Please justify this $15/hr minimum wage thing

The market already finds the happy medium between spending and saving. Forcing the rich to spend more on goods would only inflate the price of those goods for everyone else, and leave the rich with a bunch of crap they don't need. A terrible idea for the economy all around. I have no problem if you want to give cash to the poor to help them out, but businesses would also not become more profitable. They would simply raise their prices, which would weaken the purchasing power of the dollar, and the GDP or wealth of the country in real terms would probably decrease rather than increase.

This question is completely irrelevant, but since you asked, people use credit cards for everything

Except the ones paying the mortgages are not the ones doing most of the saving. Lending allows the homeowners to spend and consume by living off the money you're mad at the rich for not spending.

All I can say is you should just take a real macroeconomics course (and micro, and finance) and find out how backwards you have everything. I can illustrate why you're wrong using people on desert islands if you want.

If more people have more purchasing power than before, than they will buy more stuff. Net sales will go up in the business, profit goes up and so on and so forth. It seems to me that you think inflation will go up of we transfer wealth from the top to the bottom, it won't.

The rich won't be the ones spending it, it's the people on the bottom that will be spending the money. The money just comes from the rich on the very top.

Credit cards aren't the same as loans because if you pay at the end of the month, you aren't charged anything significantly more, or at all.

Ok, so mortgage prices go up a little bit, but again if we brought in the trillions of dollars from offshore accounts, on top of increasing taxes on the ultra rich and their highest earnings, there would be a net increase in purchasing power for those at the bottom.

You can't say that all an entrepreneur needs is saving/investment, it is ONE thing of many required to runs business. This is obvious.

My whole point here is that investment/savings is a less efficient way to stimulate the economy than consumer spending. So we take SOME of the money being invested and the money that isn't invested/spent/saved (to a reasonable amount) and tax it, then give it to the bottom who will spend every dime of it, buying from businesses, making them more profitable. I really don't know how else to explain my thinking.

Current minimum wage of $7.25 is worth about $3 less than the minimum wage in 1968 ($10.34), in constant 2012 dollars.

Annual cost of living for one adult, no children, in the U.S. is $28,474.

40 hrs per week for 50 weeks@$15/hr is $30,000.

Social Security tax is 6.2%, Medicare tax is 1.45%.

That's a tax of $2295, not including any federal withholding and state and local taxes. That leaves take home pay of $30k-$2295=$27705, over $700 less than the annual cost of living for one adult, no children.

In other words, $15/hr, assuming full-time employment for 40 hours per week for 50 weeks per year, not necessarily the case, is essentially the minimum necessary for one adult's subsistence in the course of the year, and since there are additional taxes (fed withholding, sales taxes, state/local taxes, possibly even property taxes) not figured here, it is not quite enough.

Thus, I have demonstrated that this is not merely an arbitrary figure, but rather one that approximates the cost of living, less taxes removed from all paychecks. I have also shown that it is not really enough. In some places, it would actually be quite a bit less than necessary; in others, it would be adequate for a somewhat more comfortable life.

HardLoper wrote:

Bruh wrote:

Increased Consumer Spending= Increased economic growth no matter what way you try to spin it.

WRONG! Come on, not even Krugman goes this far. If this were true, Zimbabwe's plan to print money and consume its way to prosperity would have worked.

Economic growth is a function by innovation and entrepreneurial activity, which is driven by consumer savings. Empirically, a country's economic growth rate is proportional to its savings rate. The WORST thing that could happen to the economy is if wealthy people decided to spend all their money on consumption.

Zimbabwe's printing money has nothing to do with increasing consumer spending.

If economic growth were proportional to savings rate, Japan would not have decades of zero growth.

First - what ever the hourly cost of a worker is - the cost to the employer is somewhat higher due to Social Security and medicare tax, unemployment tax (federal and state) and worker compensation insurance.

Depending on the industry, a 15 dollar wage may end up costing the employer 18-20 dollars an hour. This might be no big deal for some large employers, but to someone like myself, it would be enough for me to actually do more work myself. As a business owner, I'm allowed to exempt myself from workers comp insurance. Since my wages last year was 50k, I made about 25 dollars an hour based on a 2000 hour work year. I would imagine that the number of jobs will decrease dramatically depending on how fast such a law was enacted.

jjjjjj wrote:

If economic growth were proportional to savings rate, Japan would not have decades of zero growth.

It is. Japan's savings rate was much higher in the 60's to the early 90's when they were growing rapidly. The trend would be true if you plotted every countries' savings rate vs long term growth rate too.

Bruh wrote:

Credit cards aren't the same as loans because if you pay at the end of the month, you aren't charged anything significantly more, or at all.

Huh wha? A loan with 0% interest is still a loan.

HardLoper wrote:

All I can say is you should just take a real macroeconomics course (and micro, and finance) and find out how backwards you have everything.

It's scary how little people like Bruh and like minded socialists actually know about economics. It's always the same, take from the rich, give to the poor and assume that everything else will stay the same. It won't.

not a finance guy wrote:

Bruh wrote:

Credit cards aren't the same as loans because if you pay at the end of the month, you aren't charged anything significantly more, or at all.

Huh wha? A loan with 0% interest is still a loan.

Ok yes, it's technically a loan, but it doesn't have the same effect as a mortgage with an interest. Having interest and not having interest is a pretty big difference.

socialists: follow HL's advice wrote:

HardLoper wrote:

All I can say is you should just take a real macroeconomics course (and micro, and finance) and find out how backwards you have everything.

