General Politics Thread

[Gator Hazard]

What I have discussed with other people is something called "enterprise risk".  People need to understand how businesses run in their different structures.  Most McDs, Wendy's, Dunkin Donuts, etc are not owned by the big bad machine with the big evil ceo and board members.  It is owned by a franchisee (I am sure many of you already know this but there are a lot of people who do not) who may own anywhere from 1 to 20 stores.  The majority of them own a few stores, and only after time from enough earnings to get from one to two etc.  But here is the meat of it:  What is the incentive of a small business owner to go through the process necessary to open a business (incorporating, getting a small business loan backed usually by collateral and your credit rating on the line, investment, time, learning, etc) if they are only going to make close to or barely above the amount of money that they could make working for a big company such as a bank or a big store or any other type of mid to large size established company?

Most average small businesses and single franchise units turn a profit for the owners that is not a great deal better than a good, solid, corporate position.  I have not gone out and gotten data to solidify this number but know through personal relationships that these people are not swimming in money, they are living a lifestyle very close to my own.  If you effectively double the cost of labor, that has a direct impact on the bottom line profits for the owner.  The owners of a small business are taking a very large risk including personal bankruptcy in many cases.  There is supposed to be an incentive or reward associated with this type of risk taking (enterprise risk) that induces persons to engage in this type of behavior which also creates more jobs and expands the market.

Increase the wages and there are several things an owner can do:  raise prices, reduce staff, find substitute goods and services that are comparable (provided you are not a franchisee and restricted based on franchise agreement terms) but are cheaper, or take a smaller profit margin.  The obvious and easiest solution is going to be to reduce staff as many people are sensitive to price.

Ultimately what can, may, and probably will end up happening from a minimum wage increase that is too drastic is that many small business owners will reduce staff, raise prices slightly, work more of the hours themselves, and take a much smaller profit.  This in turn will lead to many marginally successful business owners divesting themselves of these businesses and going back to traditional jobs.

[Kenny Lee]

- I think that minimum wage should either be A) brought up to $15 an hour, or B) the government subsidizes the minimum wage to make it $15. While I get the reasoning behind stapling the minimum wage to the quality of life you are living in, I think that by raising the MW equally everywhere you'll be able to create greater wealth in all areas.

Nice try but . . . . . EPIC FAIL. They tried this in Seattle, and guess what happened?

The employees quit as soon as they approached the income threshold to stop receiving government benefits. Now the sit on their fat lazy asses, and continue to receive government benefits; while employers, customers, and taxpayers absorb the added expense.

Here is the truth:

If you want the rich to work harder, you need to pay them more.

If you want the poor to work harder, you need to pay them less.

[Gator Hazard]

Someone mentioned that minimum wage should be commensurate with where you live.  I agree with that, as an apple in New York City costs more than an apple in Georgia.  Does that mean there are regions who should have a $15 an hour minimum wage?  Maybe.  One of the other things is to live within your means.  I couldn't afford to live in downtown Chicago when I first moved there, so I didn't.  I didn't whine to the government that i felt it was not fair that I couldn't live in downtown Chicago, I worked towards my goals, saved money where I could, had a roommate for a while and did what had to do.  It was a great builder of character as well.  Everything can't be handed to you or it loses value.  Not everyone can be a Kardashian and a Paris Hilton and the rest of the rich kids.  Not everyone should deserve to drive a Range Rover, step out in their $600 dollar shoes clutching their $3,500 handbag because they see these rich people doing it.

[Patch]

What I have discussed with other people is something called "enterprise risk".  People need to understand how businesses run in their different structures.  Most McDs, Wendy's, Dunkin Donuts, etc are not owned by the big bad machine with the big evil ceo and board members.  It is owned by a franchisee (I am sure many of you already know this but there are a lot of people who do not) who may own anywhere from 1 to 20 stores.  The majority of them own a few stores, and only after time from enough earnings to get from one to two etc.  But here is the meat of it:  What is the incentive of a small business owner to go through the process necessary to open a business (incorporating, getting a small business loan backed usually by collateral and your credit rating on the line, investment, time, learning, etc) if they are only going to make close to or barely above the amount of money that they could make working for a big company such as a bank or a big store or any other type of mid to large size established company?

Most average small businesses and single franchise units turn a profit for the owners that is not a great deal better than a good, solid, corporate position.  I have not gone out and gotten data to solidify this number but know through personal relationships that these people are not swimming in money, they are living a lifestyle very close to my own.  If you effectively double the cost of labor, that has a direct impact on the bottom line profits for the owner.  The owners of a small business are taking a very large risk including personal bankruptcy in many cases.  There is supposed to be an incentive or reward associated with this type of risk taking (enterprise risk) that induces persons to engage in this type of behavior which also creates more jobs and expands the market.

