

Proving that minimum wages affect the market is easy and has been done by many. Now, does it affect it negatively or postively? To this, I refer you to this article. Basically, it makes the Austrian argument that value is subjective so what might be good for some might be bad for others. So, how to measure "good for society" when no such objective standard exist for this question.

Here's an excerpt from the article with the link below it:

Snip...

Enjoy...and there are about a dozen or more price-control type articles at this site for those inclined to learn all you can about this important policy.

Jeff Livingston

I agree completely about the point that there is no objective measure about the good of society. My point of view, and my objection to the libertarianism, has much to do with flaws in the classical notion of economic efficiency via clearing markets. Based on your knowledge of the subject, you are likely aware of various critiques along these lines--e.g. the mathematical unsoundness of aggregating demand using representative agents, for one, and the inability of the market to optimize over longer time horizons is another--even if you don't agree with them.

IMHO how price controls and redistributionist policies affect the market, while important, is not the central issue. The ultimate goal is to improve the elusive "well-being of society", and the market is only one of many tools we have. Even though "well-being" is ill-defined, it's still the goal, and we are forced into a normative judgement: substituting "GDP growth" or any narrow definition of "economic efficiency" for "well-being" is no good.

For obvious reasons, GDP is not a good measure of well-being: social inequality, happiness vs. wealth issues, "keeping up with the Joneses" etc. This is no secret: everyone knows about problems with the GDP, so the question is why is its use prevalent as a default economic objective? Why is the US GDP offered as a response to the issue of poverty, when it's trivial that high GDP does not imply low poverty? Why not use "gross national happiness" like in Bhutan, or at least use a concave utility function? The law diminishing returns, without which microeconomics basically grinds to a halt, somehow disappears from the discussion of high-level economic ends.

When faced with things that are obviously, prima facie, "bad" such as rampant poverty, why do we so often hear the excuse "that's the free market, the other option is Stalinist labor camps"? No serious person believes that the only options are Gulag or unregulated free market.

I see two reasons for this. First, the classical/libertarian theory of free markets is really simple to understand--supply meets demand, don't mess with it--in contrast to the complex intertwined realities of economics, politics, and society. It's a case of "every problem has a solution which is simple, elegant, and wrong".

The second reason is that it favors the wealthy, powerful and entrenched. History, as they say, is written by the winners, and so is economics. In particular, the US economy, when measured by more plausible "social good" scales, is no longer king of the world. "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." -JK Galbraith

 

[ShaneS]

Market discrimination. They charge less in other countries because people will not be able to afford it otherwise. I guess they figure that it's that much more money they can make. I don't think it is right, but that's how they do it. I'm sure, though, that most of these medicines are developed and perfected in the U.S. labs, and are available to the U.S. before other countries.

It's like selling the hot ticket American made custom pool cues in Taiwan, Japan, Singapore, etc., for a lot more than they sell for here in the States. I'm not certain, but I've heard of so and so Custom Cuemaker directly selling a cue overseas for a significant amount more than he would charge his American customers. Do I think it is right??? I don't know. But, they do it because they can do it.

I would agree with you that there are very many qualified doctors that can rightfully prescribe medicines that aren't offered here in America; medicines that are very effective, but for some reason are denied approval by the FDA. Who knows why they do this. I would be willing to bet that the FDA has harmed and killed more people by denying approval of certain "innocent" drugs than they have of approving dangerous drugs. But nobody seems to hold them accountable for that. With the way our law system is organized, it is in the best interest of U.S. drug companies to rigorously test their product before releasing it to the public; a job that can be done without the help of the government.

-Shane

Are you aware that the same drugs sell for a fraction of the cost in other countries? I was amazed by how inexpensive (and quick) medical care was in China. I had to go to a hospital for some minor treatment and received a specialists care within one hour. He prescribed medicine for me and we went downstairs to the pharmacy. I paid the U.S. equivalent of $8 for prescription pills and another $10 to see the doctor. His diagnosis was right on and the pills worked wonders. This was an infection that I had trouble finding a cure for in the USA.