It's scary how little people like Bruh and like minded socialists actually know about economics. It's always the same, take from the rich, give to the poor and assume that everything else will stay the same. It won't.

It's amazing how people see the broken system we have and do nothing to fix it because they are well off to where it doesn't affect them. Or they just don't see it.

These are socialistic principles, not straight socialism. Straight socialism is idiotic and will never work. Without socialist principles there would be no public schools, police, infrastructure etc. FDR pulled us out of the depression with at the time socialistic ideas that were not viewed in the highest light. They were even blocked by congress, but he made them work and it put us into an economic boom. I wonder what would have happened if we never had those reforms. The same message you are preaching now is what was being preached back then, when the problem was similar but not to the same degree.

This isn't take from the rich, give to the poor. The rich have systematically used their money to bribe politicians into creating economic policy in their favor so they would earn more money, i.e. Suppressing minim wage increases and the BS theory of trickle down economics. The Rich have bent the poor over backwards for years and they now have the nerve to say that the money they made is rightfully theirs? Swallow your pride, admit what the ultra rich have done to the poor is wrong, and make fixes by having fair economic policy in the future, we aren't even asking for reparations. This is not a hard concept to grasp.

Bruh wrote:

Without socialist principles there would be no public schools, police, infrastructure etc. FDR pulled us out of the depression with at the time socialistic ideas that were not viewed in the highest light. They were even blocked by congress, but he made them work and it put us into an economic boom. I wonder what would have happened if we never had those reforms. The same message you are preaching now is what was being preached back then, when the problem was similar but not to the same degree.

Not only are you clueless about economy. You don't know squat about history either. Wasn't there any police before socialism? No public schools? No infrastructure? Do you have the slightest idea what Adam Smith thought about infrastructure?

And no, FDR didn't pull us out of the depression. He prolonged it with his disastrous policies (to his excuse nobody knew what to do at the time). The second world war brought us out of the depression.

It doesn't matter when the idea was created, it is still a socialistic idea, even if the creators didn't even invent the word socialism yet. If it is a state run program then it is socialistic in some form. If it were capitalistic, like health care is, it would be run by private businesses.

This brings up another good point, Adam Smith was a huge supporter of the free market, yet he still wanted socialistic programs. We need to have a balance of capitalism and socialism, and in the past and right now, there is too many capitalistic policies where there should be more socialistic policies, specifically with the problem of the wealth gap.

As for FDR you are just plain wrong, read the link for more detailed info. I will summarize.

After his apparently "disastrous" policies were implemented in 1933 GNP rose year after year. And here is the kicker, the top tax rate was 79% percent, exactly what I am preaching.

Here is something to note as well, a direct quote:

"Economists attribute economic growth so far to heavy government spending"

This is exactly the opposite of "disastrous".

Now the war did help as well, but that proves another one of my points, lots more people started working, the men went overseas to fight and the women who weren't working before (most were housewives at the time) took their jobs in factories. So if the war helped get us out of the depression (which it did), that would prove my point, the more money earned by the lower and middle class, the more economic growth. Since both men and women work right now, we have to raise their earnings instead of creating more jobs (we are at full employment now). This raises the real earnings of the lower and middle classes who will then be able to spend more money and grow the economy.

Bruh wrote:

not a finance guy wrote:

Huh wha? A loan with 0% interest is still a loan.

Ok yes, it's technically a loan, but it doesn't have the same effect as a mortgage with an interest. Having interest and not having interest is a pretty big difference.

People do pay interest on credit cards. Often higher rates than any other type of loan.

No big deal wrote:

$15/hr only means that stakeholders will have to re-negotiate the slice of the pie. That means cities will have to reduce business taxes, states will have to reduce sales taxes, civil service unions will have to reduce benefits, etc., etc. etc. to ensure minimum wage workers have enough to live on, and small business owners have enough to make a profit. The American people will work together.

I don't know enough about economic theory to have an accurate opinion on the $15/hr wage (just like 99% of the other posters), but I do know that taxes NEVER EVER go down.

Because you Capitalist pigs owe us. The rich rip off the poor. Walmart and McDonald's pay slave wages. That will change soon. It's your right to get a livable wage. Long live Bernie Sanders.

Not a finance guy wrote:

Bruh wrote:

Ok yes, it's technically a loan, but it doesn't have the same effect as a mortgage with an interest. Having interest and not having interest is a pretty big difference.

People do pay interest on credit cards. Often higher rates than any other type of loan.

If you use a credit card the right way, by not overspending and paying the full amount at the end of each month, you don't pay interest. You just pay a fee to use the card.

Bruh wrote:

Not a finance guy wrote:

People do pay interest on credit cards. Often higher rates than any other type of loan.

If you use a credit card the right way, by not overspending and paying the full amount at the end of each month, you don't pay interest. You just pay a fee to use the card.

If if if if if. You said people don't borrow money to pay for ordinary things and that is simply not true, just accept it.

Not a finance guy wrote:

Bruh wrote:

If you use a credit card the right way, by not overspending and paying the full amount at the end of each month, you don't pay interest. You just pay a fee to use the card.

If if if if if. You said people don't borrow money to pay for ordinary things and that is simply not true, just accept it.

The vast majority of people use them the right way, so a very small percentage of people are idiots and use their credit cards to buy everything and rack up a ton of debt. In economics there will always be outliers, but to make the sweeping assumptions that make up basic economic principles, you have to ignore some of the outliers.

No, 38% of American households have credit card debt. That's not an outlier. Honestly, are you trying to set some record for number of times being wrong in one thread? Do you look up any facts before you post?