To re-invigorate UK business

[new_trader]

People who understand the LAW of supply and demand and basic economics are the only people who understand the argument against the minimum wage. The law of supply and demand is not my opinion.

Law of Supply and Demand in Economics: How It Works

The law of supply and demand explains how changes in a product's market price relate to its supply and demand. Demand for basic necessities is less responsive.

www.investopedia.com

• The law of supply and demand, one of the most basic economic laws, ties into almost all economic principles in some way.
• The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded.

Britannica Money

www.britannica.com

"The price per unit of time that a particular kind of labour commands in the market depends not only upon the technical efficiency of the labourer but also upon the demand for the particular services that he is able to furnish, upon their relative scarcity, and upon the supply of other productive agents."

In other words: When the Government artificially raises the price per unit of time for a particular kind of labour, the demand for that labour is reduced or even eliminated depending on the supply of other productive agents, like outsourcing to a cheaper country or using automation.

The end result is that a minimum wage reduces employment, it does not lead to economic prosperity. Why does this thread even exist when all the things that I am arguing against already exist?🤔

 

[cantagril]

I prefer " The Pirate Ship " system where all the employees get the same wage except the Captain, who gets double. That is AFTER the company expenses etc. are paid. The health of the company is put first not last. Also the greedy bosses are stopped from sucking all the wealth out of the company and then flogging it off for even more personal profit.

Aksherly, you have somewhat over-simplified the Pirate ship hierarchy of remuneration, which itself was part of the Pirate "code" (that has been so mangled by Johnny Depp and friends) and to me it does indeed make pretty good sense in its true form. I won't attempt to do your research for you but the link below leads to a docco that itself has some grown-up sources to explore for those interested in such matters:

"Booty was divided according to skill and duty.The captain and the quartermaster received between one and a half and two shares, and all other positions of name received one and a quarter share each. Regular crew members received one share."

5 Ways Pirate Ships Functioned as a True Democracy

This is something you don’t learn in school. Pirates pioneered many of the features we associate with democracy.

historynewsnetwork.org

Note to NT: "Less Marx, More Mises ....and good dollop of Captain Morgan"

 

[Pat494]

Aksherly, you have somewhat over-simplified the Pirate ship hierarchy of remuneration, which itself was part of the Pirate "code" (that has been so mangled by Johnny Depp and friends) and to me it does indeed make pretty good sense in its true form. I won't attempt to do your research for you but the link below leads to a docco that itself has some grown-up sources to explore for those interested in such matters:

"Booty was divided according to skill and duty.The captain and the quartermaster received between one and a half and two shares, and all other positions of name received one and a quarter share each. Regular crew members received one share."

5 Ways Pirate Ships Functioned as a True Democracy

This is something you don’t learn in school. Pirates pioneered many of the features we associate with democracy.

historynewsnetwork.org

Note to NT: "Less Marx, More Mises ....and good dollop of Captain Morgan"

Having worked in big and small companies I noticed that a lot of time and energy is wasted by people fighting each other for higher positions (wages ) and or survival. The crew being paid the same would lessen that hopefully. No need for Union representation or Boards of Directors as all major company decisions by the Captain could be checked openly by the crew and voted on.

 

[cantagril]

Having worked in big and small companies I noticed that a lot of time and energy is wasted by people fighting each other for higher positions (wages ) and or survival. The crew being paid the same would lessen that hopefully. No need for Union representation or Boards of Directors as all major company decisions by the Captain could be checked openly by the crew and voted on.

Alas, alack!..... and sundry similar expressions of distress and discomfort - isn't this Marx? The cadre had privileges that went with their positions and the workers got the stipend that was supposedly their "share". As we all know, the 70 year experiment in idealism started badly and deteriorated ever after, up until the point where the people decided that life under the reviled capitalistic systems was more desirable than their own (theoretically fairer) one.

...and isn't this just the problem? Ideals are just that, i.e ideal.. and often have fuck all to do with any reality - the particular reality that effs everybody equally (Marx would be happy!) is human nature. Imho, any attempt at fair play in whatever sphere - including the Re-invigoration of the High Street - has to take into account the "nasty, brutish and short" aspects of the equation and one of the least palatable (to politically correct regimes of any kind) is that the needs of the many outweigh the needs of the few. Creating and managing a stable society means that the individual and the "It's all about me" culture are of secondary importance in good governance, however un-popular that may be.