Increase the wages and there are several things an owner can do:  raise prices, reduce staff, find substitute goods and services that are comparable (provided you are not a franchisee and restricted based on franchise agreement terms) but are cheaper, or take a smaller profit margin.  The obvious and easiest solution is going to be to reduce staff as many people are sensitive to price.

Ultimately what can, may, and probably will end up happening from a minimum wage increase that is too drastic is that many small business owners will reduce staff, raise prices slightly, work more of the hours themselves, and take a much smaller profit.  This in turn will lead to many marginally successful business owners divesting themselves of these businesses and going back to traditional jobs.

Not anymore. A recent  federal court ruling has now made the corporate owner, in addition to the franchisee, co-owners of their business, and both are now responsible for their employees. The court also ruled that the size of the business did not matter. Example; Now McDonald's and their franchisee are now both responsible for their employees. When employees want to discuss raises, and other employee matters, McDonalds corporate folks, themselves now have to be involved in the negotiations, and pay a share of the agreed compensations. .

[Gator Hazard]

Nice try but . . . . . EPIC FAIL. They tried this in Seattle, and guess what happened?

The employees quit as soon as they approached the income threshold to stop receiving government benefits. Now the sit on their fat lazy asses, and continue to receive government benefits; while employers, customers, and taxpayers absorb the added expense.

Here is the truth:

If you want the rich to work harder, you need to pay them more.

If you want the poor to work harder, you need to pay them less.

There was another thread that showed the classic psychology extra credit experiment where if too many people tried to ask for the maximum extra credit the entire class would get nothing.  Every time, too many people did.  Extrapolate this to a larger scale and what does it tell us about human behavior?  That the vast majority of people without being put in the public eye are going to act in their own best and selfish interests.  This includes people of all walks of life, not just better off people.

I agree with your first statement about rich people in general but not necessarily with your second comment about poor people.

[jbishop15]

Nice try but . . . . . EPIC FAIL. They tried this in Seattle, and guess what happened? The employees quit as soon as they approached the income threshold to stop receiving government benefits. Now the sit on their fat lazy asses, and continue to receive government benefits; while employers, customers, and taxpayers absorb the added expense. Here is the truth: If you want the rich to work harder, you need to pay them more. If you want the poor to work harder, you need to pay them less.

http://m.snopes.com/seattle-15-minimum-welfare/ http://seattle.eater.com/2015/8/13/9143329/is-the-seattle-minimum-wage-law-as-bad-for-restaurants-as-the Please read up on the topic. You are misinformed.

[Gator Hazard]

Not anymore. A recent  federal court ruling has now made the corporate owner, in addition to the franchisee, co-owners of their business, and both are now responsible for their employees. The court also ruled that the size of the business did not matter. Example; Now McDonald's and their franchisee are now both responsible for their employees. When employees want to discuss raises, and other employee matters, McDonalds corporate folks, themselves now have to be involved in the negotiations, and pay a share of the agreed compensations. .

My point is more than just franchise small businesses but I would like to see how this plays out for the franchise businesses.  Did they tell the businesses how they are to alter their franchise license and royalty agreements for franchisees to pay for increases to minimum wage?  I am curious to see that information and how it is going to be enforced and held up.  I am also curious to see if it will not go to a higher court, this could possibly become a Supreme Court case.  I just googled and saw an article saying it may shift to creation of unions.  Well, if its about unionizing that only works in pro union states, guess what will happen?  Corporations will shift all of their corporate headquarters to right to work states or offshore.  The fact of the matter still remains that in a capitalist economy businesses are going to do what is in their interest to keep their profits.  Just ask the union steel workers where most of their jobs went when they negotiated the sweetest deals they could.

[Gator Hazard]

Lastly, if they do try and tell businesses how they are to pay for employees, you are clearly going to see less employees and more kiosk machines to take orders.

[saevel25]

I wouldn't mind more touch screens at fast food places :)

If the US wanted to really mess with corporations shifting locations or specifically out of country. Then you'd have to make the rule stating that a certain percentage of work must be done in the United States or you are going to get taxed.

A lot of cities and states do DBE funding. A certain percentage of work must be done by businesses with minorities.

Like for cars. If a car is sold in the United States then lets say 75% of the cars value must come from work done in the United States.

Things like that, would at least keep work in the United States. The primary issue is the extra cost associated with this. How much more expensive would the goods be to buy?

[Gator Hazard]

http://m.snopes.com/seattle-15-minimum-welfare/

http://seattle.eater.com/2015/8/13/9143329/is-the-seattle-minimum-wage-law-as-bad-for-restaurants-as-the

Please read up on the topic. You are misinformed.

