Why are we all so glum?

[Deloress]

So to avoid glumness. I prefer to play on this web site.
I am a silver member. This site has saved me a small fortune.

[Tedlark]

Welcome to you and I am in full agreement. If I gambled in a brick and mortar casino what I play here; I'd be in the poorhouse.

[BillyJoe]

[QUOTE=billyjoe]If minimum wages were increased drastically, you would see a significant and immediate cut in staff. Employers will not absorb that extra cost. The people left behind may make more, but they will be doing more work.

I don't see it working that way in food service. Say I own a restaurant. Today, I pay my wait staff minimum wage. They depend on tips to make something more than that. I charge my customers some amount for their meals. Because I pay wait staff minimum, I can charge them less than I might otherwise.

Tomorrow, minimum wage goes up so my wait staff can make a living on what they earn from me. I have to charge my customers more for their meals. But they don't have to feel obligated to add on a tip to make up for the lower minimum I used to pay my staff; arguably, their meal costs the same as it used to.

The best servers might be earning less than they did from their old low minimum plus tips, but they could also negotiate for a higher wage based on the business they bring in.

Makes sense to me.[/QUOTE]
Passing an increased cost DIRECTLY to the customer for an increase in minimum wages is a recipe for disaster. A good portion of your business will move to lower cost food outlets, since the customer has seen no benefit or added value to them (same food, same servers) for the increase in prices.

[olds442jetaway]

I have seen more businesses especially restaurants fail because of price increases without customer benefit than I can count. We have 2 good friends who operated a samll breakfast/lunch spot. I tried to tell them without sounding bossy in something that is none of my business not to do it or if they did to come up with some good specials on the menu to make up for it. Fell on deaf ears and 6 months later they were OOB. Having 7 other nice breakfast spots within a 5 minutes drive didn't help either. Luckily, they are doing OK now as wage earners.

[DaBurglar]

since this thread has morphed into several topics at once, I will throw this out there for everyone to consider, and for tedlark to ridicule:     The unemployment situation in this country, whereby a significant number of educated, experienced people are now "STUCK into this inescapable pit of chronic unemployment, combined with a simultaneous lack of economic growth along with the normal elements of unemployed population and the constant influx of new, young employable candidates, has exerted a downward pressure on wages in general, and shows no sign of changing anytime in the future.One good side to this is the lack of INFLATIONARY pressure that normally appears when a government like the US prints a lot of money and spends beyond its means, is OFFSET by this employment circumstance.      Still, the ONLY way wages (and therefore economic growth) is going to start growing again in significant numbers is for the government (state and federal) to mandate wage increases, and a minimum wage hike, in the short term, would be a positive force.........BUT, unless the government soon afterwards STOPS the insane practice of deficit spending while printing oodles of money, the inflationary pressure which has been checked thus far by economic stagnation will become a HUGE problem for everyone.

[BillyJoe]

since this thread has morphed into several topics at once, I will throw this out there for everyone to consider, and for tedlark to ridicule:     The unemployment situation in this country, whereby a significant number of educated, experienced people are now "STUCK into this inescapable pit of chronic unemployment, combined with a simultaneous lack of economic growth along with the normal elements of unemployed population and the constant influx of new, young employable candidates, has exerted a downward pressure on wages in general, and shows no sign of changing anytime in the future. One good side to this is the lack of INFLATIONARY pressure that normally appears when a government like the US prints a lot of money and spends beyond its means, is OFFSET by this employment circumstance.      Still, the ONLY way wages (and therefore economic growth) is going to start growing again in significant numbers is for the government (state and federal) to mandate wage increases, and a minimum wage hike, in the short term, would be a positive force.........BUT, unless the government soon afterwards STOPS the insane practice of deficit spending while printing oodles of money, the inflationary pressure which has been checked thus far by economic stagnation will become a HUGE problem for everyone.
I totally disagree. Every time the government gets involved in trying to manipulate Keynesian macroeconomics, bad things happen. Forced wage increases have negative effects on everyone, and disproportionately on the poor.

As for unemployment, the way that it is measured today is a very poor indication of the economic health in this country. If a $100k/year person is laid off, and goes to work for $20k/year, he is employed, yet is now in the position to contribute far less to the economy in taxes and the purchase of consumer goods.

Ignore unemployment numbers, and let free markets find their own level for pricing.

[DaBurglar]

I totally disagree. Every time the government gets involved in trying to manipulate Keynesian macroeconomics, bad things happen. Forced wage increases have negative effects on everyone, and disproportionately on the poor.

As for unemployment, the way that it is measured today is a very poor indication of the economic health in this country. If a $100k/year person is laid off, and goes to work for $20k/year, he is employed, yet is now in the position to contribute far less to the economy in taxes and the purchase of consumer goods.