History shows us that re-invigoration and renewal generally tend to be preceded by stagnation or decline and in that period people suffer. When the uptrend engages then the suffering doesn't end but it's usually a different bunch that gets to be on the muddy end of the stick.

 

[meowster]

Having worked in big and small companies I noticed that a lot of time and energy is wasted by people fighting each other for higher positions (wages ) and or survival. The crew being paid the same would lessen that hopefully. No need for Union representation or Boards of Directors as all major company decisions by the Captain could be checked openly by the crew and voted on.

* "I noticed that a lot of time and energy is wasted by people fighting each other for higher positions (wages ) and or survival."
That is an interesting point on productivity loss that I have thought about briefly but don't have an immediate answer to. You would have thought that big business HR departments or senior bosses would have worked out how many man hours are wasted on such activity by now and come up with some solution like what is done for health and safety in avoiding sicktime.

Government cannot repeal economic laws no matter how distasteful you find them. You hate the idea of automation, you hate the idea of abolishing the minimum wage, you think "do-gooding" eventually drives a country down to third world status yet you think the Government's prime function is "do-gooding"...

new_trader:​

A couple of short vignettes on the minimum wage problem at least from a US perspective. It can't be much different in the UK which in some ways is a more free market than the US.

Who Does a $15 Minimum Wage Help?
Point 3 in this video I can personally vouch for. The irony is that with a minimum wage you can no longer do point 3 unless you do an internship to get the same result- and we all know only kids with wealthier parents can support them through the internship period.
I knew guys who were working in the post room and who ended up front office brokers.
"If the camel once gets his nose in the tent, his body will soon follow."

Minimum Wage Cost Me My Job

 

[new_trader]

* "I noticed that a lot of time and energy is wasted by people fighting each other for higher positions (wages ) and or survival."
That is an interesting point on productivity loss that I have thought about briefly but don't have an immediate answer to. You would have thought that big business HR departments or senior bosses would have worked out how many man hours are wasted on such activity by now and come up with some solution like what is done for health and safety in avoiding sicktime.

new_trader:​

A couple of short vignettes on the minimum wage problem at least from a US perspective. It can't be much different in the UK which in some ways is a more free market than the US.

Who Does a $15 Minimum Wage Help?
Point 3 in this video I can personally vouch for. The irony is that with a minimum wage you can no longer do point 3 unless you do an internship to get the same result- and we all know only kids with wealthier parents can support them through the internship period.
I knew guys who were working in the post room and who ended up front office brokers.
"If the camel once gets his nose in the tent, his body will soon follow."

Minimum Wage Cost Me My Job

Excellent videos @meowster

This is another video worth listening to:

Go to 15:04 to hear how Tom Woods uses his impeccable logic to address the "moral" argument used by politicians and @Pat494 and @FXX

The Fallacies of the Living Wage​

 

[Pat494]

The US capitalist system you seem to be promoting is not only very unfair but also now uncompetitive. The US had a fairly easy time out competing old European ways and systems in the 19th and 20th century. But just look at how the US set in its over rated system has made the rich too rich and the poor too poor. There was a middle class but this has eroded away with rust belt industries. This is not because of the minimum wage socialism but rather from stiffer competition from the BRIC countries. Trump is desperately trying to encourage companies and therefore jobs back to the US by trade sanctions. Whatever happened to your winning capitalist competitive system ? In a word it started losing badly and wealth flowed out of Europe and the US to China etc.
The Pirate Ship system encourages a team effort rather than the few hogging the wealth. The richest 1% own 90% of the planet's wealth. Time for a radical change. Ask any winning Football manager and he will tell you that winning these days is ALL about teamwork. 1 good player can't do it on his own.

