Quote:
Originally Posted by Infinit47
Your talking points from Regan era economics are getting tired.
We are discussing a type of labour which is essentially a commodity. It's not priced based on the value of the labour provided to the business owner, but is based on the balance of labor supply and labor demand. If labor supply is above labor demand business owners can pay below the value of the work recieved and still attract workers. When labor supply is below labor demand wages go up, potentially even to the value of the work provided (presumably an owner can't over pay as they will go out of business). Lots of work has been done to understand the impact of minimum wage increases, and some very interesting results from studies of Big Mac pricing across different minimum wage jurisdictions. I would suggest you read this work if you think increases in minimum wage lead to less employment, because they do not.
You seem to either misunderstand or ignore the power balance that frequently exists in over supplied labour markets that lead to predatory wages which is what required the creation of unions and a minimum wage.
Regarding your trickle down, supply side position on corporate tax rates and "growing the pie" of investment. You may want to take a look at what the tech, banking, pharmaceutical, and energy industries have done with their cash windfalls at various points over the last decade. I will give you a hint. They have had so much money they were forced to "invest" it in such productive things as:
1. Share buy backs;
2. Increasing dividends;
3. Massive executive bonus packages;
4. Straight up hoarding cash.
None of these very common practices "grow the investment pie". They do not lead to hiring or increased productivity. They lead to one thing, the concentration of wealth in a place where it mostly sits idle.
Can't believe I got sucked into this on a hockey forum.
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This is a well thought out and well reasoned post that makes good points. I just wanted to highlight the bolded as I hear these two things get criticized a lot and I just don't believe they belong in the same category as massive executive salaries. A business that decides to return profits to it's owners is a perfectly appropriate course of action IMO. If you don't like what the owners do with that money, well I guess that's a different argument.