- Member Extraordinaire
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I turned 18 in 1968 and even with my college tuition increasing by leaps and bounds my friends and I were pretty much able to put ourselves through college with some scholarship money, a little help from our parents and it worse came to worst a tuition loan or two. And I attended an university with an international reputation, not just a national one. in short, that minimum wage created a floor that pushed everyone else's wages up to the point where most factory workers could afford a middle class lifestyle.
Today, most people barely get by and the average year's college tuition is more than the median household income. In other words, it's mathematically impossible for the average family to put even one kid through college, let alone that kid to do for themselves.
Carl is correct in what he says about the tax structure lead to the insane disparity in wealth and income we have in this nation. It's even worse than it was during the so-called Gilded Age at the beginning of the 20th century. One of the biggest best things that the tax rates did for the economy was that the high tax rate on the highest wages made reinvesting in one's own company the best way to preserve one's own wealth. Investing in one's own company meant making it more efficient so each worker was more productive and therefore more valuable to the company and therefore worth higher wages. Higher wages meant people had more money to spend on things, which leads to companies growing even bigger and faster. And the economic wheels just spin like a top!!
A number of years ago, after the minimum wage had stagnated for a number of years, a significant raise was under discussion. Bussinessweek (now Bloomberg Businessweek) published a very convincing piece on how consistent increases in the minimum wage had put consistent pressure on management to increase wages across the board, which in turn kept up consistent pressure to increase the productivity of labor. Consequently, by not increasing the minimum wage, Congress, in effect, let management off the hook so wages across the board didn't keep up with inflation and worse yet, productivity stagnated as well, until it got to the point that both the lack of productivity and gaming the tax system made it more profitable to export jobs, in the immediate run, than products. And it became a vicious downward cycle.
Someone wondered if the federal minimum wage would be raised to $15/hour all at once. Undoubtedly NOT. For all of the talk about states setting a $15 minimum wage, none of them have gotten there because they are moving that wage up gradually.
In the meantime, Oregon instituted a 3-tier minimum wage, with the lowest rate being assessed in the most rural areas and the highest in Portland urban area. The idea was to make it easier for rural areas to adapt. No other state has taken this measure. Indeed, the lower wage states are trying to catch -up.
I recently read an on-line news item on the states with the highest minimum wage. Earlier you had wondered aloud if having an adjoining state (right across the street) wouldn't cause the businesses in your state to be at a competitive disadvantage.
In short, Moonshadow, a $15 minimum wage, whether it's mandated by the Dominion of Virginia or the US government, will not only promote the general welfare by putting more money into the pockets of the people who need it but your welfare by giving you very good goods for an increase in your wages! And those gains will not be lost to inflation because, if the people who own the company are smart, they'll figure out how to make the whole company more productive.
Social norms aren't changed by Congress or Parliament; they're changed by a sufficient number of people ignoring the existing ones and publicly practicing new ones.
Of course, with a standard $15 across the nation, we can expect a modest increase in prices. Despite Seattle having a $15 min wage for a few years now, the Seattle economy doesn't exist in a bubble, retailers and other suppliers import items into Seattle from around the state, nation, and world at lower wages, so I suspect even in Seattle, when the cost of raw inventory goes up, those Seattle businesses will have no choice but to bump prices a little.
That's not what I heard, though it is difficult to determine as the reports don't seem to incidate either way, but I do recall reading one article where in his $1.9 trillion dollar stimulus plan, Biden planned to raise minimum wage to $15 "immediately".
That might be a mistake, and as someone who works frequently with small businesses, I can tell you that as we're right in the thick of this pandemic economy, that would be enough to do many remaining small businesses in. We've already lost several restaurants in the last 10 months.
I hope he knows what he's doing, because people on social security will NOT be having their checks increased, and unlike wage earners, they can't negotiate for higher amounts.
Doubling the cost of groceries while not increasing social security is a sure fire method to ensure Democrats do not hold onto congress in 2022.
But like you, I don't really expect groceries to "double". My "shot in the dark" bet is we'll see a 20-30% rise in COL once all is said and done. Maybe less if portions decrease (something that's been happening for the last several years now).
Look for a can of green beans to increase about 15 cents and go from net wt 15oz to say 13.5 or something like that. I've already noticed many canned goods in my pantry have reduced to 14.5 oz.. Could have sworn they were 15 oz not long ago... and the cans seem to have more water and less beans these days..
This is the "hidden price increase".
Nevertheless, as America has an obesity problem this may be a good thing.
I also ranted aloud a few days ago as I stood in Walmart and noted several shelves wiped out....AGAIN of basically all of the staple items, I complained "it's time for prices to increase, obviously people can afford it..."
But I suppose we're still in an official "state of emergency" over the pandemic, so retailers have to be wary of price gouging laws.
Toilet paper is still difficult to find, and my brand (Dollar General 12 pack 1,000 sheet rolls- $6) has been out of stock since last spring... I guess it's not coming back, so I've resorted to buying my TP off of a janitorial supply site.
Double the price of toilet paper and watch it fill the shelves again.... maybe it's time.
Anyway, slide that step ladder over here, let me climb off of this soapbox... (who knew it got so high?)
- Member Extraordinaire
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As a comparison as a CPA I bill about 150 an hour for accounting work and 250-300 per hour for tax work