 

[new_trader]

The US capitalist system you seem to be promoting is not only very unfair but also now uncompetitive. The US had a fairly easy time out competing old European ways and systems in the 19th and 20th century. But just look at how the US set in its over rated system has made the rich too rich and the poor too poor. There was a middle class but this has eroded away with rust belt industries. This is not because of the minimum wage socialism but rather from stiffer competition from the BRIC countries. Trump is desperately trying to encourage companies and therefore jobs back to the US by trade sanctions. Whatever happened to your winning capitalist competitive system ? In a word it started losing badly and wealth flowed out of Europe and the US to China etc.
The Pirate Ship system encourages a team effort rather than the few hogging the wealth. The richest 1% own 90% of the planet's wealth. Time for a radical change. Ask any winning Football manager and he will tell you that winning these days is ALL about teamwork. 1 good player can't do it on his own.

You either don't read, or don't understand anything I have posted because I haven't got the foggiest idea what you mean by "The US capitalist system you seem to be promoting". The USA is nowhere near the kind of free-market Capitalism I would like to see. In fact the USA is a poster child for your earlier comment about "Do-gooding" Governments reducing a country to third world status.

The USA was once the worlds richest country and had the highest standard of living, and it got there without any of the "do-gooding" Government programs that exist today. Look at the charts and you will see how the standard of living for the average American has got progressively worse as The Government involved itself more and more in affairs of the economy...

I am quoting from memory, but one economist figured that in the early 1900's the US Government only accounted for around 4% of GDP...today that figure is a whopping 40%...if you think this is the kind of US Capitalism I am promoting then you need your head examined.

 

[FXX]

People who understand the LAW of supply and demand and basic economics are the only people who understand the argument against the minimum wage.

The end result is that a minimum wage reduces employment, it does not lead to economic prosperity. Why does this thread even exist when all the things that I am arguing against already exist?🤔

Oh @new_trader, it is always comical discussing fundamentals with.

As an FYI - Only 5-7% of the workforce is on minimum wage - so your direction of its removal magically boosting the economy is rather, shall we say, laughable. Not least because the business cycle is largely determined by the debt cycle, and corvid-19 has unnaturally burdened businesses with increased debt, therefore, less likely to increase investment which means no growth-related hiring. Removing it will not increase employment because firms can't legally retrench and rehire for the same roles at a lower wage because this would lead to employment tribunals through unfair dismissal claims.

But let's entertain your ridiculous assertions with tangible studies using data, not a Brittanica link or some video!

Evidence shows that where applicable, minimum wages are passed onto the consumer and that a 10% increase in minimum wages only translates to a 0.4% change in price on average - source study backing this is (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=524803).

Economist Alan Krueger nd a colleague produced a paper on this comprising of 7 studies in the 90s https://journalistsresource.org/wp-content/uploads/2013/02/njmin-aer.pdf
it concluded

"Contrary to the central prediction of the
textbook model of the minimum wage, but
consistent with a number of recent studies
based on cross-sectional time-series comparisons
of affected and unaffected markets
or employers, we find no evidence that the
rise in New Jersey's minimum wage reduced
employment at fast-food restaurants in the
state. Regardless of whether we compare
stores in New Jersey that were affected by
the $5.05 minimum to stores in eastern
Pennsylvania (where the minimum wage was
constant at $4.25 per hour) or to stores in
New Jersey that were initially paying $5.00
per hour or more (and were largely unaffected by the new law), we find that the
increase in the minimum wage increased
employment. "


Another study in 2010 http://escholarship.org/uc/item/86w5m90m comprised on analysis of actual data concluded

"For the range of minimum wage increases over the past several decades, methodologies using local com-parisons provide more reliable estimates by controlling for heterogeneity in employment growth. These estimates sug-gest no detectable employment losses from the kind of minimum wage increases we have seen in the United States."

There are many more studies showing the old outdated models, which is the literature you are basing your argument off, doesn't correlate with the studies done on the subject using employment data. Furthermore, there are studies that show when you uplift the lowest workers, you increase the standard of living and this leads to greater prosperity.

 

[Pat494]

I see the US as a Capitalist system. However as far as I can gather you would prefer an even more extreme Capitalist system.
Whereas I am giving an alternative choice and a less Capitalist system by NOT promoting the self and individual greed so much. Different countries will make different choices obviously to aid themselves as well as possible.

 

[new_trader]

@FXX, you don't bother watching any of the videos I submit. If you did you will find that all of your counter-arguments have already been addressed.