In the Philipines my girlfriend was sick and we went to the pharmacy and bought strong antibiotics for $9. She was fine after a day or two. I am left to conclude that we are getting the short end of the stick over here. I think the pharmaceutical companies charge whatever the market will bear. No wonder so many people seek drugs in Canada for half the price.

 

[Russ Chewning]

Are you aware that the same drugs sell for a fraction of the cost in other countries? I was amazed by how inexpensive (and quick) medical care was in China. I had to go to a hospital for some minor treatment and received a specialists care within one hour. He prescribed medicine for me and we went downstairs to the pharmacy. I paid the U.S. equivalent of $8 for prescription pills and another $10 to see the doctor. His diagnosis was right on and the pills worked wonders. This was an infection that I had trouble finding a cure for in the USA.

In the Philipines my girlfriend was sick and we went to the pharmacy and bought strong antibiotics for $9. She was fine after a day or two. I am left to conclude that we are getting the short end of the stick over here. I think the pharmaceutical companies charge whatever the market will bear. No wonder so many people seek drugs in Canada for half the price.

Jay....

Compare the average yearly income of a Filipino/Chinese person to an American.. Then, look at what that prescription cost you. If it cost the same for the locals in those countries, they were paying every bit as much for their medicine in their country as you do in yours.. Relative to their income.

Do you know what the average Chinese salary is, Jay? I did a little research, and I can't nail down an exact figure, but it is somewhere in the range of $400 to $800 per year. Let's put the American average at $30,000.. That means that at the higher figure of Chinese income, an American makes about 37 times more. Then, take the $18 you paid, and multiply it by 37.. Which would mean, that in the local currency, you paid about $667.00 for your doctor visit, which seems just about right to me. That's more or less what you'd pay in the U.S. for a short doctor's visit with medication.

And it's already been beat to death in NPR that the Canadian health system is not all it is cracked up to be. People die on waiting lists in Canada.

Do you feel that every Chinese person/Filipino person would have been seen by a specialist within an hour? Me neither, Jay. please remember, that often times, your status as an American citizens affords you special status when in other (especially poorer) countries.

For all you know, they charged you twice what they would charge a local, and moved you up to the front of a 10 person line, because they knew they would definitely get paid, whereas that may not be the case with a local.

A lot of times people look at things the simple way, and say, gee, I can get seen by a doctor, plus prescription, for $20.00 in China. Shenanigans! The American system sucks!!! They don't bother to do the math to figure out that, believe it or not, capitalism seems to rule just as much in China as it does in America.

Jay, let's be truthful, though.. If you were paying the same percentage of your salary in either China or America for a life saving operation, which country would you have the operation in?



thankavermuch! (Elvis voice, uh huh, a uh huh...)

Russ

 

[ShaneS]

Corporations are there to make a profit. Period. That is what I learned in business school accounting.

Probably not, because that one man did not make the corporation $4 billion. Society did. The people who pulled up to the pump and filled their vehicles with the overpriced gold.

I'm self employed. The insurance companies and corporations have made it impossible for me to afford health care for my family. I'll join the ranks of the 40+ mil who can't afford it......

Corporations do what lawyers tell them they can do...not what society always wants them to do.

Insurance rates are definitely getting out of hand these days. I just read and an article entitled "Slicko", in this month's Economist or Forbes magazine. In the article, a claims auditor, Accu-Rate, found that 20% of health care spending in the U.S. -- 20% of about $2 trillion -- is considered "excessive" and "unjustified". Meaning insurance companies are paying for more than they should be and passing along the excess cost on to corporations and consumers...