One thing that is not clear from the second article is how many of those are full time jobs with benefits.  Being in a job where I can make numbers tell basically any story I want them too, I always raise an eyebrow when I see stories like that which do not discuss the type or quality of the positions.

FACT:  Unemployment is down

ALSO A FACT:  That number does not talk about the people who no longer qualify for benefits, gave up searching, or does it speak to the type and quality of positions.  Yes, there are more cheaper part time positions out there that are being filled.

[Gator Hazard]

I wouldn't mind more touch screens at fast food places :)

If the US wanted to really mess with corporations shifting locations or specifically out of country. Then you'd have to make the rule stating that a certain percentage of work must be done in the United States or you are going to get taxed.

A lot of cities and states do DBE funding. A certain percentage of work must be done by businesses with minorities.

Like for cars. If a car is sold in the United States then lets say 75% of the cars value must come from work done in the United States.

Things like that, would at least keep work in the United States. The primary issue is the extra cost associated with this. How much more expensive would the goods be to buy?

Agreed, and good points.

One of the scarriest things I saw was where  a law lapsed that actually allows for chickens to be slaughtered in the US, sent to china for processing and sent back to America for sale.  The kicker:  Tyson, Purdue, all of these companies selling chickens do not have to tell you that the chicken you are eating was processed in a plant in China.

What to me is more outrageous is what does it say about both Corporations and Unions pulling at both ends of the spectrum that it has actually become economically feasible to kill, sanitize, freeze and ship chickens to China, have them processed and sent back for sale.

These to me are the types of economic indicators that say things are going wrong

[Jeremie Boop]

One issue that many don't seem to bring up about the minimum wage increase to $15 is what do you do to address all those people who have been working for years to reach their current pay, be it 13/15/20 etc per hour, only to have everyone's wage bumped up to 15? Do you then give every other worker an equal percentage increase?

You can't just say, pay everyone more, you have to look at what the local economy can bear.

[saevel25]

One issue that many don't seem to bring up about the minimum wage increase to $15 is what do you do to address all those people who have been working for years to reach their current pay, be it 13/15/20 etc per hour, only to have everyone's wage bumped up to 15? Do you then give every other worker an equal percentage increase?

I'd say you don't. It's tough sledding, but if the minimum wage is increased then those bellow it get a bump. Those above it, tough.

[Gator Hazard]

One issue that many don't seem to bring up about the minimum wage increase to $15 is what do you do to address all those people who have been working for years to reach their current pay, be it 13/15/20 etc per hour, only to have everyone's wage bumped up to 15? Do you then give every other worker an equal percentage increase?

Or the competition for jobs requiring less skill.  Why get a job as a teacher or in the medical field if you can just be the walmart door greeter?

[phillyk]

Or the competition for jobs requiring less skill.  Why get a job as a teacher or in the medical field if you can just be the walmart door greeter?

Wow, it would be tough competition to get that door greeter position.

[Jeremie Boop]

I'd say you don't. It's tough sledding, but if the minimum wage is increased then those bellow it get a bump. Those above it, tough.

I'm sure that's the way it would be, but it's also a very crappy and, in my opinion, supremely unfair aspect of the large increase that's being pushed for. "Hey, you dropped out of high school, have little to know appreciable skills or abilities? Here's $15 an hour?" "Hey, I know you've been here for 5 years and went through several specialized training courses in order to achieve some special skills and certifications, but that new person who doesn't know how to do the job at all is now going to make almost as much as you but you're going to be at the same pay."

[Strandly]

I see more people complain about automated stuff than not and it seems a bit odd because I think it's generally a good idea most of the time.  One specific example is the self checkout at grocery stores.  I don't mind checking my own stuff out because I'm fast.  My time is worth more (to me anyway) than the $7 an hour they're paying the human sloth to scan my items for me.

One automated thing I will never embrace though is the 1-800 automated phone system.  I absolutely refuse to talk to a robot that is trying to talk to me like it's some kind of sentient being. I just hammer the 0 button until I get to a human.

[Gator Hazard]

I'm sure that's the way it would be, but it's also a very crappy and, in my opinion, supremely unfair aspect of the large increase that's being pushed for. "Hey, you dropped out of high school, have little to know appreciable skills or abilities? Here's $15 an hour?" "Hey, I know you've been here for 5 years and went through several specialized training courses in order to achieve some special skills and certifications, but that new person who doesn't know how to do the job at all is now going to make almost as much as you but you're going to be at the same pay."

We have already seen this happen and blow up in the owners faces when the owner of that credit card processing company decided to pay everyone $70K a year.   I would say great in theory but its not even good on paper (good intent no doubt) but a lot of the talent has already walked right out the door.