 

[new_trader]

I see the US as a Capitalist system. However as far as I can gather you would prefer an even more extreme Capitalist system.
Whereas I am giving an alternative choice and a less Capitalist system by NOT promoting the self and individual greed so much. Different countries will make different choices obviously to aid themselves as well as possible.

I don't want extreme anything, I would just like a return to true Capitalism.

 

[FXX]

@FXX, you don't bother watching any of the videos I submit because all of your counter-arguments are addressed.

Whats to watch, a slide deck narrated by an economist mentioning 2 studies - none of which were referenced, and charts that are shaped to support the narrative. Take EU countries, for example, a chart of unemployment comparison showing the level of unemployment relative to min wages. Any economist worth his meat wouldn't do this because employment is a complex topic in an economy with many different influencing criteria. The countries with minimum wage are very different to the countries without because of factors like

1 - infrastructure
2 - competitiveness
3 - trade relationships
4 - differences in employment law
5 - differences in welfare
6 - pricing power
7 - population and demographics
8 - education and skills
9 - government business policies
10 - is the country a net receiver or a net contributor to EU funding
11 - plenty more - its not black and white

It isn't just - oh here is a chart - showing 2 lines depicting unemployment and it proves minimum wages = higher unemployment.

I have presented you research papers covering at least 10 separate studies with actual data and all of it referenced. It is you that needs to go read up because the weight of evidence against your theory far outweighs the weight of evidence supporting it.

I'm just going to throw this in for giggles

 

[J Livermore]

I see the US as a Capitalist system. However as far as I can gather you would prefer an even more extreme Capitalist system.
Whereas I am giving an alternative choice and a less Capitalist system by NOT promoting the self and individual greed so much. Different countries will make different choices obviously to aid themselves as well as possible.

You’ve said yourself in previous posts that the U.S. is heading towards bankruptcy. Why would you want to extend government’s reach into people’s lives and the economy if what you say is true?

The U.S. should be balancing its budget and paying off the debt in a slow, methodical way before an even bigger collapse comes along.

 

[new_trader]

One more time, for the dummies: The LAW of supply and demand is not MY theory!! The law of supply and demand is a basic economic theory that explains the interaction between the sellers of a resource and the buyers for that resource.

Labour is a resource. Raise the price of labour and demand for that labour is reduced, Ceteris Paribus.

If a trader can't understand a basic economic theory, what hope is there of a Politician ever understanding and doing the correct thing?

 

[FXX]

One more time, for the dummies: The LAW of supply and demand is not MY theory!! The law of supply and demand is a basic economic theory that explains the interaction between the sellers of a resource and the buyers for that resource.

Labour is a resource. Raise the price of labour and demand for that labour is reduced, Ceteris Paribus.

If a trader can't understand a basic economic theory, what hope is there of a Politician ever understanding and doing the correct thing?

You're right it isn't your theory, and yet you choose to broadcast that removing the minimum wage (7%) of the UK workforce will increase the demand for labour. You simply don't understand the mechanics of labour supply and demand insofar that your only explanation of it focuses on wages. You ignore the real underlying dynamics that shape it like consumer debt, business debt, interest rates, the business cycle, and the list goes on. You have taken a multifaceted complex relationship and boiled it down to wages - that is a special kind of genius.

You have ignored the research I have provided by economists covering a dozen separate studies proving min wage didn't lead to job losses. Here is another one for you chum, If your theory is right, and ignoring the 2008 recession, why has the minimum wage which began in 99, and has since increased every year, resulted in the lowest unemployment reading in the history of the UK since records began? It's related to more people being employed at the lower end of the spectrum - aka min wages.

According to you, wage increases leads to job losses. Here is the median income, the only reason there are dips is because of recessions.

Taking this further, here is the unemployment chart for the USA with recessions marked. Job losses are a consequence of the economic activity weakening and demand, not because of the wages, but because the underlying demand for goods and services in the economy is weakening and businesses start cutting capacity. You focus on wages in isolation but ignore the business cycle, it's hilarious.