I say get rid of health insurance altogether. Look at all of the types medical procedures that aren't covered by insurance: plastic surgery, face lifts, laser eye surgery, liposuction, etc. Since insurance companies aren't around to muck things up, competition alone determines prices. When was the last time you saw an advert. for Lasik surgery? When it first came out it was inefficient and dreadfully expensive, more so than the general public could afford. Now this operation is nearly flawless and only costs around a few $ hunnies an eye. Think of what competition could do for the $200,000 triple by-pass surgery.

-S

 

[ineedaspot]

Corporations do what we as a society granted them to do.

Pharmaceutical companies charge a boatload because they have to create an incentive for the the movers and shakers in the economy to invest in them. That $75 tube of cream reflects research and development costs. Because of medical testing and endless red-tape with the FDA, it takes several years and even decades before some companies make any $ at all. Not to mention the many drugs that are disapproved. By a promised decent rate of return, investors are willing to forgo income for the time being. Innovations come with steep price tags.

As for the huge bonuses, governance boards figured out that if they aligned the personal interests of their officers with interests of the company -- by offering huge bonuses and stock options -- then maximum productivity would be reached. If someone made you $4 billion a year, would you pay them $400 million for doing so?

The government steals... Corporations don't.

-S

The government also does what we as a society grant it to; in fact, it's through the government that corporations are granted the power to do what they do.

As for stealing, presumably you mean taxation, which is only stealing in a loose philosophical sense. You will admit that some taxation is necessary in order to protect private property, uphold contracts, national defense etc... zero taxation is impossible. Is it only theft if the money is spent in certain ways? Who gets to decide?

On the other hand, is monopolistic price-fixing or oligopolistic collusion not tantamount to stealing? If I own the only well in town and charge everyone $100 for a glass of water, is that just the free market doing its thing? Is it right that people are denied health care because they don't have enough money, while CEOs to sit on boards and grant themselves huge bonuses on behalf of shareholders who have essentially no say in the matter? Do CEO bonuses actually correlate to long-term performance? Is there any evidence to believe that CEO pay levels set by current market conditions are economically justified, other than the circular justification that the market set the pay, so it must be right?

The fact that the free market creates such absurdities does not justify the absurdities; rather, it illustrates that the unregulated free market is itself absurd.

 

[Kerry Impson]

The only way to beat the system is to beat it first before it beats you......Its a dirty world out there and if you don't get to stepping someone will step on you in a heart beat without a shred of decency about it.

Wow, that's a nice philosophy: Screw them before they can screw you. Is this something like that old inversion of the Golden Rule (do unto others before they can do unto you)? The actual Golden Rule (a very fine principle to live by) seems to have fallen by the wayside these days. Whatever happened to personal integrity? To wanting to do the right thing? To a friggin' CONSCIENCE, for crying out loud?

I'd wager all my Vcash that Bishop is under 30.

 

[ineedaspot]

Insurance rates are definitely getting out of hand these days. I just read and an article entitled "Slicko", in this month's Economist or Forbes magazine. In the article, a claims auditor, Accu-Rate, found that 20% of health care spending in the U.S. -- 20% of about $2 trillion -- is considered "excessive" and "unjustified". Meaning insurance companies are paying for more than they should be and passing along the excess cost on to corporations and consumers...

LOL, I read the same article, and also can't remember if it was Forbes or the Economist, because I was on a plane and I brought those same two mags. Seems we read the same stuff and come to different conclusions about everything.

Anyway, this thread is taking too much of my time, it's been fun (but don't hold me to that...). And kudos for the appropriate and measured return of fire in response to my calling you a freshman in econ 101. I owe you a beer. Cheers.

On edit, I must point out that if you knew anything, you would know that the Economist is weekly, not monthly. See, I'm always right.

 

[td873]

Compare the average yearly income of a Filipino/Chinese person to an American..

Bringing this back to the OP's rant -> here in the States, there is (generally) the opportunity to become educated and elevate yourself out of the "minimum wage" race.

If someone is unhappy with their lot in life, perhaps going to school and getting a $75K job is more to their liking. Sure, there may be hurdles, but then again what was that saying about talkers and doers? Or was it about excuses? I can't remember...


