May 2015 Provincial Election Thread v2

[nik-]

Dammit Jim, just do better!

[rubecube]

Originally Posted by IliketoPuck

Sorry?

How the hell does increasing his costs increase customer demand.

Jim has a hardware store. He sells hardware. He competes against Home Depot, Canadian Tire, Lowe's, Rona.

He doesn't have the purchasing power to not pass through increased costs to customers, therefore he can't compete and there is no normalization.

Jim does not exist in a vacuum. Last I checked, there are roughly 2000 full-time minimum wage workers in Alberta. Since the minimum wage increased, those people have seen their income go up by 10% this year, and will see it go up by 50% over the next few years, which should in turn provide them with more disposable income. So Jim's customer base has the potential to increase, thereby increasing the demand for his products.

[Senator Clay Davis]

Ok I've said this before, but can we please just go with another thread already? Now that this thread has been cut by several thousand posts, it has 0% of posts about the 2015 Provincial Election. Suggested new thread titles include...

The Ongoing "Thanks NDP" Thread
Благодаря НДП (Thanks NDP in Russian)
The Red Brigade Thread
Please Be 2019 Already Thread

[nik-]

Originally Posted by rubecube

This is such a brutal article.



Well which one is it? Was it at 8.2% a year ago, or was it at 13.2% in November 2014.

uhh, one is national and one is provincial.

[Fuzz]

Originally Posted by rubecube

This is such a brutal article.



Well which one is it? Was it at 8.2% a year ago, or was it at 13.2% in November 2014.

I think they are saying a year ago Alberta was 8.2% and Canada was 13.2%. So we are now close to average. Story of my life.

[nik-]

Originally Posted by rubecube

Jim does not exist in a vacuum. Last I checked, there are roughly 2000 full-time minimum wage workers in Alberta. Since the minimum wage increased, those people have seen their income go up by 10% this year, and will see it go up by 50% over the next few years, which should in turn provide them with more disposable income. So Jim's customer base has the potential to increase, thereby increasing the demand for his products.

Potentially. Again, no business, especially one that's not large, is going to bleed money because they potentially might have more disposable income coming in. They're going to set their costs with the current reality of their business.

[polak]

Originally Posted by username

Simplified (rushed my other reply):

Jims business has fixed it's budget for labor at $30 hr. Instead of exploring other avenues to increase margin, he cuts staff. Cutting staff will lower the customer serivce at his business', most likely lowering sales even more. Why should we feel like he should get to underpay his employees to protect his profit margin?

Any business lost by Jim will be picked up by other hardware stores. Other hardware stores will need more people to handle the growing business. Everyone wins but Jim. Cause Jim is a ####ty business owner.

[Smartcar]

Originally Posted by rubecube

This is such a brutal article.

Well which one is it? Was it at 8.2% a year ago, or was it at 13.2% in November 2014.

The Alberta youth unemployment rate in November 2014 was 8.2%, the national rate was 13.2% November 2014. They're trying to sat the national rate is down while the Alberta rate is up.

I don't see why it's not clear.

[IliketoPuck]

Originally Posted by rubecube

Jim does not exist in a vacuum. Last I checked, there are roughly 2000 full-time minimum wage workers in Alberta. Since the minimum wage increased, those people have seen their income go up by 10% this year, and will see it go up by 50% over the next few years, which should in turn provide them with more disposable income. So Jim's customer base has the potential to increase, thereby increasing the demand for his products.

But why would those people spend their money at Jim's? He's had to increase his prices to offset the wage increase.

Large retailers with substantial purchasing power have managed to keep their prices down.

Jim loses market share.

What I'm trying to get at here is that the NDP policy benefits large companies at the detriment of local mom and pop type stores. That's the reality of a higher minimum wage.

[polak]

So Jims marketshare should be subsidized by his staff because Jim can't compete with Home Depot?

[rubecube]

Originally Posted by Smartcar

The Alberta youth unemployment rate in November 2014 was 8.2%, the national rate was 13.2% November 2014. They're trying to sat the national rate is down while the Alberta rate is up.