@new_trader your understanding of fundamentals can be represented in a single post

And just to prove your understanding of fundamentals and markets ar wrong - here are economic indicators (some of many) scaled alongside the British Pound. Can you see how the market is correlating with the economic data!
Yes, it is utterly ridiculous isn't, to use economic data and other fundamentals like Brexit or US election to trade the markets. Stick to your candlesticks @new_trader

Please do yourself a favour, if you want to continue this conversation and have any credibility, it would be in your interest to post some actual data or economist grade research publications. This continued battering of the perverbial wages stick with unreferenced material (aka how can it be trusted) and britannica links won't cut the mustard. I suspect however you will run off as you have done with me in the past and pretend like nothing has happened.

 

[new_trader]

The minimum wage is just one form of Price control. Government apologists try to disguise the impact of price controls with statistics that ignore all the unseen & unintended consequences. This why I advocate studying Austrian Economics, it is the only way you can survive and prosper the intended AND unintended consequences of Government intervention.

Go to: Here to understand the impact of the minimum wage

Price Controls | The Effects of Price Controls​

 

[FXX]

http://cep.lse.ac.uk/pubs/download/CP217.pdf

"we now have evidence from over 25 British
studies so we no longer need to rely on our prejudices. The conclusions are clear-cut – the minimum wage has not had an adverse impact on jobs"

David Metcalf is professor of industrial relations at LSE, a member of the Low Pay Commission and a research associate in CEP’s labour markets programme.

 

[new_trader]

This is how the U.S. Bureau of Labor Statistics defines Employed:
REF: http://www.bls.gov/cps/definitions.htm#employed

Employed​

In the Current Population Survey (CPS), people are classified as employed if, during the survey reference week, they meet any of the following criteria:

1. worked at least 1 hour as a paid employee (see wage and salary workers)
2. worked at least 1 hour in their own business, profession, trade, or farm (see self-employed)
3. were temporarily absent from their job, business, or farm, whether or not they were paid for the time off (see with a job, not at work)
4. worked without pay for a minimum of 15 hours in a business or farm owned by a member of their family (see unpaid family workers)

Look at criteria 1. A person only has to be employed for 1 HOUR to be classed as employed. This means an employer could cut employees hours from 40 per week to 20 per week as a result of the minimum wage increase, and they will still be counted as employed. This is something the Government Apologists either conveniently ignore, or don't understand. However it is perfectly explained by the law of supply and demand.

The original video I posted already covered the bias of Government funded "studies" that purportedly show the minimum wage has had no impact. But as was mentioned, there were many flaws in the way the original (Government funded) studies were conducted. Other independent studies for the same period, using a different methodology, showed an absolute 100% correlation between minimum wage increase and reduction in employment hours or job losses.

Usually the Government funded studies completely ignore the quality of jobs. If a factory is forced to close and 10 manufacturing jobs are lost as a result of the higher input costs due to the minimum wage increase, these 10 people might end up finding another job packing shelves in a supermarket. But manufacturing and exports really make a county wealthy, not so much service sector jobs. Government funded studies ignore the impact on sectors and just focus on aggregates like "employment".

Government funded studies ignore the unseen consequences of the higher labour costs, like new small business formations. How many businesses would be started if labour were more affordable? Are there any Government studies that show this?

The Austrian Economists have been studying the impact of Government price controls for decades, they have written many books on the subject and published uncountable articles. I suppose all of these will need to be rewritten because we now have google!

Here are two excellent videos that were posted earlier. Government apologists won't dare watch these!

If the minimum wage was so good for an economy, and there was absolutely no impact on employment, why wait until October 2025? Just do it now and make it $50/hour...the higher the better right?

House passes bill to raise federal minimum wage to $15 an hour​

House passes bill to raise federal minimum wage to $15 an hour

The U.S. House of Representatives on Thursday passed legislation to raise the federal minimum wage to $15 an hour by October 2025, a big win for workers and labor groups, even as it remained unlikely the bill would pass a Republican-controlled Senate.

www.reuters.com

 

[FXX]

Nobody suggested raising it to stupid levels and to suggest as much reflects a weak point. We are talking about 7 percent of the workforce, or approximately 2 million people in a nation 66 million (hardly noticeable in the grand scheme of things). Removing minimum wage wont have any impact on the economy besides increasing inequality, crime, social imbalances, and increased costs for insurance and security. If minimum wages were spread out to skilled workers you won't see any noticeable stimulus to the economy.

is removing minimum wages your best ammo for stimulating the economy? It's rather pointless