In any event $5.00/gallon milk and $3.50/gallon gas is still less than the $30+/gallon we pay for Starbucks...

-td <- may have a tainted opinion as billing rate is above minimum wage

 

[thyme3421]

I watched a show on tv one day about how the cost of milk was going to go up. They said that alternative fuel was taking food from the cows and that it costs more to feed them now. And of course the gas prices.

I'd like to hear more on this..... oh, and no, I'm not attacking you, just the tv show. Oh, and one more thing... I mean the following in good humor, don't take me too seriously.
Ever

But I don't see how using Solar energy, or wind energy, or battery powered cars are going to reduce the amount of grass for the cows to consume.

Well, unless of course we're blocking out the sun with our huge solar panels and the grasses of the random fields that cows feed on are dying because of lack of sunlight. Along with this our massive solar panels from hell will be blocking the wind, not allowing the trees to grow thick strong trunks and rise into the skies above our solar panel apocalypse, eliminating the need for a balanced atomosphere... and then our alternate fuels were pretty much wasted researching into them.
And naturally the acid from the batteries are giving off so many fumes that our old fashioned fossil fuels can't keep up/counteract. lol

hmmm.... poor cows

stupid television.

 

[ShaneS]

As for stealing, presumably you mean taxation, which is only stealing in a loose philosophical sense. You will admit that some taxation is necessary in order to protect private property, uphold contracts, national defense etc... zero taxation is impossible. Is it only theft if the money is spent in certain ways? Who gets to decide?

Nobody mentioned zero taxation.

On the other hand, is monopolistic price-fixing or oligopolistic collusion not tantamount to stealing? If I own the only well in town and charge everyone $100 for a glass of water, is that just the free market doing its thing? Is it right that people are denied health care because they don't have enough money, while CEOs to sit on boards and grant themselves huge bonuses on behalf of shareholders who have essentially no say in the matter?

In the highly unrealistic case where a monopolized corp. charges $100 for a glass, I'll offer a very plausible solution to you: Move. Move to California; move to Montana; move to France -- It's good enough for Johhny Depp! Nobody is forcing you to pay $100 for a glass of water. Drink diet Seven Up. Drink bottled water. In the short run you might have to pay $100, in the long run there will be a solution.

No, I don't think that it is right for people to be denied health coverage because they don't have enough money. I do, however, have a problem with subsidizing someone else's health care. Do whatever you must to help the needy, but know I will, "in a loose philosophical sense", consider it stealing if you force me to pay for it.

I guess people have totally written-off charity and altruism?

Do CEO bonuses actually correlate to long-term performance? Is there any evidence to believe that CEO pay levels set by current market conditions are economically justified, other than the circular justification that the market set the pay, so it must be right?

By this reasoning, no price in the economy is justified. I'm not saying whether it is right or wrong; I'm saying that it is not arbitrary, as opposed to ________________ (your solution here). The market is amoral, period. Workers are compensated for their disutility of work. If not the unfettered market, who is, not only morally justified, but capable of determining the wage for anyone, nonetheless the CEO?

The fact that the free market creates such absurdities does not justify the absurdities; rather, it illustrates that the unregulated free market is itself absurd.

What unregulated free market are you talking about?

-S

 

[The Woim]

Wrong Location For This Thread

Guys, could we please move this to the non-pool related thread? It's not my website, but that's what I would do.

As for MW & COL, life has never been harder and it's never been easier. We take for granted today what was a luxury 20 years ago.

Most MW workers actually live better than upper middle class people of 50 years ago. But that's irrelevant. A lot of losers in life are looking hard for that good excuse that explains the way things didn't turn out for them.

I refuse to look for excuses. I live in a $230,000 home and I kick myself for buying a pool table for $4000 when it's the $13,000 table that I really wanted. I hate to cheat myself. I thought too small on that table.

