.... really. So raw materials, energy, etc; these are all fictional?
Of course not. Did you not read what I wrote in the next sentence?
If my employees require food, then the food that they purchase does not fuel their production?
If you provide your employees with food, that's on you. If they purchase it themselves, it has no bearing whatsoever on this discussion. In fact, it has no bearing on the discussion if you
do provide them with food, as that is merely a different way of paying their wages. The cost of labor intrinsically includes such things. It
also includes the cost of workman's comp insurance, employee benefits, etc.
If I have to ship my materials from the port to the factory, then the gallon of gasoline that I buy does not affect my production?
I addressed this specifically. Did you not bother to read what was written at all?
I had the misguided idea that you were interested in a discussion with people, not your imagination. My bad.
My facilities, equipment, electricity, all my overhead.... none of this affects production?
Of course it does. It was addressed.
At some point, most stuff goes back into supporting follow-on production.
And that was addressed in my post.
Sure, you have your entertainment goods (television doesn't really go back in to supporting production), but the majority of expenditures are on goods (housing, food, energy, transportation) that do.
That's not true. What the worker spends their money on does
not affect your production. You cannot claim that it affects your production because it's absurd and dishonest to do so. So since the majority of goods do not directly affect production.
Oh, and that pesky word direct was present initially. If you're going to have arguments with your imagination, that's one thing, but please do not direct this self-masturbatory nonsense at me in the future.
Actually there are several different venues for you here. You can (as you have suggested) raise the price of your product. Or you can purchase from another supplier who does not suffer under the same raised price floor. Or you can alter your mixture to reduce the corn percentage in your corn chips. Or you can fire low-skill workers and automate some of your processes. Or you can seek out a combination of any of these.
You'll note the
important thing, however, is that there is not,
in any way, a decrease in demand.
There are alternate means of transportation and you will likely begin to look at those, as well as looking at more fuel efficient means of powering your trucks.
And alternate means often cost more. And even if I have the capital to overhaul my entire operation, it might not be economically viable. The important thing,
again, is that the price did
not affect demand.
that is correct only in that you have consistently misrepresented the examples above, and labor.
I didn't do that. Your imagination is
not me. Please do not attribute the actions of your own imagination to me again in the future.
You are basically arguing that labor and these goods are completely price inelastic - that if we were to (for example) hike up the minimum wage to $1,000 an hour, McDonalds would duly keep the same number of employees and give them all commiserate raises instead of automating it's franchises and hiring a very few highly talented workers to run the software and hardware.
Think about what such a hike would do to the economy. Don't oversimplify reality,
account for it. What you describe would cause
mega-inflation and devalue the money exponentially. IF minimum wage was $1000 per hour, then the cost of a hamburger would be about $500.
Demand would not change, the value of money would change.
Yes, but the number of employees that they require is not fixed.
The
number is dictated by the rate of production required to maintain profits. I was really ratehr clear about that.
And so demand for labor can go down while companies continue production.
If the rate of production was unchanged, then the labor employed did not directly affect production. I've addressed this.
Remember back when Congress last raised the minimum wage to $7.25? Did you notice how it was a couple of months after that that all those self-checkout lanes started popping up?
Aside from the obvious fact that correlation =/= causation, there's also this glaring little flaw in your anecdotal claim: the facts disagree with it.
The increase in those self-checkout lanes has been a
worldwide phenomenon (increasing in multiple countries at the same rates) that
started in the 90's and is not directly tied to US minimum wage rates.
Technology
definitely affects the demand for labor, but it is usually a double ended affect: It both increases and decreases demand for labor. It will decrease the demand in the place where the technology is implemented, but it increases demand for labor in producing, maintaining, distributing, transporting, and installing such technology. Now, while it's true that production typically ends up being outsourced, labor associated with maintenance, distribution, transport, and installation cannot really be outsourced.
Employees were no longer profitable on the margin, and so they were replaced with previously prohibitively expensive automation that was now cost-effective due to an artificial raising of a price ceiling on labor.
If it was caused by
our minimum wage increase, why did it happen A. before that increase and B. in places where that increase did not exist?
True, the less necessary labor will be the first cut. Or it (and that involved in direct production) could be replaced with either alternative (say, foreign, or illegal) labor, automation, or some other alternative.
Ah, so you agree that the demand for labor is not really affected at all.
This is the Henry Ford Fallacy. Increases in wages in and of themselves do not lead to an increase in demand because you have not increased the wealth inside the system. Increases in production lead to increases in demand.
You are debating with your imagination again. First: You are describing the exact polar opposite of what occurs in supply and demand: Increased production =/= increased demand. That's a profoundly incorrect view of supply and demand. Increased production merely increases the supply. The demand can
always stay constant or decrease in the face of such increases in production.
For example, if I have a company that makes pies, and I make about 100 pies a day, selling about 95 of them each day, producing 200 pies would not mean that I sell 190 pies that day. In fact, I'm probably only going to sell 95 of them and I'll be tossing 105 out.
Second: I never said that increased wages increase demand. That, much like your imaginings about the effect of production on demand, is not only utterly imaginary, it's 100% factually incorrect.
). At the same time, use of these offers gives them discounts at various accommodations and attractions, free VOIP calls and/or texts to and from their home country and tethered Internet access to their laptops and tablets, etc. If we can get people from around the world making America an easy to visit tourist destination, that alone might turn the economy around and it cannot be duplicated anywhere.