I don't see why it's not clear.

Skimmed it too quickly and didn't see the word "national" in there. Brutal reading by rubecube is what it was.

[PsYcNeT]

So what you're saying, is a low minimum wage artificially levels the playing field for poorly run businesses to compete against the big box stores.

[rubecube]

Originally Posted by IliketoPuck

But why would those people spend their money at Jim's? He's had to increase his prices to offset the wage increase.

Large retailers with substantial purchasing power have managed to keep their prices down.

Jim loses market share.

What I'm trying to get at here is that the NDP policy benefits large companies at the detriment of local mom and pop type stores. That's the reality of a higher minimum wage.

Why would he have to increase his prices if he's laying off employees?

[nik-]

Originally Posted by PsYcNeT

So what you're saying, is a low minimum wage artificially levels the playing field for poorly run businesses to compete against the big box stores.

This has to be deliberate at this point, you're not this slow.

[Jacks]

Originally Posted by polak

Jims business has fixed it's budget for labor at $30 hr. Instead of exploring other avenues to increase margin, he cuts staff. Cutting staff will lower the customer serivce at his business', most likely lowering sales even more. Why should we feel like he should get to underpay his employees to protect his profit margin?

Such as?
On top of the increased labour costs he is facing higher taxes, higher utility costs and lower demand as the economy tanks. How big do you think Jim's profit margin was to be able to weather all those storms?

Originally Posted by polak

Any business lost by Jim will be picked up by other hardware stores. Other hardware stores will need more people to handle the growing business.

It's be picked up by big box stores that don't pay any higher of wages and a lot of them ship any profits out of the country. Who exactly wins there?

Originally Posted by polak

Everyone wins but Jim. Cause Jim is a ####ty business owner.

Are you for real?

[rubecube]

Originally Posted by nik-

Potentially. Again, no business, especially one that's not large, is going to bleed money because they potentially might have more disposable income coming in. They're going to set their costs with the current reality of their business.

Totally. Like I said, I'm not naive to the fact that there would likely be an adjustment period, but I think it will level out in the long run. That seems to be what's been shown in the various studies on the subject that have used real life examples. The only difference between those studies and what we have in Alberta is the rate at which the minimum wage is increasing.

[Mister Yamoto]

Originally Posted by polak

Simplified (rushed my other reply):

Jims business has fixed it's budget for labor at $30 hr. Instead of exploring other avenues to increase margin, he cuts staff. Cutting staff will lower the customer serivce at his business', most likely lowering sales even more. Why should we feel like he should get to underpay his employees to protect his profit margin?

Any business lost by Jim will be picked up by other hardware stores. Other hardware stores will need more people to handle the growing business. Everyone wins but Jim. Cause Jim is a ####ty business owner.

I like it how you felt that there was a need to let us know that this is simplified.
Let's have a Jims' Hardware store thread. It's hilarious.

[rubecube]

Originally Posted by Fuzz

I think they are saying a year ago Alberta was 8.2% and Canada was 13.2%. So we are now close to average. Story of my life.

Yeah, I skimmed too quickly. I still think the article is missing some finer details. How do loss of youth jobs compare to the loss of regular jobs. It would make sense if we were seeing similar numbers in each, would it not?

[Flacker]

Originally Posted by polak

Any business lost by Jim will be picked up by other hardware stores. Other hardware stores will need more people to handle the growing business. Everyone wins but Jim. Cause Jim is a ####ty business owner.

Jim is a bad business owner because he has a fixed budget for labour? You can't be serious.

[username]

Originally Posted by rubecube

Totally. Like I said, I'm not naive to the fact that there would likely be an adjustment period, but I think it will level out in the long run. That seems to be what's been shown in the various studies on the subject that have used real life examples. The only difference between those studies and what we have in Alberta is the rate at which the minimum wage is increasing.

Do you have a link/reference to these studies? I'm really curious because everything I was taught in university economics (albeit a long time ago) would suggest otherwise.