My next table is going to be a fully restored antique in the neighborhood of $20-25K.

I make plans for my future. I don't know if I'm going to nail the big one, but at least by going for the big one I may only get the "above average" one.

Dismiss this as a cliche or wishful thinking, but thinking like a loser is the prerequisite for being a loser.

With love; handed down from the Desk of the One-Eyed Jack

The Woim

 

[thyme3421]

Bringing this back to the OP's rant -> here in the States,

--snip--

If someone is unhappy with their lot in life, perhaps going to school and getting a $75K job is more to their liking.

--snip--

-td <- may have a tainted opinion as billing rate is above minimum wage

Good point td...... the only trouble with furthering one's adult education is that it's not cheap.
And since there's so many out there now that are surviving on minimum wage... barely even though... they don't have a chance to save money under the mattress and go to a university to get a $55k+/year job.

Shortly before I met my ex she had her car stolen. I remember her making a comment to the effect of "my college books were in the back seat. Couldn't they see that I'm a poor college student??"
My only reply was something along the lines of "You have money for food and school, they have money for food. To them, you're rich."

 

[ShaneS]

LOL, I read the same article, and also can't remember if it was Forbes or the Economist, because I was on a plane and I brought those same two mags. Seems we read the same stuff and come to different conclusions about everything.

Anyway, this thread is taking too much of my time, it's been fun (but don't hold me to that...). And kudos for the appropriate and measured return of fire in response to my calling you a freshman in econ 101. I owe you a beer. Cheers.

On edit, I must point out that if you knew anything, you would know that the Economist is weekly, not monthly. See, I'm always right.

Touche, indeedaspot.

It's been hella fun debating with you. What's the point of studying for years if we're not able to engage in friendly discourse now and then!

Take care,
-Shane

P.S. Rep points for pointing out that The Economist is a weekly pub.

 

[chefjeff]

Wow, that's a nice philosophy: Screw them before they can screw you. Is this something like that old inversion of the Golden Rule (do unto others before they can do unto you)? The actual Golden Rule (a very fine principle to live by) seems to have fallen by the wayside these days. Whatever happened to personal integrity? To wanting to do the right thing? To a friggin' CONSCIENCE, for crying out loud?

I'd wager all my Vcash that Bishop is under 30.

I agree, Kerry, but isn't it refreshing to hear such an honest assessment of the situation and a way to use it to one's advantage? I mean, most would do most of what Bishop said and then lie about it...or worse, say the opposite in an attempt to be seen as good. At least Bishop has the gonads (no offense) to say it like he sees it.

Bishop's remarks are similar to what Kim Jong Il recently did in N. Korea when he made smoking in public illegal because he quit and doesn't like it anymore. I started a thread about that last week and it was ignored.

Jeff Livingston

 

[td873]

Good point td...... the only trouble with furthering one's adult education is that it's not cheap.

Derek Curtis Bok -> "If you think education is expensive, try ignorance." This quote has many implications, but financially: it might cost you $20K-50K to go through college. Assume that you only make 10K more per year with a college education (which is a really low number). In 40 years (when your retire) you will have lost out on $350K ($400K-$50K education) by not going to college. If you make 20K more a year, then you're out $800K. And if you take raises etc into account, you can figure the difference is more than a million dollars.

People can complain how hard it is to make a living, or get an education, or do this or do that. But the truth is, lots of people do whatever it takes to improve themselves. Even if it means sacrificing for a short time to make it to the "other side." If the will is there, they find a way.

If having an extra million+ dollars over your lifetime isn't motivation, IMO, $5.00 milk is the least of your worries...

-td <- worked for me

 

[Russ Chewning]

td,

You know it's easier to whine about how hard things are than to take responsibility for your own life. Our grandparent's generation would be ashamed of us as a society...

Russ

 

[td873]

td,

You know it's easier to whine about how hard things are than to take responsibility for your own life. Our grandparent's generation would be ashamed of us as a society...

Russ

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