Ignore unemployment numbers, and let free markets find their own level for pricing. well, I actually agree with much of your "disagreement" here billy, but I think you might have missed the specific point(s) I was making so let me respond and clarify a bit....The great depression actually proved that, for certain REALLY REALLY BAD economic times and scenarios, there is a point where the government SHOULD get involved and implement what you termed "keynesian macroeconomics"....I agree with you that it is NOT a good thing or desirable thing, but I also think you would agree with me in that there are times where must choose the lesser of two crappy scenarios.Our current economy is incredibly muddled and complex, as well as severely cramped and limited due to many EXTREME and unique things all happening at the same time.  And this is why I believe in what I wrote, that IN THE SHORT term, hiking the minimum wage upwards 30-40% would be a good thing.....BUT I agree with you (and did state in my first post) that UNLESS the government also changes and modifies its behavior, in the LONG RUN, the wage hike will prove detrimental, possibly in a HUGE way.     But nothing is guaranteed or 100% certain.You are 100% correct about the way unemployment is REPORTED in everyday papers and mags, but believe it or not, it can (and is) correctly MEASURED by those who know how to do so and have NO political agenda, namely college professors and objective non-partisan experts and analysts.    People who choose to look at the truth know what you posted is true, such as your example of the guy who takes a wage decrease when he changes jobs.....also such things as people who "GIVE UP" looking for a job and magically vanish, they no longer count in the typical unemployment rate that gets reported, even though you and I know that they are still there and SHOULD be counted......the unemployment number that gets reported on the evening news or in the USA TODAY publication (etc etc) is total baloney......if you want to know the REAL unemployment number (or a good realistic approximation anyway), multiply the reported number by at least 1.6 to 2.1!!    That is to say, if the Barackness Obamanation press secretary is saying that unemployment is now at 7.2%, you can rest assured that in the REAL world and in realistic terms, it is actually somewhere in the neighborhood of 14%, give or take......anyone who has taken macroeconomics in college knows the real story.   It is good politics for the president and congressional leaders to obfuscate the true situation.But that being said, the current market will absorb and correct itself to a new equilibrium IF and WHEN there is a minimum wage hike....let us just pray that the government does not make a bad situation worse by failing to follow it up with needed changes and policy adjustments.In my heart though, I do know that the situation in today's real world, regarding income disparity and wage stagnation (which is happening in many places not just the USA), is an issue that needs to be addressed at least in some degree.   we cannot continue the current path and avoid catastrophe somewhere in the next decade.

[BillyJoe]

[QUOTE=billyjoe]I totally disagree. Every time the government gets involved in trying to manipulate Keynesian macroeconomics, bad things happen. Forced wage increases have negative effects on everyone, and disproportionately on the poor.

As for unemployment, the way that it is measured today is a very poor indication of the economic health in this country. If a $100k/year person is laid off, and goes to work for $20k/year, he is employed, yet is now in the position to contribute far less to the economy in taxes and the purchase of consumer goods.

Ignore unemployment numbers, and let free markets find their own level for pricing. well, I actually agree with much of your "disagreement" here billy, but I think you might have missed the specific point(s) I was making so let me respond and clarify a bit....The great depression actually proved that, for certain REALLY REALLY BAD economic times and scenarios, there is a point where the government SHOULD get involved and implement what you termed "keynesian macroeconomics"....I agree with you that it is NOT a good thing or desirable thing, but I also think you would agree with me in that there are times where must choose the lesser of two crappy scenarios.[/QUOTE]
Not to prolong an economic discussion on a VP site, but your view of the Federal government 'helping' during the Great Depression is inaccurate. According to a WSJ article published in Feb/2009, history now shows that policies implemented during The Great Depression actually slowed the normal recovery that would have taken place.

Take a look at the article. The key was the NIRA, which set aside antitrust acts and permitted price hikes commensurate with wage hikes. This distorted the normal economic forces, restricting output and productivity.

[Tedlark]

  Obfuscate = to make (something) more difficult to understand.    Got this from Websters, even I had to look that one up. Most of us would simply say: muddy up.

[Minn. Fatz]

"World Peace through Obfuscation" was the motto of our class of Foreign Service officers...how'd that work for us...

On our jaunt to northern Minnesota a couple months ago, and again on Harriet Island in St. Paul, we saw several examples of public works erected by the Depression-era Civilian Conservation Corps and Works Progress Administration that are still standing and still being used over 80 years later.

I'm no expert so I'm not gonna debate the pluses and minuses of FDR's approach to the Great Depression. But I will say that if I live to be as old as my late grandmother (102) I'll never understand why more was not spent after October 2008 on hiring people to improve the nation's badly deteriorating infrastructure, or even to dig holes and fill them in again, rather than on money for too-big-to-fail, too-big-to-jail, too-big-to-care banks to play liar's poker with each other while millions and millions whose savings had evaporated lost their incomes as well.