Paying workers more is better for everyone

[Stark]

Maybe you should ask your dad to be clearer so when you repost what he says you'd don't look so stupid?

In any case, if you turn the daft logic around you can say that CAPITALIST needs inevitably lead to negative outcomes as well. It turns out the real world is something that happens in between these two options.

[ryacko]

Maybe you should ask your dad to be clearer so when you repost what he says you'd don't look so stupid?

In any case, if you turn the daft logic around you can say that CAPITALIST needs inevitably lead to negative outcomes as well. It turns out the real world is something that happens in between these two options.

Capitalist needs are actually far below capitalist income, and it is through that investment often occurs.
Although I'll through you a bone and say that the richer a person is, the less they value money, and the less efficiently they would allocate it.

[Stark]

I'm actually blown away that you think that this a response to what I just posted.

[Esquire]

Maybe you should ask your dad to be clearer so when you repost what he says you'd don't look so stupid?

In any case, if you turn the daft logic around you can say that CAPITALIST needs inevitably lead to negative outcomes as well. It turns out the real world is something that happens in between these two options.

Capitalist needs are actually far below capitalist income, and it is through that investment often occurs.
Although I'll through you a bone and say that the richer a person is, the less they value money, and the less efficiently they would allocate it.

Do you mean that in a capitalist society everyone's needs are below their income, or simply a reformed version of 'the rich are rich?' How do you mean 'efficiently' in this context? Why should the rich value money less, and what exactly do you mean by it?

[ryacko]

Capitalist needs are actually far below capitalist income, and it is through that investment often occurs.
Although I'll through you a bone and say that the richer a person is, the less they value money, and the less efficiently they would allocate it.

Do you mean that in a capitalist society everyone's needs are below their income, or simply a reformed version of 'the rich are rich?' How do you mean 'efficiently' in this context? Why should the rich value money less, and what exactly do you mean by it?

What do you mean by needs?
What does efficiently typically mean to you?

People who have a lot of money value their money less. This is because they have so much of it.

[Surlethe]

Three loosely related points.

1. Megan McArdle on why Wal-Mart isn't more like Costco. Basically, Costco's employees are roughly three times as productive as Wal-Mart's employees because of differences in the firms' strategies and consumer bases.
2. We should be careful of saying the wealthy have diminishing marginal utility from "money." Warren Buffett (say) doesn't have much "money" - he owns assets whose value is measured in dollars. We should also be careful of the implication that the wealthy don't get much value from their higher income - if we operate by the principle that people should pay back to society in proportion to what they receive, we should from this institute a regressive income tax. (But while an interesting thought, that's a little far afield. I just mean to generally urge caution in favor of precision.)
3. To the thread title: as we all know, in a low-inflation (or more correctly low-income-growth) recovery, paying workers less is what's better for everyone. In fact, one of the greatest causes prolonging the Great Depression in the US was Roosevelt's pro-labor policies (especially the NIRA, which stopped the 1933 recovery dead in its tracks), which identified low prices and low wages as a cause of the Depression and therefore encouraged unionization and industrial cartelization to raise prices and wages.

[Darth Wong]

I didn't gloss over anything. The fact that your words meant something other than what you say you intended is entirely YOUR fault.

The point is moot when you make an argument based upon an incorrect interpretation.
It is up to you to ask for clarification before making an ass out of yourself.

You're a fucking idiot. You made a statement which was quite clearly worded, and then claimed that you didn't mean it at all. In fact, you did it more than once, actually claiming that unions want destructive outcomes even for themselves. The word "want" is not an ambiguous word; it clearly denotes intent and desire. No one needs to ask for clarification of what the word "want" means. Don't blame other people when you get caught saying something so monumentally stupid that you are later forced to pretend you never intended to say it.

[Guardsman Bass]

Three loosely related points.

1. Megan McArdle on why Wal-Mart isn't more like Costco. Basically, Costco's employees are roughly three times as productive as Wal-Mart's employees because of differences in the firms' strategies and consumer bases.

That doesn't surprise me. As I said up-thread, their markets are rather different, with Costco's customer base having a rather high average household income (and nearly a third of their customers being in the upper middle class).

[*]To the thread title: as we all know, in a low-inflation (or more correctly low-income-growth) recovery, paying workers less is what's better for everyone. In fact, one of the greatest causes prolonging the Great Depression in the US was Roosevelt's pro-labor policies (especially the NIRA, which stopped the 1933 recovery dead in its tracks), which identified low prices and low wages as a cause of the Depression and therefore encouraged unionization and industrial cartelization to raise prices and wages.[/list]

That's why it can be good economic policy to set a target for nominal GDP growth even if it results in a slightly higher inflation rate in the short term (such as 4% instead of 2%). That type of inflation not only encourages spending, it is also more or less the same thing as lowering wages in the face of decreased demand (since the real value of the wages goes down).

[Esquire]

Capitalist needs are actually far below capitalist income, and it is through that investment often occurs.
Although I'll through you a bone and say that the richer a person is, the less they value money, and the less efficiently they would allocate it.

Do you mean that in a capitalist society everyone's needs are below their income, or simply a reformed version of 'the rich are rich?' How do you mean 'efficiently' in this context? Why should the rich value money less, and what exactly do you mean by it?

What do you mean by needs?
What does efficiently typically mean to you?

People who have a lot of money value their money less. This is because they have so much of it.

Oh no you don't. You used the terms first, you get to define them. Wouldn't a person with more money be more likely to appreciate what that money could get them, since it could get them better things?

[Highlord Laan]

How Costco Became the Anti-Walmart

Relevant to the OP. Also reaffirms why I like shopping at Costco. That, and the cheese selection. Mmm. Cheese.

*edit* Screwed up link dressing.

I love the wall street filth bemoaning Mr. Sinegal not treating his employees like cattle. "We'd be making more money if he just treated his employees like shit. He's doing it wrong!" /cry

[Darth Wong]

People who have a lot of money value their money less. This is because they have so much of it.

Evidence?

You make statements like this because they feel right to you. Using a priori reasoning, you state it as a fact, when it has not been established as such. Precisely how do you know that rich people value their money less?

In fact, one can easily make a case for the exact opposite theory: that rich people value their money more than poor people do. Consider this: while rich people do obviously spend more than poor people in absolute per-person dollar terms, they actually tend to spend much less as a proportion of their income than poor people do. That's one piece of empirical evidence, which is admittedly not an airtight case but which is still one more than you've provided. Moreover, a rich person's income is usually based in large part upon the money he already has (ie- his savings and investments), whereas a poor person's income is generally based entirely upon either labour or handouts. Also, the statistics on charitable giving indicate that proportionally speaking, rich people tend to be stingier with charity than poor or middle-income people.

[Surlethe]

Observation: Most wealthy people become wealthy by saving money, not spending it. This would also tend to indicate that wealthy people value their money more than poor people do. (Of course, this is an average statement - to discuss marginal tax rates, one must consider the derivative of value with respect to income, not the value function itself.)

[Lagmonster]

I would guess, based on the hard-hitting research I just did in my gut, that people who come into sudden wealth may not value their money as highly. Say, an athlete or singer who goes from poverty to celebrity overnight, and doesn't know quite what to do with themselves, and ends up buying a solid gold prostitute dispenser or something. On a basic level, watching my peers transition into adulthood seems to show that if you didn't have a background where you had at least SOME money, you may have never have learned to control it.

[Darth Wong]

I would guess, based on the hard-hitting research I just did in my gut, that people who come into sudden wealth may not value their money as highly. Say, an athlete or singer who goes from poverty to celebrity overnight, and doesn't know quite what to do with themselves, and ends up buying a solid gold prostitute dispenser or something. On a basic level, watching my peers transition into adulthood seems to show that if you didn't have a background where you had at least SOME money, you may have never have learned to control it.

That reminds me of the "welfare lottery winner who ends up right back on welfare 2 years later" phenomenon.

[Starglider]

In many cases raising the salary of a US employee will not significantly increase their net income and may in fact reduce it.



Assuming of course they are being a good socialist and collecting every possible government benefit.

[Grandmaster Jogurt]

A simple solution to that is to eliminate means testing and provide the benefits regardless of income.

Alternately you could just restructure it to be smoother to avoid the cliffs and traps but either way.

[Darth Wong]

It's funny how people always complain about how complex the tax code is, and yet things like tax rates and social benefits are generally based on ultra-simplistic discontinuous flat rates instead of a smooth mathematical function. In short, the tax code is loaded with massive legalese, but its mathematical complexity sits at around a grade 3 level.

I can't help but think that this is because the average politician understands legalistic bullshit, but has the math skills of a pre-adolescent.

[Stark]

In many cases raising the salary of a US employee will not significantly increase their net income and may in fact reduce it.

Thats pretty obviously because of poorly arrange benefit criteria rather than the evils of socialism, however.

[Connor MacLeod]

It's funny how people always complain about how complex the tax code is, and yet things like tax rates and social benefits are generally based on ultra-simplistic discontinuous flat rates instead of a smooth mathematical function. In short, the tax code is loaded with massive legalese, but its mathematical complexity sits at around a grade 3 level.

I can't help but think that this is because the average politician understands legalistic bullshit, but has the math skills of a pre-adolescent.

One view I've always had of it (at least from the US point of view) is that having things needlessly complex is simply to justify alot of bureacuracy and having to have people who understand these things - legally, economically, whatever. And possibly to help hide the corruption.

[Simon_Jester]

With taxes, there's also the element of "hey, wouldn't it be great if there was a tax break for X?"

Schoolteachers can deduct from their taxes money they personally spend on supplies for school. Which sounds great for teachers; I love it! But for everyone else it's a totally irrelevant and just adds a line to their 1040 form.

[Darth Wong]

It's funny how people always complain about how complex the tax code is, and yet things like tax rates and social benefits are generally based on ultra-simplistic discontinuous flat rates instead of a smooth mathematical function. In short, the tax code is loaded with massive legalese, but its mathematical complexity sits at around a grade 3 level.

I can't help but think that this is because the average politician understands legalistic bullshit, but has the math skills of a pre-adolescent.

One view I've always had of it (at least from the US point of view) is that having things needlessly complex is simply to justify alot of bureacuracy and having to have people who understand these things - legally, economically, whatever. And possibly to help hide the corruption.

Yes, but the point I'm making is that the tax code is complex only in one sense: a legalistic one. In a mathematical sense, it is ridiculously simplistic, literally operating at a child's level, which is why you have these sudden discontinuities that people are upset about. Why can't a tax code include a mathematical function more complex than "x% from point A to point B"?

[Civil War Man]

I would guess, based on the hard-hitting research I just did in my gut, that people who come into sudden wealth may not value their money as highly. Say, an athlete or singer who goes from poverty to celebrity overnight, and doesn't know quite what to do with themselves, and ends up buying a solid gold prostitute dispenser or something. On a basic level, watching my peers transition into adulthood seems to show that if you didn't have a background where you had at least SOME money, you may have never have learned to control it.

It's not necessarily that they don't value money as much, so much as they get screwed over by the mindset one learns growing up poor. If someone is barely scraping by their entire life, they often begin to view money as something impermanent, which morphs into an impulse to immediately spend any excess money they have now for fear that it will all disappear if they don't. Many are incapable of viewing money as a renewable resource, something that can be tapped when you need it immediately and stockpiled when you don't, because they have never had that experience. It's very much a "use it or lose it" mentality.

The mindset is that if you spend the money now, you at least end up with the thing you just bought, but if you don't, it will somehow disappear and you will be left with nothing.

It's a warped outlook that is incredibly hard to unlearn.

[Darth Wong]

I would guess, based on the hard-hitting research I just did in my gut, that people who come into sudden wealth may not value their money as highly. Say, an athlete or singer who goes from poverty to celebrity overnight, and doesn't know quite what to do with themselves, and ends up buying a solid gold prostitute dispenser or something. On a basic level, watching my peers transition into adulthood seems to show that if you didn't have a background where you had at least SOME money, you may have never have learned to control it.

It's not necessarily that they don't value money as much, so much as they get screwed over by the mindset one learns growing up poor. If someone is barely scraping by their entire life, they often begin to view money as something impermanent, which morphs into an impulse to immediately spend any excess money they have now for fear that it will all disappear if they don't. Many are incapable of viewing money as a renewable resource, something that can be tapped when you need it immediately and stockpiled when you don't, because they have never had that experience. It's very much a "use it or lose it" mentality.

The mindset is that if you spend the money now, you at least end up with the thing you just bought, but if you don't, it will somehow disappear and you will be left with nothing.

It's a warped outlook that is incredibly hard to unlearn.

The idea that some people are conditioned to think of money in an impermanent sense is an interesting insight, and one I had not thought of before. Thanks.

[Stark]

If you value money only as something you turn into 'stuff', it becomes very hard to save or even plan ahead financially. In addition, it means increases in income are generally immediately turned into 'better stuff', such that those increases don't help your financial standing.

At the extremely poor end I imagine its even worse, because once you grow up knowing your family or friends will use the money if you don't, it becomes even more important to convert it to usable (but not interest bearing) 'stuff'. I don't even think many of these people are aware of the habits they've built up over their lives.

[Sea Skimmer]

A lot of people also just think inflation will destroy any savings they have within a few years, and as such all savings are futile. I suspect people with this mentality somehow think that the value of money in a bank account is disconnected from the prices on store shelves.